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Why You Should Ask A Duplex Realtor What’s In Her Pockets
February 8th, 2010 categories: Buying A Duplex
Are you having trouble finding the right duplex?
I’ve got some bad news. It’s about to get worse.
As we officially kick off the spring housing market, more buyers and investors are going to jump into the market. Many will be trying to beat the April 30 tax deadline for the $8000 and $6500 tax credits.
That means you’ll have more competition.
And if you’re working with an agent who don’t specialize in multi family properties, the odds are stacked against you.
The single most important reason to work with a specialist is what we have in our pockets.
I’m not talking about lint, or quarters, but what are called “pocket listings”. What are those? Well, we work with sellers too. At any given moment, we know a number of them who are either in the process of putting their duplex on the market, or who haven’t quite yet decided to sell.
Most are willing to show potential buyers their property; even if they haven’t quite made up their minds. And when we run into a buyer looking for a duplex that seems to match a non-MLS duplex we’ve seen, we can make showing arrangements.
Don’t forget, however, that when it comes to MLS listings, we also know the inventory.
On average, I show more than 30 duplexes a month. While many of the properties simply are not fits for any of my clients, some are. (Ironically, they’re frequently the ones with few or no MLS photos.) When I find them, I call.
Established duplex specialists also offer their buyers the advantage of having seen countless properties the last time they were on the market. We don’t remember the bad ones, but the good ones are clear memories.
A good example of this happened over the weekend. A property I’d frequently shown as a short sale reappeared on the MLS as a bank owned property.
The pipes were frozen and both boilers blown. Having seen it in the past, however, I knew the rest of the building was in great shape.
My clients footsteps were the first in the snow on the listing’s sidewalk.
If you’re looking, give me a call and ask what’s in my pocket.
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I Sell St Paul Duplexes Too
February 5th, 2010 categories: Buying A Duplex, Selling A Duplex
I lost out on a duplex listing the other day because I “don’t specialize in St Paul”.
This made me chuckle.
The seller had the impression that because of the frequent appearance of the word “Minneapolis” in my blog headlines, I don’t know St Paul.
I explained to him I do this because according to Google Ad Words, far more people search the Internet for the term “Minneapolis duplex” than they do “St Paul duplex”.
I am, after all, in business. Part of my job as a business owner is to make sure I’m found where people are looking for the type of services I provide.
So, my headlines say “Minneapolis”, even though I list, show and sell St Paul properties just as often; simply because of the popularity of the search term.
The seller, in this case, hired an agent who specialized in his neighborhood. On some level, this is a concept I absolutely understand when it comes to single family homes. After all, there are thousands and thousands of single family homes, and most MLS districts have neighborhoods with wildly different personalities within their boundaries.
Duplexes, however, are another story.
See, there just aren’t as many of them out there.
As a result, duplex buyers I work with tend to cover 5, 10, or even as many as 15-20 MLS districts in their search.
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Two Halves Make A Whole In Minneapolis Duplex Market
February 4th, 2010 categories: Buying A Duplex, Selling A Duplex
What is the most common question I get asked in a duplex open house?
Is it, “What will the seller take?”
No. And even if it were, and I knew the answer (sometimes sellers surprise me), I couldn’t tell you. After all, the seller hired me to look out for her best interests, and by law, I have a duty to do just that.
The number one question is, “Is the whole duplex for sale or just one side?”
Many people don’t understand that while a duplex contains two residences, it has one Property Identification Number or PIN, with the county. It is considered one property.
In order for the two halves to be sold separately, each would need to have its own PIN. While that is possible, and certainly, many fourplexes and larger apartment buildings have been split up and sold independently as condominiums, there is some legal paperwork involved.
One of the challenges in doing this with a duplex is the formation of an association. With larger properties especially, developers who are selling the individual units, hire an attorney to form a homeowners association,.
In the bylaws, all the rules, regulations, dues, and means of resolving disputes are clearly spelled out in advance of the sale. This infrastructure helps prove a mechanism through which to collect and pay for maintenance, improvements and pursue delinquent homeowners.
Most of these associations have a board of directors which is populated by residents of the property. The board makes recommendations in terms of increased fees, exterior paint color schemes, etc., which residents then vote on.
