Disadvantages to Selling Your Home Without a Realtor

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With the declining housing market, many potential home sellers are weighing in on the task of selling their homes themselves to cut the costs of hiring a realtor. While this may be beneficial to some, the negatives outweigh the positives. Here are a few reasons why it is not a good idea to forgo realty guidance to sell a home:

One of the first steps with selling a home is finding a market. This task can be difficult without the assistance of a realtor. You may not be able to market your home as well as a realtor can. Realtors are trained professionals, and a realtor's business is making a home sellable. Marketing on your own can be a daunting task for the first time home seller. It is a realtor's job to advertise your home and promote its availability. Realtors have experience and knowledge of the real estate market and can help you to determine your home's selling price.

While you may be up to the task of putting your own house on the market, negotiating a price with potential buyers is only a quarter of the work. A realtor is a professional negotiator. A real estate agent is not only profitable in locating prospective buyers, but an agent can also utilize a larger housing market that will guarantee an effective and lucrative sale. With the assistance of a realtor, your home is more likely to sell in a timely, cost-effective manner.

One thing that every home buyer thinks when they see a "For Sale by Owner" sign is that the price will be lower than if the home was being sold by a big name realty firm. While this may work out for the buyer, it may not be in the best interest of the seller. A realtor can not only screen potential buyers for you before they take a tour, they can also evaluate and ensure their ability to afford the cost of the house.

The task of closing the sale and writing up paperwork for your home can be grueling. The benefit of a realtor is that they do all the hard work for you. Realtors are trained in writing up all of the closing paperwork and handling all of the closing proceedings, so this will alleviate any stress on the home seller. A realtor will also act as your representative, so any questions or concerns a potential buyer has, a realtor can address those concerns on your behalf.

While it may save you some extra money in the long run, deciding to sell your house without a realtor can extremely cause cause more stress and require more work. A realtor can actually become more cost effective because not only can they assist you with low cost improvements that may be necessary to sell your home, but a realtor more often than not can secure a higher price for your home.

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Source by Sarah Reece

The Benefits of a FSBO – For Sale by Owner – Home Sale

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One of the most transparent benefits of an FSBO home sale to many home owners is that sticking that ‘For Sale By Owner’ sign in their front yard says that they might have some control over the selling of their home. However, what are the benefits of an FSBO home sale, and how do you go about doing it.

While not a ‘benefit’, one of the first things to remember when thinking about an FSBO home sale is that no matter where you are, the entire task can seem somewhat daunting and complicated. Adding to the complications is the fact that not only are there all kinds of legal forms required (if you have ever bought a home you know what I mean), but that requirements may vary from state to state. A California ‘for sale by owner’ home sale is probalby going to be different from a Texas FSBO transaction.

You might wonder that; if going the ‘for sale by owner’ route is so complicated and messy, why am I including this comment in an article for someone who is contemplating putting up their home in a ‘for sale by owner’ offering?

Well, let’s talk about those benefits.

1. The FSBO Kit – Despite the potential complexities, there are many companies which offer what could be called an FSBO kit. Depending upon the company, this kit will provide the homeowner with the FSBO legal forms, and hopefully some guidance on preparation and filing of the ‘for sale by owner’ documents.

However, be advised that an FSBO kit may range from simply the basic or most common forms needed with some instructions on how to fill them out and where to file them, to very complete FSBO kits which include ALL the legal forms needed, instructions on how to fill them out, where to file them, instructions on how to prepare your home for sale, how to advertise your home for sale effectively, and, in some cases, contact with a listing service which will help put the home out in front of prospective buyers.

2. Growing Public Acceptance of the FSBO Process – A few years ago, most buyers would have been wary of a home with an FSBO sign in the front yard. However, since more and more home owners have opted in for this type of home sale, not only are many more people actually looking for those signs, but an entire support industry seems to have sprung up to assist the homeowner who has decided to try the ‘for sale by owner’ route. Newspapers offer advertising packages and guidance, for example, and even some realtors have jumped on the bandwagon by offering assistance and guidance to the homeowner – for a fee, of course.

3. A Desire for Control of the Home Sale Process – I alluded to this above in the opening paragraph. Many people just want to have some control over the process and not feel that they are a pawn in the hands of the real estate agent.

