Congratulations! You’ve decided to join the many retirees making the most of the “Silver Tsunami” by selling a property. This exciting new chapter requires some preparation, and that’s where we come in. Today, we begin a 10-part series that will walk you through everything you need to do to get your property ready for a smooth and successful sale.
We’ll define what is Real Property to be Sold and other items are included in the sale.
Part 1: Understanding What You’re Selling
Before you list your property, it’s crucial to understand exactly what you’re offering to potential buyers. This goes beyond the physical characteristics and includes various legal details about ownership. Here’s a breakdown of what you need to consider:
1. Ownership and Encumbrance Report
This report, obtainable through your real estate agent, is vital for a successful sale. It provides the legal description of the property, ensuring an accurate listing. More importantly, it reveals any liens (claims against the property) such as unpaid taxes, mortgages, or judgments. These liens could prevent a clean sale. Addressing any liens before listing is essential. It’s best to consult with your broker and possibly an attorney to determine the best course of action for resolving any outstanding issues.
2. Real Estate Components
Carefully examine the property to determine what’s included in the sale. This could involve permanent structures like buildings, foundations, and built-in features. It also includes fixtures that are permanently attached to the property, such as plumbing, electrical systems, and built-in appliances (depending on local customs). Any attached improvements that add value, such as decks, patios, or security systems, should also be considered part of the sale unless you plan to remove them beforehand.
3. Personal Property
Do you plan to include any equipment, machinery, or other non-permanent items in the sale? A Bill of Sale will be needed to transfer ownership of this personal property to the buyer. Carefully decide what you’ll keep and what will be part of the sale. Consider the value and functionality of these items for potential buyers.
4. Intangible Assets
This might seem complex, but it’s important! Do you own any intellectual property associated with the property, such as patents or trademarks? These become relevant if you’re also selling a business that operates on the premises. Including these assets can add significant value to the sale, so be sure to identify and disclose them accurately.
5. Leases and Rents
If your property has existing tenants, you’ll need to provide copies of all lease agreements and any amendments made to them. Additionally, having a record of current rent amounts and any upcoming rent increases is critical for potential buyers. Understanding the existing rental income stream will help them evaluate the property’s investment potential.
6. Mineral and Water Rights
Do you own the mineral rights below the property, such as oil, gas, or precious metals?What about water rights? These valuable assets can be a significant selling point for certain types of properties.Determine if you own these rights and, if so, whether you want to include them in the sale or specifically exclude them. Keep in mind, only an attorney can issue a water rights title opinion.
7. Excluded Property
Make a clear list of anything that is specifically not being sold with the property. This could be equipment, furniture, artwork, or other items you plan to keep. Transparency is key! Providing a clear list upfront avoids any confusion with potential buyers later.
8. Utility Capacity and Development Rights
As the owner, have you established any development rights on the property? Do you have a specific utility capacity allocated, such as extra water usage or higher electrical service? Be sure to include this information in the listing. Development rights can be a major selling point for certain buyers, and increased utility capacity can be attractive to businesses or properties with high energy needs.
9. Right of First Refusal
Does your property have a clause granting someone the “Right of First Refusal” if it’s put up for sale? If so, you’ll need to comply with this right by notifying the designated party before accepting offers from others. This clause is often found in estate planning or co-ownership agreements. Failing to comply with the Right of First Refusal could lead to legal complications.
By gathering and understanding this information upfront, you’ll ensure your listing is accurate and comprehensive. This transparency will attract serious buyers and set the stage for a successful sale.
Have Questions?
If you have any questions about selling your property, don’t hesitate to contact Cynthia Daughtrey at 3D Real Estate. Call 303-548-9659. We’re here to guide you through the process!
