Archive for December, 2011
Comments Off on Should I Sell My Duplex Or Wait For The Market To Return?
If you’ve been trying to weigh your options when it comes to hanging on to your duplex or having to sell it as a short sale, I have a tool that might help you work through the process.
To the lower right of this column, you’ll see a box that reads “Short or Sale Calculator”. If you click on it, you’ll be lead to a form that will ask you some questions about your duplex, and offer some simple calculations about the cost of staying in the property long enough to earn back lost equity, vs. selling it as a short sale now.
Once you’re entered your data, the program will crunch some numbers and email you an estimate of how many years, at various rates of appreciation, it will take you to get back that lost ground.
As always, if you’re thinking of selling your duplex, and are either behind on your mortgage, or just upside down and stuck, please feel free to call or drop me an email. There are answers out there to your situation; and often more than you think. I’m always happy to try to help you find them.
Comments Off on Duplex Seller Asks, “Keller Who?”
If you’re thinking of selling your duplex, which is more important… the Realtor you list the property with or the company whose name is on their sign?
The other day, a Realtor in my office lost a listing because her prospective sellers thought the local company, named after a local community, had more cache than a Keller Williams agent who specializes in the neighborhood.
It seems they’d never heard of Keller Williams. Or, at least, they thought they never had.
With more than 80,000 agents, Keller Williams is the second largest residential real estate company in North America. In fact, it is the only company to have actually increased in size in the recent market downturn.
Regardless of a company’s size, most duplex sellers choose an agent they feel is competent to get the job done, regardless of the company they’re with.
After all, would you rather hire a Realtor who got her license last week and doesn’t know a thing about duplexes– but works with a company you know or, one with years of experience who specializes in duplexes, and has a name on her sign that indicates exactly that?
Research indicates, and Keller Williams believes you hire a Realtor based on that individual’s experience and expertise. As a result, you might not realize you’ve seen their signs, simply because they believe in the agent branding themselves, not the company.
Comments Off on Minneapolis Duplex Buyers Get Ugly Sweaters
If people gave Minneapolis duplexes as Christmas gifts, this year recipients would be getting the equivalent of a whole lot of ugly sweaters.
It isn’t that the gift givers have bad taste. It’s just that, well, there weren’t a lot of choices left at the store.
For the week ending December 10, for example, there were just 20 new Minneapolis and St Paul duplex, triplex and fourplex listings for buyers to choose from. Just 30 percent of these were being offered for sale by traditional duplex owners.
One year ago during the same week, there were 35 newly listed duplexes for sale. Of these, 31 percent didn’t need to involve a bank in negotiating a sales price.
There were 13 Minneapolis duplexes that sold during the week. The parties involved in twenty-three percent of these transactions did not have to consult with a lender to arrive at the final price and terms.
In the same week one year ago, 17 duplex sellers received and accepted offers on their properties. Of these, 17.6 percent did not need a lender’s permission to sell.
The single family home sector also continued to see a decline in new listings for the week, dropping 11.3 percent from the same week the year before. Meanwhile, pending sales continued to increase; up 31.7 percent over early December 2010 figures.
If you want to sell your Minneapolis duplex, it’s a great time to do so.
No, prices aren’t what they were in 2006. But remember, those prices were a little like flying reindeer anyway.
Comments Off on Why That Minneapolis Duplex Is So Cheap
We’ve all seen duplexes listed for sale on web sites like Realtor.com or Zillow and thought to ourselves, “Wow, that’s a really good deal!”
And yet, that duplex doesn’t seem to sell. It just sits there, week after week.
Many first time duplex buyers are certain if they call their Realtor and rush right over to the property, they’ll be able to snap up an opportunity they’ll be able to brag about to their friends for years to come.
The trouble is, most of these buyers don’t realize there’s a reason it hasn’t sold. If the price is low enough, odds are the duplex has already been passed on by experienced buyers and Realtors.
