Archive for November, 2013
Comments Off on Duplex Sellers Want To Move On
We’ve all heard of pent-up buyer demand.
It’s what economists talk about when economic conditions prevent consumers from buying what’s usually durable good due like a duplex, house, washer, dryer, or new car.
What we hear far less about is pent-up seller demand. And while most in the housing market use it in conjunction with home owners who would love to sell and buy something bigger, it’s a phenomenon I have begun to see in the duplex owner market as well.
Many Minneapolis and St Paul duplex owners purchased their investment properties seven or eight years ago. The market was at its peak, prices at a premium, and it seemed like values would go up forever.
Of course, that didn’t happen.
However, thanks to fewer people being able to qualify for mortgages, rental demand rose and so too did rents. This meant many properties that previously had negative cash flows were suddenly putting cash in their owners pockets every month.
This allowed many owners to hang on until values rose.
I actively prospect for both duplex sellers and buyers. If I had a dollar for every Twin Cities duplex owner who said in the last eight years they intended to “wait until the market came back” or to “ride this out”, I could retire.
I haven’t heard that as much the last six months.
You see, life has changed in the near decade since the boom busted; for all of us.
And what many duplex owners who were either single or newly married when they invested are telling me is that life is suddenly in the way of being a landlord.
Kids are in sports.
Work promotions mean more responsibility.
And aging parents require more care.
Time and again, I am hearing, “If I didn’t have to come to the closing table with money, I would sell now.” Or, “I plan to sell in the spring.”
A lot of people have been waiting it out; and many aren’t sure they can take much more. They just want to move on.
If you are a duplex owner who’s been considering selling, this should get your ears up. You are not alone, and if you “wait til spring”, you may have a lot of competition.
And when supply exceeds demand, prices decline.
What’s the solution?
Remember, the spring housing and duplex market begins the week after the Super Bowl. In other words, to beat the crowds, it may be wise to consider selling now.
Yes, duplexes sell in winter, and over the holidays. In fact, some of the most serious buyers of the year — who are buying due to job transfers, to lessen tax burdens, or because life has simply dictated a change — are oblivious to snow and the elements and actively shopping now.
For sellers, there’s less competition. And that’s always good for prices– meaning it’s a great time to sell.
I work during the winter too, so feel free to call or email so we can get you out before the post winter crowds.
Comments Off on Duplex Sales Remain Upbeat
Things are looking up in every way in the Minneapolis and St Paul duplex market.
For example, there were 20 property owners who accepted offers during the week. Of these, 60 percent have equity in their properties.
Last year, there were 16 sellers who accepted offers during the same week; 62.5 percent of them went home from their closings with money in their pockets.
There were 23 duplexes, triplexes and fourplexes that were new to the MLS during the first full week of November. The majority of these, at 60.9 percent, were owned by people with equity in their properties.
One year ago, there were just 16 new listings for the same calendar stretch, with 50 percent of these sales not involving distressed properties.
The single family home market saw the number of new listings increase 11.4 percent year over year. Ironically, the number of pending sales actually decreased 3.1 percent, while total inventory continued to be 3.2 percent lower than last year’s.
Let’s hope the good news continues.
Comments Off on Minneapolis Duplex Sellers See Life In Winter
Some Minneapolis duplex sellers often hibernate at the first sign of winter. The irony is, many duplex buyers do not.
For the week ending November 2, 2013, there were 21 Twin Cities duplex sellers who received and accepted offers from those cold and snow-proof buyers.
Just 47.6 percent of those sellers, however, did not need a bank’s permission to sell their investment property. And on average, the last price those properties were listed at was $178,006.
During the same week in 2012, there were 18 Minneapolis and St Paul duplex sellers who accepted offers. A slight majority of these properties, at 55.6 percent, were not in a distressed situation. On average, those investment properties sold for $134,912.
There were 21 new listings during the last week of October. Equity sellers contributed the majority of this inventory, at 81 percent.
One year ago, traditional duplex sellers were responsible for just 40 percent of the 20 newly listed properties.
Meanwhile, the single family home market saw a 5.5 percent increase in new listings, 6.9 percent rise in pending sales, and a 2.6 percent decline in total inventory for the week.
October’s median sales price was up 11.4 percent over last year to $195,000.
Comments Off on Can You Get A Better Deal Through The Realtor Whose Sign Is In Front Of The Duplex?
Is it true you get a better deal if you contact the Realtor whose sign is in front of a property (the listing agent) than you would using an agent not affiliated with the property whatsoever?
