Out-of-Area Home Sellers: Selecting an Agent to Sell Your Home

With today’s internet and tele-communication technologies, it has become relatively easy for out-of-area home sellers to select and work with real estate agents remotely. We have been helping a number of such sellers on LessThan6Percent, so we wanted to blog about some of the key considerations for sellers when selling remotely:

Working with tenants. When a seller lives out of the area, the property is question is often occupied by tenants or family members. When selecting an agent, we often advise the seller to seek out agents who have experience working with tenants. The seller may want to sell the property tenant-occupied or vacant, so ask the agents his/her experience selling with a tenant in place, or assisting with relocating tenants. In certain cities such as San Francisco, it can be tricky if the property is occupied by tenants prior to or during a sale, having a tenant-expert representing the sale is critical to the sale being successful and stress-free. If you’re unsure as whether you want to sell the property tenant occupied or vacant, read our previous article on this topic here and also read from our guest blogger on this issue.

Remodeling/fixing up. We are seeing that most sellers do some of type of remodeling prior to listing their homes. This can be a little tricky for home owners who live hundreds or thousands of miles away. It simply does not make economic sense for most remote sellers to fly back and forth interviewing contractors and following up on remodeling work. Again, here is where having an experienced real estate agent really helps. For those who have been in the business for awhile, well-connected agents typically have certain contractors they can call upon to update a property quickly and economically. Ask for before and after pictures from the agents, ask for detailed quotes and estimated timelines. As with everything else, try to get the quote in writing so there is less room for potential disputes in the future.

Internet presence and tech-savviness. Most tech-savvy real estate agents now have either DocuSign or HelloSign to help remote sellers with document review and signature collection. If you have a preferred method of communication such as text, email or phone calls, make sure to communicate that upfront with the agents you interview. Make sure you’re comfortable with the agent’s communication style and responsiveness before committing to a listing agreement. Since 90+% of buyers now first find their ultimate home online, ask to see each agent’s online marketing materials for the homes they recently sold. Partnering with an online marketing expert will get your home sold faster and at a higher price for sure. We at LessThan6Percent readily highlight our partner agents’ online marketing materials on our site so it makes comparison easy and convenient.

Tax consideration. Is the property going to be subject to capital gain taxes? Would this impact the decision to sell? Typically, unless the property owner has lived for 2 years (the 24 months do NOT need to be continuous) in the property during the immediate 5 years prior to selling, the property will be subject to capital gain. Even if the property meets the live-in requirement, only a $250K gain for an individual (and $500K for a couple) is not subject to the capital gain tax. We have also previously covered the capital gain topic here.

1031 exchange. 1031 Exchange can be a very useful tool for remote property owners to avoid hefty capital gain taxes. Timing is the key with a 1031 exchange, so if you’re a seller and you’re considering this approach, make sure you educate yourself before listing your property or work with an agent who has past experience with 1031 exchange transactions. You can read our primer on 1031 exchange here.