Archive for February, 2013

FHA Duplex Loans About To Get More Expensive

said on February 28th, 2013 categorized under: Buying A Duplex

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Home and Stacks of Money Isolated on a White BackgroundIf you’re thinking about buying a Minneapolis duplex with an FHA loan, you should act now or it will cost you money.

If you sign a purchase agreement after March 31, 2013, new FHA mortgages with the amount of your mandatory mortgage premium for loans with 3.5 – 10 percent down payments will rise from 1.25 basis points to 130 basis points.  This would increase your monthly insurance premium on a $100,000 loan from $104.17 to $108.33.

While that doesn’t seem like such a bad deal, the next piece of information might make you think differently. For all FHA mortgages with less than 10 percent equity when they are placed on a property, you will now pay mortgage insurance for the life of the loan. In other words, for 30 years (unless, of course, you refinance).

Prior to this, FHA borrowers were eligible to have their mortgage insurance premiums waived once they had 22 percent equity in the home or had paid the premium for five years.

Over the life of a $100,000 loan, that adds up to $39,000 rather than the $6500 it would have cost you for five years of mortgage insurance.

Again, you don’t need to have closed on the purchase of a property– only to have come to a written agreement to buy a duplex with its seller.

Hurry, or it may cost you a lot of money!

Minneapolis Duplex Sales Work Through Vacation

said on February 26th, 2013 categorized under: Twin Cities Real Est

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minneapolis duplex sales grow in the sunSorry for my absence. I needed a little time in the sun. I’m happy to report, however, that in my absence, Minneapolis and St Paul duplex sales went charging on without me.

For the week ending February 26, 2013, there were 23 offers accepted by Twin Cities duplex, triplex and fourplex owners. Of these, almost half (47.8 percent) had equity in their properties.

This resulted in a final average off-market list price of $159,850. As properties are currently selling for around 94 percent of their list price, it’s reasonable to assume a final average sales price north of $150,000.

During the same week in 2012, 22 small multifamily property owners received and accepted offers. Of these, 59.1 percent could call themselves “traditional sellers” who had equity in their duplex. This resulted in an average sold price of $143,177.

New inventory continued to shrivel, as there were just 18 new listings for the week. Of these, a whopping 72.2 percent belonged to equity sellers.

For the same week in 2012, there were 22 new listings, 68.2 of which were brought to the market by equity sellers. A drop of four listings year over year doesn’t sound like much until you realize, that’s 18.2 percent fewer Minneapolis and St Paul duplexes, triplexes and fourplexes available for people to buy.

The single family home market followed a similar trend, with new listings down 4.9 percent and pending sales up 7.9 percent, which contributed to overall inventory being down 31 percent from the same time last year.

And even after a week of vacation, I can still say…it’s a great time to sell a Minneapolis duplex.

How Duplex Owners Can Feed Their Tenants To The Alligators

said on February 13th, 2013 categorized under: Tenants

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alligators in duplex sewersHow much notice do you need to give a tenant that you’re coming over to fix a dripping faucet or a Realtor is coming to show your duplex to a prospective buyer?

Ask a Minneapolis or St Paul duplex owner that question and odds are they’ll tell you it’s a minimum of 24 hours notice. Ask their tenants, and they absolutely will.

But that’s an urban myth. Like alligators in sewers.

And even though I’ve blogged about it before, it bears repeating.

In Minnesota, landlords may enter a unit at any time provided they have made a reasonable attempt to notify the tenant. Unless, of course, your lease specifically states otherwise.

What’s a reasonable attempt?

Who knows? Minnesota state law doesn’t define it. (For questions, contact Minnesota Attorney General Lori Swanson.)

While the right thing to do as a citizen of the planet is to give your tenants as much notice as you can, there are times when that’s just not possible.

And if your tenant insists otherwise, politely share Minnesota law with them. After all, they might think there’s alligators in the sewers too.

Minneapolis Duplex Sellers Apply Sunscreen

said on February 12th, 2013 categorized under: Twin Cities Real Est

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minneapolis duplex sellers on vacationFebruary’s the time of year when many Minnesotans flee the state in search of warmer climates.

Apparently this year, all of the Minneapolis and St Paul duplex sellers went with them.

Last year during the same week, 20 multifamily property sellers in the Twin Cities accepted offers. Most of these (70 percent) were actually banks or involved talking to one in order to sell.For the week ending February 2,2013, 23 duplex, triplex and fourplex owners received and accepted purchase agreements on their MLS listed properties. Of these, 65.2 percent were people who didn’t need to get a bank’s permission to sell.

Of course, as is usually the case,  the more traditional sellers in the marketplace, the higher the average sales price. This week was no exception, with the 23 duplexes leaving the market at an average list price of $160,846 compared with last year’s average sold price of $144,523.

