Watch the videoclip here

Or go to this website to read about it. www.oneredpaperclip.com.

Call me to discuss exchange options for your house.

–
Claudia Williams
Owner/Ecobroker/Exchangor
Blue Ribbon Properties
835 Main Ave #214
Durango, CO 81301

970 247 8388 (office)
970 749 3555 (cell)
970 247 8360 (fax)
www.blueribbondurango.com

Check out my blog
The Scoop on Durango Real Estate
www.blueribbondurango.com/blog

I found this helpful bit of advice on www.goswap.org, one of the internets most popular trade and exchange websites. We couldn’t agree more.

“Unofficial guide and practical advice with dirty tricks on selling or swapping a house when nothing is selling, or call it what you will.

Selling in this market takes extra effort. This guide is intended to give sellers some sense of direction where this effort should be directed to increase chances of having their property sold or swapped. Obviously there is an infinite number of ways to market a home for sale, but I emphasize some of the most productive ways plus throw in a few tricks of the trade. Permanently swapping homes is one of the best options in which sellers cannot reduce the price drastically. Trading homes by owner will also save sellers on the realtor’s commission.

1. Advertise, advertise, advertise!

Just like location, location, location is important in real estate, advertising is by far one of the most important factors (yet frequently overlooked) when it comes to selling a home in a slow market. 

UPDATE: As of late 2008, after enactment of the new Buy and Bail law, it is becoming less effective to advertise a property for sale, except if:

•           The property is priced considerably below the current market value

•           The seller is offering substantial incentives, such as seller financing

We strongly believe that pursuing a permanent exchange will likely yield higher chances of finding a buyer than trying to sell via conventional methods. Therefore, we suggest to avoid spending much money on newspaper ads or typical FSBO or MLS websites and directing marketing efforts on finding a real estate match instead.

Take many fresh quality pics of your house. Then choose the ones that can inspire or make your listing stand out and submit to all of these and other sites: http://craigslist.org  http://owners.com  http://allthelistings.com  http://realtor.com (once you submit to one of the MLS listing services such as http://iggyshouse.com make sure your listing appears on realtor.com). One way to simplify the process is to use our site http://GoSwap.org as the base and most detailed listing with up to 15 pics, then use the listing sharing tools at the bottom of your goswap.org listing to submit the same info to other sites. This reduces redundancy as you will then simply copy and paste the HTML code we provide on many sites that accept it including pics. Make sure to write extremely descriptive and long titles, description, and fill out most fields on all sites. Listing on GoSwap.org is also beneficial as your property will automatically be submitted to http://trulia.com (quickly becoming the #3 website in real estate), Google Base, and http://homesbyowner.com

The goal is to inspire buyers and make them want to click on your listing. Most swappers, myself included, would not reply to emails sent from people without their own home listed because if someone is not serious enough to spend some time describing what he/she has, what are the chances this seller will proceed with a swap? Many will also skip listings with no pics. A picture is worth a thousand words, remember?

Go one step further and make a short video if you are a techie. In fact take extra steps on any of the points mentioned here–be creative.

2. MLS, MLS, MLS!

List in the Multiple Listing Service but avoid listing with what I call a “sleepy realtor” who simply submits your listing to the MLS then waits until it sells through other realtors so that he/she can then cash your commission check to pay for his sleeping. Either find an ACTIVE realtor in YOUR AREA (not a national firm) or, better yet, submit your listing to the MLS yourself, then reduce the price by the amount of the commission you will save. There is at least one FREE service at http://iggyshouse.com , but make sure that this service belongs to your immediate area MLS board. For example, Iggyshouse.com does not yet cover all parts of Florida. Even though they will submit your listing, it will appear in the closest MLS system, which is not good enough. You want your property to be listed in your area MLS so that local agents can see it. Do not forget to set a commission. I suggest at least 3%, otherwise realtors will not show or mention your house to prospective buyers.

