DEAR BOB: We made a bad mistake last September. My husband’s niece just received her real estate sales license so we listed our home for sale with her. Fortunately, we followed your advice and listed for only 90 days. She was a complete dunce. It turned out she is selling real estate in addition to her part-time school teaching job. When I talked to a full-time realty sales agent, she said our house never appeared on the weekly real estate broker tour (probably because our agent was busy at school). The listing expired with only a half-dozen showings by other agents. No offers. Our listing agent never showed our house once. She only held two weekend open houses because she was “too busy.” We are now ready to list our home for sale with a better agent. How do we find the right agent to sell our home? –Brent W.
DEAR BRENT: Now you know why I constantly recommend home sellers interview at least three successful local agents before listing their home with the best agent for 90 days. If you had done that, your niece probably wouldn’t have obtained your listing.
Purchase Bob Bruss reports online.
Each full-time agent you interview should provide you with his/her personal brochure of qualifications for your listing consideration.
In addition, each agent should also submit a written CMA (comparative market analysis) of your home. The CMA will show recent sales prices of similar nearby homes, asking prices of comparable neighborhood homes (your competition), asking prices of recently expired competitive listings, and each agent’s recommended asking and probable sales price for your home.
Without your asking, the best agents you interview should provide you with their marketing plan and recent seller references. Before listing with any agent, be sure to phone those sellers to ask “Were you in any way unhappy with your listing agent and you would sell you home again with the same agent?
Of course, don’t sign a listing for longer than 90 days unless the listing agent includes a written unconditional cancellation clause after the first 90 days.
ALWAYS CHECK RENTER’S CREDIT SCORE
DEAR BOB: My wife and I own six rental houses. They have appreciated handsomely in market value and, next to our home, have been our best investments. However, when we have a vacancy, we seem to have trouble obtaining qualified tenants. Of course, we obtain a written tenant application and we phone the previous landlords for recommendations. Any other hints to avoid bad tenants? –Vern V.
DEAR VERN: Yes. Always obtain a written credit report on the tenant applicant. To pay for this, charge the applicant a credit report fee of up to $30.
My experience has been, if the applicant knows they have bad credit, they won’t pay the $30. I know it is difficult, but when that happens be very thankful because that person probably has credit problems that will result in late or no rent payment.
If you have a laptop computer, have the tenant apply for his/her own credit report when the application is filled out. The easiest source I’ve found is www.myfico.com and the cost is $14.95 including FICO (Fair Isaac Corp.) score. Read the credit report carefully. If the FICO score is below 650, you will probably have a rent collection problem unless the tenant has some redeeming quality, such as a large security deposit.
CAN REAL ESTATE TRADER BUY OR SELL MORE THAN ONE PROPERTY?
DEAR BOB: I own several rental properties that I would like to sell so I can acquire one large property. Is this possible if I want to avoid the capital gain tax on the sale of my current property? –Margo Y.
DEAR MARGO: Yes. The number of rental or investment properties you trade, either on the selling or buying side, is irrelevant. What matters is the total sales price and the total purchase price.
To illustrate, you can exchange two rental properties for one large property. Or, you can sell one investment property and acquire three rental properties. To qualify for an Internal Revenue Code 1031 tax-deferred exchange the acquired property total cost and equity must equal or exceed the sales price and equity of the old property relinquished. For more details, please consult your personal tax adviser.
The new Robert Bruss special report “Foreclosure and Distress Property Profit Secrets” is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet PDF delivery at www.bobbruss.com. Questions for this column are welcome at either address.
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