Real Estate Post

Inheriting real estate can be one of the most painful ways to acquire property. You’ve lost a loved one and now you have your loved one’s primary residence to handle. If you plan to sell the property make sure you read on to get a general idea about what to do next.

“A lot of people have enough to do just to maintain their own property and now all of a sudden they have another piece of property they have to deal with — that’s a little difficult, says Carl Izzo, Managing Director at Fiduciary Real Estate Advisors in Boston.

Transferring the property Getting legal advice should be your first step. Depending on where you live, the legal process will vary, but all states allow those who inherited property to have the property transferred from the previous owner’s name to theirs. Sometimes a lawyer will be needed for this process and other times the clerk of courts office can guide you through the process. Since the property isn’t being sold to those inheriting it, it’s unlikely that there would be any transfer tax.

Meeting of the minds After a death, most people are upset and not always able to think clearly about what they should do with the property. Some family members may want to keep it while others may want to sell the property right away and still others may think it should be sold after some time has passed. This is the time to have multiple round-table discussions to come together and try to have a meeting of the minds. Allow everyone to express their opinions and ideas about what should happen with the property. Depending on how different everyone’s thoughts are, this could take several attempts to reach a decision. However, it’s worth the time to try to determine who might want to keep the property and who wants to sell it immediately. Finding a viable solution for all could avoid a lawsuit that forces the sale of the property.

“If you can determine during the estate administration who really wants to hold the property, you may want to give [that person] the property as [that person's] share of the estate and those who aren’t interested in a long-term hold can have the stocks and bonds,” says John Sorensen, The Law Offices of John R. Sorensen in Del Mar, California.

Check the status of the property Go to the house and see what condition the property is in. Sometimes inherited property can be badly run down and need a tremendous amount of work before it is ready to be sold. There are cases where those who inherited the property find they have inherited a huge mess that needs immediate attention. If immediate attention isn’t necessary, before you dive into fixing up the home, consult with a real estate agent to see which improvement projects might help the home sell faster. Be sure to keep good records of any and all costs for improvements; this will be important when determining if capital gains and state taxes apply.

Get financially organized Right away it is crucial to figure out if the mortgage has been paid and if there are any liens on the property. Check to make sure the taxes are current. Also, remember to keep the homeowner’s insurance paid until the property is sold.

Stepped-up basis will likely help save taxes “The property gets what they call a ’stepped-up basis’ meaning it’s valued as of the date of the death,” says Thomas Lee, Partner at LEE & KANE, P.C. in New York.

Therefore if the property is sold for about the same price as it’s valued you will likely not pay taxes. “So even though the parent may have paid, for argument sake, $50,000 for a one-family house which is now valued at $500,000 or $600,000, when the [beneficiaries] sell it, it’s as if they paid that $500,000 or $600,000 because it’s been revalued based on the date of death,” says Lee.

While the stepped-up basis still applies, note that the tax law is different if this is a spouse inheritance. Be sure to consult a real estate tax attorney for details.

The appraisal It’s very critical to get an accurate appraisal so everyone understands the value of the home. This helps the inherited parties to see how much they can expect to receive after the home is sold. Once the appraisal comes in, have another meeting to determine your low-end offer that will be accepted.

Hire professionals to help Izzo says using a real estate counselor can be a huge help and relief because frequently beneficiaries will not agree on the sale price or other terms of the sale. The counselor will help to assess the overall situation and determine what each person wants—such as, do the beneficiaries want the highest price or simply to just get the property sold immediately?

He also recommends seeking expert help from quality real estate agents. “I usually suggest to [beneficiaries] that they talk to local Realtors and get a marketing plan from two or three which basically says, ‘If I list this property with you, what would you do with it? Where would you market it? How would you market it and what is the current market price?’”

Having legal experts involved will help to lessen any possible feelings that someone is getting cheated. Taking these steps will help to ward off family arguments.

A study done by a pair of Canadian psychologists demonstrates how the law works. What the psychologists discovered is that people at a racetrack, after placing a bet, are more confident of their chance of winning than they were immediately before placing the bet. Keep in mind that nothing about the horse’s chances of winning changed. It’s the same horse, on the same track, in the same field of horses; but in the mind of the bettor, the horse’s chances of winning improve once they purchased a ticket. Although this may be a bit puzzling at first, the reason has to do with the law of consistency.

Like the other laws of persuasion, this one lays deep within a person. It is a person’s desire to be (and appear to be) consistent with what has been done. Once people take a position, they will behave consistent with their commitments.

