Archive for April, 2010
Comments Off on Minneapolis Duplex Short Sales May Be Your Prince
With just hours left to take advantage of either the $8000 first time home st buyer or $6500 repeat buyer tax credits, you may find the inventory of decent dupelxes offered by traditional sellers and banks gone.
In fact, with time running out, you may feel a bit like Cinderella. Your carriage is about to revert to a pumpkin.
But fairy tales aren’t the only place where magic happens.
In this case, have your fairy godmother Realtor wave her wand at a short sale.
Legal counsel for Coldwell Banker Burnet’s parent company, NRT, has found that in order to qualify for either credit, a fully executed contract must be in place no later than 11:59 pm on April 30, 2010. Counsel further advises that a short sale is considered a legally binding contract when both the buyer and seller have signed the purchase agreement.
The fact that the lender still has to approve the terms doesn’t prevent the contract from being created. Therefore, that contract qualifies the buyer to earn the credit.
Of course, Cinderella still had to wait for her glass slipper to be returned. Duplex tax credit sales are no different. They must still close no later than June 30, 2010, in order for the buyer to earn the credit, which may or may not be problematic.
Comments Off on Duplex Tax Credits Enter The Home Stretch
As we race like Kentucky Derby entries toward the finish of the first time and repeat home buyer tax credits, word came from the Minneapolis Area Association of Realtors that new listings may be the fastest horses racing, not pending sales.
For the week ending April 17, new listings finished 21.9 percent ahead of the same week last year.
Pending sales, on the other hand, also grew but at a pace neck and neck with the 2009 statistics. In the end, however, 2010 nosed out 2009 by just 1.8 percent.
Duplex sales had a close year-over-year finish as well, with pending sales for the week finishing 11.5 percent ahead of last year’s.
The average off-market price for the week was also a nose ahead, crossing the wire at $124,789 compared to $121,742 for the same week last year. Of those listings that left the market, just 23 percent were offered by traditional sellers.
New listings for the week were the real winners; leading last year by 40.5 percent. Of that new inventory, 52.54 percent were offered by traditional sellers compared to last year’s 45.2 percent.
After the tax credit race ends on Friday, let’s hope the real estate market doesn’t come up lame.
Comments Off on Can A Duplex Chick In Minnesota Help You With A Duplex In Denver?
Did you know there aren’t any special requirements necessary for a residential agent to sell someone an income property?
For example, a Realtor who spends most of his time selling houses in the suburbs, can help you buy a duplex and not be required to know how to do an income property analysis spreadsheet.
As a result, he may tell you the property with the upgraded kitchen is a better buy, when in reality, it may have a negative cash flow which will cause you to either spend more for your portion of the rent than you wanted or, dig in to your pocket in order to cover the difference between income and expenses.
That’s why it’s so important to find an agent to work with who specializes in these unique properties. Not everyone does. And when it comes to duplexes, granite counter tops may or may not make a property a better value, but higher rent always will.
While the bulk of my business is in Minnesota and western Wisconsin, I am always happy to help duplex buyers and sellers nationwide find competent agents in their area to help them in their multifamily transactions.
Because I specialize, I know which questions to ask prospective agents on a buyer or seller’s behalf, and how to tell whether or not a prospective agent truly knows what he or she is talking about.
Whether you’re looking for a duplex specialist in Los Angeles, Maine, or some point in between, drop me a line or give me a call. I’d love to help you find the right agent for the job.
Comments Off on Buy A Duplex, Get A Tax Credit
With just 8 days left to qualify for both the $8000 first time home buyer’s and $6500 repeat buyer’s tax credit, it’s important to remember that a duplex qualifies for both.
Remember, the credits are for up to 10 percent of the purchase price of the property, with the total benefit not to exceed $8000 for a first time home buyer, or $6500 for a move-up or repeat buyer.
For a duplex, qualification is based on the percentage of the property the buyer intends to owner occupy. For example, if the purchase price for a duplex was $200,000, and the buyer lived in half, her tax credit would be based on a purchase price of $100,000, with the total not to exceed the caps set by the federal government.
