Archive for the 'Selling A Duplex' Category

Why A Discount Realtor Costs You A Lot

said on May 12th, 2014 categorized under: Selling A Duplex

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save money reminder noteWhen selling a duplex, Realtors are often asked to reduce the amount of commission we charge. And while a commission structure is always negotiable, the money you think you may be saving may actually cost you a lot.

When an agent takes a listing, almost half of the percentage she agrees to charge is usually shared with the Realtor and their brokerage who bring a buyer to the table. This commission is advertised on the Multiple Listing Service.

In other words, a reduced commission may result in that payout amount becoming less than what most of the other sellers are offering through their agents. And while that won’t usually be a deal breaker for buyer’s agents, they may choose to show your property after the one with more competitive compensation, or ask their buyers to pay the difference.

Often, in order for you property to remain competitive, your agent may choose to work for less than he’s willing to pay the buyer’s agent; which may mean he’s less likely to negotiate hard for you.

And quite often, he just met you. He agreed for his family to live on less within minutes of meeting a total stranger. This doesn’t speak well of his negotiating skills.

A reduced commission may also result in your Realtor cutting the amount of money he spends on marketing your property.  The first place this usually happens is photography.

In today’s technology-driven world, recent National Association of Realtor’s studies show more than 90 percent of all buyers use the Internet to find property.

And the most important way to represent your duplex on the Internet is through photography.

Many discount agents use little more than their cell phone camera to communicate with all these prospective buyers. After all, hiring a professional photographer costs money.

This poor visual representation attracts fewer buyers. And we all know the more people you have who want to buy something, the more valuable it becomes.

Bad photos, also make it hard to create great-looking brochures and ads that entice the other 10 percent of the people in the market to come take a look at your property.

And of course, your Realtor won’t have money to spend on that advertising anyway.

As the saying goes, have you ever tried to save a little and had it end up costing you a lot?

Some Realtors Are Liars

said on April 14th, 2014 categorized under: Selling A Duplex

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Young woman making a lie with long noseIf you want me to tell you what your duplex is worth, I will tell you the truth.

If you want a Realtor to tell you what you wish your duplex was worth, it isn’t me.

But there are plenty of agents who will.

The market determines the value of your duplex. Not you. Not me.

It isn’t worth the total of what you have in to it. Or what your friends tell you that you should be able to get based on what they’ve seen for sale in the neighborhood.

Single family home sales have little to nothing to do with duplex values.

And any Realtor who goes along with your hopes or friends opinions of value without market data to back it up is lying to you.

In the real estate industry, what they’re doing is called “buying a listing”.  They’re telling you what you want to hear, knowing full well that at some point, you will finally realize through either a lack of showings or a sale that the property is simply overpriced.

And they hope at that point, you’ll see the light and agree to lower your price.

There wouldn’t be anything wrong with this if it weren’t for statistics from the National Association of Realtors that sellers who price their properties correctly from the start ultimately net more money thanks to immediate influx of buyers waiting for inventory to come on the market.

When a property is for sale for an abnormally long period of time, it leads buyers to believe there’s something wrong with it.

And, just like new technology at an electronics store, they will wait until it goes on sale to either look at it or buy it.

Ironically, had that new gadget come on the market near their price range to begin with, they would have looked at it and perhaps, even found a way to pay a little more. This is especially true if it was the only one on the market, with multiple buyers vying for it.

So, in the end, the Realtor who agreed to your price not only lacked integrity, but ultimately cost you money.

And wasn’t money the reason you listed with him in the first plac

Minneapolis Sellers Trade Duplexes For Malls

said on April 7th, 2014 categorized under: Selling A Duplex

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sell a duplexOne of the many reasons there aren’t many duplexes, triplexes or apartment buildings for buyers to purchase is a lack of places for would-be sellers to move their money.

Thanks to so many investment property owners being upside down for so many years on their properties, it’s been a long time since we’ve talked about what’s known as a “like kind”, 1031 or Starker Exchange.

Simply put, a 1031 Exchange is a way for property owners to defer capital gains tax by adhering to a set of relatively easy IRS rules and reinvesting in another property.

Many duplex sellers have misconceptions about this process. Some believe they must buy a building with an equal number of units to the one they’re selling. Other think if they’re selling a multifamily property, they must replace it with a multifamily property.

Seeing what they believe are few opportunities to purchase property, these people simply choose not to sell.

The facts are, however, there are plenty of great properties to invest in; if they just know the rules.

First, “like kind” does not mean multifamily housing must be exchanged for multifamily housing. A duplex seller, for example, can reinvest her profits in a retail center, a mixed-use building, an office building, industrial warehouse or, even land.

And since this exchange is possible, the number of units one exchanges for is also irrelevant.

While the economy is still in recovery mode, it’s important to remember it isn’t just the housing rental market that’s improving.  Other sectors are starting to get on their feet as well, and the return on your investment may be greater, thanks to less competition for the “good deals”.