For example, take the bettors in the racetrack experiment. Thirty seconds before placing the bet, they were tentative and uncertain, thirty seconds after placing the bet they became optimistic. The act of making the decision is the critical factor. Once a decision was made, the need for consistency caused these people to bring what they were feeling into line with what they had done. They simply convinced themselves that they had made the right choice and, as a result, felt more confident about the decision. Pattern of Yes

As a home salesperson you can use the law of consistency to get prospects to make minor decisions that lead to the big decision — a home sale. The best and easiest way to lead people to any decision is to use the ‘Pattern of Yes’.

People are creatures of habit, people like what is familiar. The human brain seeks pattern and having established a pattern, likes it to continue in order to be consistent. When someone has said “Yes” three times, they are likely to say “Yes” a fourth time.

When you get a prospect to agree, you are establishing a pattern of consistency. People don’t say “Yes” to things they don’t want. It would be inconsistent to say “Yes” to a home, community and location and then say “No” when you ask for the order. So, a key to sales success is finding many ways to get prospects to say “Yes”. And once prospects say “Yes” it is likely they will to stick with the decision in order to be consistent. Use Tie-Down Questions to Lead People to Minor Decisions

The more a prospect says “Yes,” the harder it will be to say “No.” Get prospects to agree that a home, community, location, and financing satisfy what is important to them. Ask affirmative questions or tie-downs throughout your sales presentation and especially during the demonstration of home. A tie-down question is any question that asks for an agreement. Use tie-down phrases such as these: don’t you agree; wouldn’t it; isn’t it; right; doesn’t it; aren’t they; don’t you; aren’t they; can’t you; isn’t that right; don’t you think; aren’t you; okay?

This is an easy way to lead prospects into minor decisions, isn’t it? You can gently influence prospects to nod their head in agreement, can’t you? The result is a series of “Yes” responses that will lead to a sale, don’t you agree?

Summarizing Decisions

The key to the effectiveness of the law of consistency lies in your ability to get people to make a decision. Start today to use the ‘Pattern of Yes’ consistently. Then ask for the order by summarizing the decisions your prospect made. How can prospects say “No” when they have consistently said “Yes”? After all, that would be inconsistent.

Nowadays, the US economy is facing one of the biggest recessions of all time. The real estate market is in a slump as well. But, like everything, it is not permanent too - there is nothing permanent except change.

Even in this condition, there are many areas where the property business does not have any bad impact as such. Though, now market is a buyer’s market, but you can still sell and buy properties and earn a very good profit. It is important to understand that prime location properties are always in demand.

In this cutthroat competition, you have to be alert and act quickly as a good opportunity would not last longer - there are thousands of agents waiting for good opportunities in the market.

What businessman wants?

Every good businessman wants to buy a property at a low price and wants to sell it at a high price. This is the ideal time to buy good properties as their prices are low - a buyer can get very good profits once the recession period is over.

Look around for Properties

Always look around for those properties which are in the market for some time as usually their sellers are tired of waiting and ready to sell them at a negotiated or low price. Don’t buy or recommend those properties that require a lot of maintenance work.

Moreover, if a house needs some minor repairs, get it done before calling the potential buyers for visits; always make the house as presentable as possible.

Nevertheless, you can buy or recommend a property that requires some maintenance work - in such cases, you can get the work done on your own in only a few hundred dollar, on the other hand, you can get a good discount from the seller.

Research is Key

Always do research about the neighborhood properties prices; it would help you in calculating the price of the property you are planning to buy. In addition, preference should be given in buying well-to-do neighborhoods. If you buy a property in run-down neighborhood, you might have to bear the loss - don’t invest money in the run-down neighborhood.

Keep researching about the home you want to sell. Ask the owner about the history of the home - it might give you some good points that will help you in designing the sales pitch of the home.

Regardless of your working style, whether you are working as a part-time or a full-time real estate agent always try to attend seminar and conventions so that you can gain the knowledge of the current market trends and interact with other agents - you might get some customers over there too.

Make yourself as vocally expressive as possible. You should be a people friendly person. Never brag in front of your customers as it creates a negative effect - people are not mad these days, in fact, they are very well aware of the market.

‘House for Sale’ board is not ENOUGH

Remember! Only posting a board with the wordings like “House for Sale” does not do the job effectively. Always complete the paper work of the home so that it would not delay the selling process - it would also help you in improving your image as the customers don’t want delays.

In the end, we can say that if you follow the aforementioned tips, you will certainly improve your impression among other real estate agents and potential customers; and eventually, you would be able to do more business.