It seems like the banks that are selling the foreclosed properties (REO banks) are trying to rewrite Minnesota law!  I am constantly bombarded by their version of purchase agreement and 100% of them require the buyer to sign a “bank addendum” after they accept the offer.

Many of these REO banks also believe that they are not required to sign a seller’s disclosure or the seller’s disclosure waiver.   Minnesota Statute 513.52 -513.60 (Seller Disclosure law) requires a property owner of an existing residential property (including banks selling bank-owned foreclosed properties) to make a written disclosure to a prospective buyer, prior to entering into a purchase agreement, including all material facts of which the seller is aware that could significantly or adversely affect an ordinary buyer’s use or enjoyment of the property or any intended use of the property of which the seller is aware.

The Seller Disclosure law does allows a buyer to agree to a waiver of the seller disclosure requirements under Minnesota Stat. 513.52- 513.60.  Such a waiver must be in writing signed by the buyer and the seller.  Often the bank will argue that they are exempt from signing anything because they have never occupied the property or because the property was acquired through foreclosure.

Other times the bank (and some short sale sellers) will claim the buyer is agreeing to buy the property “as-is”. Selling a property “AS-IS” DOES NOT eliminate the seller’s obligation to make required disclosures regarding the property. A seller is still required to give, and a prospective buyer still has the right to receive, the required written disclosures from the seller even if the seller is demanding that the property be sold “AS-IS.”  The “AS-IS” is not a “waiver” of any disclosures that are required by federal state and local government regulations to be provided by the seller.

So if you are buying properties in Minnesota, make sure you demand to receive the seller’s disclosure.  Even though the waiver may not tell you anything, it is still your right to receive it.

Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.

When the weather turns cold, my customers inevitably ask, “Do investment property sales slow down in the winter”? There are several ways to answer that question:

Yes-I have noticed that many real estate investors will slow down there buying during the winter, just like traditional home buyers. These investors are either taking time off for the holidays or are simply absorbing what they bought during the warmer months.

No-Especially in this heavily foreclosure market, banks do not care what time of year it is. When the end of the redemption period is over, they simply put the house on the market. They are less concerned with market timing and seasonality.

What does this mean for you as the real estate investor?
With less competition, but steady inventory, winter is the best time to buy investment properties. You can usually get better deals (especially as banks want to clear their books prior to year end). You are less likely to be in multiple offer situations.

So what are you waiting for? Give us a call and see what you are missing.

Like most landlords, I have learned most of what I know about tenants and toilets through my own experience and mistakes.  Occasionally, I do learn a new trick from another landlord.  Sometimes that learning comes because I asked a specific question of them when I was stuck on what to do, other times it comes when I am helping new investors buy property and the learning simply presents itself.

Previously I published a post regarding “Power Lease Clauses for Your Investment Property“.  I had accumulated many of these clauses over time reviewing leases at Minnesota Investment properties that my customers were buying.  While I am not an attorney, most of these clauses seemed reasonable and if the tenant was given this requirement up front, I assumed it was all legal and within statutes.

I enjoy reading Kelly Klein’s posts on the Star Tribune website.  She is a real estate attorney in Minneapolis and answers questions from the public in her weekly column.  Her November 14, 2008 column made me rethink the #1 clause I had on the above article.  It said:

“All drains, waste pipes, and plumbing are accepted as clear by the tenant at the time of occupancy and any material blocking them after occupancy shall be repaired by the tenant except blockages caused by roots or backups from the street.”

All drains, waste pipes, and plumbing are accepted as clear by the tenant at the time of occupancy and any material blocking them after occupancy shall be repaired by the tenant except blockages caused by roots or backups from the street.

Again, I felt like this was not an unfair clause to put in a lease.  I have experienced tenants pouring pans full of grease down the drain, not because they are trying to be malicious, but simply because they didn’t think it was a problem.  Unfortunately, Kelly makes an argument (albeit brief) that in Minnesota, the landlord has the responsibility to “maintain the premises, which includes keeping the pipes and toilet in good working order”.

I am always willing to accept when I am wrong, but I think the clause is still usable and reasonable.  The clause could be reworked to read:

“All drains, waste pipes, and plumbing are accepted as clear by the tenant at the time of occupancy and any atypical material (such as toys, clothing, diapers, etc) blocking them after occupancy shall be repaired by the landlord with tenant paying all costs of repairs.”

Again, I am not an attorney, but I think a reasonable person (ie:  housing judge), would see the intent of this clause and probably give you the benefit of the doubt.  Tell me what you think!