Easy Steps to Selling an Investment Property
Believe it or not, the most stressful part of real estate investing is making a sale. During this phase of the investment there are so many things that can go wrong, and your profit depends on making a smooth and quick sale. While most sales do go through smoothly, the uncertainty and anticipation can keep you worrying late into the night. This is especially true if you choose to bypass an agent and sell your property on your own.
A brokerage agent does do a lot of leg work during a sale, but all of it comes at a cost. Hefty brokerage commissions turn many investors off of the idea of using an agent and onto the idea of selling the property themselves in the hopes of increasing residual income. If this sounds like something that you would like to do, follow the following steps for selling your investment property.
The first thing that you need to do to make your first sale in real estate investing is to calculate the asking price for the property. You can do this by hiring a professional appraiser to price the home or by checking the sales prices of comparable homes in the same area of your property. This is normally done at the court house by comparing similar recent real estate sales prices within a few miles of your property. You should also take into consideration the current real estate market. If the market is a buyers market, you will probably have to lower your price. If it is a sellers market, on the other hand, you might be able to fetch more than the market value of the property.
Once you have settled on a price, you need to market the property. This involves advertising the property and showing it to perspective buyers individually and at open houses. During this phase you should also contact your attorney to draw up the necessary purchase contract forms. This purchase contract will need to be signed by you and the buyer once you have negotiated an offer.
After you have negotiated an offer, the real work begins. Now it is time to close the deal. To do this, you will need an escrow company to perform the closing. This is the time of paperwork as you will need to provide the buyer with disclosure statements and he will need to provide you with a loan commitment letter. Inspections are also performed during this time and a title search will be completed by your escrow company. Next, you will need to meet with the escrow company and buyer to sign the paperwork, pay closing fees to the escrow company; pay off the mortgage; and pay or put aside any taxes owed.
As you can see, the closing phase is the busiest time of selling your first property in real estate investing. But it is also the most exciting. This is where all of your hard work pays off and you get to walk away with the profit.