If you need a referral to a Realtor to help you explore other investment opportunities, I’d be glad to guide you to a competent professional.

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super bowl 2014 sell minneapolis duplexIf you’re a Minneapolis or St Paul duplex owner who wants to sell, chances are you’re thinking you’ll do so in the spring.

And yet, judging by the countless owner I’ve spoken with, everybody has the same strategy.

In Minnesota, while most of us consider spring to be the months of April and may, in real estate the spring housing market generally begins the week after the Super Bowl. In other words, Monday, February 3.

For the last year, the Twin Cities duplex market has suffered from an acute lack of inventory. Prices have risen largely due to two factors: low interest rates and abundant competition for the few properties on the market.

If interest rates rise, or, everyone who wants to sell their duplex lists it when the tulips bloom, there may actually be downward pressure on prices. After all, one of the most basic laws of economics is supply and demand.

If you’re thinking of selling your duplex, the best possible strategy to maximize value is to beat the competition to the market. And that means listing in February or early March.

If you’re considering selling, give me a call or send an email (kari@duplexchick.com). I’d be happy to give you an opinion on value.

Is Your Minneapolis Duplex Radioactive?

said on January 9th, 2014 categorized under: Selling A Duplex

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radon elementYou many not know this, but all homes and duplexes in Minnesota can have dangerous levels of Radon in them.

Radon comes from the soil. It is the result of natural decay and, since it’s a gas, can easily move into the air.

Radon is radioactive. As a result, long-term exposure can cause lung cancer. In fact, it is the leading cause of lung cancer in non-smokers. Estimates suggest it is responsible for approximately 21,000 deaths from lung cancer every year.

As a result, as of January 1, 2014,  residential Minnesota real estate transactions are now required to include radon disclosures and education.

Prior to a sale, a seller must disclose in writing any knowledge he or she may have regarding radon in the building.

The disclosure must include:

  1. whether any radon tests have been done in the duplex
  2. the most current reports regarding radon concentrations in the property
  3. a description of any radon mitigation, remediation or concentrations
  4. information about any radon mitigation system if one has been installed in the building
  5. a radon warning statement

The age of your duplex has little to no impact on radon concentrations. It’s estimated that as many as 2 in 5 properties built before 2010 and 1 in 5 built since then have unacceptable levels of radon.

There are several kinds of radon tests available, which, in the event of a sale of the duplex, you should hire a Minnesota Department of Housing-listed professional for.

And if you have no interest in selling your home or duplex, there are over-the-counter tests available you can conduct yourself.

Radon is relatively inexpensive to mitigate compared to the emotional and financial costs of lung cancer. And it would probably be wise to know whether our homes or duplexes have put us or our tenants at risk.

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minneapolis duplex for saleMany investment property owners have the mistaken belief the holidays are a terrible time to sell a duplex.

Here are 10 reasons the holidays are actually a great time to sell:

  1. Properties tend to show better when they are decorated for the holidays. In fact, your tenants may have decorated and even picked up their units for family gatherings
  2. Winter buyers are more serious than their spring/summer counterparts. After all, if you didn’t absolutely have to be out in the snow and cold looking at property, would you be?
  3. Duplex, triplex and fourplex buyers get tremendous tax advantages buying at the end of the year.
  4. There is less inventory for buyers to chose from, therefore sellers have less competition.
  5. Less competition means higher prices.
  6. January is a big month for moving. With job transfers and school calendar breaks, many people focus on moving specifically in January, rather than over the course of a summer.
  7. When you sell your duplex over the winter, there will be more properties available to chose a replacement property from when the spring market begins.
  8. Your rental property is occupied. To investors, not having to find tenants over the winter may be a bonus.
  9. Showings can be restricted so as not to interfere with tenant’s family activities.
  10. Buyers can be more emotional over the holidays. While this may not be a factor if your property lends itself primarily to being 100 percent tenant occupied, it may be a significant one if your duplex is currently or is conducive to being owner occupied.

If you’ve been thinking about selling your duplex, but waiting until spring, thank carefully. Now might be the perfect time to beat the competition and net more for your property.

Minneapolis Duplex Sellers Want To Move On

said on November 25th, 2013 categorized under: Selling A Duplex

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Time to sell minneapolis duplexWe’ve all heard of pent-up buyer demand.

It’s what economists talk about when economic conditions prevent consumers from buying what’s usually durable good due like a duplex, house, washer, dryer, or new car.

What we hear far less about is pent-up seller demand.  And while most in the housing market use it in conjunction with home owners who would love to sell and buy something bigger, it’s a phenomenon I have begun to see in the duplex owner market as well.

Many Minneapolis and St Paul duplex owners purchased their investment properties seven or eight years ago. The market was at its peak, prices at a premium, and it seemed like values would go up forever.

Of course, that didn’t happen.

However, thanks to fewer people being able to qualify for mortgages, rental demand rose and so too did rents. This meant many properties that previously had negative cash flows were suddenly putting cash in their owners pockets every month.

