Archive for the 'Selling A Duplex' Category

Duplex Sellers Given Caution Sign

said on January 9th, 2013 categorized under: Selling A Duplex

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duplex sellers proceed with cautionOne of my biggest concerns for duplex sellers as we head into 2013 is what’s been driving rising prices in our market recovery.

Prices are up thanks to two factors: low interest rates and scarce inventory. If either of these variables change significantly, so too will the market.

Fitch Ratings agrees. According to a recent report, they have seen housing and duplex prices rise at their greatest pace since 2005. They believe this is the result of technical factors (supply and interest rates), rather than fundamentals like employment and wage growth.

The reporting agency also believes market stabilization is contingent upon the pace of distressed sales and foreclosure liquidations. The slower the pace of foreclosures, the longer it will take for a real estate market to be sustainable.

For some states, the foreclosure process can take as little as 90 days (Texas) and for others, an average of 1,019 days (New York).

If banks continue to sell off inventory at their current pace, it is estimated it would still take 34 months before they cleared their backlog of delinquencies.

Sellers should celebrate a rebounding market, but know there may be a wave of inventory on its way from both banks and other traditional sellers anxious to make a change in their life.

Of course, increased inventory may have a negative impact on price; especially since the economy has yet to experience the kind of job growth necessary for a complete recovery.

In other words, it’s a great time to sell, but it may or may not be three months from now.

Why Buyers And Sellers Are Happy With Higher Duplex Prices

said on December 13th, 2012 categorized under: Selling A Duplex

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duplex What’s one of the best but least discussed reasons it’s a great time to buy or sell a Minneapolis duplex?

Interest rates.

Perhaps we’ve all become a little numb to the news that interest rates are at historic lows. After all, it’s been in the headlines for years.

Let me explain why it matters.

Six months ago, interest rates for duplex investors hovered around 6 percent.

I met with a number of duplex owners who wanted to sell, but when I calculated investment property analysis worksheets to help determine value, the sellers and I quickly realized it didn’t make financial sense either to them or duplex investors active in today’s market.

I have been calling many of those same people in the last two months. Why? Because a reduction of 2 percent in interest rates suddenly makes their property incredibly attractive to buyers.

Each percentage in interest is the annual equivalent of one percent of the mortgage amount. So, on a $200,000 loan, that’s a savings of $4000 a year.

That not only helps many duplexes provide a terrific return on investment, it also allows buyers afford a higher market price, which is better for sellers.

In other words, as long as interest rates remain low, everybody wins.

What the “Fiscal Cliff” Means To Duplex Sellers

said on November 19th, 2012 categorized under: Selling A Duplex

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duplex sellers Fiscal CliffWe’ve all heard or read about the looming “fiscal cliff” if Congress and President Obama fail to strike a deal before the year’s end. But what does it mean, and far more importantly, what does it mean to Minneapolis duplex owners?

Basically, the fiscal cliff is the ultimatum Congress gave itself a few years ago.

They decided if they failed to produce a balanced budget in 2012, automatic triggers including spending cuts and tax increases would being the first day of 2013.

One of these was an increase in the capital gains tax; which is basically, the amount of taxes you pay on a duplex sale after expenses.

For the past 10 years or so, the capital gains tax rate has been relatively low. In fact, through December 31, 2012, it is 15 percent.

Unless Congress acts to change the increases they planned for 2013, it will go up to 20 percent.

In other words, on a gain of $100,000, you would pay $15,000 in taxes if you sold before December 31 and $20,000 if you sold your duplex after January 1.

While five thousand dollars is a lot of money, consider this. In the 1970’s, the capital gains tax rate was 39.9 percent, and in much of the 1980’s and 1990’s, it hovered closer to 28 percent.

In this context, if something doesn’t change, 20 percent still looks like a pretty good deal.

Interest Rates Make Minneapolis Duplex Sellers Jump

said on October 22nd, 2012 categorized under: Selling A Duplex

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happy duplex sellerI have good news that has many prospective Minneapolis duplex sellers jumping for joy.

