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Selling

Price Your Property To Sell For Maximum Profit

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how to sell your home for more money

We all want to know how to sell your home for more money.

Let’s discuss how to increase your home value.

The asking price you set for your home significantly affects whether you will profit in the sale, how much you will profit and how long your home will sit on the market. Your real estate agent’s knowledge of the overall market and what’s selling – or not selling – will be invaluable in helping you determine the price. The objective is to find a price that the market will bear but won’t leave money on the table. 

Here are some points to consider: Time. Time is not on your side when it comes to real estate. Although many factors influence the outcome, perhaps time is the biggest determinant in whether or not you see a profit and how much you profit. Studies show that the longer a house stays on the market, the less likely it is to sell for the original asking price. Therefore, if your goal is to make money, think about a price that will encourage buyer activity (read: fair market value).

Value vs. Cost. Pricing your home to sell in a timely fashion requires some objectivity. It’s important that you not confuse value with cost – in other words, how much you value your home versus what buyers are willing to pay for it. Don’t place too much emphasis on home improvements when calculating your price, because buyers may not share your taste. For instance, not everyone wants hardwood floors or granite countertops. 

Keep it simple. Because time is of the essence, make it easy for the buyers. Remain flexible on when your agent can schedule showings. Also, avoid putting contingencies on the sale. Though a desirable move-in date makes for a smoother transition between homes, it could cause you to lose the sale altogether. 

Questions about how to sell your home for more money? We can help! Contact us about selling a property.

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Selling

8 Steps To Selling Your Home In 2021

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sell your house, tips for selling your home

Here are a few tips for selling your home:

1. Define Your Needs

Write down all the reasons for selling your home. Ask yourself, “Why do I want to sell and what do I expect to accomplish with the sale?” For example, a growing family may prompt your need for a larger home, or a job opportunity in another city may necessitate a move.

For your goals, write down if you’d like to sell your house within a certain time frame or make a particular profit margin. Work with your real estate agent to map out the best path to achieve your objectives and set a realistic time frame for the sale

2. Name your price.

Your next objective should be to determine the best possible selling price for your house. Setting a fair asking price from the outset will generate the most activity from other real estate agents and buyers.

You will need to take into account the condition of your home, what comparable homes in your neighborhood are selling for, and state of the overall market in your area. It’s often difficult to remain unbiased when putting a price on your home, so your real estate agent’s expertise is invaluable at this step.

Your agent will know what comparable homes are selling for in your neighborhood and the average time those homes are sitting on the market.

If you want a truly objective opinion about the price of your home, you could have an appraisal done. This typically costs a few hundred dollars. Remember: You’re always better off setting a fair market value price than setting your price too high. Studies show that homes priced higher than 3 percent of their market value take longer to sell. If your home sits on the market for too long, potential buyers may think there is something wrong with the property. Often, when this happens, the seller has to drop the price below market value to compete with newer, reasonably priced listings.

3. Prepare your home.

Most of us don’t keep our homes in “showroom” condition. We tend to overlook piles of boxes in the garage, broken porch lights, and doors or windows that stick. It’s time to break out of that owner’s mindset and get your house in tip-top shape.

The condition of your home will affect how quickly it sells and the price the buyer is willing to offer. First impressions are the most important.

Your real estate agent can help you take a fresh look at your home and suggest ways to stage it and make it more appealing to buyers.

  • A home with too much “personality” is harder to sell. Removing family photos, mementos and personalized décor will help buyers visualize the home as theirs.
  • Make minor repairs and replacements. Small defects, such as a leaky faucet, a torn screen or a worn doormat, can ruin the buyer’s first impression.
  • Clutter is a big no-no when showing your home to potential buyers. Make sure you have removed all knick-knacks from your shelves and cleared all your bathroom and kitchen counters to make every area seem as spacious as possible. 
how much do sellers usually come down on a house

4. The Marketing Starts!

Our office will get the word out. Now that you’re ready to sell, we will set up a marketing strategy specifically for your home.

There are many ways to get the word out, including:

  • The Internet
  • Yard signs
  • Open houses
  • Media advertising
  • Agent-to-agent referrals
  • Direct mail marketing campaigns

In addition to listing your home on the MLS, we will use a combination of the above tactics to bring the most qualified buyers to your home. We will structure the marketing plan so that the first week is the busiest. 

5. Receive an offer.

When you receive a written offer from a potential buyer, your real estate agent will first find out whether or not the individual is prequalified or preapproved to buy your home. If so, then you and your agent will review the proposed contract, taking care to understand what is required of both parties to execute the transaction.