Additionally, some people want to be involved in showing the house, explaining its values and even such simple things as ‘how nice the next door neighbor is’ to prospective buyers. Some people feel that this more personal approach may do more to sell the house than a realtor’s remark about how the owner mentioned that it was a nice neighborhood to live in.

4. Saving Real Estate Commissions and Fees – I saved this for last, just because I knew you wanted to see it first! Actually, I do not necessarily consider savings to be the main reason that ALL people choose to go with an FSBO home sale, but it is certainly a primary factor for a large percentage of home sellers. On the other hand, many of us simply believe that we don’t mind paying if we know what we are paying for. When that realtor walks off with a large commission, we often wonder what he or she did to earn it.

While ‘for sale by owner’ will certainly very often offer savings, ranging from small to large amounts, many of us are just happy to know where our money is going. While there is almost no concrete way to measure how much money is actually saved in an FSBO home sale, there will almost always be some savings, if the process is done correctly and efficiently.

For most, the FSBO home sale will be a rewarding experience if done properly. If you are not an experienced home seller, probably the best way to be successful is to do your homework and get your hands on the best FSBO kit you can find.

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Source by Donovan Baldwin

FSBO vs Realtors

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When you think of selling your home, you really have two options: list it "for sale by owner" or list it on the Multiple Listing Service with a professional real estate agent. What's the difference? What are the pros and cons of each? Read on to find answers to these questions and more.

The Scoop on Realtors

A real estate agent, or Realtor (if they belong to the Realtor trade association), must go through some extensive training in order to lawfully help you sell your home. They must become licensed with your state and maintain a good standing in order to act on your behalf in a real estate transaction.

Some of the common duties real estate agents will perform for you or help you with are:

  • Set an asking price
  • Point out needed repairs and recommend upgrades
  • Screen buyers
  • Handle paperwork
  • Provide legally required disclosures
  • Advertise and market your property to the buying public
  • Negotiate with buyers

The traditional fee for real estate agents is 6% of the final selling price of the property. That's $ 18,000 on a property worth $ 300,000. Discount real estate brokers have made a splash in the real estate world with the help of the internet. Sellers can commonly find discount brokers who charge 4% of the final sales price. That's still a $ 12,000 fee for a $ 300,000 property.

The Scoop on FSBO (For Sale By Owner)

The reasons many home owners decide to list their home FSBO should be obvious at this point. There's a lot of money to be saved if one can successfully sell their home on their own. Historically, 13-16% of real estate sold annually in America has been sold by the owner, without the help of a real estate agent. However, almost 9 out of 10 sellers who initially list their home by owner wind up hiring an agent. Why?

The varied reasons include:

  • Time. The FSBO did not get offers as fast as needed, and because convinced an agent could help them sell faster.
  • Money. The FSBO did not price the home right and therefore did not get any offers.
  • Knowledge. The FSBO did not know enough about the steps required to complete the sale.

There are other reasons, but those are the big three. Can they be addressed by the average home owner? Sure they can. Almost all knowledge is available to us on the internet these days, and armed with knowledge, more home owners can successfully sell their home on their own.

The Pros and Cons

Before deciding to list your home for sale, consider how much time you have to devote to the task yourself. If you are extremely busy already already, you may want to hire an agent right off the bat. There is definitely a time requirement when it comes to selling by owner. You'll need to handle advertising and marketing, take calls, show your home, entertain offers and make sure you comply with all the local laws to complete the sale.

There are people and resources available to help you like for sale by owner web sites, where you can advertise your home to a nationwide audience, and your local mortgage broker who can pre-qualify buyers that show interest in your home. Other local professionals like title companies and attorneys can help you with legal requirements.

The immediate benefit of hiring an agent is that all these duties become their responsibility, not yours. You can continue on with your life, avoiding many of the headaches that come with the sale of real estate. That is, until it comes time to actually move. But that's another story. However, hiring an agent can be a double-edged sword. If you hire the wrong one you will probably rue the day for years to come. Most brokers require you to sign a listing contract for at least three months, although most want six months to a year. This means that they have the exclusive right to sell your property for that length of time, and you will have a hard time firing them if things do not work out and you want to go with a different broker.

So do some homework before you hire an agent, if that's the route you choose. Ask questions like:

  • How long have you been in the business?
  • How many properties did you sell last year?
  • How many properties have you sold that far this year?
  • Can I call some of your past clients for reference?
  • Do you do this full-time?

