Archive for November, 2008
said on November 26th, 2008 categorized under: Tenants
Comments Off on Ask Santa to Help Eliminate Vacancies in Your Minneapolis Duplex
Although sometimes it seems Halloween marks the start of the holiday season, most of us still think of the Thanksgiving holiday as the big kickoff. It must be something about seeing Santa at the end of the Macy’s Thanksgiving Day Parade
that awakens the urge to sing carols and go shopping.
While most of us think and worry about taking care of the family and friends on our holiday gift-giving lists, I’ve found also including tenants can be an easy and inexpensive way to help reduce my turnover rate.
Now I’m not saying you have to entice someone to stay with a plasma TV. After all, the Minneapolis and St Paul rental vacancy rates are finally below 5 percent; skewing decidedly in the landlord’s favor. Just think of who your tenants are, and keep it simple.
In one property, my tenants were predominantly young single professionals just starting their careers. I gave them each a $10 gift card to iTunes
. They were not only surprised, but commented they had never had a landlord give them anything; ever.
In another building, my residents tended to be an older, more blue collar crowd. For them I alternated; giving gift cards to Cub Foods
one year, and Wal Mart
another. Again, the universal response was one of surprise and gratitude.
However, it’s important to remember that not everyone celebrates Christmas or Hanukkah. I’ve had residents of every religious persuasion. Therefore, when I purchase cards I make sure they express a general holiday wish, rather than one of a specific belief or tradition.
Yes, money’s tight for everyone right now; an additional expenditure the last thing any of us want. But a $10 gift card that might help someone feel welcome in your property is a much smaller investment than the cost of a vacancy.
Have a safe and happy holiday!
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Are we at the bottom of the market? We could look at MAAR‘s weekly activity report this morning for hints. Then again, these numbers are confusing. We might have more fun asking the Magic Eight Ball and getting the side of the floating triangle that says, “Who Knows?”
According to MAAR, the trend of pending sales being significantly above those from the same time a year ago continued. In fact, sales were up a whopping 19.1 percent.
Of course, the tendency toward lender-mediated sales remains equally robust. Of the properties that received purchase agreements, 53.5 percent involved a bank at some level. What’s more, 41.9 percent were in the lower tier of pricing; being listed at $150,000 or below; usually first time home buyer territory.
The number of single family homes new to the market continued its downward trend, with new listings being 9.0 percent below last year’s mark.
This was not the case in the small multi-family home sector, however. New listings were up a staggering 265 percent. The silver lining in this news, however, is that while last year’s new listings were 80 percent lender mediated, the number of bank-involved properties during the same week this year dropped to 75 percent.
On the pending sales side of the duplex market, the surge continued. Forty-eight properties received purchase agreements; up 369 percent over the same week last year. Of these, 85 percent were lender mediated. Last year, all of the pended properties included a bank in the negotiations.
While the average sale price of the pended homes dropped from last week’s mark, so too did the figures for 2007. The 2007 figure reflected an average sale price for duplexes of $130,270. This year’s mark was $105,560.
This week’s figures certainly send mixed messages. However, there does appear to be a leveling off of the number of short sale and foreclosure properties.
Comments Off on Does the Stuff Left in My New Minneapolis Duplex Really Have to Be Stored?
Last week I explained what you can and can’t do with all the things tenants leave behind, and how Minnesota State Law requires you to store it for 60 days. What about the stuff that’s left in the basement when you buy a duplex? Do you have to store that too?
The news is more encouraging on this front. Unless you’ve negotiated for otherwise with the seller, anything left behind in the property after closing is considered “debris”. You can do with this what you wish; whether it be selling it on Craigslist
or tossing it in the dumpster.
Of course, you have to make sure the items do in fact belong to the seller and not the tenants.
Dumpsters are expensive. And if there’s an excessive amount of debris on the property, it might be wise to either negotiate the cost of a dumpster into the purchase agreement, or require the seller to dispose of it prior to closing. This is especially important if there is an excessive amount of non-working appliances, as most refuse companies charge extra fees for disposal.
said on November 21st, 2008 categorized under: Legal Stuff
Comments Off on Wait On That Dumpster for Your Minneapolis Duplex!
