I tend to look at properties from a “multi-use” perspective.
I might say to a prospective buyer client “will you ever work from home ?…have customers stop by ?…. want rent out part for future/retirement income stream ?… have retired parent(s) live with you ?… have a business & residence at the same location ?
In our up/down economy that has become more of the norm in recent years these are valid considerations. I prefer to start with “when will you move” or “what might cause you to have to move”, to help a buyer consider liquidity – and the “what if you can’t sell” perspective.
I’ve linked to an article on an adaptive reuse option that has always intrigued me. Converted factories turned dazzling homes
Oh yeah ? Not so fast.
I hear it over and over – “lets bandwagon, let the bank have it, let it go, walk away”…after all, Mr Fix It is in the white house and America cares for the little guy, not those ding nab fat rich bankers !
Try on a dose of reality:
To short sell, you’ll need to prove hardship, and then wait for the income tax bill and higher insurance rates while you ponder getting sued for the short fall and remaining fall out of bad credit for 7 years.
..do NOT constitute hardship:
- Bad purchase decisions.
- Unhappy with the neighbors.
- Buying another home.
- Moving into an apartment.
Examples of hardship are:
- Medical emergency / sudden illness
A decent article for the cold shower awaiting.
ps, consider buying something that makes sense in the first place – questions ? Call us.
In case you wondered. I’m thinking I’ve counted well over 100 on most.
33 Steps REALTORs® do to complete a Purchase .
Crazy but true. We’ve been filing for refunds when sellers have a:
- Lower SEV when they sold than when they bought
- Sell for less than or equal to: Actual Cash Value ( ACV is SEV X 2 in most locations – sell for more and no refund available)
- Home has always been homestead/main residence/ non rental property
How much will be saved ?
- the state .075% portion of your .086% at closing transfer tax
Whats needed ?
- Proof of SEVs on the way in and out
Can I guess ?
- 20 % penalty if you are wrong ( plus our fee wasted )
There are useful applications to this for buyers/ sellers/ investors.
MULTIPLE PRINCIPLE RESIDENCES:
If you are a seller and have moved into a new home awaiting a sale on the old home, you may qualify for principle residence exemption on BOTH homes whilst you await the sale.
Only makes sense.
Many more U.S. homeowners face the prospect of losing their homes this year as banks pick up the pace of foreclosures.
“We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010,” said Mark Seifert, executive director of Empowering & Strengthening Ohio’s People (ESOP), a counseling group with 10 offices in Ohio.
“Last year was an anomaly, and not in a good way,” he said.
When discussing list price adjustments I often get this question.
My admirably successful broker-father oft said “when you overprice a property you take it off the market”. I give more value to the saying now that I’ve logged near 3 decades of experience and consider his economics Masters and PhD work.
If I drive by an unlisted house that fits a buyer customers desire, I have no problem knocking on the door to inquire, but if there’s a sign and I call and its significantly overpriced, well, that owner had better chances w/me had it not even been offered w/sign.
Many agents will show an overpriced home as an example, but the last home in the tour will save “the best one for last”.
There you go, your house is a time wasting guinea pig for you and your listing agent.
Consider getting an appraisal, looking at unsold homes, sold prices, and consider some articles:
1. We want to test the market. For how long ? Whats the exact plan, 90 days ? And the 91st day? Price reduction– 90 days worth of potential buyers gone.
2. It costs too much. Staging costs virtually always less than the first price reduction…and carrying costs. ?
3. We can’t, we’re living in it. .. common misconception..
4. We didn’t have to stage any of the other properties we sold . Once you could generate three offers by 5 p.m. the same day your Realtor put the sign in the yard. Not now.
5. Everyone loves our house . Sellers are often baffled .. amazed that buyers have found things they don’t like about the property.
6. We can clean the carpets and declutter without someone telling us how. Do you know what separates “clutter” from “asset”? And what about traffic flows, highlighting architectural features, updating, and appealing to your target market?
7. We have no desire to remove/change our ____ (wallpaper/mirrored tile/gold faucets/paneling/dated light fixtures . . .). neither do buyers. Be ready to sell at a deep discount.
8. The view will sell this place. Then why many months later are these great view homes/condos still on the market?
9. We would rather let the buyers makes their own paint/flooring choices. And that equals a price reduction, double or triple the cost of these items and reflect that in their discounted offer price–which includes inconvenience.
10. Our home is professionally decorated. … tailored to the owner’s particular needs. Does it work for the new buyer’s needs?
