Storm Lake & Surrounding Area Real Estate & Community News
What can be found here and why should you follow this blog?
This blog contains information for Buyers, Sellers, Investors and Renters. Real estate is a fascinating topic and a very complex one. You can search this blog by topic to find exactly what you are looking for, it will also have all of our new listings. You can learn about Storm Lake's current local (50 mile radius), real estate market, and the current real estate market in the surrounding areas like Alta, Newell, Aurelia, Schaller, Early, Fonda, Cherokee, Sioux Rapids, Ida Grove, Spencer, Spirit Lake, Lake View, Lakeside, Correctionville, Remsen and others.
For Buyers we will have topics including financing, down payment assistance programs, tips on how to compete with other buyers, how to offer, home inspections and how they work, the process of buying a property, what not to do after you have an accepted offer, the advantage of having a Certified Negotiations Expert on your side and a lot more.
For Sellers we will have topics including how to best price your property, how to prepare your property and see it through the buyer's eyes, home inspections and how they work, how to negotiate, the importance of staging, why pictures are worth a million dollars, the advantage of having a Certified Negotiations Expert on your side and a lot more.
For Investors - a topic I LOVE! Topics will include how to evaluate a property, what tools I personally use and access to them, how to find an investment property, what basic improvements cost if done by you or a contractor, how to find a good tenant, why you need your properties in an entity and not in your personal name, how to negotiate with buyers, sellers and tenants, 1031 Exchanges and a lot more.
For Renters - we list all the new rentals as we are notified of their availability on this blog, we can help you determine if it is time to buy instead of rent, help you determine what if any programs - like down payment assistance - you may qualify for, discuss how to have a conversation with a landlord when the property you are renting is in need of work, and a lot more.
For Everyone - Thank you for making Weaver LLC, Realtors the #1 Most Recommended Real Estate Company on Google 2017, 2018, 2019, 2020, 2021 & ....for our Area!
Escalation Clause - How your offer can go to first place in a multiple offer situation
Are you tired not getting your bid accepted in this hot market?
Enter the Escalation Clause. A tool I have used successfully to give our buyers an edge over the competition.
How does an Escalation Clause work?
If you have ever made a bid on eBay you probably understand the basics of this tool. You make an offer and you agree to increase your offer in set dollar increments if another competing offer is received. You set a predetermined amount (highest price you are willing to pay) upon acceptance of a copy of the competing offer.
Your Offer: Lets say a house comes on the market at $275,000. This price is backed up by a good comparative market analysis (CMA) and your agent agrees with this price. So, you offer $285,000 with an escalation clause of $500 with a contingency for obtaining an 80% mortgage, but add in the Escalation Clause form stating you are prepared to increase your offer by $500 over any other competing offer. This escalating of the offer stops at a predetermined dollar amount. Yours is at $300,000.
The seller's agent has a 3 day hold or review period on offers noted in the listing (seller will keep the property active and accept offers for 3 business days prior to choosing or countering an offer) and you know there will be other offers to compete with.
2nd Offer: Offer number 2 is for $289,000 without an escalation form. The other terms: same loan type, same close date.
Upon receiving a copy of the competing offer, your offer increases to $289,500, five hundred dollars over this competing offer.
What happens and who's offer will the Seller accept?
The seller will accept your offer, it is higher, with all terms the same.
While Escalation Clauses vary significantly, the general escalation clause addendum has 4 basic components:
1) The original offer price is stated
2) The dollar amount increment ($500 on yours), that the original offer amount will be escalated above any other competitive bid.
3) The maximum amount that the buyer is willing to go to to purchase the property.
4) The circumstances in which this clause is used, should be only with multiple offers.
When should an escalation clause be used
Escalation Clauses should only be used by experienced knowledgeable REALTORS because there is risk. Once an Escalation Clause is written and presented there is no going back. You just told the seller how high you are willing to go. I personally would only use one on a newly listed property (less than 3 days) and one that had another offer in. If there is no other offer in you have no need to do an Escalation Clause, my opinion.
If your offer is contingent on an inspection, appraisal for a mortgage or other terms be sure they are included. Has the seller's agent include a review time period for the offer? I do a certain number of days the seller is accepting offers (in my case usually 3-5 business days). It is a good idea to know and understand how all offers are going to be reviewed and responded.