The scarcity of new listings continued to be problematic, with just 17 new investment opportunities coming n the market. This represents a drop in new inventory of 32 percent from last year’s number.  Traditional sellers lead the way in new listings, contributing 58.8 percent of them, whereas last year, they listed just 44 percent of the new inventory.

Single family homes saw a similar decline in new inventory, dropping 9.6 percent over the previous year. Meanwhile, pending sales rose 1.8 percent, helping the total amount of inventory drop 31.4 percent over that of 2012.

Let’s hope the snowbirds get back soon. We need duplexes to sell!

Let Your Duplex Speak For Itself

said on February 11th, 2013 categorized under: Buying A Duplex, Selling A Duplex

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duplexes sell themselvesIf you’re selling your Minneapolis duplex and a buyer’s agent wants to show it to a client, should you be there?

No.

Buyers want the opportunity to objectively look at your duplex; to decide whether it fits their wants, goals and needs in a property, and if not, what they could do to make it so.

While it may seem important to share the property’s history, attributes and benefits with a prospective buyer, doing so when they are in the initial stages of considering your duplex may be perceived as you trying to “sell” them something they don’t want.

Nobody likes to be pressured to buy something, or to feel so smothered we can’t think for ourselves.

Buyers chose a property to buy based on its value compared to other duplexes for sale,  and how well it suits their needs as a place to live and/or an investment.

Telling them the property’s’ history won’t change those facts, but may, in the end, leave the buyer feeling so smothered they chose to buy somewhere else.

And if you’re concerned about somebody stealing something, it is a good idea to remove all valuables from the property before it goes on the market. Most Realtors keep tabs on their buyers, but simple preventative measures can keep the worst from happening.

Home and Duplex Values Rise

said on February 6th, 2013 categorized under: Selling A Duplex

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Avereage List Price for Minneapolis Duplexes for Sale

Avereage List Price for Minneapolis Duplexes for Sale

You might have heard the news: according to CoreLogic, which provides residential real estate data, released its December report yesterday.

Nationally, home prices, including distressed sales, increased 8.3 percent over December 2011.

That’s the biggest increase since May 2006, and marks 10 consecutive months of increases in national home prices.

If you take distressed sales out of those number, prices were still up 7.5 percent. Traditional home and duplex sellers even saw prices rise on average .9 percent between November and December in 2012.

Phoenix lead the nation with a 22.9 percent spike in values. Only four states posted home price declines: Delaware, Illinois, New Jersey and Pennsylania.

Minnesota ranked 19th in the nation, experiencing a 6 percent single family price increase when including distressed properties, and a 6.4 percent rise when the bank negotiated sales were eliminated from the calculations.

While duplexes, triplexes and fourplexes aren’t calculated as part of the averages, the Twin Cities actually saw a slight decline in median sales prices, with sales falling as a result of continued inventory shortages.

It continues to be a great time to sell.

Duplexes For Sale in Short Supply

said on February 5th, 2013 categorized under: Twin Cities Real Est

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duplex sellers in short supplyWhen there’s a gasoline shortage, the average price per gallon goes up. When there’s a water shortage, people hold on to what they’ve got and prices go up. And when there’s a shortage of Minneapolis and St Paul duplexes for sale, prices go up.

The average list price a duplex left the market at the week ending January 26, 2013 was $216,158.  The average sold price for the same week last year was $151,665. Granted, the list price is generally higher than the sold price, but not 30 percent higher.

There were 19 duplex owners who received and accepted offers. Just 36.8 percent of them had enough equity in their properties to  not have to consult with a bank in order to sell. This is up slightly from the 29.4 percent market share traditional sellers had for the week the year before.

However, equity sellers did contribute  43.8 percent of the weeks 19 new listings.  There were 26 new listings for the same week in 2012, and just 29.4 percent of these came from traditional sellers. That also represents a week over week decline in new inventory of 26.9 percent.

Single family home sellers also seemed to be hoarding homes, as the number of new listings decreased 4.9 percent. Meanwhile, pending sales continued their uptick, rising 3.1 percent for the week.

If the trend continues, perhaps we should start exploring the possibility of issuing investment property rationing coupons.

Why Is A Duplex Seller Selling?

said on February 1st, 2013 categorized under: Selling A Duplex

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Property and house for sale concept 3d illustrationWhen I have a duplex listed for sale, I am sometimes asked why the owner is selling.

I love to provide answers when people have questions, but that’s one I actually can’t answer.

It isn’t that I don’t know. It’s that the law won’t allow me to.

When a duplex seller signs a listing agreement with a Realtor, that agent has certain fiduciary duties to him or her.

Perhaps the most important one is to act in their best interests at all times.

Disclosing with the public that sellers reason for selling might adversely impact their ability to get the most money they can for their property.

For example, if you called me about a duplex I have listed, and I told you they were getting a divorce, would you offer them full price?

Most likely, you would think they’d take less, just to get out of a difficult emotional situation.

And in that instance, I would have cost my seller money.