Just a few years ago, at the height of the real estate crisis, if homeowners were transferred for work or moved for personal reasons and couldn’t afford to sell their homes, they often opted to become “accidental” landlords.
Not experienced real estate investors, they became such as a result of the market. Now that the economy has picked up, many of these landlords are finally selling their investments.
If you know that you’ll be selling a home remotely, don’t wait until the last minute. It’s hard enough to sell a home, and being far away makes it even more difficult to prep the home, deal with tenants and make sure that you have the best agent for the job. Here are some tips for making your sale a success.
Make sure you’ve lived in the home for at least two of the past five years
The federal government allows homeowners to sell their home without paying taxes on the first $250,000 in gain for single people, or $500,000 for married folks. The catch is that the home has to have been your primary residence for at least two of the past five years.
Many people don’t realize this requirement, nor do they plan for it, and they end up with a taxable gain. Still others don’t account for timing and end up selling “under the gun” to make the deadline.
To benefit from this amazing tax break, the sale has to close within the appropriate window. Know this and plan ahead. Otherwise, the home will be taxed as an investment property.
Get a good agent on board early
The smartest remote sellers have a solid agent with their feet on the street. A good agent provides a local resource for their clients. They can field late night calls from owners with leaky faucets, or intervene with tenant issues.
If you don’t know a good local agent, try to identify one before you move away, or on a visit back to the old home. Solidify the relationship well before you plan to sell, and do it in person, because that agent’s time can be invaluable.
Once the time comes to sell, it could be as easy as picking up the phone and asking the agent to execute the listing.
Stay on top of the home’s market
Put together a search of your property and stay on top of what’s selling in the area. Follow similar-sized homes that go for sale and keep an eye on their listings.
A smart homeowner will keep a search open at all times, in addition to staying in touch with their real estate agent. Just one or two comparable sales, at the right price, could motivate you to take action.
Take care of your tenants
Nobody wants to be displaced. Moving is incredibly disrupting. If you’ve been renting your home and are likely to sell to someone who will want to live there, as opposed to inheriting your tenant, then give your tenant some notice of your intention to sell.
A smart homeowner will tell the tenant upfront of their long-term plan and write language into the rental agreement stating that the tenant needs to cooperate for showings at the end of the lease.
If you have a good relationship with your tenant, drop their rent while the home is for sale, in return for their cooperation. It will go a long way towards a solid relationship.