This allowed many owners to hang on until values rose.

I actively prospect for both duplex sellers and buyers. If I had a dollar for every Twin Cities duplex owner who said in the last eight years they intended to “wait until the market came back” or to “ride this out”, I could retire.

I haven’t heard that as much the last six months.

You see, life has changed in the near decade since the boom busted; for all of us.

And what many duplex owners who were either single or newly married when they invested are telling me is that life is suddenly in the way of being a landlord.

Kids are in sports.

Work promotions mean more responsibility.

And aging parents require more care.

Time and again, I am hearing, “If I didn’t have to come to the closing table with money, I would sell now.” Or, “I plan to sell in the spring.”

A lot of people have been waiting it out; and many aren’t sure they can take much more. They just want to move on.

If you are a duplex owner who’s been considering selling, this should get your ears up. You are not alone, and if you “wait til spring”, you may have a lot of competition.

And when supply exceeds demand, prices decline.

What’s the solution?

Remember, the spring housing and duplex market begins the week after the Super Bowl. In other words, to beat the crowds, it may be wise to consider selling now.

Yes, duplexes sell in winter, and over the holidays. In fact, some of the most serious buyers of the year — who are buying due to job transfers, to lessen tax burdens, or because life has simply dictated a change — are oblivious to snow and the elements and actively shopping now.

For sellers, there’s less competition. And that’s always good for prices– meaning it’s a great time to sell.

I work during the winter too, so feel free to call or email so we can get you out before the post winter crowds.

Where Have All The Minneapolis Duplex Sellers Gone?

said on March 25th, 2013 categorized under: Selling A Duplex

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cartoon wowWow. I just did a Minneapolis and St Paul MLS search for duplexes, triplexes and four unit apartment buildings for sale in the metro area that are not sold subject to either bank approval or inspection.

There were just 175.

Talk about a shortage!

Properties are receiving multiple offers (even if they are short sales which will require buyers to wait for months), and unprecedented numbers of showings.

One recent listing of mine received four offers within two hours of being on the market. Another got 6 within a day. Yet another had 36 showings in the first week it was on the market alone!

It’s a great time to sell your Minneapolis or St Paul duplex, I can’t imagine a market like this will come along again any time soon.

Minneapolis Duplex Sellers Look For Ghosts

said on March 11th, 2013 categorized under: Selling A Duplex

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haunted duplexesWhen selling a duplex, owners and the Realtors representing them are required to disclosure to potential buyers any “material facts” which may adversely impact their use and enjoyment of the property.

For example, if the roof leaks on Thursdays, the seller or the duplex is right on the path of a proposed new highway off ramp, the seller and or the agent is required to say something (unless both the buyer and seller agree to waive the requirement to do so).

So are deaths and ghosts material facts?

It depends on where you live.

In Minnesota, for example, sellers are required to disclose the existence of cemeteries or buried human remains on a property. This, of course, would be extremely uncommon in the city.

However, Minnesota duplex sellers are not required to disclose if a murder, suicide or death took place in the property.

In California, on the other hand, duplex are not required to disclose any death that happened more than three years prior, but are required to whether a death has occurred in the last three years if the buyer asks.

As a seller it’s important to know that disclosing a death, murder, suicide or a perceived haunting may increase market time by up to 50 percent and decrease value by as much as 35 percent.

However, in some instances, disclosing the presence of a ghost may enhance the appeal of a property in some buyers eyes.

I personally have been faced with the decision whether or not to disclose a death on a property. Within 24 hours of buying my first investment property, one of the tenants committed suicide. And while I was not required to disclose this information when I sold the property years later, I believed it was the right thing to do.

And the buyer wasn’t bothered a bit. After all, once any duplex or house gets to be a certain age, it’s more likely someon someone died there of natural causes.

There’s simply no one left alive to ask.

Let Your Minneapolis Duplex Speak For Itself

said on February 11th, 2013 categorized under: Selling A Duplex

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Minneapolis Duplexes Sell ThemselvesIf you’re selling your Minneapolis duplex and a buyer’s agent wants to show it to a client, should you be there?

No.

Buyers want the opportunity to objectively look at your duplex; to decide whether it fits their wants, goals and needs in a property, and if not, what they could do to make it so.

While it may seem important to share the property’s history, attributes and benefits with a prospective buyer, doing so when they are in the initial stages of considering your duplex may be perceived as you trying to “sell” them something they don’t want.

Nobody likes to be pressured to buy something, or to feel so smothered we can’t think for ourselves.

Buyers chose a property to buy based on its value compared to other duplexes for sale,  and how well it suits their needs as a place to live and/or an investment.

Telling them the property’s’ history won’t change those facts, but may, in the end, leave the buyer feeling so smothered they chose to buy somewhere else.

And if you’re concerned about somebody stealing something, it is a good idea to remove all valuables from the property before it goes on the market. Most Realtors keep tabs on their buyers, but simple preventative measures can keep the worst from happening.