The answers to these questions should give you a good idea of ​​where a particular agent stands in relation to any other agent.

The Bottom Line

A comparison can be made between going FSBO versus hiring an agent, to selling your car in the newspaper versus trading-in. The former takes a little more time and effort than the latter, but it can save you a bundle.

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Source by Nate Garin

FSBO Selling Tip – Follow These Safety Rules

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One of the most over-looked items by the "fsbo" is that of safety. While most use common sense knowledge, some are just lacking in this area.

Recently, I called a "fsbo" and asked when I could come over to see the home. A young girl answered the phone and said her parents were not home but I could come over to look if I wanted. With no parents home? I would imagine the parents never educated the daughter regarding showing safety.

Safety Tip # 1 – Have all calls go directly to one of the parents cell phones. That way, all or most calls come in with caller identification and the caller can leave a message if they want to. I would personally suggest investing in an 800 # voice mail message where you can sell the benefits of your home using a message greeting, capture the callers number, and mention that you will be returning the call shortly. This avoids the safety issue of leaving your home number where anyone in your family can answer it. Plus, these 800 # voice mail services will automatically call your cell phone alerting you to the call. That way, you can return the message right away.

Safety Tip # 2 – Set aside one or two days a week for showing. Make sure your neighbors know when you are showing, so they will be aware of the coming and going traffic. During showing there are more than one adult available and make sure if there are multiple people in the "buyers party" that they do not get scattered all over your home. Try to keep everyone together during the showing.

Safety Tip # 3 – This will be a hard tip to follow and you might see it as restricting your showing activity. Tell all potential buyers that you would like a pre-qualification letter by a lender and a copy of the potential buyers drivers license. Why? Because of the safety issue. Quite a few of the lady agents in my office are now making copies of potential buyers driver licenses and giving them to Carol at the front desk before showing them property. Yes, some agents have been injured by buyers.

Safety Tip # 4 – Safely store everything of value, momentos, etc. during the times of showing your home. I have simply suggested to "fsbo's" who asked to either take their small items to a safety deposit box or even put items in the trunk of their car.

Safety Tip # 5 – Never give out too much information over the phone. This is non-fsbo related but is a good example. My friend Larry across the street received a call from a salesman offering a home security system. Larry told the salesman he did not have any use for one. Yes, Larry was burglarized the very next day.

While this briefly covers most of common concerns, you will have to use your own jurisdiction depending on your own situation.

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Source by Tom Jacobson

Buying or Selling A FSBO Home – Contracts

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Contracts are created to focus on the legally binding aspects of the real estate transaction. The good news is contracts come pre-printed for easy use in FSBO transactions.

When we talk about a contract for the sale of a property, we are talking about a buyer and seller getting to the heart of the matter. A contract is a binding agreement where each party agreements to provide consideration for the other party doing something. In the case of the buyer, he or she agreements to pay money on a specified date in exchange for the title to the property in question. As you may guess, the consideration of the seller is the transfer of title upon receipt of said funds. This is how contracts work in FSBO transactions when boiled down to their basic function.

As you may imagine, these contracts also cover more than the basic funds and title transfer. The contract should include representations from the seller that they are transferring "good title" to the property, to wit, they actually own the property and no outstanding debts are recorded against it such as lawsuits. Other conditions that can include things such the transaction being conditioned upon the buyer obtaining financing, the completion of a home inspection, certain assets being left with the property such as furniture and the deposit of an earnest money deposit by the buyer to show he or she is serious. The beauty of a contract is that it is a negotiable document, to wit, you and the other party can put in writing practically any reasonable terms you agree on.

As you know, owning a home is part of the American Dream. One characteristic of this dream is the fact that people have been buying and selling property for hundreds of years. Given this history, it is not particularly surprising that contracts for property have evolved into pre-printed forms. In fact, these are the very forms being used by realtors!

In most situations, you can go ahead and use pre-printed contracts without any problem. If there is something out of the norm with what you are buying or selling, however, you may want to use a lawyer to handle the transaction. Obviously, that is going to cost a bit more!

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Source by Raynor James

Why Use a Real Estate Agent?

