Selling a home can be an emotionally painful experience. Having the right strategies in place in the days, weeks and months before releasing it to the market can result in a faster sale and, of course, a higher price. Here are a few pre-sale factors to consider before putting it on the market:
Market Timing
Historical sales data shows which months most buyers are active. Multiple Listing Service (MLS) data shows that June typically contains the highest volume of recorded sales. These sales typically are from purchase contracts signed in April and May. The pulse of the market for Yavapai County shows a dramatic uptick in showings around the beginning of April. Data also shows that days-on-market numbers are much less than aging listings that were on the market between October through March, also known as the slow season.
Capital Gains or Rental Conversion
Under current tax law, a single person selling a primary residence can enjoy up to $250,000 in capital gains tax-free; married, up to $500,000. If the asset being sold is a second home, vacation home or long-term rental, a consideration for a 1031 Tax-Deferred Exchange is a viable option. The capital gains tax is deferred in a 1031 transaction if a subsequent property is purchased of equal or greater value.
Under the tax law, if you had rented out a primary residence but had lived in the property for at least two of the previous five tax years, the sale is still considered a primary residence sale. Therefore, the sale is not subject to a capital gain above the noted thresholds. In an upwardly mobile market, where the seller does not need the proceeds of the relinquished property, renting for a few years makes it an excellent investment.
Avoiding the Dreaded Double Move
Many real estate agents refuse to allow their sellers to entertain a contingency sale. From the perspective of the seller, this option has a huge advantage. The buyer essentially loses strength in price negotiations. This tactic has many distinct advantages and disadvantages when properly employed. If purchasing a new home, most builders will accept a contingent contract, which provides for ample time to get the property sold. This leads to another consideration: lease back. Again, this is a tactic ill-advised by many agents, but when used effectively, provides numerous advantages.
Curb Appeal is King
The most important tactic a seller needs to employ is improving presentation of their property before it goes on the market. Trees and bushes need to be trimmed and pruned. Grass needs to be green and meticulously cut. The grounds should be free and clear of any debris and weeds. Accents and uplighting greatly improve the property view. Walkways and gutters should be cleaned. The property should be free of excess personal property or furniture. Garden beds with lots of vibrant color and freshly-planted flowers make a house pop with energy. Front exterior light fixtures, particularly those around the garage, walkways or doors should be changed out and updated. Painted surfaces should look clean and fresh.
About Carpets, Flooring
If the carpet is dirty or there are scratches or cracks in wood or tile floors, buyers will immediately offer $10,000 to $20,000 less. Make sure carpets have been steam-cleaned and the floors are looking top notch. If the carpeting is old and worn, it’s time to replace it. A good agent will have connections to get new carpeting at investor/builder pricing. Do not replace outdated flooring! Tile, laminate, wood and the colors or patterns are personal preference. The best strategy here is to get cost estimates for current trends, giving homebuyers the choice for their flooring package. Then, the cost of the flooring can either be a credit off the sale price or included as an expense from sale proceeds.
Other Considerations
Effective Pricing Strategy is the single most important factor in selling a home. This tactic, along with lighting, clutter, kitchen strategies, the “Auction Effect” and other processes are outlined in our free report entitled 10 Simple Things in Selling Your Home for Top Dollar. Ask us for a copy of the report. QCBN
By Peter Medal
Peter Medal & Leslie Nelson are the founders of the Prescott Elite Team at My Home Group Real Estate. Their offices are in downtown Prescott at 240 S. Montezuma Street, Suite 101. Reach them at 928-597-5151 or PrescottEliteTeam.com.