Imagine this. You go to pick up a rent check from your tenants and after repeated attempts, discover they’ve abandoned the unit, leaving what appears to be a mound of trash and personal property behind. Or, you were successful in an eviction action
, and the same scenario unfolds. What do you do?
Call for a dumpster, right? Aw c’mon. We know nothing could be that easy.
When law enforcement performs the eviction, the stuff the tenant leaves behind must either be stored on the property or at a storage facility. If the landlord is planning on storing the items on the property, she must prepare an inventory listing the items and their condition. This list must be signed and dated in the presence of a law enforcement officer acting on a court order, include the name and telephone number of the person authorized to release the property, as well as the officer’s name and badge number.
The landlord must remove and store the property. If it’s damaged or lost, guess what? She’s responsible for it. And if she’s moving the stuff out? She needs to try to contact the tenant by first class mail and telephone.
While on the surface it may seem more cost and labor efficient to store the personal belongings on the property, there’s a catch. If the tenant’s stuff is stored on the property, he can simply demand, in writing that it be returned. And the landlord has to return it; without repayment of rent. By law, she doesn’t have a lien on the items.
Comments Off on How Does My Realtor Get Paid When I Buy A Minneapolis Duplex?
Most Minnesotans understand when they sell their property using a Realtor, the seller is charged a commission by the agent’s broker (usually the parent company, such as Coldwell Banker Burnet) and the agent gets a percentage of that commission when the property sells.
However, many people aren’t sure how an agent gets paid when he or she helps someone purchase a duplex. In fact, some buyers are convinced they’ll have to dig into their pocket to pay an agent for his or her help, and as a result, try to avoid using an agent altogether.
What’s ironic is the agent helping the buyer charges their client absolutely nothing. The uninformed buyer is losing out on the opportunity to gain from the agent’s skills and expertise.
So how do agents working with buyers make a living?
When the seller signs a listing agreement with a Realtor, he agrees to pay that agent a pre-negotiated commission upon the sale of the property. Until the duplex sells, the agent fronts all marketing costs. This can include everything from the cost of having a sign installed in the yard, taking pictures or hiring a photographer to do so, featuring the property on Realtor.com
, advertising in local papers like the Star Tribune
or Pioneer Press
, conducting open houses and in some cases, hiring a professional home stager
to create a sense of warmth and ambiance.
The listing agent may or may not have a buyer for the property. As it is in her clients best interest for as many potential buyers to see the property as possible, she lists it on the MLS, promising to pay the broker of any agent whose client buys the property a pre-determined percentage of her commission.
The buyer’s agent, meanwhile, fronts all of her time searching for and showing properties, as well as her money for fuel, desk fees, insurance and so forth. Like the listing agent, she doesn’t get paid until her client successfully purchases a property. If her client never signs a purchase agreement, she has essentially worked for nothing.
Sometimes clients see a handful of properties before they buy. Others see houses almost as a hobby. The latter can be especially frustrating for Realtors. Like everyone else, they too have families and obligations; which most are happy to juggle if a client is earnest in their desire to acquire property.
Comments Off on The Good News and the Bad News in the Minneapolis Duplex Market
MAAR s released its weekly report of market activity this morning, and in spite of all the doom and gloom in the media, pending home sales for the week ending were nonetheless 16.9 percent higher than they were over the same period in 2007. This has been a trend for some time. In fact, over the last three months, sales have been 26.6 percent higher than the same time in 2007 .
The first time home buyer is the engine that leads the housing train. And it looks like the wheels in that market have started to turn. Of course, lender-mediated foreclosures and short sales are fueling the market, with 54.4 percent of the transactions that week lender-mediated. However, a full 43.2 percent of those properties were priced below $150,000.
While pending sales of multi-family properties were down 44 percent from their mark for the week ending November 1, the average list price of those properties that received purchase agreements was $130,408. This is the third week in a row we’ve seen a significant jump in that number, coupled with a comparable drop in the average sales price for the same week last year; now down to $162,673.
What’s more, sales for the week were a robust 188 percent ahead of the mark for last year. Of the 32 duplexes that received purchase agreements, 84 percent involved lender mediated sales. In 2007, 75 percent of the properties that received purchase agreements were lender-mediated.
