Downtown Condos take longer to sell

The downtown condo market has mostly recovered from the housing market crash and great recession. Distressed condos were bought by investors who rented them out. I have sold a few condos that were owned by investors and are now owner occupied. There is a lot more downtown than there was during the recession, especially more luxury rentals.

It takes longer to sell a condo in St. Paul than it does to sell other types of homes. An average of 40 days to sell a condo anywhere is the city,  vs. 25 days to sell a fee standing type single family home and  it takes an average of 44 days to sell a downtown condo.

months supply
Months supply of condos

There is a 3.4 month supply of condos on the market downtown. The average sale price is around $211k. Right now there are 57 units on the market which is about the same as September 2016.

People who do not know downtown should tour several condo buildings before deciding where to live.

Old on the outside, newer on the inside

brick turret
Historic brick and stone

I know my St. Paul condo buildings because I have seen the inside of many of them. What is historic on the outside may look like it was built in the 1980’s on the inside.

The original woodwork was replaced with blond oak and the floors are carpeted. The “old world” charm can not be found on the inside. In fact sometimes there isn’t anything charming about the interior.

There are several buildings in downtown St. Paul that were factories or warehouses that were converted into condos. The kitchens are all new but the buildings still have exposed brick and timber.

They don’t look like they did when they were factories but they look historic and authentic. The developers restored unique historic features rather than just gutting the building and starting over.

There are a few great old buildings that are disappointing on the inside because they were chopped up and made into small apartments that don’t make sense. Who wants a north facing condo with one window?

Historic preservation districts have rules about how the outside of a building has to look but no rules about the inside.

Associations and condo docs are a pain point

Sometimes condo associations hire management companies to take over the tasks involved in running an association like collecting monthly dues, managing the bank coordinating repairs, maintenance, construction projects and managing and storing all those condo documents.

Part of the sale process in selling a condo involves getting condo docs to the potential buyer. In the olden days not all that long ago sellers used to have to pay for these huge piles of paper that were given to the buyer. Today these documents are usually stored electronically and sent out via email which should save money and speed things up.

Some of these management companies charge what seems like a large sum $300-$500 dollars for the documents the owners need so that they can sell their unit. Some of the documents never change and just need to be stored and sent out. Other documents like rules and by laws may be updated periodically but not very often. Condo owners do not usually find out about these fees until they have to sell and have no choice but to pay them.

Usually the documents are needed quickly after an offer is received. The management companies charge an extra fee to expedite the order. Sellers should order the documents as soon as they know they are going to sell.

The resale certificate includes financials and other items that need to be updated monthly. I totally understand why there would be a charge to prepare such a document but since it is part of the management company’s job to keep the information up-to-date the charge should be small, like less than $100. It is in fact the job of the association to keep records.

Some of the management companies and condo associations are difficult to deal with to say the least. I know some of the people who are employees in one management companies because I have dealt with them so many times. I have learned how to go around the worst employees to avoid rudeness and possible delays in closings of the condos I sell. I have been known to go to their offices and wait when they won’t return phone calls or respond to email messages.

Managing an association is a lot of work but hiring a rude, slow and bureaucratic  management company might not be the best solution.

Summer flowers
Summer flowers

Also see Read the rules

There is no such thing as identical condos

view
view from a River Park Loft

In a condo building it isn’t unusual to find unite that have the same floor plan and are the same size as the condo’s directly above and below. Yet they are not identical because they are on higher or lower floors. They are similar but not identical.

The condo on the same floor but down the hall may not be the same size or have the same floor plan and it doesn’t have the same view.

Each piece of real estate is unique even if it is in a building with similar units. A 900 square foot condo on the 25th floor may be worth 30% more than the same unit on the 2nd floor. The unit that overlooks the patio won’t be as valuable as the unit that is the same size and has the same floor plan but has a view of the river.

A north facing unit with all of the windows on the North side may be less valuable than the similar South facing condo.

Homes can be similar to other homes. Maybe they were built the same year using the same materials and are facing the same direction. If the homes are in different towns or neighborhoods the values are not the same.

Home buyers usually don’t have any problem understanding the differences.

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.

Condos townhouses and parking

When it comes to parking spaces and condos make sure everything is in writing and that the person who is making the parking promises actually owns the parking space.

I once had an agent promise a buyer a parking space that frankly was not part of the purchase and the condominium documents specifically stated that there wasn’t a parking spot included.

A few years ago a parking space was sold that technically could not be sold with the unit. Occasionally when I go to sell a condo I find out that the owner does not own the parking space he or she is using because the deed was not transferred at the last sale. This can be repaired but it can also slow down the sale process.

Here are some of the parking possibilities for St. Paul condos:

1. A garage with an assigned parking space.

2. A garage with an assigned parking space and the space is deeded. Sometimes these spaces can be sold separately from the unit and other times they have to be sold with it.

3. No parking what so ever included with the unit.

4. There are X number of parking spaces and they are assigned on a first come first served basis. Owners with “seniority” get to choose the spot they want. Spaces may be reassigned when units change hands. In that case sometimes a parking space is included in with the purchase but it isn’t a particular space.

5. A private surface lot with no assigned spaces but enough spaces so that everyone can park.

6. There is on street parking only.

7. Parking spaces are leased through a third party. The space that the last owner of the condo used does not transfer to the new owner. He or she must acquire their own parking space.

8. There is a garage with valet parking only. Each unit owner is entitled to park one or more vehicles in the garage but there are no designated spaces.

Then of course there are heated garages and garages that are not heated and ramps that are attached to the building or sometimes across the street.

As an agent I ask a lot of questions about parking if I am putting a condo on the market. If I am working with a buyer I make sure that there is something in writing about parking.  Usually we find it right in the condo documents that our Minnesota state laws require that buyers receive before the purchase is finalized. Buyers have 10 days to review the documents and can cancel the purchase with no penalty if  they don’t like the parking situation or anything else.

Parked car
Parked car

Also so see downtown parking options