To be eligible for the first time credit, a person may not have owned a home in the last three years. Repeat buyers must have lived in their home for five consecutive years of the last eight years.
Both tax credits require that buyers have a binding purchase agreement in place no later than April 20,2010. However, these purchases have until June 30, 2010 to close.
Remember, FHA financing may be used for most duplexes, triplexes and fouplexes; meaning an owner occupant need only have 3.5 percent saved for a down payment.
Investors, on the other hand, are still restricted to conventional loans requiring 20 to 25 percent down as minimums.
Comments Off on Minneapolis Duplex Sales Round The Bases For Home
As the $8000 first time home buyer and $6500 repeat buyer tax credits round the bases for home, the Twin Cities housing market appears to be staging a late inning rally.
For the week ending April 10, 2010, the number of new listings to hit the market was up 47.9 percent over the same week last year. In spite of this leap, there is still just 6.5 months of housing inventory in the marketplace; the lowest supply in years.
Pending sales were also ahead of last year, though the 3.6 percent jump wasn’t enough to seal a victory.
Meanwhile, the Twin Cities duplex market seems to need a seventh inning stretch. The number of properties to receive purchase agreements for the week was down 39 percent from last year. Of those transactions, 32 percent belonged to traditional sellers, with the balance involving some sort of negotiations with a lender.
This slow re-emergence of the traditional seller has served to boost the average price a property leaves active status on the MLS at. For the week, this figure was $106,489; a grand slam when compared with last year’s $80,873.
While excess supply can often lead to falling prices, the week’s 23 percent year-over-year gain was as welcome as a seventh inning stretch. Much of the existing inventory had been sitting for a while, and the appearance of great new listings gave duplex buyers in search of a tax credit something to cheer.
Remember, the deadline for both tax credits is April 30. By then, buyers must have a signed purchase agreement in place, with closing on the property occuring no later than the end of June.
said on April 19th, 2010 categorized under: Tenants
Comments Off on Don’t Let Your Tenants Suffer Burnout
We’re living in economically challenging times.
As a result, most of us are cutting back on “extras”. For some, that means opting to stay home and watch cable rather than going out. To others, that may mean choosing to make a peanut buttersandwich rather than bologna.
Unfortunately, for some tenants, that also means going without renter’s insurance.
First, if you’re a landlord and your lease doesn’t include language clearly stating that it’s your tenant’s responsibility to get insurance for her belongings, it should.
The reason is your owner’s insurance policy doesn’t cover the contents of your duplex.
In other words, if a fire, tornado, hurricane or earthquake topples your property, your losses may be covered, but your tenants belongings.
Most major insurance companies, like Allstate, Geico and State Farm offer some form of renter’s insurance.
While you must tell your tenant of their obligation to buy coverage, it’s a good idea to require them to provide you with proof they’ve done so.
After all, times may be hard but they’d be tougher still if you lost absolutely everything and didn’t have insurance.
said on April 15th, 2010 categorized under: Financing
Comments Off on Why Internet Lenders Are A Lot Like Sea Monkeys
I used to stare endlessly at the ads in comic books for sea-monkeys.
You know the ones.
They typically featured a cartoon of a little pink sea-monkey family, with their castle in the background.
There was also an image meant to resemble my family enjoying staring at my sea monkeys swimming around in a fish bowl. Of course, these sea-monkeys were waving at us.
Who wouldn’t want a pet like that? Heck, not even my dogs never waved at me.
Of course, when I ordered the sea-monkeys, they weren’t at all what I’d imagined. Oh, they were miraculous to watch hatch. But they weren’t pink, didn’t have a castle and most certainly did NOT wave back.
In fact, they were nothing more than shrimp. Brine shrimp.
Internet lenders remind me a lot of sea-monkeys. They promise to deliver lower interest rates, lower loan origination fees, faster closing dates and yet, no matter what Realtor you ask anywhere in the nation, you’ll get the same answer; they almost never come through.
And on the rare occasions when they do, nothing was what it appeared to be.
Most Realtors have a select handful of local loan officers they recommend. Agents get paid nothing for referring someone to a loan officer.
