Real Estate for Sale by Owner – the Advantages Over Real Estate Listed by a Third Party
Category : Real Estate
There are several advantages when an individual chooses to buy real estate for sale by owner versus real estate sold through an agent, listing company, or other third party. These advantages include the money saved on the real estate agent fees, better terms through owner financing, and usually a better overall buying price because of the money saved through the process and the relative inexperience of most private sellers. Therefore, when an individual is looking to purchase a property, it would be a good idea to look at the properties for sale by a private owner before looking at listed properties or attempting to contact a licensed and experienced real estate agent.
Real estate agents make their money through commission. A commission is predetermined rate that listing houses use to provide incentive for agents to sell more property. It is usually a percentage, anywhere from three to seven percent of the proceeds of the sale of the property. This means that the higher the selling price for a particular house, the more money a real estate agent earns. Therefore, an agent tries to elevate the asking price by making the house sound better than it is, offering counter offers from other potential buyers, or advertising characteristics that many people find attraction. This is well and good for the agent and the seller, but not that great for the buyer. Therefore, it is advantageous for the buyer to search out listings that have been offered by private owners because there is no associated agent and thus no incentive to elevate the asking price.
Another advantage to seeking out real estate for sale by owner versus real estate sold through a real estate company is the potential for owner financing. Usually, when a person places a house on the market without the use of a listing company it is because the owner is in need of the money. Sometimes this need turns into desperation. When a seller becomes desperate all options are on the table, including owner financing.
Owner financing is similar to loans and mortgages offered by banks or other lending institutions. However, these private financing options are more fluid and less rigid than bank loans or financing options. Because owner financing revolves around a private individual there are no rigid restrictions associated with the loans. An owner who is motivated to sell will usually offer better terms than a bank might offer. These terms might include a lower loan rate, flexible payment due dates, or smaller penalties for missed or late payments. Another great advantage with owner financing is that you deal with an individual person instead of a large bank or lending institution. This person will be more likely to be lenient with payments.
Finally, and the most important reason to buy from a private owner, is that the bottom line price paid for property purchased in this manner is usually considerably less than property offered by real estate companies. This is so because agent fees are eliminated through this process, there is no incentive for a third party to increase the asking price, and favorable owner financing is usually available.
When buying a house, do not over look the properties available by the owner. They are oftentimes cheaper with more flexible terms than houses bought through a third party.
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Help answer the question about real estate for sale
What are my tax deduction for CA real estate sale on a loss and depreciation?Owned the property for 1.5 years, unable to rent, second home in area of primary, upgrades made and no depreciation taken for duration. Paid out any equity gain at close of escrow, repair costs from pest inspection and covered all sellers expenses. Of course, taxes and interest taken since purchase.
Depends on when it was sold I think. If the estate sold it and then distributed cash to you and sibling, then that's just part of the estate distribution and no tax due. If the estate distributed the real estate to you and sibling, you have a "basis" (amount paid) equal to your share of the value. If you then sell it, you will have either gain or loss for the difference between your basis and the selling price. Probably worth the $$ to get some professional advice if the amounts are big.
"Prime" real estate & "difficult location" should not be in the same sentence.
Prime real estate is Prime real estate because it has the best of everything, especially Location!
Have you been a "for sale by owner" for 2yrs? If not, you're real estate agent is NOT educating you on market conditions & proper pricing.
If you are already in the foreclosure process you probably have about 2-3months left to actually sell it.
Drop the price!!!
If it doesn't seem possible to make a profit after costs & commissions, inquire your agent about getting into a "short sale", where the bank will accept LESS than you owe. Doing a short sale won't harm your credit as bad as actually going into forecloure & the bank owning it.
Make sure your Commercial Realtor is advertising your property on the nationally known websites for commercial properties at http://www.propertyline.com or http://www.loopnet.com
Now that’s an absolute hoot! Let’s see some more!!
Funny Stuff!! Saw this video on realestatecomedy(dot)net
very creative.
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If this was deducted as a 2nd residence, then your loss is personal and not deductible. In order to have deducted the loss, the property would have had to been held & OPERATED as an investment (rental) property, Sorry.
If you have any other questions, or need assistance, please contact me via my website http://www.slarson.com/contact or email me directly at Steve@SLarson.com
Well done. Funny.
The reason it is called subordinate is because it is secondary to the first loan. There is definately some risk involved. If the property is forclosed on, and sold at auction the first loan is paid, and the remainder of funds go to pay off each subordinate loan. You can still go after the defaulter for the remainder, but it may be hard to collect without legal fees. Most the time there are no troubles, but choose the buyer wisely.
Pretty funny commercial. Nice job
Don't buy a house only because there is a short sale involved or because it is a foreclosed property- buy the house you find that is the best house for the money! Even if you are only buying a rent house- only buy because the house seems to get you a very good cash flow.
I have been in real estate sales for 31 years and there is always a scheme for con men to entice people apart from their money.
A short sale may be involved in the purchase of the property you find—or it may not. It is foolish to think that is the only way to get a good deal.
you cannot practice real estate without a license!!! this means anyone who is an unlicensed individual who sells a home, no matter who it's for/to, for a commission. if you don't have your licnese, and act as an agent, then you can/will be fined by the Real Estate Commission & LLR. the penalties vary from state to state.
you wouldn't practice law or medicine without a license,… same thing with real estate!
This commercial is great…Very funny.
Figure 6% of the sale price to the brokers (not 6% of the gross profit but 6% of the sales price) which you can probably negotiate down since the sales price is clearly very high. Just a few % of the sales price for other fees – mostly taxes. I'll bet you can get out of the deal paying maybe 6-8% of the sales price (but I have no idea what NYC taxes run so I'm not really sure how that would affect the transaction).
I'd invest the money is a diversified group of well performing mutual funds. That should easily set you up for life assuming you live within your means (but alas your children will probably blow whatever is left – the downside of being rich I guess).
funny
Nice Vid. I enjoyed it. We market properties and other things on youtube, we hope to create a large network of people interested in making money. Your video gets a five star rating from us. I hope you feel the same about ours.
Disclaimer: Consult your tax advisor
That said, if you lived on the land/in the mobile for 2 of the last 5 years as your primary residence, you might be entitled to the first $250k if single/$500k if married of profit without paying capital gains.
If you didn't live there in the last five years, you probably need to trade into something to defer capital gains taxes. Keep in mind that capital gains run around 20% of the profit and 80% of something is better than 0% of nothing.
Any investment that you do with the sales proceeds should provide you income or equity appreciation as well as tax benefits.
You could put your money into commercial or residential real estate, land (like a mobile home park), hotels, motels or whatever. Just perform your due diligence and work with licensed professionals.
co-worker discount lol