Comments Off on Minneapolis Duplex Sellers An Endangered Species
In recent months, you’ve probably heard from countless Realtors and national media talking heads that it’s a great time to sell your house or duplex.
If you’re like me, you kept waiting for the pundit, or the agent, to provide some statistic; some snippet of data, to back it up. And it never came.
Well, here it is.
The last moment of the great real estate market of the mid 2000’s was 2007. It was in late spring of that year that lending standards changed and everything came crashing down.
In other words, the month of January that year was still a great time to sell real estate. In fact, it was so great that there were 935 active duplex, triplex and fourplex properties available for buyers to choose from in the seven county metro area.
What about a more recent comparison? In January of 2015 there were 241 active multifamily listings; that represents the equivalent of a 12.8 percent decline from one January to the next.
In other words, duplex sellers are becoming an endangered species.
In the last two weeks I’ve had a call a day either from consumers looking for duplexes, or other Realtors trying to find properties for their buyers who can’t find anything on the MLS.
Combine the two phenomenon and you have a market where duplex sellers aren’t facing a great deal of competition from other properties in the area.
In fact, the only competition is between buyers trying to beat each other to write an offer on the property!
If you’ve been thinking about selling your Twin Cities duplex, triplex or fourplex, but aren’t sure what it’s worth, give me a call or send an email. I’d be happy to let you know where you stand.
Comments Off on Why Zillow’s Minneapolis Duplex Auctions Are The New Zestimates
The real estate web site Zillow sure causes a lot of misunderstandings.
Initial confusion was a result of their Zestimates. Their algorithm had many duplex and home owners believing their properties were worth tens of thousands of dollars more than they actually were; and more recently, tens of thousands of dollars less.
More recently, Zillow’s “auction” properties have lead many duplex buyers to believe they can show up someplace, get a bidder number, and bit on a property featured on the web site.
Now, in theory, a buyer can do just that. However, at least in Minnesota, there’s an enormous hurdle in the process.
The auction the Zillow properties can be purchased at is the sheriff’s sale.
So what’s a sheriff’s sale?
When a duplex owner falls behind on mortgage payments, the bank tries to get them to get current. After three to four months of missed payments, the lender then issues a Notice of Default (NOD). This notice is published in a local periodical for a period of time, and it essentially states if the duplex owner doesn’t get caught up by the six month mark, the lender will auction the property off at a sheriff’s sale.
At the sale, the bank usually “buys” the property back. While it’s easy to envision this as the bank showing up with a briefcase full of cash, in reality, it’s a paper transaction. At the “auction” the bank is essentially asking if anyone will pay them the amount they’re asking for to
Most of the time, the amount they bid is equal to the amount the duplex owner owes on the property. Every now and then, for whatever reason, the bank decides they’ll take less.
Now, you are welcome to “buy” the property for that amount of money. First, you have to have a cashier’s check in hand sufficient to pay for the property in its entirety. In other words, you need to show up with the equivalent of cash to buy a property you’ve never been inside.
To complicate things further, you can’t just call a locksmith to meet you at the property and let you in. In Minnesota, the current duplex owner has six months to redeem the property. In other words, to pay off the amount of the winning bid, as well as additional attorneys fees and interest.
In other words, you tie up your money for six months. And, to make sure you’re following the letter of the law, you need to hire a real estate attorney to conduct the eventual removal of the current owner.
What happens when the six month redemption period is over and the current occupants have left? You take possession. Best case scenario, they left the place in perfect condition.
More likely, however, as they didn’t have the money to pay the mortgage, they didn’t have the money to do repair and maintenance either.
So again, as with their Zestimate, Zillow’s good intentions result in something that isn’t quite true.
Comments Off on Duplex Sellers Say “Show Me The Money”
It’s a great time to buy a duplex.
Judging by the number of calls I’ve been getting, many duplex buyers have already figured this out.
What most have forgotten, however, is in order to buy a duplex, you have to have the money to do so. And you have to be able to prove it.
Telling a seller you have the money, or running a calculation using an online mortgage calculator that says you can afford it doesn’t suffice for proof.
You need a bank to put it in writing that you can.
Duplex inventory in the Twin Cities market is very low. This means there are multiple buyers interested in the great properties that come onto the market.
And in order to even consider your offer, the seller is going to want to see a letter from a credible financial institution saying you can afford it.
This can take a day or, if there’s a hiccup, more. And if you’ve picked out a hot property that will sell quickly, having this document ready or having to wait for it can mean the difference between submitting the winning bid and missing out.
There are many great loan programs out there, and I am happy to connect you with reputable lenders with one that’s right for you.
That way, we can make sure you’re in the best possible position to get the duplex of your dreams.
said on January 4th, 2016 categorized under: Legislation
Comments Off on South St Paul Mulls Whether To Prevent Property Owners From Renting
Can a Twin Cities neighborhood have too many rental properties?
Some on the South St. Paul city council think so.
A proposed ordinance limiting single family rental units to just 10 percent of the properties on each block could prevent some home owners from putting tenants in their homes.
The rental density cap would cause the city clerk to approve rental licenses based, in part, on whether anyone else on the block already rents a home.
There are already four cities in Minnesota with such restrictions in place: Winona, West St. Paul, Mankato and Northfield.
The proposal was brought before the city council because some area residents raised concerns that there were too many rental properties on their blocks.
Opponents of the ordinance, maintain rental restrictions would limit their fundamental property rights, as well as their ability to sell their home to investors if there were already existing rental properties on the block.
The ordinance would not effect duplex, triplex and apartment complexes.
Residents may attend a discussion meeting January 4, or should reach out to Mayor Beth Baumann, or city council members with feedback.