Did you know that there were around 7.15 million second homes in 2020? Having a second home can be very convenient, but there may come a time when you need to sell it. Selling a second home in Kensington, MD, can be difficult if you don’t know where to start.
How much should you list the property for? How can you make the property sell faster? What should you avoid when putting it up for sale?
Did you know real estate can become stale and a decreasing yield invesetment? Yes, you read that right. When you hear buy and hold, do you think of buy young and hold till retirement – we hope not!! That is usually not a wise move and we can postion you to refresh your portfolio only as often as needed so that you are no longer making tax decisions but wise investment decisions.
Well, I heard about 1031 exchanges. Yes, this can be used in some cases but it’s not a strategy that you should become solely reliant upon to shift your tax burden from one pocket to another and/or across multiple other investments you own. We can help advise on this too.
Real estate agents in Kensington can help you answer these questions. They can also help you make the right decisions for your real estate investments. But where should you start?
Keep reading and learn more about how to sell your second home.
Choose the Right Real Estate Agent or Broker
Learning how to sell my home is a much easier process when you have a real estate agent by your side. Many people try to sell their second homes without an agent, but this is not recommended. While it’s possible to sell your second home on your own, it will be very difficult.
This is especially true if you don’t know much about selling a house. You might get far less than the price you want, or the house might take too long to sell. Getting a real estate agent or some of the best brokers in Kensington, MD, can help.
But what should you look for when choosing a real estate agent near me? A good real estate agent will always be one with plenty of experience. A more experienced agent will know more about the state of the housing market.
They can help you list your second home, set it at the best price, and promote it to potential homebuyers. This will make your listing more visible to a larger group of people.
The more visible your house listing is, the better chance it has of selling at a good price.
An agent or broker can also help you understand the difference between selling a second home vs investment property. Is your second home nothing more than a vacation home?
Or is it a house that you don’t use but instead rent out to others? Did you buy the house with the sole purpose of waiting for its price to increase so you can make a profit? These differences may affect the way the house sells and how much money you will get after taxes.
There are thousands of scenarios our brokerage would discuss on the financial side of things prior to listing your property but for the sake of this article we will address some basic and obvious first steps.
Make Sure the House Looks Good
You won’t get very far in the process of selling your second home if it doesn’t look good. Before a photographer comes out to take pictures of the house, you should make sure it’s in great shape. This is because houses that don’t look good on their listings have a lower chance of selling.
They will instead sit for sale for months. You might have to lower the price several times before you can sell it. This is because most homebuyers aren’t interested in houses that look old, run-down, or dirty.
Suppose the outside of your house hasn’t been cleaned in a while. The house’s paint might be chipping or the siding might be dented and bent. The yard may be overgrown and filled with weeds.
The roof may have shingles missing or it may be faded. All of these factors would make your house very unattractive to most homebuyers. But you can improve the chances of your house selling fast and at a high price by sprucing up the property.
Curb appeal is very important for every home listing. The point of curb appeal is to make sure that your home looks good. This will give homebuyers a good first impression.
Consider giving your home a new coat of paint. This will make it look much fresher and more vibrant. Cut the grass and pull out any ugly weeds. Believe it or not but outdoor landscaping has one of the highest and immediate ROI’s on presenting a home for sale. A freshly mulched bed with some annuals near the doorway do wonders for listing pictures and won’t break the bank by any means.
Don’t forget about the interior. If the walls are scratched or stained, add a new layer of paint to the inside, too. If you have ratty and stained carpets, consider replacing them. As tempting as it can be to go for the newest styles or colors and patterns try to stick to neutral colors and a mid-tier priced paint.
If there is a lot of furniture cluttering the space, consider moving or getting rid of some of it. This will make your home look much more appealing. The more appealing it looks, the faster it will sell and at a higher price.
You will want to find a middle ground between spending uncessarily (which may not provide much ROI as you might have expected) and the bare minimum to get the place presentable but not too customized (you want new buyers to use their own imagination to dream of their ideal setup not box them into a trend or idea that you love but they might not).
Think About Real Estate Capital Gains Tax
Many people forget about capital gains taxes when they sell their second home. They may think that they may receive a large chunk of what the house sold for, but this isn’t always true.
You will have to pay these taxes in addition to other standard fees that come with selling a house. You can pay these taxes with the money you made from selling your second home. These taxes are based on your income but your income can also be sheltered (another discussion altogether).
The less you make, the fewer taxes you’ll have to pay. The only way you can avoid capital gains taxes is if you consider your second home your primary residence. There are a few ways you can avoid these taxes, but you’ll need professionals to help you.
Remember, tax avoidance is legal, tax evasion is NOT!
All About Selling a Second Home
Selling a second home is a great way to get some extra money. If you don’t know where to start, a real estate agent or broker can help you. They will make sure that your home is listed properly and that you’re on the right track.
Are you ready to sell your second home? See how our agents can help you.