What’s Your Minneapolis Duplex Worth?

Is a Minneapolis duplex worth what a seller wants for it?

Is it worth what the Realtor says it’s worth?

Is it worth what a buyer is willing to pay for it?

The fact of the matter is, the buyer, or more broadly speaking, the market is what determines property values.

I seem to be meeting a lot of duplex sellers these days who think it’s the other way around- that the price is what they either want out of a property or what they have into it.

What Minneapolis duplex sellers fail to understand is buyers compare one duplex to another, and they select the one that has the features, condition, price and rents that match what they want in a property. And if a duplex is marketed at a price that is far out of step when compared to the other listings they’ve seen, not only are they not going to buy it, odds are they won’t even bother to look at it until or unless it comes down in price.

Would-be duplex sellers also seem to forget that when they first acquired the property themselves, either cash flow or reduced living expenses were critical to them. And yet, they seem to think today’s buyers have an entirely different set of criteria.

They don’t. They want the same thing those duplex sellers wanted.

What they don’t want is to either come out of pocket every month to offset a property’s negative cash flow. Nor do they want to pay substantially more to live in half of a duplex than they were paying in rent.

There is actual harm to the seller in listing a property too high. A simple pricing error of $25,000 may as well be a pricing error of a million. Either way, the property gets stale, and buyers either think there’s something wrong with it or wait for it to go on sale. In the end, the seller ends up getting less for the property than had they listed it at a price where buyers saw the value in it in the first place.

Look, a Realtor has no incentive to underprice a duplex. We work on commission. So it’s in our best interest for it to sell as much as possible too. But we don’t make that decision.

The buyer does.

Wouldn’t it be better to have an agent tell you that upfront rather than lie to you?