3. Be creative, be creative, be creative

and look for creative, alternative, and cost effective ways to promote your sale. So advertising your house for swap on this website is one of the creative ways, but open up your other options. Describe all your possible swap combinations, then search our site for people who want to swap for your location and email all of them about possible trade. Go a step further, and email all owners who indicated they will consider swapping for ANY LOCATION, then please do not stop even at that.

Look in your local craigslist.org real estate wanted ads section and see if anyone might want your property. There are many other great services that cost next to nothing. The ultimate goal is to get as much foot traffic through your front door as possible. Keep in mind that nowadays internet has become a vital tool used by buyers to shop for real estate. So online traffic to your listing plays the same role as the physical home showings. It is a pure numbers game: the more people know about your house for sale, the higher the chances of your success in selling it.

4. Open, open, open!

Hold open houses every weekend, even if just a few people stop by. Remember, you only need one buyer! Constantly advertise your property and open houses in local papers, community forums, craigslist.org,  GoSwap.org (of course) and anywhere else you may think of. Use your own imagination to get some traffic through your door. If you are really desperate, consider very desperate measures, such as contacting a local newspaper reporter to do a story about your house not selling even at a greatly reduced price. This would certainly bring some attention.

5. Price, price, price!

Price your property slightly below of what you think the market price is. Remember that in a low market no one really knows what the actual market price is, but the only price that matters is the one that gets your property sold. No, I am not implying selling short (less than you paid). Buyers will only consider buying from you if THEY THINK your price is LOW, so make them think your price is low. One trick of lowering the price without actually lowering it is by having buyer pay for most of the closing costs, while reducing your asking price by that amount. So, say the house is listed at $250K and seller’s closing costs will typically run $5K, then lower the price to $245K and when it comes to signing the contract insist that buyer pays for closing because the price is great. Do the same by listing in MLS yourself and apply the savings in commission towards the ASKING price of your home. A 3% commission savings equals $7,500, then your new asking price should be around $237.500 ($250K – $5K – $7.5K = $237.5K) Here you effectively reduced your asking price by $12.5K, while you would end up with the same amount at closing.

Remember, one of the most effective ways to get people to look at the property is to attract them with a low price. Think about it this way: if your house was for sale for a hundred bucks, the entire nation would probably stand in line to write you a check. Well, find that magic number that seems attractively low to buyers, yet acceptable to you. Forget about the era of making huge profits in real estate.

6. Follow up, follow up, follow up!

Create a new folder called “prospects” in your email program and save all your listing related emails there. Keep a detailed log of all callers, too. Keep in touch with all your previous enquirers with any updates or changes in price. If you get a lowball offer, here’s another of my dirty tricks. Contact all your prospects saying you have an offer while indirectly inviting them to participate in a bidding war. I am not a psychologist, but  it appears people get especially excited when something they consider buying is becoming popular and wanted by other people. In fact, this is precisely why this whole bubble thing popped up–flipping homes has gotten too popular. Someone once said, if even homemakers get involved in buying real estate, it’s time to get out as things are just about to get ugly and they sure did.

7. What to do if nothing happens?

If you have done everything above and are still sitting in your living room and scratching your head, then repeat some steps above.

If it still does not sell, consider the following alternatives. Can you owner finance? If you have only a small balance on your mortgage, then odds are in your favor and you could potentially set the down payment close to the amount of your mortgage balance, so that the balance is paid off and the buyer owes you about the same as your equity. You could create a balloon mortgage where the buyer will be required to pay off the mortgage early, say in 5 years, if becoming a bank and carrying a loan for 30 years is not your cup of tea. One great site to advertise your owner financed real estate FREE is http://SellFinanced.com“

The key is creativity and hard work. I do believe if both the homeowner and realtor work together in getting as many of these steps done as possible it’s just a matter of time before your property will sell.

Call me to discuss, Claudia Williams, Exchangor, Realtor, 970 749 3555.

P.S. Thank you www.goswap.org for this great bit of advice.

