Locating Lakeshore Property- Lessons from Elmo, by Carter DeLaittre
As published in the February 22, 2002 issue of Outdoor News
Remember the Tickle Me Elmo craze during the 1996 holiday shopping season? Elmo's giggling and shaking made him the #1 toy on children's wish lists. Stores could not keep up with the demand. As soon as Elmo hit the shelves, he was snatched up by panicky parents. Those who delayed went away empty handed.
Buyers in today's real estate market can encounter the same dilemma. The inventory of lakeshore property being offered for sale frequently cannot meet the demand. Often there are bidding wars for the same property. Many properties sell within hours of being listed. Some are gone even before hitting the market.
Buyers need access to current information about available properties and must react quickly when an opportunity arises. Here are some resources that may help you beat others to the punch and increase your odds of finding the right property.
Real Estate Brokers
Many buyers begin their search by contacting a real estate broker in the geographical area where they wish to concentrate their search.
A broker is required to provide a buyer with an agency disclosure form when they have their "first substantive contact." This form describes the different relationships that may exist between a broker and a buyer depending upon whether the broker represents the seller, the buyer or possibly both. If a broker gives you this form and asks you to sign it, don't panic. It is not a contract, and does not obligate you to anything. Nonetheless, read it carefully, and have your questions answered.
If a broker is hired as the buyer's representative, the parties sign a "buyer's broker agreement." The broker will owe the buyer certain fiduciary duties (i.e. loyalty, obedience, confidentiality, etc.). Until such an agreement is entered into, however, the buyer is treated only as a "customer" and is not represented by the broker. The distinction can be important.
According to Mark Meixner, a broker with Positive North GMAC Real Estate in Nisswa, Minnesota (www.markmeixner.com ), being represented by a broker gives the buyer a big advantage. "A buyer's broker should meet the needs of his client first before addressing the needs of the broker's non-represented customers. The broker's client should be notified first about an available property. In today's market, non-represented customers may never hear about a property before its gone."
Hiring a broker that uses a "team approach" is critical, says Bruce Larson, head of the Larson Team with Shores & More Realty in Crosslake, Minnesota (www.larsonteam.com). "Make sure your broker has a team to represent you. You don't want them on vacation, or on their day off, when the perfect cabin is listed and no one is in the office to let you know. The top brokers have a team of players who constantly search for available properties and can get you information at a moment's notice."
Other advantages to being represented by a broker, according to Meixner and Larson, include instant notification via the Internet when a property becomes available, access to the broker's knowledge of the particular market area and what it has to offer and assistance with the preparation and negotiation of a purchase agreement.
If you hire a broker, review the terms of the buyer's broker agreement carefully before signing. Pay close attention to the terms regarding the computation and payment of the broker's commission. While the buyer's broker and the seller's broker typically share a commission paid by the seller, a buyer's broker agreement may obligate you, as the buyer, to pay all or a portion of your broker's commission under certain circumstances.
Not interested in hiring a broker? Don't despair. Brokers will still gladly send you property information by mail or e-mail and will let you review their book of listings.
The Internet
Take a tour of different properties from the comfort of your own home. Check out different brokers' websites and view their listings. Most websites contain one or more pictures of each available property. General websites to try include www.realtor.com and www.mnproperty.com. Zoom in on a specific area by typing the name of the largest city and the words "minnesota real estate" in your search engine (e.g. "walker minnesota real estate").
Area Real Estate Magazines
Most of you have seen these publications in grocery stores, gas stations and shopping malls. Pick one up whenever you get the chance. They are great for showing the price of lakeshore property in the area and are a good source for the names, websites, phone numbers and e-mail addresses of the different brokers. The only drawback is that by the time you pick up a copy, it may have become "old news" because many of the listed properties have already been sold.
City Newspapers
The Sunday classifieds sections of the metro newspapers, as well as the display and classified sections of Outdoor News, contain advertisements for lakeshore property. Get a jump on the rest of the crowd by purchasing the early edition of the metro dailies on Saturday afternoon. The classifieds have ads for properties listed on the Multiple Listing Service and ads for properties that are "for sale by owner"(FSBO). The cabin we purchased was a FSBO. My wife found it in the Sunday paper.
These are the resources commonly used when searching for lakeshore property. If you want to exhaust all available options, even those that may be considered "longshots," consider the following possibilities.
Local newspapers. Subscribe to the local newspapers in your favorite geographical areas. They are fun to read and you never know when that ad for the perfect property may catch your eye.
Local attorneys. Send a letter to attorneys located in your favorite geographical areas and ask if any of their clients may be interested in selling lakeshore property in connection with a probate proceeding, a divorce or a mortgage foreclosure. If the timing is right, you could be surprised.
Local banks. When a loan goes bad and a bank is forced to foreclose its mortgage, the bank may end up owning title to the property. The bank usually will be interested in selling the property as soon as possible. Send a letter to the banks in your favorite geographical areas and ask if they have any lakeshore property in their foreclosure inventory. You just might be able to acquire a piece of property at a below market price.
Eventually, you will
find "THE DREAM PROPERTY." You may see it for the first time
at 10:00 am on a Sunday morning and then find yourself signing a purchase
agreement an hour later. Hopefully, the agreement will contain terms that
will give you "an out" if subsequent investigations reveal problems
concerning the condition, or your future use, of the property. Next week
we'll discuss some of these investigations and the contingency provisions
that buyers should include in a purchase agreement in order to keep
the "dream property" from becoming a lasting nightmare. For more information,
please contact Carter DeLaittre
at 612.252.2858 or cdelaittre@hensonefron.com.