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Many people think they can go it alone when buying or selling real estate, mostly a home. Is this really a good idea and what advantages do you have if you choose to go it alone or hire a real estate agent?

First and foremost, if you are a buyer there should be no cost to you in buying a home. You will actually get many valuable services at no cost to you. First of all, it is much easier to find any and all home that meet your criteria as well as access to seeing multiple homes pre-lined up for your viewing saving you valuable time from having to see maybe one home at a time and making those arrangements yourself.

Beside the fact that finding the right home for you and your family in a timely manner, your realtor will then do research on comparable to the home you are thinking of purchasing. After the final decision has been made to actually make an offer on a property there is several documents that you will need to sign and understand in order to make the offer to the seller. Some of this paperwork will include, the purchase contract, an agency disclosure, HOA documents, As Is and Short Sale paperwork if it is a short sale home or a lender owned home as well as having to have evidence that you have the cash or the financing to purchase the home. The amount of this paperwork is not necessarily all you will need depending on location of the home or the age and other factors involved as well.

The negotiating is a huge factor in this process as well so keep in mind that this is only one thing that your realtor will be assisting you with. Once the property goes into contract there are many things your realtor will be doing such as inspection arrangements and negotiating the items to be repaired by the seller, making sure all paperwork and loan process is going smoothly and that the title company has the amounts paid by each party correct on the HUD. Your realtor will go with you to the home to check on repairs, making sure the seller has done the requested and agreed upon repairs in the inspection period.

Do you save money not using a realtor? Do not be fooled into thinking that you do. The seller is probably already contracted with an agent themselves and they same fees are to be paid wherever you have your own representation or not. If you use the list agent of the home, you may not be getting the same loyalty and negotiations for you that you would be if you had your own agent. Remember the list agent is also working for the seller and having their best interest in time. Do not be fooled to think that you are getting a lower price by not bringing in your own agent, the home price will not change, the list agent will simply make all the decisions.

You need to be represented in order to protect yourself. As a seller, more people see your home when using an agent, negotiations are handled and so much advise on price, staging, making sure the buyer stays in compliance with the contract. A very high number of for sale by owners fall out of escrows, buyers and sellers are too personally involved to deal head to head with each other and need good experienced representation.Selling a property on your own will likely sell much slower and possibly for a lower price than you could get if you hired a professional. Most buyers end up buying a home that is being handled by a licensed realtor as well as having their own licensed realtor to represent them. Do not go it alone, it may cost you thousands of dollars.

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Source by Nancy Niblett

Top 10 FSBO Tips to Selling Your Home by Owner

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By using some simple FSBO (For Sale by Owner) tips and techniques, the average homeowner can sell his or her own home without the assistance of a real estate agent. Just as many others have done in the past. You can sell your own home and save thousands, but it takes work and commitment.

Below you will read some simple strategies that can stack the odds in your favor, greatly increasing your chances for success when selling on your own.

FSBO Tip 1. Understanding the real estate market.

Getting an idea of ​​your local market conditions makes good sense. Just like any other product getting a feel of what's hot and what's not can help you make decisions that affect the sale of your home. Consider your neighborhood and the features that distinguish it from others. If you're comfortable, contact a real estate agent to discuss what the current market environment is like.

FSBO Tip 2. Timing is everything.

Timing the decision to sell and gauging the current market conditions could be two of the most critical decisions you make. If you need to sell your home quickly, the less flexibility, you'll be able to have. Conversely, if you're not in a big hurry you can sit back and wait for the perfect buyer. Just remember the real estate market is a cyclical environment. If it's a slow period now and you're in a position to wait it out then it might be a good idea to wait for the next upswing.

FSBO Tip 3. Assemble a team of professionals to help you.

While it's nice to think that you can handle things on your own, selling a home takes specialized knowledge. It's more than just writing up a sales agreement. Depending on what part of the country you're in you'll either need to find a real estate attorney or a title / escrow company to help with the legal details. As a rule of thumb, if you're east of the Mississippi it's usually a real estate attorney. If you're west of the Mississippi, it's a title company. Either way they'll be an indispensable part of your home selling process. Another important partner to consider is a reputable mortgage banker / lender. They can assist in helping you prequalify buyer prospects. We'll talk more about qualifying prospects as you read on.

FSBO Tip 4.How to determine the fair market price of your home.

