Intown Atlanta Home Selling FAQ's
Questions About Selling Your Home? Here is What the Experts Recommend
Answering Your Intown Atlanta Home Buying Questions
What are capital gains taxes and how can I avoid them?
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.
What is a 1031 exchange?
The 1031 exchange is a program set up by the IRS that allows you to sell an investment property and purchase another “like kind” investment property within a specific time frame, without having to pay capital gains taxes on the sale. In other words, you are “exchanging” one investment property for another and your taxes are deferred. There are specific rules that must be followed to qualify for the 1031 exchange tax deferral. For more information, consult with an experienced real estate agent or click here for an article from the IRS.
What is an assumable mortgage? How do I know if I have one?
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.
Should I offer seller financing?
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.
What is the difference between a lease purchase and a lease option?
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.
What if I can’t be at the closing?
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.
If I list my home with you and buy my next home from you, will you cut your commission?
As professionals, our time has a certain value and the clients we work with realize the value of our team's service. If an agent is willing to cut his or her commission, how well do you think he will hold up when it comes to negotiating the best possible price for your home? We want to demonstrate up front how untiringly we are going to work for you; therefore, we will keep our existing commission structure.
What should I do about keeping my promise to the agent from whom I originally bought my home?
We understand your loyalty—it is a quality that we respect in people. However, you need to review your original agent’s marketing strategies. Will he give you the level of service you need to sell your home in this difficult market? The zac team will give you unparalleled marketing and service throughout the entire sales process. Be sure to compare your other agent’s list of services with ours.
I have seen marketing plans from many different agents; what makes yours different?
Our results! Our team had over 300 sales in 2016, and over 240 in 2015. The Zac Team’s plan of action and marketing plan may look similar to others, but we must be doing something right to have sold this many homes in 2016. And, we’re on track to increase our numbers again in 2017.
Why is your price so much lower than the other agents that we have talked to? I mean, they have comparisons that show higher prices than yours.
You interview four agents and you get four different prices. Why? Many agents will quote you the price they think you want to hear—not the price at which your home may actually sell. The Zac Team will base your home’s listing price on data compiled from all the homes in your area that have recently sold. It may be a little lower than what other agents have told you, but, if you’re serious about selling, the zac team will get your house sold.
How much advertising will you do? I want a lot of advertising!
Are you familiar with the difference between passive and active marketing? Passive marketing consists of holding open houses, sending out flyers and advertising in the newspaper. You can sell a home using these methods, but you can’t guarantee it.
Active marketing, on the other hand, is much more aggressive and yields results. We advertise your home on hundreds of websites. Our team members are on the phone every single day, calling prospects and asking them if they would like to buy your home, if they know someone who would like to buy your home or if they would like to sell their house. The more signs we have out in the community, the more buyers will call us about one or more of those signs. The more buyer calls we get, the more people we can tell about your home. This active marketing strategy is why the Zac Team sells more homes.
Why should I hire such a busy agent? You have so many listings, we want someone that can give us the attention we deserve.
Benjamin Franklin said, “If you need something done, ask a busy person.” As we mentioned above, the more listings we have, the more signs we have on the street. The more signs we have on the street, the more calls we get from buyers. And many of those buyers will be very interested in your house. Can you see the advantage of listing with a very successful agent who has 45-60 signs working for you?
Should I find a house before I put mine on the market?
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 I have to sell at a lower price, why shouldn't I just sell it myself?
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.