Getting The Most For Your Real Estate
Whether you’re selling a home or some other real estate property, there are some associated best practices you’ll want to take into account. While the total process isn’t over-complicated, it can be if you don’t do a little research beforehand. Following we’ll briefly cover three primary considerations you need to make before even listing your real estate for sale.
Preparing A Property For Sale
It’s essential to maximize remodel, refurbish, and landscape the premises. Fix all the “honey-do’s” in the house. Caulk the tubs. Clean the windows, or replace those that have a crack. Service the roof and gutters. Paint the walls. Install a few new cabinets. Get your attic and basement ready for viewing—stage these areas of the house, perhaps. Vacuum everything.
You might put in new floors if that’s appropriate. Different homes will have different needs. You want to be as comprehensive in this effort as you possibly can. An “as-is” property will always be sold for less than its potential value. If you want to leave thousands—or tens of thousands—on the table, that’s your business.
But you don’t have to, and it only takes a few days or weeks to clean things up. Renovations and landscaping could take a few months or years, and will be more costly. Basic cleaning and refurbishment is more straightforward, though, and you can do most of these chores on your own. Do everything you can to make things clean and salable.
Your yard alone could bring up to $38k in value, if you get the job done right. Additionally, “green” energy options can add home value and net you a tax break, making them a great last-minute addition prior sale. Save even more money by going the DIY-route; though you want to do your homework so the end result passes necessary inspections.
When you’re moving a property, it’s not so cut-and-dry as it may seem at the outset. There are taxes and closing fees which must be taken into consideration. You want to subtract these from the list price to get an accurate idea what your final costs will be. It turns out there’s a specific percentage which is average pertaining to the cost of selling a house.
For most properties, the percentage that taxes, real estate agents, and other miscellaneous fees ends up producing is between 2% and 5% of the property’s purchase price. If your home were $100k, that would be $2k to $5k. If it were 500k, it would be $10k to $25k.
Legally Avoiding Taxes Strategically
Most people selling their property will move belongings they maintained in that property to some new living space. Before you sell, if you know where you’re going to go, then you can turn the money you acquire from your property sale directly into your new home in a way which primarily avoids associated taxation. This is called a 1031 exchange.
Essentially, you’re just transferring equity from one property to another. Depending on the new home you’re buying, you could experience exceptional equity expansion in such a move while avoiding taxes, or basically end up just shuffling your value around. It all depends on the second property you’re looking at.
Certainly you don’t have to follow through with a 1031 exchange, but doing so is a very wise way to save money that, let’s be honest, Uncle Sam shouldn’t even be taking from you. If the founding fathers of America only knew where things would be in several hundred years! However, this is the world we live in, so you need to be carefully strategic here to save.
Maximizing Your Equity
As was mentioned, you can certainly sell whatever property you have as-is. The money will go in your pocket, or into the pocket of whoever is the manager of your estate. That money will likely be taxed, depending on your particular region in the United States. However, there are some tactics you can take to minimize associated closing costs and taxation.
Refurbish, upgrade, and landscape your property. Find ways around realtor fees and other closing costs through creative listing strategies. Consider a 1031 exchange if you’re shifting properties. Tactics like these help you get the most value for property while avoiding unnecessary costs. Selling is straightforward, but you need to research carefully beforehand.