What happens in a duplex if each owner wants the outside a different color? Who casts the deciding vote? Or if one owner stops paying her share?
Tough to resolve. Which is exactly why most duplexes never face being split up and sold separately.
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Minneapolis Duplex Market Studies Itself In The Mirror
February 2nd, 2010 categories: Twin Cities Real Est
The Minneapolis Area Association of Realtors released its weekly activity report last night, and it turns out that January of 2009 and 2010 are almost mirror images of one another.
Pending sales and new listings are down a bit from last year, and there’s a little bit more inventory on the market, but, by en large, it’s a wash.
For the week ending January 23, there were 2.3 percent fewer signed single family purchase agreements than there were for the previous year.
In the duplex market, however, the reflection from year over year had a few ripples in it.
The number of signed purchase agreements for the week in 2010 was down 31.4 percent from the 2009 mark. Of those properties that did receive and accept offers, 12.5 percent were brought to the market by traditional sellers. This represennts an increase of 4 percent year over year.
The average off market price for the week was $95,177; almost identical to 2009’s $95,371.
While the number of new listings to hit the market was virtually identical, this year traditional sellers were responsible for 40.35 percent of the new inventory. This is a stark contrast to last year’s market share of just 8.5 percent.
Hey, look at it this way. At least there aren’t any new wrinkles or gray hairs to contend with.
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13 Inexpensive Ways To Improve Your Minneapolis Duplex
February 1st, 2010 categories: Home Repair
The spring housing market begins one week from today.
If you’re thinking about selling, that’s important information. However, it’s equally important if you’re a landlord facing a spring vacancy.
Why?
Many of your usual prospective tenants are going to be looking for houses in order to beat the April 30 first time homebuyer tax credit deadline, resulting in more landlords competing for fewer prospective tenants.
What’s more, many homeowners unable to sell their property for what it’s worth have turned them in to rentals, meaning there’s far more competition out there than ever for rental dollars.
Here are ten ways you as a landlord can compete:
1. Get your vacant unit so clean that your mother would stay there.
2. Give every room a fresh coat of paint.
3. If the kitchen cabinets lend themselves to it, apply a fresh coat of paint and updated hardware. You’d be surprised how inexpensive hinges, knobs and drawer pulls can be. Replacing them can immediately give a kitchen a face lift.
4. If your kitchen counters are dated, replace them. You don’t have to put in granite, but many of the larger home improvement chains offer relatively inexpensive laminate counter tops with a similar look and feel to high end stone.
5. Replace switch plates. At pennies a piece, the return on the investment here is significant. Filthy switch plates imply a history of grime. Painted-over switch plates send a message of laziness.
6. Paint the front door. It’s tough to paint in the winter, I know. But you could remove the door, taking it to the warm basement long enough to get it painted and dry. It may be possible to cover the opening with plastic while you’re waiting.
7. Shovel the sidewalks. Fallen on ice yet this year? Enough said.
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Minneapolis Duplex Owners Have A Theme
January 29th, 2010 categories: Buying A Duplex, Home Repair, Selling A Duplex
I don’t know whether to call it a trend or a theme, but this week my real estate business has had one.
First, the pilot light on the furnace in a buyer’s new property went out the day before closing. Next, the forced air furnace in one side of a duplex a buyer is considering came back with a yellow flame; which may or may not be the sign of a cracked heat exchanger (which can result in the unit producing unsafe levels of carbon monoxide).
Then I got a call from a rural tenant stating they had no water in the house or any of the outbuildings on the property.
The theme for the week could be ”things break”. However, there’s another one here; whenever possible, get a home warranty.
It seems like everyone from Best Buy to car dealers offer an extended warranty these days. And we’ve all had experiences where the coverage they provided were not worth the additional cost.
I haven’t found this to be the case with most home warranties, however; especially when a client is purchasing a foreclosed property.
Many foreclosures not only have deferred cosmetic maintenance, but the mechanicals like the furnace or boiler and water heater have been ignored as well. Most banks aren’t in the business or maintenance or repair, so whatever’s wrong with the property will most likely be the buyer’s responsibility.