Problems that can happen with an Escalation Clause and why you need an experienced REALTOR
An Escalation Clause should only be used by an experienced Realtor who can clearly explain to you how the process works and answer your questions. A real estate contract is a complicated legal form, adding things to it make it even more complicated. But, there are times when addendums can give a client an advantage in negotiations and should be used. If you are unsure or uncomfortable with your agent using an Escalation Clause have them get their Broker involved.
Weaver LLC, Realtors is an experienced knowledgeable real estate company, at this time we have 2 Associate Brokers and me, the Broker. If you are in this pursuit to win it, we can help. An Escalation Clause is only one of the many tools we use to assist our clients. Call me, Georgia Weaver at 712-291-0118 to help you get the property you want under contract.
2021 has been an unusual year, as was 2020 with the Corona Virus. This year is a little wild in the real estate industry. Homes are getting multiple offers, most are selling for more than listed price. Some homes are getting as many at 6-8 offers. That is unusual in NW Iowa here except for in the early Spring market. Even then, it is unusual to get more than 3-4 offers.
Realtors are changing how they do business to best assist their buyers and sellers, including our office. Last year we saw the lack of inventory and the low interest rate as 2 significant factors that would change our market. We started looking outside our area for solutions to how other Realtors were handling the situations. 3 Tools are making a big difference for our Buyer and Seller Clients.
Several solutions surfaced immediately:
1) This one we have been doing for nearly 2.5 years. The other realtors in our area are not doing this to this day. That is to hold a property on the market available for at least 3 days and 5 is what we recommend to sellers. Of course, this is up to the seller. But, if the ultimate goal is to sell for top dollar then this is the way to go in the current market. By not immediately accepting an offer, more realtors and buyers are aware the property is for sale.
2) Buyers are required to be preapproved prior to looking at properties. Sellers are encouraged to require this in their listing criteria. If a buyer is preapproved, they will know what price range to search for properties, what kind of loan they are getting and therefore the Realtor will know if a specific property qualifies for the loan type. They will also know what their payment should be.
3) Escalation Clause - I LOVE THESE. Our office is the only one in our area that uses these, not sure why. Other than they are not aware of them or how to use them to benefit their clients. These give my Buyers a tool to safely ratchet up their offer if another offer comes in above theirs.
As a Realtor, I understand the amount of work both buyer and seller put into purchasing and selling a property. Throw in this Coronavirus social distancing and it gets about 20 times more complicated.
Is it a good time to buy, in my opinion YES. That's because there are homes to sell, interest rates are low, rental rates are very high, this Coronavirus will end. Once that happens, hopefully sooner than later, interest rates will go up, more buyers will be out looking and competition will increase.
It is still a very good idea to not be any closer than 6 feet from another individual. Also, if you are sick, have been sick in the last 14 days or have been exposed to anyone who has been sick in the last 14 days, please do not ask a Realtor to show you properties. Can you still see houses, YES, but be prepared to answer health questions, follow the homeowner's precaution requests and have your temperature taken.
You do not know if that Realtor or the home owners are immune compromised or have elderly people they care for. The responsible ethical thing to do is to wait. This illness is spread by contact with an infected individual, who may not show symptoms for 14 days after they were exposed and can still be able to spread the virus up to 14 days after becoming symptom free. Keep track of those you have been in contact with, it could matter a lot to someone. This is not a time to panic, this will end. It is a time to take precautions, be mindful of others and limit everyone's exposure. Who is your neighbor, Jesus would say everyone.
. Thank you for your diligence and caring for others.
Georgia Weaver, Broker/Owner, Weaver LLC, REALTORS, 607 Lake Ave, Storm Lake IA
If you have questions please call me at 712-291-0118.
Great Before and After photos show what a little time and elbow grease can do. One thing I see a lot while looking at or showing homes for sale in the Storm Lake IA and surrounding area is simple fixes that sellers are missing. These simple fixes make all the difference in a showing and presentation. The laundry rooms below are the same room. One is just a blah typical laundry, like most of us have. The second one is an organized, tastefully decorated and painted laundry that someone wouldn't mind being in to do laundry.
