Want A Guaranteed Offer On Your Minneapolis Duplex?

We’ve all heard or seen the ads.

Guaranteed offer! Sell your property without having to fix it up! No open houses!

They sound great. Easy. After all, life is hectic and complicated enough without having to pretend to be Chip and Joanna Gaines for six months on a duplex you no longer want to own.

And if you’ve got tenants? How can you even try?

Well, at some point in life, we’ve all also been duped by something that was too good to be true. And these ads for the quick and easy sale of your property may be just that.

Whether it’s a national real estate web site or a local Realtor, odds are the “easy” sales method may also be the expensive one.

While I can’t speak for every program out there, the ones I’m familiar with typically offer you far less than what your duplex would sell for on the open market.

How much less? Usually the math goes something like this: Fixed up retail selling price – sales costs (commissions, deed tax, etc.) – fixup and holding costs – profit = offer to you.

For example, on a Minneapolis duplex that would sell for $400,000 after it’s cleaned and spruced up, subtract 8-10% for the selling costs. We’ll call it 8%. 400,000 – 32,000 = $368,000. Let’s say your property really doesn’t need much – mostly paint, cleaning and some carpeting that would cost $10,000. The buyer will also have costs of carrying your property – loan payments, taxes, insurance, utilities, etc while doing all the work. Call that another $8000. $368,000- 18,000 = 350,000.

After that, of course, the Realtor or entity making you the offer is going to want to make a profit. Usually that is somewhere between 10 and 20 percent. So, anywhere from $35,000 to $70,000 in profit. $350,000 – $35,000 = $315,000.

And what would your net be using the same measures if you either did or hired out the work yourself?

$400,000 – 32,000 (8%) = $368,000. Take that and subtract the $10,000 in rehab costs and you’re at $358,000.

So if you took that “guaranteed offer” in this case, you lost $43,000. And that’s only if the buyer wanted a 10, not a 20 percent profit.

Getting a duplex in the kind of shape it takes to maximize the amount of money you net can be costly and tiresome.

But is it as painful as losing that much money?