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What NOT to do when Selling Income Property


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Categories
Buying Rental Property
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They sale that in real estate, you make money when you buy, but of course that assumes that you’ve figured out how to sell the property as quickly as possible and for the most money possible.  So for today’s post I thought it would be helpful to list a few things that you should never do when trying to sell a property.

First and most obvious is that you should never list the income property at an unreasonably high price point.  Always analyze comps (what similar neighboring properties have sold for recently), the overall state of the market, and your rent roll to determine a fair and reasonable listing price.  Avoid the temptation to try and make a killing because the likely result is that your property will stagnate on the market for many months.

Second, do not hold out for the perfect offer, because this might never come.  I’ve seen time and time again investors holding out for a full-price offer, or one with the most favorable terms.  This is a mistake because your goal is always to sell property as quickly as possible. As an example, holding out for 3 months to get an offer that is $10,000 closer to your asking price than the first offer you receive is not worth it, because the extra sales revenue would be eaten up by your carrying costs, not to mention the additional stress that holding out creates.

Third, do not use an inexperienced real estate agent – or no agent – to sell the property.  Avoid the FSBO routine (For Sale By Owner), because this is an extremely time consuming and stressful experience that you as the CEO of your investing business should not be dealing with.  Use an experienced rental property agent who you know has good selling skills.  He/she must understand the need to clearly communicate the pricing message, and always keep all comparables and other similar documentation at their fingertips.

The bottom line is that selling is almost as important as buying in the real estate investing game.  So always set a reasonable and logical listing price, avoid the temptation to hold out for that perfect offer, and always use an experienced agent.  Good luck and happy selling!



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