No, settle down. Prices aren’t back to their 2006 levels.

But — interest rates may not only help them get there, but help you sell your duplex be appealing to a buyer right now.

Take, for example, two prospective sellers I’ve been working with since last winter.

They have been in their duplex almost a decade.

In that time, their family grew. Now they now find themselves cramped and longing for a single family house with a yard. In other words, they don’t have to move, but they sure would like it if they could.

Last spring, the Twin Cities duplex market didn’t substantiate the price they needed to still have enough money left for a down payment on a home. This was due largely to interest rates for investor borrowers being above six percent; and at that mark, the property just didn’t make financial sense.

Since then, interest rates have dropped approximately two percent. That doesn’t sound like a lot until you realize one percent in interest is equal to one percent of the amount you owe on your loan; per year. So, if you owe the lender $250,000,  one percent of that annually is $2500.

In the case of my duplex sellers, this drop in interest rates means their duplex went from making little, if any, financial sense, to being one of the best deals not yet on the market.

And that will help them finally get the elbow room they so desperately need.

Call me if you’re thinking about selling your Minneapolis duplex. I may be able to give you the same happy news.

Minneapolis Duplex Prices Go Up

said on September 5th, 2012 categorized under: Selling A Duplex

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duplex prices go upWould you be shocked to hear it’s a Minneapolis duplex seller’s market?

Increasing prices are usually a sign of exactly that.  And according to CoreLogic’s July Home Price Index, average home prices (the don’t break duplexes out into a separate category), including distressed properties, increased over July of 2011 by 3.8 percent. Better yet, they were up 1.3 percent since June.

The news was better yet when CoreLogic removed short sales and foreclosures from their calculations. Prices then were up 4.3 percent over last year, and 1.7 percent over the month before.

The company sees more monthly increases ahead. They estimate prices will rise at least .6 percent from July to August. This would result in a year-over-year price increase for the month of 4.6 percent. The projections are better still when excluding distressed sales. Anticipated gains based on those calculations put price gains at 1.3 percent month-over-month and 6 percent year-over-year.

While this is welcome news, please note that at this pace, it will take us more than five years to realize the prices we saw in 2005 and 2006.

Be Happy: Hire A Keller Williams Duplex Agent

said on August 22nd, 2012 categorized under: Selling A Duplex

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duplex seller happy faceIf you’re thinking of buying or selling a Minneapolis or St Paul duplex, and want to be satisfied with the experience, you may want to hire a Keller Williams Realty agent.

According to the just released J.D. Power and Associates 2012 Home Buyer/Seller Satisfaction study, Keller Williams ranks highest in customer satisfaction in both the buyer and seller segments.

The study found Keller Williams also earned the highest scores in all the factors considered in calculating satisfaction. When it came to buying property, those included the agent, office, and additional services. Sellers were asked also about their experience with the agent, office, additional services and marketing.

Power’s study also found that the highest performing real estate companies are better at getting a higher percentage of the list price for their sellers.

So if you want to sell your Minneapolis duplex for as much as possible AND be happy, contact the Duplex Chick– she happens to be a Keller Williams agent!

How Saving On Your Minneapolis Duplex Gets Expensive

said on August 2nd, 2012 categorized under: Selling A Duplex

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Save on duplexHave you ever tried to save a little and had it end up costing a lot?

For example, if you’re thinking of selling your Minneapolis duplex, and just don’t want to put another dime, let alone hundreds or thousands of dollars into it.

So, you don’t paint. Or, you don’t fix the rotted soffit, or even make sure you have carbon monoxide detectors in the hallways outside bedrooms.

And then you decide to sell, putting it on the market as is, figuring the buyers can take it or leave it.

The trouble with that thinking is what might in reality have only cost a few hundred dollars to repair, becomes thousands in a buyer’s mind.

Take, for example, a water heater. You may be able to pick one up at your local home improvement store for several hundred dollars. And, you might have a plumber friend who’ll install it for you after hours for not that much money.