More often than not in a real estate market filled with duplex foreclosures and short sales, it’s highly likely the reason is the condition is so bad that the price isn’t justified.
As in, making this duplex right is going to take more than stripping some wallpaper and picking up a paintbrush; which are exactly the kind of repairs and improvements most first time home buyers are willing to take on.
Now this doesn’t mean this duplex is hopeless.
There are financing options for duplex repair like an FHA 203k loan or a Rental Rehabilitation loan from the Minnesota Housing Finance Agency.
However, it’s important to know your appetite for projects before you shout to the world that you’ve found the Holy Grail.
I realize there’s not a lot of duplexes for sale in Minneapolis right now.
Be patient. The right one will come along.
Comments Off on Would You Pay $500 To See A Duplex?
By now, you’ve probably heard it’s a duplex buyer’s market.
You’ve also probably heard there are so many houses and duplexes for sale that it’s difficult to make a decision. So, as you consider buying a duplex, you want to see everything that’s on the market– so you’re sure you find the very best one.
So you look at 20. Or even 30.
Then you change your mind and decide you want to move in with your girlfriend and see how that goes before you buy a thing.
Believe it or not, this happens a lot.
And that’s why many of the Realtors I know are requiring clients to put up a retainer fee before they take them out to look at duplexes. In turn, the agent agrees to give them a credit for that amount when they purchase a property.
Realtors are independent contractors. They are not paid a salary, nor are they reimbursed for their expenses. They earn a check only when one of their clients successfully buys or sells a duplex.
Now, buyers don’t usually have to pay a Realtor a thing. Their agent is compensated through a commission that comes from the seller’s real estate broker.
However, because there is the perception that there is so much on the market, and so much more coming, buyers are less motivated and committed than they’ve been in the past. And they’re costing Realtors much more time and money; especially if they change their minds.
What do you think? Would a retainer fee keep you from buying a duplex?
Comments Off on Did You Give Your Friend A W-2 For Managing Your Duplex?
If you’ve been paying a friend, relative or neighbor to manage your duplex, are you planning on sending them a W-2 at the end of the year?
Minnesota state law requires anyone being compensated for managing a property either be a waged employee of the duplex owners, have a real estate salesperson’s license, or work for a management company that has a real estate license.
Don’t ask me why, but property managers cannot be classified as independent contractors. I’ve asked a number of legal and tax professionals, and no one seems to have a definitive answer. Perhaps it’s due to the regularity of the work they do for duplex owners.
And all fees for a real estate licensee must be paid to that salesperson’s broker, not the agent directly.
Comments Off on Where Have All The Minneapolis Duplexes Gone?
I have to confess, I love it when I’m right about Minneapolis duplex sales.
Especially when they’ve gone missing.
You see, all year, I’ve been complaining– well, you might actually call it whining– about the lack of duplexes for sale here in the Twin Cities.
Every week it seems there are fewer new listings than there were during the same week the year before.
For the week ending December 3, 2011, for example, there were just 23 duplexes, triplexes and four unit apartment buildings that came on the Minneapolis and St Paul market.
Compare that with 36 during the same week in 2010.
Of the week’s new listings, 52.2 percent were offered for sale by traditional sellers. Last year, just 27.7 percent of the new listings were.
If you think these weekly drops of 10 – 15 new listings don’t add up, consider this: in 2010, there were 2,320 duplexes made available for sale in the seven county metro area.
To date in 2011, there have been 1572. That’s a decline in inventory of 32.2 percent.
And I don’t know about you, but I personally don’t think there are going to be 800 new listings between now and year’s end.
The week after Thanksgiving saw 20 duplex sellers receive and accept purchase agreements. Of these, just 15 percent were traditional sellers with equity in their investment property.
Last year, that weekly figure stood at 22 purchase agreements, with 36.5 percent of them signed by duplex owners with equity.
The average price the week’s duplexes left the market at was $144,180. While this is sure to drop when sold prices are reported, it is, nonetheless, significantly higher than the $110,200 sold price of last year’s group.
