What Kind Of Offer Wins In The Minneapolis Duplex Market?

Every week Home Free TC, which is a company that provides administrative support to Realtors that makes sure all paperwork is correct and signed sends out a list of statistics they see in their business.

While the company is tan independent contractor and does not provide support to all Realtors, nor are they specific to multifamily or single-family homes, the data they collect and share nonetheless offers behind-the-scenes insight to what’s happening behind the curtain in real estate sales.

It is important to note, however, this data is limited to trends they are seeing in their company, and may not reflect the market in total.

As of the third week of April, Home Free TC reports:

• Buyers are waiving an inspection contingency in 31% of all transactions.
• Just over one in ten, (12%) of sales are happening before a property hits the MLS.
• Cash buyers have been responsible for 25% of  sales to date. Buyers using conventional financing were successful 65% of the time. FHA financed offers contributed 7% in sales, and VA loans another 4%.
• The average purchase price to list price ratio was 100.7%. The median was 100%. Remember, this may be different if we isolate multifamily properties.
• In 28% of the successful offers, sellers contributed something toward the buyer’s closing costs.
• Home warranties were a part of 7% of all transactions.
• Another 7% of the offers were contingent on the sale of another property.
• An escalation clause, which is something where a buyer agrees to pay $x amount above any other offer not to exceed a certain amount were part of 10% of Home Free TC’s transactions.
• Sometimes when properties sell far above the asking price the appraiser doesn’t think they’re worth that much, which means the buyer can’t get a big enough loan to cover the sale. To make seller’s more comfortable with this possibility, 14% of buyers included an appraisal gap guaranty in their offer. This means the buyer was willing to bring additional cash to closing to bridge the gap between the appraised value and the purchase price.
• Of course, sometimes deals fall apart. However, just 7% have so far this month.

While this information isn’t specific to Minneapolis duplexes, triplexes or fourplexes, it certainly is helpful if you’re thinking of buying or selling. It helps both sides understand what to expect.

If you’re thinking of buying or selling a Minneapolis, St Paul or surrounding area duplex, triplex or fourplex, feel free to give me a call. While it is still a seller’s market, the numbers above suggest buyers may be gaining ground.