This always seems to be a real tricky one. For many home sellers this typically reveals itself as a major point of contention. When trying to decide on a price guessing or basing your asking price on hearsay or nontraditional methods immediately reduces your negotiating advantage. Basing your price on what the house down the street sold for or what media outlets perceives as increased market value is not the way to get a legitimate price either. There are only two legitimate and well-recognized ways of determining a fair market value. One way is to contact a real estate agent or broker to provide you with a CMA otherwise known as a comparative market analysis. The best and most accurate way of determining price comes from a full-blown appraisal done by a professional real estate appraiser.

FSBO Tip 5. You're selling a house not a home.

While it's important to become emotionally distracted, you do not have to become a robot. After all this is your home, be objective but do not be cold. Keep in mind that people are going to perceive your home differently than you do. Either way way remain positive and extremely the right person will walk through the door and buy your home.

FSBO Tip 6. Preparing your home for sale.

Today's real estate market rewards those homeowners that place a high-value on neatnessas well as cleanliness. It not only adds value but alsogenerously promotes a quicker and more profitable sale. Once again the depersonalizing of your home helps your prospect with such an emotional decision. Decluttering the inside of a home is also key to your preparation. If necessary, rent out a small storage space and store some household items there. Just as a side note, having a garage sale is also a great way of getting rid of items that clutter up the house. Not only do you get rid of the items but also you make a little money in the process.

FSBO Tip 7. Start spreading the news.

It should be understood if you're going to sell your home and you're going to do it yourself, the easiest way to get the word out is to put a sign in your yard. This will immediately get the attention of anyone that happens to ride by. Naturally, this is the essence of selling on your own. Coming up with a highlight sheet to outline the key features of your home is a must. With the readily available use of word processing programs putting together a simple highlight sheet is easy.

FSBO Tip 8. Knowing a few, negotiating skills will get you a long way.

It's not necessary to become the next great diplomat. You will want to keep in mind that it's necessary to keep your emotions and personal feelings regarding the negotiating price of your property in check. When considering the selling price it's important that your calculations and numbers are correct. This allows you to have greater flexibility and leverage and you can negotiate from a position of strength.

FSBO Tip 9. Qualifying buyers and stopping the cookie loos.

So what's a lookie loo? A lookie loo is a person that comes to your house and looks in everything. They, look in cabinets, closets and drawers check everything out but never make you a serious offer. You need qualified buyers looking at your home or it's going to get very discouraging. One of the best ways of getting qualified prospects is to have them referred by your mortgage broker / lender. You can also take the direct approach. If you're arranging a showing over the phone, go ahead and ask them if they are pre-qualified. Do not be too shy when it comes to your prospects. If you're holding an open house and someone expresses interest in your home go-ahead and ask. Most of the time if they're pre-qualified they love to tell you. So do not worry about asking, it's the right thing to do.

FSBO Tip 10. If all else fails go to where the realters hang out.

If after a while, you're not getting the results that you were expecting for you can always go to the MLS option. This does not mean that you have to list with a real estate agent or broker. As a private party, you can list your home with your local multiple listing service. Usually this cost a fee but by doing this you automatically exposes your house to thousands of potential prospects all over the country. The upside is that you should be able to sell your home in short order. The obvious downside will be that you will have to pay co-op to an agent. Only in unique situations would the cost of co-opting be virtually impossible, due to low equity or some other extenuating circumstance.

These FSBO tips should give you a solid foundation to successfully selling your own home. There are many specific ideas and recommendations that are beyond the scope of this article when it comes to pricing, preparing and staging your home, and all of the items previously outlined. You should definitely research and prepare yourself for the selling of your own home process. In the long run, it will make things easier and could either save you or even make you thousands of dollars.

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Source by Alan Kirchain

Get Some Help With Your FSBO

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Deciding to sell your home yourself does not mean that you have to go it alone. In fact, it is probably a good idea if you do not. Selling your home yourself is a great way to save some money in realtor contracts but there are also quite a few professionals that you can utilize to make the sale smoother and more manageable. As you are the home's owner and not a sales professional who is familiar with the ins-and-outs of selling a home you will have to seek out a few individuals to help with the actual transfer of title, the title search and other aspects of the sale that would normally be handled by an agent.

