If you can read you can buy a condo

MN Capitol
Minnesota Capitol building

My headline is a little silly. I recently helped an investor buy a condo and the agent who was representing the seller seemed to know that the buyer had to have some association documents but did not include all the required documents.

Selling a condo is a little more involved than selling a regular home. The good news is that all of the documents are listed on a addendum that is part of the purchase agreement. Buyers should reference the addendum and check to make sure that they have all of the documents.

Under a consumer protection law Minnesota condo buyers have a ten day period to review the association documents and can withdraw their offer without penalty if they do not like what they see.

Buyers should actually read these documents.

Here is a list of documents as outlined on the condominium, townhouse and cooperative addendum:

DOCUMENTS: Seller is required to furnish Buyer with the following documents relating to the Association and/or the Master Association, if applicable, before conveyance of unit:

38. (1) (a) a copy of the  declaration (other than any CIC plat), (b) the  articles of incorporation, (c)  bylaws, (d) any  rules

39.  and regulations for the association, and (e) any  amendments or supplemental declarations;

40. (2) a copy of the master declaration, articles of incorporation, bylaws, and rules and regulations, if the common interest

41. community is a member of a master association;

42. (3) (a) a Disclosure Statement (for initial sale of property) and all amendments thereto required by MN Statute

43. 515B.4-101, including a balance sheet of the Association, current within 90 days, and the projected annual budget

44. of the Association and a statement identifying the party responsible for preparation of the budget; or (b) Resale

45. Disclosure Certificate (for resale of property) and all amendments thereto required by MN Statute 515B.4-107,

46. including the most recent regularly prepared balance sheets, income and expense statements and current budget

47. of the Association. The Resale Disclosure Certificate from the Association must be dated not more than 90 days

prior to the date of this Purchase Agreement or the date of conveyance, whichever is earlier.

Do you dream of owning a duplex?

The real estate shortage also includes multi-family homes. There are few duplexes, triplexes and assorted fourplexes on the market at the moment. If you have a multi unit investment type property to sell give us a call.

There was a big sell off in about 2008. Currently rents are high and vacancy rates are low.

chart
multi family homes for sale in Saint Paul

The data on the chart is from the NorthstarMLS which is deemed reliable but not guaranteed.

Multiple offers, identical offers

Door

I know I have written about this before but it keeps happening. Sometimes when there are multiple offers on a home the highest offers or all of the offers are identical or close to exactly the same.

If you are a home seller do not be surprised if you get multiple offers and if all are lower than the asking price. It is even possible to get two identical offers that are less than the asking price.

Sometimes multiple offers are over the asking price. That is what home sellers hope for but is especially challenging for buyers. Usually buyers will not be told what is in the other offers. It kind of feels like gambling.

Three offers on a home are really all you need. That way there may be a tie breaker.

Sometimes sellers will not negotiate. If they don’t like the offers they will try to get more offers. I am not sure how that works for them. Negotiating with the buyers makes more sense and is probably faster too.

Occasionally buyers win in multiple offer situations by adding an odd an random number of dollars onto the end of their offer. For instance instead of offering 200K an offer could be for 200,890, or 210,000.78. 199K looks like a lot less than the other two numbers.

There is more to a good offer than money. A higher downpayment means that an offer is more likely to close. More earnest money means that the buyer is serious. A quickly closing date may be desirable if the sellers have already moved on. An offer where the buyers are paying their own closing costs is usually better too.

Some buyers are skipping the inspection contingency. Please do not skip the inspection. The inspection protects buyers and sellers. I strongly encourage buyers to have a complete home inspection.

 

Consider a 6 week contract

The real estate market is ever changing. The average number of days on market for homes that have recently sold in St. Paul is around 36. I say it over and over we are in a strong sellers market, yet we cling to the traditional six month listing contract.

Why?  Because most real estate agents will ask for a six month commitment. We love six month contracts. They are the closest we ever come to job security. We wake up each morning unemployed and are only paid after the successful closing of a real estate sale.

For the homes that are worth more then 600K a longer contract may be more appropriate but for everything that is at or below half a million six weeks should be a long enough contract. It is important to know the numbers. Find out what the average days on market are for a homes like yours that are in your area.

Contracts can be extended as needed and home sellers who have six week contracts have more control and leverage over the marketing process. If they do not like the way things are going it is much easier to switch real estate agents sooner. In some situations it may even make sense to put a home on the market for six weeks and if it doesn’t get an offer take it off the market and put it back on a few weeks or months later.

Go ahead and ask for a six week contract. If that doesn’t work try for two or three months. If the home sells in  few days a short term listing contract will need to be extended so that it lasts through the closing, it takes at least 35 to 45 days from the time an offer is accepted until the sale closes if the buyer is borrowing money. A clause to cover that can be put right in the contract.

bumper sticker
We love short contracts

Pictures I took last summer

It is Friday and Fridays are for fun. Last summer was last weekend. We had an entire weekend of summer and I am thankful that I was able to be outside and that I got some pictures. Last weekend may have been the shortest summer ever on record.

red winged blackbirds
Red winged black birds
bald eagle
Nesting bald eagle

It isn’t every day I can photograph a bald eagle. it is a shame I didn’t have my tripod with me.

Warm weather will return when it returns. The photos were taken at Lilydale regional park.

Home Buyers should verify measurements

tape measure

Our MLS shows the measurements for homes that are on the market. Including room sizes, which floor the room is on, the foundation size, the total finished above and below ground square footages.

There are some things home buyers should know:

1.   Not everything you read in the MLS is 100% accurate, which is why if you read the fine print it will say the information is “deemed reliable but not guaranteed”.  We strive for accuracy and there are checks and balances, but mistakes are made. Total square footages and room sizes are not always accurate.

Generally agents do not deliberately misrepresent room sizes or square footages but sometimes they make mistakes and sometimes they just use the last set of measurements that were in the MLS without verifying them.

2.   Finished Square footage is not equal.  What I mean by that is that below ground square footage is not as valuable as above ground square footage is so when looking at the totals check to see how much is above ground and how much is below.

3.  Property tax records do not always show an accurate square footage and the square footage is used in the record to calculate the value of the home.  Sometimes buyers like to use tax records as a source of information about property values.  If the square footages are wrong the value could also be wrong because size matters.

There are rules about what can be included in finished square footage. Certainly closets, hallways and bathrooms are included even though we don’t see measurements for them separately in the MLS.  If there is a finished room that is surrounded by unfinished space we can not include it in the finished square footage.  Sometimes there will be one room finished in the basement but the space outside the room is unfinished.

It isn’t always easy to get accurate measurements.  Some rooms have irregular shapes and we are only allowed to put two measurements in the MLS for each room.

It should be noted that the source of the information about homes for sale is the Northstar MLS which feeds data to sites like Zillow and the web sites of real estate companies. MLS online is not the MLS but a real estate company. Confusing I know but it is what it is. 

**real estate is local if any of these rules apply outside of Minnesota it is purely by chance. 🙂

Also see Legal Bedroom