… consult with a professional home stager before listing your property for sale.
Long-term capital gains (held more than 12 months) are taxed at a maximum rate of 15 % ( 5% for persons in the 15% tax bracket).
CAUTION: When investment property is sold, depreciation taken during the holding period is “recaptured” & taxed at 25 %.
- Assume an apartment bldg. purchased nine years ago for $300,000.
- The building represented 80% of the total.
- The property is sold this year for $510,000 with selling costs of $10,000.
- Depreciation, using a 27½-year life, is approximately $78,545 ($300,000 × 80% ÷ 27.5 = 9 years).
What is the tax liability?
An offer is a sale, you sold it as you wanted to. As soon as you counter, you have rejected the deal, it is legally dead with no obligation from the prospective buyer that made the offer. In essence, you’ve just bought it back at the price and terms it was sold for. If you are in the market for that type of property for that price, fine…if not you just made a costly oops., Paul
Every situation is unique, and the decision of whether to counter an offer should reflect both the current market for your home and the particular offer that is presented. However, I do believe that the decision to counter an offer should not be made lightly. At a minimum, you should think twice. (click pic for full story)
Before signing a listing agreement, there were five things almost every seller would say that they knew weren’t necessarily true. Regardless, we savvy and experienced agents are on to these sellers. From my years of experience, I knew how to persuade a seller to tell the truth….. full story
Though the numbers seem a little conservative, here’s a good basic article about what buyer like when looking at your home. In the meantime, these are good bang-for-buck ideas whilst you occupy. Webmaster. ps. Please make sure to pre-wire cable/phone/audio etc to the garage before drywalling…we guys like to watch the game & listen to tunes while tinkering outside.
Every home that goes on sale needs a makeunder. The less of you, the quicker your home will sell. The bigger and more spacious your home looks the higher it’s perceived value.
I maintain that you almost always shoot yourself in the foot by overpricing your home. Your home will almost always sale at or above market value by pricing at or below market value.
There is indeed a tax on the sale of real estate. It doesn’t apply to many people, but it WILL apply to some people that have profit from the sale of their homes. Starting in 2013, those with incomes over $200,000 will have to pay a 3.8% tax on profit from the sale of their primary residence or investment properties. The exact amount will be based on a formula that includes the profit from the property and the income above $200,000. The tax is not an income tax, but rather it is a “payroll tax”… officially it is a Medicare Tax.
It does not just apply to real estate, but also applies to investment income and dividends.
It will drive another nail into the luxury real estate market. It has been in the doldrums for a while. Adding new taxes will not get it going again. And if you are thinking that this only affects ‘the wealthy’, think again. Those homes are not built by ‘the wealthy’. Those homes are not renovated by ‘the wealthy’. Those consumers are more likely to hire contractors to do improvements. And they are more likely to update more often… They are a driver in the housing sector. This added tax is NOT putting gas in the tank…
“Put your junk in a storage locker, neaten, fix the wobbly ceiling fan–and do it before you call your Realtor.”
…. Many of the best professional home sellers will shy away from putting a lot of time into selling your home if it’s a mess.
The only home improvement Sudler recommends is painting. Even there, he advises limiting the work to covering blemishes and repainting any rooms that have overly bright or outdated colors. More
10) Leave your “friendly” dog roaming free inside the house when you know we are coming to see it.
Not all buyers are dog people.
9) Leave something aromatic cooking in the crock pot for your dinner that night
Not all buyers are going to be fans of your food choices.
8) Keep photos of your family up throughout the house
Guess what they are not doing? Looking at your house.
7) Keep all your nick knacks out
I know they are precious to you but honestly they are distracting to the buyer.
6) Make it difficult for me to show your house
…. if our appointment time does not work for you don’t be surprised when we don’t reschedule. The buyer is likely to have moved on.
5) To continue on the pet theme, leave your cat roaming free throughout the house with a note by the front door stating “Please do not let the cat out”.
Again the focus has been shifted away from your home.
4) Don’t replace burned out light bulbs or use low wattage bulbs.
3) Close all the curtains and turn off all the lights
When we walk into the house instead of immediately noticing the great things about the house we are going to be fumbling around looking for light switches.
2) Turn the heat down
One of the quickest ways to drive a potential buyer out of your house is to make them view a cold house in stocking feet. It is hard to admire the spacious kitchen when your feet are being flash frozen by the cold tile floors.
1) Stay in your home while we are showing it