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Homeselling Information
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In selling real estate, the name of the game is usually: Exposure, Exposure, and Exposure. Whether it's through the Internet, the Multiple Listing Service(s), Advertising, or word-of-mouth. The more exposure a property gets, the higher the likelihood of getting the highest price and best terms, in the shortest period of time.
But, it's not that simple to sell income property. Yes, exposure is extremely important, but unlike 'standard' residential properties, residential income properties.
are usually not available to be shown to prospective buyers.
have specialized forms and documents.
have a myriad of financial considerations to be considered as an investment.
When investors sell income property, they usually do not want their tenants disturbed, therefore most income properties are listed as subject-to-inspection (STI). This means that buyers and their real estate agents do not have access to the property until the prospective buyer submits an acceptable offer to the seller.
This makes it incumbent upon the seller's real estate agent to completely understand the property's characteristics, and also its current investment attributes and/or its future potential as a good investment. Understanding all aspects of selling income property as an investment is crucial.
Most agents don't understand and aren't able to explain the financial side of an investment. This aspect of selling income property is important to get the highest price and best terms possible.
Also, you must consider your investment goals when you sell income property. Do you plan to reinvest your capital gain? Do you plan to execute a tax-deferred exchange? Does your agent know how to handle these transactions? Do they have the ability to find a replacement property that's a good investment for you, in a timely fashion?
Common Selling Mistakes
Mistake #1 – Incorrect Pricing
Every seller naturally wants to get the most money for his or her product. The most common mistake that causes sellers to get less than they hope for, however, is listing too high. Listings reach the greatest proportion of potential buyers shortly after they reach the market. If a property is dismissed as being overpriced early on, it can result in later price reductions. Overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price than they likely would have had they been priced properly in the first place.
Mistake #2 -- Mistaking Re-finance Appraisals for Market Value
Re-finance appraisals can be very encouraging for homeowners, leading them to assume that the appraisal is the amount that they should expect to receive for their property. Lenders often estimate the value of your property higher than it actually is, however, in order to encourage re-financing. The market value of your home could actually be (and often is) lower. Your best bet is to ask your Agent for the most recent information regarding property sales in your community. This will give you an up-to-date and factually accurate estimate of your property value.
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