However, if you leave it to the buyer, here’s what happens.

The buyer hires a home inspector, who sees the water heater leaking on the floor. As he or she is supposed to do, she recognizes it needs to be replaced, and, according to city or state building code, that repair must be done with a permit and by a licensed plumber.

In reality, the cost of having this done probably won’t be much different than if you’d done it before listing your duplex for sale.

But in the buyer’s mind, (especially a first time buyer), the words “licensed” and “permit” suggest expensive, doubling or even tripling their perception of the cost.
To offset this, they ask their Realtor to reduce their offer by several thousand dollars.
Which means you’re back to either fixing it anyway, or reducing your sales price.
Might as well have done it the first time.

Comments Off on Why The Duplex Market Won’t Get Better Until You Sell

duplex frontAre you a Minneapolis duplex owner with equity who would like to sell, but have decided to wait out the market?

If so, you’re like countless other Minneapolis and St Paul duplex sellers.

And it scares me to think that one day, you’ll all decide at the same time to sell your duplex, flooding the market and driving down prices.

Of course, odds are that won’t happen.

Still, things won’t truly get better until some of you do decide to sell.

Duplexes owned and sold by traditional sellers typically sell for 30 to 40 percent more than those that involve a bank in the negotiations.

Until those kinds of Minneapolis and St Paul duplexes start hitting the market, values won’t go up as aggressively as most people sitting on the sidelines would like.

There continues to be a shortage of Minneapolis duplexes for sale, and if you’ve been thinking of selling yours, it’s a great opportunity to showcase yours.

Comments Off on How Did That Minneapolis Duplex Sell So Fast?

exteriorIf you’re in the market to buy a Minneapolis duplex, by now, you know things have really heated up.

And sometimes, duplexes seem to be sold the minute they appear on the MLS.

How do buyers get through those properties so fast?

If you’re a buyer working with a Realtor who’s a specialist in duplexes, odds are, you already know how.

Duplex specialists always have their own buyers in mind whenever they speak with a prospective duplex seller. After all, the seller’s property may be a perfect fit for someone the Realtor has been working with for a long time.

When this happens, the agent may ask the seller if it’s ok to let her buyer or buyers look at the duplex before it ever hits the market.

While a sale isn’t guaranteed, many sellers see the possibility of the duplex selling before it’s exposed to a wider audience as a way to minimize stress on their tenants.

If a duplex listing agent hasn’t sold the property to one of her clients, it may be a situation where through her years of experience, she has managed to cultivate a network of other Realtors who have expressed to her they have clients looking for a property in a specific area.  In that case, the seller might agree to let the buyers come through before the property is exposed to a broader audience via the MLS.

There is no rule that a property must ever be on the MLS, or be on it for a specific length of time before it’s sold.

It is the owner’s property, to sell as he or she wishes.

Comments Off on Minneapolis Duplex Sellers Have Long Wait For Rebound

Duplex market Moving UpThere has been a lot of encouraging real estate news in the media lately. While this is wonderful, it has lead a lot of  prospective Minneapolis duplex sellers to believe the market for their duplexes will be back as early as late summer.

In other words, values will have rebounded to 2005 and 2006 prices.

In three months.

This is about as likely to happen as me winning the lottery.

Since their peak, real estate values locally and nationally have fallen anywhere from 25 to 50 percent.

What this means to a southwest Minneapolis duplex seller is the property that was worth 475,000 six years ago is now worth $300,000 to $340,000.

Recent headlines touted a year over year increase in Twin Cities real estate values of three percent. While this is wonderful news, continuing on at this pace would mean it would take us at least a decade to get back to where we were.

And that’s if we continue to see three percent appreciation.

If you’re thinking of selling your Minneapolis duplex, and don’t think you can endure ten more years of property management, please call.

We have more buyers than sellers in the marketplace right now, and while that won’t translate into the halcyon days of 2006, it will assure you of a quick sale and the ability to move on with all the other plans you may have for your life.