Realtor, Real Estate Okotoks, Cochrane, Calgary

      


Big city deals with a small town feel! 

Specializing in Real Estate in Calgary, Okotoks, Cochrane & Area


Call or text 403.700-2532   Email: home@griffinre.ca

Brett Murrell, Realtor Real Estate Agent serving Calgary, Okotoks, Cochrane & areas


Do your research before selling a second home


Owning an investment property can provide useful income, while having a recreational property can provide a great place to spend time with family and friends.

 

But if you are thinking it’s time to sell, some careful research is in order.

 

“There’s a lot to consider when selling your investment property or a vacation home,” said Laura Parsons, the Calgary-area manager for mortgage specialists with BMO Financial Group. “Do your homework.”

A major factor when selling a property that is not your principal residence is the potential for capital gains.
Generally, if you sell the property for more than your original purchase price, half of the capital gain is taxable at your marginal tax rate.

 

However, the Canada Revenue Agency has strict rules on calculating capital gains, and changes do occur, so Parsons recommends talking to your accountant and making sure they are knowledgeable about investment real estate.

 

“The impact of when you sell may have a bearing on how much tax you pay,” she said. “So, it’s really important that you speak to your accountant and make sure that this is a good time for you to sell.”

 

Your accountant can determine if there are ways to reduce your capital gains for tax purposes – any renovations you’ve made to the property of a capital nature, for example.

 

On the flip side, an accountant might caution you against a sale if you are expecting increased income that would bump you into a higher tax bracket.

 

“If you’re in a high-income-earning year, you may not want to have some capital gains on top of that,” said Parsons.

She says if you’re paying a mortgage on an investment property or vacation home, you should also consider the effects on financing if you sell.

“THE IMPACT OF WHEN YOU SELL MAY HAVE A BEARING ON HOW MUCH TAX YOU PAY. SO, IT’S REALLY IMPORTANT THAT YOU SPEAK TO YOUR ACCOUNTANT AND MAKE SURE THAT THIS IS A GOOD TIME FOR YOU TO SELL.” – LAURA PARSONS, BMO FINANCIAL GROUP

“Are you going to have penalties? Are you losing a great [interest] rate? Because sometimes you can port your mortgage if you plan on buying another investment property,” she said.

 

There are also ways to try and maximize the selling price for your property and determine when to sell.

Parsons recommends talking to your REALTOR® to see what the local market is like for the type of property you own, and to get an idea of vacancy rates if it’s a rental property.

 

Find out what’s going on in the neighbourhood, such as plans for improved transit or construction of a leisure facility that might appeal to buyers.

 

“Any time you go to sell, make sure you’re sharing a lot of the knowledge, because it will be more desirable from a buyer’s point of view,” said Parsons.

 

If the property needs fixing up, Parsons recommends highlighting the availability of the Purchase Plus Improvements program that allows a buyer to finance some renovations into a mortgage.

 

“Position it with your Realtor and your banker to do what’s called mortgage staging, where we actually show people coming in to buy the house that they can build the renovations right into the purchase,” she said.

 

Parsons’ final piece of advice is to talk to the experts – your financial adviser, accountant, lawyer and Realtor – before any sale.

 

“Everything matters, especially with investment properties,” she said. “You really want to make a great decision.”

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Brett Murrell, Realtor Real Estate Agent serving Calgary, Okotoks, Cochrane & areas

 
 

Most people believe there are lots of reasons that a home doesn’t sell. However, there are actually only five. If you address these five common mistakes, then you will never have a problem getting your home sold. 

Over Pricing and Speculating
We all wish we could ask whatever we wanted for our homes, but unfortunately price is set by comparable properties and market conditions. If you are priced above either of these, then your home will sit for a long time.

Looking at the price of homes currently listed for sale in your neighborhood only tells part of the story. You must research how much homes are actually selling for, and price your home accordingly.

 
Exposure
Even a well priced property can’t sell, if no one knows about it. If you are not marketing your home where the buyers are looking, then you will not sell it. The more of your target market that sees your home, the better chance you have.

More and more, people are using the internet as their primary source of research. Be sure your home is easy to find in the most common places that people look.

 
Poor Marketing
You have to make buyers want to look at your home. If your marketing makes your property look like every other listing, then you are simply “rolling the dice” and hoping for the best. Is your marketing truly compelling?

A great question to ask is... Why should someone buy my home, versus any other home in the neighborhood or city? If you don’t believe that you have a compelling reason, then the buyer won’t either.

 
Presentation
So now you’ve got someone to look at your home, but it’s a mess, smells bad, or simply shows poorly. If a buyer doesn’t feel comfortable in your home, you can forget about the sale.

If you can, don’t be around for showings, keep the house clean, and do some research on staging your home for sale. A small investment can make or save you thousands.

 
Lack of Buyer Confidence
Purchases fall through every day because sellers cannot confidently answer the buyer’s questions; provide accurate paperwork, or verify important details. If you are not organized before you sell, then you may watch all your hard work go to waste as a potential buyer walks away due to a lack of confidence. 

Do Your Homework
You need to be very realistic with your goals when you are selling and you must do your homework. As the marketplace changes so must your strategy. Too many people spend thousands of dollars, hours of their time (not to mention stress) and miss the best opportunities to sell or don’t have the proper information to make a sale possible.

Gather all the information that you need and get the advice of experts when you can. At the end of the day, hiring a professional to ensure your sale is done properly may be one of the best investments you can make.

 

Source: Courtesy CIR Realty

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