Of course, it isn’t just duplex inventory that’s down. The single family home sector also saw a 9.3 percent decline in new listings. Meanwhile, pending sales were up 36.4 percent over the year before.
If you’re thinking of selling in the spring, don’t wait. Right now, there’s clearly little to no competition for your Minneapolis duplex!
Comments Off on Why You Need An Inspection To Sell Your Minneapolis Duplex
Many duplex owners across the nation are required to obtain a pre-sale inspection of their property before their local municipality will allow them to sell their duplex.
In Minneapolis, this report is called a truth-in-housing or T-I-H.
This inspection is required for all properties four units in size or smaller. So, not only would a Minneapolis duplex need to have one, but so too would a condo, single family home, townhouse, triplex or four unit apartment building.
It is also a requirement regardless of the way you sell your property; whether it be via a contract for deed, an all cash sale, whether you used a Realtor or sold the duplex yourself.
The purpose of this inspection is simply to see how the duplex measures up to current housing code. For example, current city of Minneapolis code is that all properties have a carbon monoxide detector within ten feet of any bedroom.
The pre-sale inspection is NOT as thorough as the kind of inspection a buyer might wish to have done prior to purchasing the duplex, and a clean T-I-H may or may not mean there aren’t issues with the property.
Failure to have one will result in what’s known as a Required Repair or RR. The seller may choose to make this repair before the property is sold. However, if the seller is unwilling or unable to make those changes, the buyer may assume responsibility for them at closing, provided he or she agrees to complete them and have the property reinspected within 30 days.
So what happens if you don’t get a pre-sale inspection done? While penalties differ everywhere, in the city of St. Paul, for example, you may be charged with a misdemeanor, which is punishable by up to 90 days in jail and/or a $1000 fine.
That should be enough incentive to check with your city or county to see if a pre-sale inspection’s required if you’re going to be selling a duplex!
Comments Off on Lenders Give Delinquent Duplex Sellers A Gift– Sort Of
In an effort to show a bit of holiday goodwill, Fannie Mae and Freddie Mac announced they will not foreclosue on delinquent duplex and single family home owners during the holidays.
The moratorium will run from December 19 to January 2.
Apparently, this freeze applies only to the eviction of homeowners and tenants at the end of the redemption period, as they did warn that the legal and administrative proceedings for the evictions may continue.
Not wanting to look like Scrooge himself, Bank of America, Chase and Wells Fargo said they would follow suit.
It’s important to note this policy only applies to loans the banks actually own, not those they service for other investors.
For example, if your loan is managed by Wells Fargo, but the folks borrowers actually owe the money. This may be a group of investors or yet another bank, who want to go forward with the eviction.
Comments Off on Minneapolis Duplex Sellers Stick With Tradition
Thanksgiving is about traditions. And when it came to Minneapolis duplex sales for the week ending November 26, the real estate market was too.
Eight duplex owners received and accepted offers on their properties during the week. Of these, half were duplex sellers with equity who didn’t have to talk to a lender in order to sell their property.
Last year, there were 11 Minneapolis duplex sellers who received and accepted offers sometime between eating too much and camping out at the mall. Of these, just three were people who eventually walked away from the sale of their duplex with money in their pocket.
Understandably, there weren’t a lot of new duplexes listed for sale during the holiday week; just 17, as a matter of fact. Of these, 35.3 percent were people with equity.
One year ago during the same week, there were 21 new duplex investment opportunities that came onto the market. Just 28.5 percent of these belonged to duplex sellers you could actually shake hands with.
It seems single family home buyers weren’t all at grandma’s house over the holiday, as pending home sales jumped 46.8 percent over the same week last year.
Sellers, however, continued to be lethargic, bringing 601 fewer listings to the market than they did one year ago.
If the number of single family homes and duplexes for sale in Minneapolis continues to decline, watch for a Black Friday kind of spring.