When selling a property it is a good idea to super clean, if you can't do it or you hate to clean, HIRE IT DONE. It is critical your property is clean, de-cluttered and well maintained looking. It is a great idea to have a pre-listing property inspection, that way there are no unpleasant surprises once the home has an accepted offer. It is also great to have a Realtor look at your property at least 60 days before you plan to put it on the market. A good realtor can point out things like the laundry below, unflattering paint colors, half dead trees (landscaping concerns), additions or subtractions that can not only sell your property sooner but for more money.
Blah laundry room, not organized After Laundry Room - so much better!
Paint, shelf, small cabinet, some wall decorations. Maybe $100 in materials and 2 hours of work. YOU CAN DO IT! Which one would you rather buy? Call me and schedule a time to walk through your property. I can do a valuation (called a Comparative Market Analysis or CMA), give you insight into what could cause problems with a USDA or a FHA loan (the majority of loans in our area are of these 2 types), and help you tweak your property room by room to bring top dollar.
Georgia Weaver, 712-291-0118, IA Licensed, Broker/Owner, Weaver LLC, Realtors, 607 Lake Ave, Storm Lake, IA online at www.weaverrealtors.com
4 bedroom 1 1/2 bath brick ranch acreage with attached 1 car garage, and double car garage next to house, on blacktop with asphalt driveway. Alta or Sioux Central school district. 4 stainless steel kitchen appliances, and washer and dryer included. Central air. Full unfinished basement. Living and dining room carpeted, 4 bedrooms hardwood floors. 1 year lease. No smoking, No pets. Application and credit check. $875/month, plus utilities, $875 Security Deposit. Call Barbara 712-299-3164.
Single family homes offer the investor an opportunity to borrow large loan-to-value loans at fixed interest rates for long terms. Lenders will loan 75-80% of the purchase price at 5.5% to 6.5% interest rate for thirty years. Compare that with other popular investment alternatives like precious metals, commodities, stocks, and mutual funds and it will be hard to find financing available at all. In Storm Lake and Alta we have a very low housing inventory and these numbers are even higher.
There may be some short term, one-year, loans at a floating rate tied to prime plus with no guarantee that it will be renewed. Some of those loans require you to have a 50% margin of equity and if the value goes down, you'll have to put up additional cash or be forced to sell.
The advantage of having long-term mortgages is that an investor could find the optimal time to sell the property instead of needing to sell it because the term is due, and no other financing is available. Supply and demand cause the real estate market to be higher and lower and a long-term mortgage provides options to sell when the price is optimal.
Single family homes enjoy distinct tax advantages. If the rental or investment property is held for more than 12 months, the gain is taxed at lower, long-term capital gains rates rather than ordinary income rates.
Another advantage of rental homes is that the improvements can be depreciated over a 27.5-year life. This is a non-cash deduction that reduces income and shelters income. The accumulated depreciation taken over the life of the property is recaptured when the property is sold.
Since rental homes provide income that other investments may not, tax would have to be recognized on the annual income. IRS allows normal operating expenses like interest, property taxes, insurance, repairs, and management to be deducted including the annual depreciation.
Rental and investment property are eligible for tax-deferred exchanges to avoid paying tax at the time of disposition. Real estate also enjoys stepped-up basis which means that when an heir inherits a property, instead of having a potential gain from the value the decedent had purchased it for less depreciation taken, the heir's basis becomes the fair market value at time of death. All potential gain may be permanently avoided.
Appreciation is a much-anticipated benefit of real estate because value tends to go up over time.
Another big benefit is the control that an investor has with rentals that is not available with other investments like stocks, bonds, or commercial real estate. It takes a relatively small amount of cash to control the entire investment in a home that wouldn't be available in other investments without partners or publicly traded companies.
Single family homes are an investment that homeowners understand because they are essentially the same as the home they live in. They're used for rental purposes but the maintenance is the same, the service providers are the same, and the neighborhood are the same. Most homeowners understand rentals far better than alternative investments.
Contact me at if you'd like to know more about rental property.
We are holding a Free Home Buyers Seminar on March 14th from 6 pm to 8 pm. Come and learn what you need to buy a home, meet some of the local professionals, banker, realtors, attorney, home inspector and enjoy a sandwich as we take you through the home buying process. Seating is limited, all attendees must pre-register no walk ins. We are keeping this small so we can answer everyone's questions completely. If this date doesn't work for you please call our office at 712-213-4663 to set up an appointment with one of our Realtors.
Georgia Weaver Broker Owner Weaver Realtors 607 Lake Ave IA Licensed