For the first time in months, new duplex listings year over year were up 167.5 percent over the same stretch last year. Supply in the single family home market, however, seems to have leveled off; down from last year, but holding.
Comments Off on Why Realtors and Real Estate Agents Are Not Equal
I took a Code of Ethics class last week which is required of all members of the National Association of Realtors
(NAR). While suffering through three hours of dry material, I was reminded of a pet peeve. I’m a REAL-TOR. Not a Real-I-Tor.
Yeah, yeah. I know. Everybody says “Real-I-Tor”; not just folks with Minnesota accents as thick as Marge Gunderson’s. I don’t know where it came from, I only know we don’t all say “Doc-I-Tor”, so it must not be a result of a consonant followed by “tor”.
While the mispronunciation is only a minor nuisance, I do want to offer the following clarification: not every real estate agent is a Realtor.
For an agent to use the title Realtor; a word which is, in fact, trademarked, an agent must be a member of NAR and adhere to that organization’s Code of Ethics
. The code is a set of guidelines originally implemented in 1913 to establish a professional standard of conduct among members. The code governs a Realtor’s Duties to Clients and Customers, the Public, and other Realtors, creating the highest ethical standards for agents in any transaction. Real estate agents who are not members of NAR are not held to the same high ethical standards and rules of conduct, nor the organization’s measures for enforcement.
The next time you need help with a real estate transaction, be sure to ask your agent whether he or she is a Realtor.
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There are some interesting trends starting to emerge in the housing market as evidenced by MAAR’s
just released weekly activity report for the week ending November 1.
First, the average number of days a single family home sits on the market before selling was down .8 percent to 141. This is the first drop in average market time in the last two years.
The week also ended with 21 percent less new listings than for the same period in 2007, and 1.4 percent fewer pending sales. This is the first drop in pending sales since June.
Meanwhile in the multi-family market, the average price of duplexes that received purchase agreements rose for the third week in a row. For the week ending November 1, this figure was $116,320. While still not as robust as the 2007 average of $188,295 of the comparable week, it is, nonetheless, an increase over last week’s mark of 11.38 percent. A point of interest is the 2007 figure decreased for the third week in a row; declining 5 percent this time around.
The number of newly listed multi-family properties also continued their decline, falling a full 20 percent from those coming on the market in the same week last year. If inventory continues to tighten, prices are more likely to continue to rise.
Comments Off on How The Fear Monster Ate Your Minneapolis Duplex
I’m a good Realtor. I make sure that I never sell a property that has monsters hiding in the closets or under the beds.
I’m very brave. I lead the way into dark musty basements and sometimes, guided by only the light of my cell phone, fumble around attics for lights.
Too often my clients aren’t very brave. Many of them are afraid of monsters. And even when I tell them that I checked and the property doesn’t have any, they stare at me with wide eyes and fail to jump on a deal.
A friend once told me that the word FEAR is an acronym for False Evidence Appearing Real. I think he was right. I see plenty of evidence of it in today’s real estate investment property market.
What monsters are people most afraid of?
Negative Cash Flow
While on rare occasion I do meet investors who, for tax purposes, actually want to purchase a property with a negative cash flow, they are the exception rather than the rule. Most investors want a property to at least pay its own bills, or even create a small profit every month. No problem. I’m a monster buster. Read the rest of this entry »
said on November 7th, 2008 categorized under: Home Repair
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One of the greatest challenges for any first time investor or homeowner is finding reliable handymen and contractors for repairs or home improvements. And while I am always happy to pass along names and numbers of service people either I or my clients have been happy with, sometimes I don’t have the right person for the job.
While Angie’s List
is always a viable option, a client called this morning with what may be a wonderful alternative; Service Magic
Like Angie’s List, Service Magic lists and works with reliable contractors who they’ve screened. They also ask customers for reviews of the services performed which they then make public.
Where they differ, however, is their web site asks you for a description of the job you need done. They then figure out what type of contractor you need, then have up to four pre-screened contractors who do that type of work contact you.
My client reported she was thrilled by the caliber of people sent (which included Sears
), the speed in which they contacted her and the quality of work done.
It’s always nice to have these kind of resources on hand.