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Every Minneapolis Duplex Cloud Has A Silver Lining
January 25th, 2010 categories: Twin Cities Real Est
There’s a lot of doom and gloom in the air today, and not all of it has to do with last night’s Viking loss.
Some of it has to do with today’s announcement by the National Association of Realtors that nationally, existing home sales fell in December. It wasn’t entirely unanticipated. Most economists thought the rush to beat the original November tax credit deadline might have an effect on December’s housing market. And it did.
So that’s the bad news. But there was some good news in the rest of the story.
See, while existing home sales fell 16.7 percent, they were still 15 percent higher than they were in December 2008.
More importantly perhaps, 4.9 percent more existing homes sold in 2009 than they did in 2008.
The national median home price was $178,300, which is again up over December 2008; albeit a slight 1.5 percent.
Of course, foreclosures and short sales, which represented 36 percent of all home sales last year continue to skew those median price numbers.
The Vikings had a sliver of good news too. Yesterday’s loss means they’ll get a better draft choice.
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What’s Different About Buying A Minneapolis Duplex?
January 22nd, 2010 categories: Legal Stuff
What one thing do you have to do after closing on your new duplex or rental property that you don’t have to do when you buy your own house?
Get a license.
Whether you’re owner occuping your duplex or intend to operate it as an investment, many cities require you to have a rental license.
What does that take?
Rules vary according to municipalities. In Minneapolis, however, a new rental property owner must fill out an application, as well as provide the city with a copy of either the Minneapolis Truth & Housing Certificate of Approval or Buyer Certificate of Completion.
If the property is owned by an LLC, partnership or corporation, articles of incorporation are also required. New owners must also attach proof of ownership, which is generally covered by a HUD Statement, copy of a Certificate of Real Estate Value or Bill of Sale.
The fee, at least in Minneapolis, is $65 for the first unit, and $19 for each additional unit. This covers licensing from September 1 to August 31 of the following year.
And if you don’t get a license? Fines can run north of $500, and tenants can file a rent escrow case, where rental income is escrowed until the situation is resolved. Tenants may not, however, withhold rent simply because you don’t have a license.
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HUD Flips Minneapolis Duplex Rules
January 21st, 2010 categories: Financing
Either someone at HUD is really smart, or they’re reading my blog.
I’m inclined to think it’s the former.
Last week I explained many rehabbers I work with were scrambling to find houses and duplexes to buy before the end of the month so once repairs were completed, they would have owned it the required 90 days in order to be able to resell it to an FHA buyer before the tax credit deadline.
This same waiting period often prohibited FHA insured buyers from acquiring some bank and HUD owned properties.
On Friday, HUD Secretary Shaun Donovan announced a temporary policy lifting the 90 day waiting period.
The waiver goes into effect on February 1, 2010, and is effective for one year; unless, of course, HUD changes its mind.
Sales must be “arms-length”, with no shared interest between the buyer and seller or anyone else participating in the sale. When the resale price of the duplex is more than 20 percent above what it cost the seller to acquire it, certain conditions have to be met for the waiver to apply.
This should help keep the market supplied with affordable first time home buyer properties in good condition.
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Minneapolis Duplex Sales: Nothing To Buy
January 19th, 2010 categories: Twin Cities Real Est
Something’s happening in the Twin Cities house and duplex markets.
New duplex listings for the week e000 firstnding January 9, 2010, were down 36 percent from their market one year ago. Of these, a whopping 45 percent were listed by traditional sellers.
Over the last three months, the number of new single family home listings in Minneapolis and St Paul has dropped 11.7 percent from one year ago.
Less inventory is a good thing, right? Won’t that cause prices to go up?
Theoretically. However, for the week, the average off market price for a small multi-family property was $87,635. The average sales price for the same stretch in 2009 was $124,989. That’s the first time in months the average off market price has dropped.
Here’s the other bit of befuddling news. In spite of the looming April 30 expiration of both the $8000 first time home buyers and $6500 repeat buyer tax credits, duplex sales were down 43.9 percent year over year.
The same trend is happening in the single family market. For the seventh time in nine weeks sales were down; this time 1.7 percent from 2009.
I have a theory. It isn’t scientific, but having been out in the field with buyers, I can say this: there’s nothing decent for them to buy.
Tough to have booming sales when the store shelves are empty.
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