The agent whose sign is in front of the duplex for sale has a fiduciary duty to the seller. That duty includes getting that property owner as much money as she can for the property.
As the Realtor’s commission comes out of the seller’s equity, it is really the seller’s money a buyer is asking the agent to give away.
Doing so would be like stealing from the seller; whom the agent on the sign represents.
But what if both the buyer and seller are represented by the same Realtor or real estate brokerage? Meaning both have a signed cont
That creates something called dual agency. In that case, the Realtor, or the two Realtors with the same broker, need to act in both the buyer and sellers best interests.
However, as the listing agent already has a signed contract with the seller, in which the seller most likely agreed to pay a fixed commission, regardless of who represents any prospective buyer. Agreeing to sell it at a discount would likely be a deterrent to bringing a buyer, rather than an incentive. After all, the agent would earn less than she would if she sold some other property.
Believe it or not, Realtors work long hours, often without pay. And we bring our best deals to the clients who find what we do valuable, not to those who don’t.
Comments Off on Duplex Sales Repeat Themselves
Minneapolis duplex buyers and sellers saw more of the same the week ending October 26, 2013.
There were 22 sellers who accepted offers during the week. Of these, 68.2 percent will be able to walk away from their properties with cash at closing. Last year during the same week there were 19 sellers, and just 47.4 percent of those folks went home with cash.
That difference resulted in an average off market list price of $171,195 for the week this year. Last year’s average sold price of $181,850 looks like an omen, until you realize there was one duplex that week that sold for $523,000. When that’s removed from the average, the numbers drop to a more predictable $162,897.
There were 29 new listings for the week. A staggering 75.9 percent of these new opportunities were brought to the market by traditional sellers. Just half of last year’s 28 sellers could say the same.
The single family home market saw the number of new listings for the week up 16.4 percent. Pending sales were also up, increasing 10.4 percent. Overall, there is 3.1 percent less inventory on the market than there was at this time one year ago.
said on November 4th, 2013 categorized under: Tenants
Comments Off on How To Never Evict A Tenant
What is the easiest way to never have to evict a tenant from your duplex?
Screen them thoroughly before you let them move in.
If you’re new to rental property ownership, it may seem like a good credit score is enough to prevent getting stiffed on rent. But that’s just the beginning.
According to the Minnesota Multi Housing Association (MMHA), you should write down your screening criteria before you ever take tenant rental applications. This sets an objective set of criteria which a tenant must adhere to, which may be referred to when declining an applicant.
In your written criteria, you should consider including:
- Credit: If someone doesn’t pay their other bills, what makes you think they’ll pay you? People who don’t pay their credit cards, make their car payments or cover other bills should be avoided.
- Rental History: Call the applicants previous landlords; not just the last one, but the one before that. If yoCriu choose to use a screening service, ask them to investigate whether a tenant has previously been evicted. After all, the tenant is likely to treat you the same way.
- Income: It’s clearly a good idea for a prospective tenant to have a job if you expect them to pay you on time. A good guideline is to require an income of 2.5 to 3.0 times the amount of monthly rent.
- Criminal Record: You should always check criminal background records everywhere a prospective tenant has lived. Be sure to pay a bit extra to drill down to records on the county-level, which generally include lesser charges of the type that may impact the living environment of your property.
Nobody likes the expense of having a vacant unit. However, taking a little bit of extra time to make sure you get the right tenant may save you more money and heartache in the long run.
Comments Off on Duplex Sales See More Of The Same
The playing field has begun to level for traditional Minneapolis and St Paul duplex sellers when challenged with the aggressive pricing of distressed properties.
The market appears to be stabilizing; at least for the week ending October 19, 2013.
There were 28 duplex sellers who accepted purchase agreements during the week. At 75 percent, the vast majority of these had equity in their properties. Last year, there were just 13 duplex sellers who signed purchase agreements, and just 23 percent of them took a check home from the closing table.
On average, the final list price of this year’s crop ($169,089) was just slightly below last year’s average sold price of $169,633.
There were 35 new listings for the week. A whopping 88.6 percent of these new listings came from traditional duplex sellers. Last year there were 30 for the same week, and 7o percent of those folks were equity sellers.
The same can’t be said for the single family home market. While single family home listings were up 16.3 percent over last year, pending sales actually decreased 11.4 percent over the same time one year ago. Nonetheless, there was still 3.9 percent less inventory on the market than there was one year ago.