Making Your Real Property Sale Work Out

Banks are being more strict than ever with whom they lend money to, so if you are a home seller you really need to consider becoming the bank, and loaning our your own equity to a prospective buyer. Why should I do that, you say?

Let us just say, for this example, you have sold a property that you have fifty thousands dollars in equity in. Deciding to just sell it and pocket the big chunk of money may end up hurting you by increasing your tax liability. It is not only a matter of income taxes or municipal taxes that may affect your bottom line, and there are additional taxes that tax you at a higher rate. There are many rules that govern taxes like capital gains tax, so consulting with an accountant or other tax professional is really important in order to save your money and profits.

It may seem counter intuitive, but loaning the buyer your profits from the sale may be the best way to limit your tax liability and generate some income doing so. Whenever possible, you should try to be the primary lien on the property to limit your own risk in case things go sideways with the homeowner, and they can not pay for their loans in the future.

With a solid lien position, you have a certain amount of control over your destiny, in regard to the property you are loaning on. If the buyer does get behind on payments, you simply go to them personally and express some empathy for them, then offer to take the property back through a deed in lieu of foreclosure. Processing a foreclosure completely is expensive and ruins the homeowners credit, but signing the house back to you avoids one and allows to you iron out the problem. Finding a renter is easy so renting to the homeowner or not, is not a problem, but make sure you can sell it when you find another buyer for it. Buying a home is on the forefront of many minds, so loaning out your money on it again is not too difficult.

Loaning your money out again will do a lot of positive things, including helping your next buyer improve their credit history, and bring you a nice chunk of change as you go along. The homeowner may even eventually refinance you out of your lien position altogether.

The author enjoys writing articles about boise home search & boise idaho real estate. Click on the above links to learn more about these topics! Get a totally unique version of this article from our article submission service