The marketplace can be a frustrating place, and selling your own home isn’t as easy as it may sound. You need to have an aggressive marketing plan, understand how to use online real estate tools and have lots of time to spare.

In the event that you do find a buyer for your home, do you have the legal expertise to draw up contracts and negotiate all the steps and paperwork necessary to close the sale? Most buyers’ agents would rather work with other licensed real estate agents than the property owners themselves. Licensed agents know that other agents have the expertise and experience to complete the sale; they may be leery of dealing with a novice. Using an experienced, professional agent will save you time and headaches, as well as earn you a greater profit.

Finding your new home is important. However, it may take as long as three months for your current home to sell. Then it may take another two months to get all of the paperwork done and, by that time, the home that you found may already be sold.

Have you seen a home or are you ready to make an offer on one? If so, we can schedule a time with our lender and one of our sales consultants to help handle that transaction for you. In the meantime, let’s get to work on getting your home sold now so you don’t have to wait any longer than necessary to move into your new home!

If you are unable to attend the closing, you may give someone what is known as “Power of Attorney” (POA) to represent you. A POA can be drawn up by an attorney and will state that the person you have chosen has your permission to act as your representative and sign legal documents in your stead. Be sure that the person you delegate the POA to has a chance to review all the paperwork associated with the transaction and is able to contact you if any questions arise.

A lease-purchase agreement is similar to “buying on time.” It is a written contract in which the buyer agrees to pay rent and a monthly fee over a set period of time, with the fee going towards the purchase of the home. The buyer generally lives in the home while he is completing the purchase.

A lease-option agreement allows someone to rent your home with the option to buy it at some point in the future. If the tenant does decide to buy, a certain portion of the rent he has paid is applied towards the purchase price of the home. You should work with an experienced real estate attorney to draw up either lease-purchase or lease-option agreements.

It depends on how much financial risk you are willing to take. By financing your home for the buyer, you are often able to sell your home at a higher price in a shorter amount of time to a buyer who may not qualify for a standard home mortgage. There are several ways you can arrange the financing:

Finance the entire purchase yourself
Finance part of the purchase price
Draw up a lease-purchase or lease-option agreement
If you are considering seller financing, consult with an experienced real estate attorney who can draw up the loan agreement with adequate protection for you.

An assumable mortgage is one that the buyer of your home can take over as long as the lender approves. In other words, the buyer assumes your existing loan and makes the payments. If current interest rates are higher than your existing loan, this allows the buyer to pay the lower rate by taking over your mortgage payments. However, he may still have to finance any part of the purchase price that is not covered under the mortgage. For example, if you sell your home for $150,000 and the buyer assumes your existing $80,000 mortgage, he will still have to obtain financing for $70,000 at the current rate. If you are considering transferring your mortgage, be sure to release your liability in writing, otherwise you may be held liable if the new owner defaults.

A like-kind exchange is used when someone wants to sell an asset and acquire a similar one while avoiding the capital gains tax. Like-kind exchanges are heavily monitored by the IRS and require accurate bookkeeping to ensure no tax penalty is incurred. Savvy sellers can use the like-kind exchange to defer other specific types of gains, such as depreciation.
Read full article on investopedia.com
For more information, consult One Focus Realty or click here for an article from the IRS.

Anything you own and use for investment purposes is considered a capital asset. Your home is probably one of your largest assets and, when you sell it at a profit, you are taxed on the difference between your purchase price and the price at which you sell. The general federal tax rate for capital gains is 15% (you may need to pay state and city taxes as well), but there are ways you can minimize the net amount on which you actually pay taxes.

The primary way to avoid capital gains taxes is to live in your residence for two out of five years consecutively. When you do that, you are exempt from paying taxes on a profit of up to $250,000. Also, any major improvements you have made (remodeling, upgrading a heating system, adding a pool, etc.) may be able to be deducted from your profit (be sure to save all receipts and records from these projects). The commission you pay to a real estate agent to sell your home is deductible as well. In some cases, you may be able to “roll over” your profit into another property Consult your tax professional or attorney for detailed information.