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Choose Powerful Selling Property Options

Selling property doesn’t have to be a challenge. Just know there are five ways to sell property. Each selling property method has its own advantages and disadvantages.

Selling property like land, multi-unit apartments or even a single family residence requires the right team.

Sell property fast by selling directly to us….we’ll buy it.

We buy Chicago property located in the Loop, River North, Streeterville, Lakeshore East, Gold Coast, Old Town, Lincoln Park, East Lakeview and Museum Park.

We also buy San Francisco property located in Nob Hill, Russian Hill, Pacific Heights, Marina and SoMa.

If selling property to us does not sound appealing, we can market the sale of your property to other buyers. Either way, we can tailor a solution with your needs in mind.

Are you an investor selling property or looking for other real estate investment opportunity?

The tax man will pick your pocket.

If you are selling property for a profit with the intention of finding a replacement property and minimizing your capital gains tax liability…then a 1031 Exchange may be the best way for you to increase your purchasing power.

We can even help you identify the replacement property.

Be the bank.

For those with substantial equity or others who may wish to minimize their initial tax liability in other ways, selling property by structuring owner financing allows you to make money like a bank.

Looking to sell property fast to avoid foreclosure? There are tax implications to be aware of.

To sell property in a global economy, knowing local market data and the three ways to determine market value (price) are extremely important.

Banks, brokers, appraisers and investors have three ways to determine property value…depending on whether your property is land, a single family residential unit, or a multi-unit apartment building.

Selling Property with a Regular Sale

A regular sale will require a qualified buyer, cash or lender approved, to purchase your property outright and immediately cause the clear transfer of Title to the buyer at the closing table.

The clear transfer of the Title implies that all taxes, lender notes, broker commissions and any other fees associated with the sale are sufficiently met by the sale price.

The advantage of this selling property method is that the incoming proceeds (money) of the transaction are collected in the present. The disadvantage is that the final settlement price could be much lower than what you expected… depending on the market cycle.

Selling property for a profit or selling property for a loss will both have their own unique tax implications. If you are selling property for a profit with the intention of replacing it with another property…a 1031 Exchange may be right for you.

What happens when there is not enough money at the closing table to pay off your lender?

Selling Property with a Short Sale

Are you behind, or plan to become behind, on your mortgage?

A short sale occurs anytime you are selling property where you owe more money to lenders, or note holders, than your property is worth. Therefore, approval for the release of liens ‘pinned’ to the Deed must be negotiated for a clear Title transfer to occur.

Just know that if you are selling property in a short sale scenario…you will not be doing this alone.

Next to syndicating the ground-up development of a large building, a short sale is the most complicated real estate transaction.

Can you still sell property fast under a short sale? Yes….but you need the right team.

Selling Property with a Pure Option

If you intend on selling property using a Pure Option, keep in mind that you will be selling your property to a buyer that understands how to handle this process. Usually, the buyer will be an investor or a real estate fund.

Selling property with a pure option is a straightforward process. Like any option contract, there is a specified start and end date. A buyer typically pays non-refundable option money to the seller.

It is important to note that the expiration period of the option contract is negotiable; as is the amount of money to be paid in option consideration.

The seller will maintain possession of the Deed to the property for the entire time until the option ‘rights’ are exercised by the buyer. When the buyer decides to exercise the option to buy, the seller will then receive all transaction proceeds (money) at that time.

Selling Property with a Lease Purchase

Do you have a lot of equity in your property? Then maybe selling property with a lease purchase is right for you.

Also known as rent to own, lease option or rent with the option to buy, selling property with a lease purchase can be a win for all parties. There are various ways to structure a Lease Purchase sale…each circumstance is unique.

The key word here again is ‘option.’ A Lease Purchase aligns two separate real estate transactions: (1) a lease contract and (2) an option contract right to purchase.

You are renting your property to a tenant/buyer who has prepaid non-refundable option consideration that will be applied to a pre-negotiated price if the buyer exercises the right to buy.

You will receive some money on the front end, money along the way in monthly rent and the majority of proceeds (money) will come at the end if the tenant/buyer chooses to exercise the option.

Like the pure option…you will maintain ownership of the Deed to your property until all conditions under the option contract are met.

One word of caution, if you plan to sell property with a ‘sandwich lease’ option agreement…we recommend you work with a buyer who is a full-time investor or real estate fund that uses a suitable asset protection strategy.

In short, we can purchase your property from you on a Lease Purchase agreement.

Selling Property and the Garn Act…if you are interested in selling property using a lease purchase agreement, it is important to know the implications regarding the Garn Act.

The Garn Act was enacted October 15th, 1982. Among other provisions, the most important provision to be aware of when selling property in a lease purchase is the “due on sale” clause.

The “due on sale” clause applies only when selling property that has an existing mortgage(s); does not apply when selling property where there is no remaining mortgage balance.

What is the “due on sale” clause?

The “due on sale”, otherwise known as an “acceleration clause,” is a contractual right; not a law. The “due on sale” clause is a provision in a mortgage document that grants a lender the right, but not the obligation, to call a loan due if all or any part of the property is sold or transferred without lender written consent.

Section 1701j-3(b) (3) in the law encourages lenders to permit real property assumption and reads:
“in the exercise of its option under a due on sale clause, a lender is encouraged to permit an assumption of a real property loan at the existing contract rate or at a rate which is at or below the average between the contract and market rates, and nothing in this section shall be interpreted to prohibit any such assumption.”
Only in rare instances does selling property with a lease purchase compel a lender to accelerate and make all sums payable. That said proper disclosure is preferred.

The best way to completely avoid any “due on sale” risk is by obtaining lender written consent when selling property with lease purchase.

There is no “due on sale” risk for anyone selling property with a lease purchase that has no existing mortgage.

If selling property to us on a Lease Purchase does not sound appealing, we can market the sale of your property to other tenant/buyers. Either way, we can tailor a solution with your needs in mind.

Selling Property ‘Subject to’ the Existing Financing

When a buyer buys your property ‘subject to’ or ‘sub2’ the existing financing…you deliver the Deed to the buyer upfront. This is a good thing for you because now you are no longer the owner of the property.

On the other hand, when selling property with a ‘subject to,’ your name still remains on the existing mortgage. However, instead of you making payments on your loan, the new buyer takes over making payments on your loan each month until they can refinance or sell the property and close out your existing loan.

The risk for you is that if the buyer were to cease making payments on the note…you are still liable to the bank.

The reality remains if there is equity in the deal, the buyer will make sure to meet all bank payments because the buyer will not want to lose out on profits. Likewise, the buyer would not want to risk losing the deed and a foreclosure on their record.

When selling property, we recommend that you only enter into a ‘subject to’ arrangement with a professional that you trust and obtain lender approval. It is all about trust in a ‘subject to’ transaction.

When selling property where an existing loan will remain in place, you will have to consider the implications regarding the Garn Act. When you sell property, do not be misled by anyone who doesn’t inform you of this important variable concerning modern day loans.

If your property is paid off with no existing loan debt…you don’t have to worry about the Garn Act when selling property.

When selling property it all starts with proper education. Most importantly, one must understand how property title is exchanged.

If you need to sell property fast or need marketing answers on selling property, contact us for a solution to your needs today.