The first thing you may want to do is find a listing agent who offers a flat-fee MLS listing. This will take care of some of the marketing aspect of the sale. This is one aspect that many FSBO's are missing in and access to the MLS is one thing that FSBO's were traditionally lacking and part of the reason that most FSBO's took longer to sell. The MLS will give access to your home to a huge number of internet browsers and other agents in your area who have customers who are currently looking for a home.

Another professional who should be a part of your sale is a home stager. Staging is the process wherey your home is visually prepared for sale by strategically arranging furniture and decorating the home. More and more we are seeing the art of staging playing an increasingly important role in most home sales. Also you may want to consult and retain the services of a real estate attorney to help with the contracts and title concerns when the home does sell. Having a proper legal professional handling all the title and contract issues will ensure that everything is done in the correct fashion and is legal and binding. This is not the kind of thing that you want to make mistakes on so it is in your best interests to hire the right people for the job.

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Source by Ken Hamric

Short Selling an Investment Property

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I have many clients that call me wanting to short sell their investment properties, they are generally worried about the tax liability of a short sale- AKA owed the IRS on money the investor never made. As most of you know, if the home is your primary residence- the Debt Cancellation Act of Congress protects the homeowner. Basically- the Lender will send a 1099 C for their loss in the property (which in turn shows the homeowner with the gain as extra income- even though this is phantom income) – as a primary residence, the IRS has one form that cancels this phantom income. However, as an investor- this cancellation of debt does not exist. What are your options as an investor, struggling with a property and losing money everyday?

If I have an investor client, these are the steps I suggest they take:

1. Find your loan documents- see if your lender has the right to sue you for any deficiencies or just take the property

2. In the loan documents- check if it is a non-recourse loan (CANCELLATION OF INDEBTEDNESS "EUR IRS-IRC SECTIONS 108 AND 1017), non-recourse loans are not taxable

3. Talk to your tax accountant- the tax accountant I spoke with Randy Kiesel, Chandler AZ- stated that at the time of the short sale sale if the owner can prove technical insolvency- there is no tax liability (See further explanation of insolvency below)

4. Analyze the percentage of loss- if you have lost over 15% in value- I suggest my clients think about selling the property

5. Determine whether you can purchase in 2 years for LESS than the amount you owe on the property. Calculate 3% increases for the next two years. (I am being lenient in allowing for value increases in the next two years)

6. Make your decision- if you can sell with no tax liability, in my opinion it is a good option. Start fresh with new investment properties at the new low market prices of homes.

**** Remember, short sales require a proven hardship- you can no longer afford the property, medical issues, divorce, etc.

So what is technical insolvency- showing that your debts are more than the fair market value of your assets. This must be proved at the time of short sale. In today's real estate market, if you own multiple properties, it is probably easy to show debts higher than assets.

Most Arizona homeowners lost 25-50% of value on their homes, this of course does not exclude investors. Investors, I suggest you speak with your tax accountant and determine if you will have any tax liability. Would not it be a better option to sell now, cut your losses & purchase at the reduced prices in the next 2 years?

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Source by Charlotte Allred

4 Tips to Sell Your Home Fast

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Selling your home is a big deal and can be stressful. Here are four points to ponder to help you sell your home fast.

1) Ask a professional for help!

Find the top real estate agents in your area. Then call each one and interview them. Good real estate agents can expedite the sale of your home through their knowledge of your local market. Find out how long they have been in business. How many homes have they sold in your area and what is their turn around time? What separates them from the competition?

2) Price your home correctly.

Unfortunately, it is a sellers market. In order to price your home properly think of it as a product. How fast are other homes selling in your price range? How do other homes in the same area compare to yours?

3) Make your home attractive.

Make sure your home shows well. Remember that the competition is fierce and if your buyer is looking at similar homes they will most likely choose the more attractive one. Clean everything once and then again and have everything well organized. Have the carpets cleaned and deformed, paint rooms that look dull and outdated. How does your home look from the curve? Make sure the gutters are clean and the landscape looks sharp.

4) Market your home effectively.

Whether you are selling your home yourself or using a professional it is crucial to use as many forms of advertisement as possible. Almost all buyers start their home search on the Internet so make sure you're on a good site. Have many photos taken from your home and added to the site your on.

I wish you the best of luck selling your home!

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Source by Paul Mcparland