The reason we suggest our buyers work with these people is from experience, we know they can be trusted to tell our clients the truth, work hard to get them the best deal, and help them close on their new home on time.
Again, there is absolutely nothing in it for us to make these recommendations.
It’s easy for a loan officer who’s 1500 miles away to tell you to just hang out for two weeks while they get your loan together. They can’t see your moving van loaded with furniture out in the parking lot.
It’s a lot tougher for a local loan officer to avoid looking you in the eye.
Or not wave back.
Comments Off on Minneapolis Duplex Market Open To Interpretation
Sometimes interpreting the Minneapolis/St Paul duplex market is a bit like reading tea leaves.
There might be some meaning in the patterns. But they’re open to interpretation.
For the week ending April 3, 2010, the number of new duplex, triplex and fourplex listings was up 18 percent over those properties new to the market for the same stretch last year.
Of these, 49.23 percent were being offered by traditional sellers. This figure meant a year-over-year decrease in lender owned or mediated listings of 20 percent.
However, it should be noted that the number of pended transactions for the week represented a drop of 9.5 percent year-over-year.
This decrease in sales activity did not seem to impact the average off market price, however, which was $119,734. While not the obvious improvement of recent weeks, this figure was nonetheless just over $9000 higher than last year’s sold price.
Of those properties that received purchase agreements, 26.32 percent had people sign the purchase agreements rather than financial institutions. This represents a traditional seller gain of nearly 10 percent year over year.
The single family market was a bit easier to interpret. There were 11.8 percent more homes that received purchase agreements than did last year.
The number of active listings on the market are also up, beating last year’s by half a percent.
Further good fortune is promised with the news that the average number of days a property is on the market before being sold has dropped to its lowest in years, while the percentage of the list price a property sells for rose. Most properties now sell within 2.7 percent of their asking price.
said on April 12th, 2010 categorized under: Financing
2 Comments »
To buy a duplex, you need at least 20 percent down, right?
Remember, if you’re looking to owner occupy a duplex, triplex, or even a four unit apartment building, you have the option of using FHA insured financing.
While FHA recently increased its minimum down payment requirements, 3.5 percent is still within reach of many home buyers.
Best of all, if you don’t have that much saved, there’s no limit to the amount a blood relative can gift a buyer for use as a down payment, closing costs, etc.
Of course, if you have a signed purchase agreement in place prior to April 30, you may also qualify for the $8000 first time home buyer or $6500 tax credits.
Comments Off on Why Buying A Duplex Is Not Like Going To The Salad Bar
I’ve had a number of phone calls of the same flavor the last few weeks.
The voices on the phone are interested in seeing one of my duplex listings; could they meet me there after another agent shows them his?
This always leaves a bad taste in my mouth.
MLS listed duplexes aren’t like cottage cheese and onions on a salad bar. You don’t need a separate spoon for each.
Now I’m happy to show any of my listings to any qualified buyer. But I’ll be the first to say my sellers property may or may not be the flavor you’re looking for.
Let’s face it. Some people like Ranch dressing. Others like vinaigrette. Some like Craftsmen duplexes, and others like 1960’s built side by sides.
The listing agent you contact may or may not be able to recommend other properties for you to sample if his isn’t right for you. But beware; he may not even specialize in duplexes.
Every Twin Cities Realtor who’s a member can show you any property that’s active on the MLS. Properties aren’t limited by type, nor by who the listing agent is. A residential home specialist can show you a duplex, single family, fourplex or even a strip mall.
In other words, you don’t need to use a separate spoon for each offering.
In fact, one spoon will get you a better salad.
Agents who specialize in duplexes not only know the inventory that’s on the market, which properties are over priced, which need work, and most importantly, often know of duplexes that are available for sale, but not yet on the market.
Like shrimp on a salad bar, good properties go fast. The minute a property comes on the MLS that’s right for one of my clients, we see it. And if it’s what we hoped, we write an offer on it; so by the time it hits Realtor.com, it’s already gone.
And buyers working by themselves, or with inexperienced duplex agents, never had a chance.
Smart buyers pick a spoon.
Especially with just 21 days left to earn the home buyer tax credits.