The contract, though not limited to this list, should include the following:

  • Legal description of the property
  • Offer price
  • Down payment
  • Financing arrangements
  • List of fees and who will pay them
  • Deposit amount
  • Inspection rights and possible repair allowances
  • Method of conveying the title and who will handle the closing
  • Appliances and furnishings that will stay with the home
  • Settlement date
  • Contingencies

At this point, you have three options:

  1. accept the contract as is or
  2. accept it with changes (a counteroffer) or
  3. reject it

Remember: Once both parties have signed a written offer, the document becomes legally binding. If you have any questions or concerns, be certain to address them with your real estate agent right away. 

Just Sold: Selling A Home In Any Market
Get a copy of “Just Sold | Selling A Home In Any Market” by Dana Ash-McGinty. 

6. Negotiate to sell.

Most offers to purchase your home will require some negotiating to come to a win-win agreement. We are well versed on the intricacies of the contracts used in your area and will protect your best interest. Your agent also knows what each contract clause means, what you will net from the sale and what areas are easiest to negotiate.

Here are some typical negotiable items:

  • Price
  • Financing
  • Closing costs
  • Repairs
  • Appliances and fixtures
  • Landscaping
  • Painting
  • Move-in date

Once both parties have agreed on the terms of the sale, your agent will prepare a contract

7. Prepare to close.

Once you accept an offer to sell your house, we will make a list of all the things you and your buyer must do before closing. The property may need to be formally appraised, surveyed, inspected and/or repaired. Your real estate agent can spearhead the effort and serve as your advocate when dealing with the buyer’s agent and service providers.

Depending on the written contract, you may pay for all, some or none of these items. If each procedure returns acceptable results as defined by the contract, then the sale may continue. If there are problems with the home, the terms set forth in the contract will dictate your next step. You or the buyer may decide to walk away, open a new round of negotiations or proceed to closing. Important reminder:

A few days before the closing, we will contact the entity that is closing the transaction and make sure the necessary documents will be ready to sign on the appropriate date. Also, we will assist as needed, arrangements for your upcoming move if you have not done so. 

8. Close the deal.

Closing refers to the meeting where ownership of the property is legally transferred to the buyer. Your agent will be present during the closing to guide you through the process and make sure everything goes as planned. By being present during the closing, he or she can mediate any last-minute issues that may arise. In some states, an attorney is required and you may wish to have one present. After the closing, you should make a “to do” list for turning the property over to the new owners.

These items may include:

  • Cancel electricity, gas, lawn care, cable and other routine services.
  • If the new owner is retaining any of the services, change the name on the account.
  • Gather owner’s manuals and warranties for all conveying appliances. 

Questions? Contact us. We will be happy to assist!

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Real Estate Investing

Cash Flow Is King In Real Estate Investing

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Real estate investors are generally looking for tax write-offs, long-term appreciation, or cash flow— and if you twist their arms, they’ll take all three. If they had to choose just one, well—as they say—cash is king. The advantage of positive cash flow (more money coming in than going out) is that the property is self-sustaining, and the investor can take the profits and reinvest in another property. 

Investors like to know everything there is to know about their cash. They want to know their cash flow, their before-tax cash flow, their after-tax cash flow, and how to shelter their cash from taxes.  

Before-Tax Cash Flow

The before-tax cash flow is calculated before income taxes are figured into the equation. So if an investment property is generating $20,000 in income, and expenses are $12,000, that’s a net return (cash flow) of $8,000.

Investors also like to know their cash-on-cash-return. Cash-on-cash return is the ratio of annual before-tax cash flow to the amount of cash they’ve invested, and it’s expressed as a percentage.

So if our investor had an annual before-tax cash flow of $9,000, and had put $350,000 down on the property, the cash on cash return would be 2.6%.

$9,000 ÷ $350,000 = 0.0257 (or 2.6%)

Note that this is cash invested, which has nothing to do with mortgage debt taken on. So it doesn’t matter if the investor paid $400,000 for the property or $1 million; the cash-on-cash return would be the same. The purpose of this formula is to give the investor an idea of how hard invested cash is working on the investor’s behalf.

Cash-on-cash return is all well and good—but what about those taxes? A 10% cash-on-cash return may sound great, but it can be whittled to nothing depending on the investor’s tax situation. Cash-on-cash also doesn’t account for appreciation of the property, or depreciation of the property. And because the percentage it yields is simple, it may not compare favorably to other investments with perhaps lower risk, and compound interest. 

After-Tax Cash Flow

Computing after-tax cash flow solves some of these issues. To determine after-tax cash flow, you simply take the profit yielded from the investment and subtract income taxes that apply to the property’s income.

What if, in doing so, you come up with a negative number? This means the investment is a losing investment in that year; the investor is putting in more money than is being returned by the investment. This paper loss can be used as a tax shelter, and is actually desirable by some investors for that purpose, because shelters can be used to offset other income.

Remember that depreciating an appreciating asset can be a wonderful thing! This paper loss is due in part or whole to the depreciation taken against the investment property. As such it may not “feel” like a loss in terms of cash flow or other purposes, and in fact can be used to reduce tax burden in other areas.


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