So how does a real estate exchange or trade really work? It’s essentially a permanent house swap, you buy mine, I buy yours. You balance the values with equity, loans or other assets, or you can do what is called a three way trade and involve a third party to take the house. It can become confusing and definitely involves creativity. In a tough market like this it definitely helps to be creative and is almost a must to get the job done.

Goswap.org has a great little interactive tool to determine if you are a good canditate for property trade. It just takes a few minutes and you will have your result right away. Call me if you have any questions.

Can I trade my property? What are my chance? Find out by clicking here.

Here is a video of an inspiring story of two families in Florida that successfully traded their homes, click here.

I am a NCE (National Council of Exchangors) certified Equity Marketing Specialist, meaning I am trained in exchanges and go to regular exchange marketing meetings. I have contacts and resources to help you market your home for both sale and trade and have successfully completed trades. Stay tuned for more trade and exchange info.

Claudia Williams

Exchangor

970 749 3555

claudia@blueribbondurango.com

I got it from http://www.buzzle.com/editorials/11-23-2005-82165.asp, the author is Stephen Nelson, an accountant from WA, contact info follows post.

Accountants and attorneys love limited liability companies. But do limited liability companies—LLCs for short—really make sense for real estate investors? Probably they do for two almost unknown reasons.

The Big Legal Benefit of an LLC: Limited Liability…

The big legal benefit of an LLC is that limited liability companies provide all the same liability protection as a corporation—but with much less red tape. A regular corporation, for example, requires regular stockholders meetings, a board of directors, regular board meetings, and of course records of all these activities and bodies. But a limited liability company doesn’t.

This legal liability protection provided by an LLC can be extremely valuable. One local attorney I often collaborate with, for example, tells his clients that an LLC protects real estate investors from the worst case scenario—which in his mind is a “slip and fall” accident on the investor’s property.

With an LLC as the property owner, so says my attorney friend, the “worst case scenario” is liquidation of the LLC. That liquidation means the people who own the LLC wind up with nothing—which isn’t good. But all the owners lose is what they’ve invested in the LLC.

In comparison, without an LLC, the real estate investor’s “worst case scenario” if there’s a “slip and fall” accident is that the owner or investor can lose almost everything they own. In other words, the investors could lose not only their investment in the real estate property but many other assets.

Let me issue a caveat here, however. You may not get as much legal liability protection from an LLC as you want or hope. Say, for example, that you’re repairing the roof on your apartment house and that, unfortunately, you happen to drop a hammer onto the tenant’s head during the roofing project. Your LLC probably won’t protect you from that sort of tort liability. In other words, the tenant can probably look not only to your LLC for payment of damages related to the dropped hammer but also to you personally.

And here’s another example, which unfortunately makes things even murkier. What happens if someone working for you, one of your employees or subcontractors, drops a hammer on the tenant’s head? The LLC may offer you some protection in this case. But you may still be personally responsible. The tenant might reasonably argue that you should have done a better job managing the employee or subcontractor, for example.

If you’re extremely concerned about the asset protection features of setting up and operating an LLC, get an attorney involved in your real estate investment planning. An attorney knowledgeable in LLC and real estate law can help you increase the liability protection that you gain from using an LLC for your investing. And this consultation doesn’t need to be particularly expensive. You may be able to buy an hour or two of time from a good local attorney and get all your LLC- and liability-related questions answers.

The Big Tax Benefit: Enormous Tax Flexibility…

A second benefit of LLCs relates to the income taxes that investors pay on profits and capital gains. A limited liability company can be almost whatever tax entity it wants to be for income tax purposes. A limited liability company that is owned by one person can be a sole proprietorship, a C corporation, or an S corporation. A limited liability company that is owned by two or more persons can be a partnership, a C corporation, or even an S corporation (if the LLC meets the S corporation eligibility requirements). This second benefit of the limited liability company means that an LLC can choose to be taxed in whatever way is most favorable to the investment or the owners.

For example, a very small real estate business with a single member (LLC owners are called “members”), might decide to be treated as a sole proprietorship for federal income tax purposes. This decision to be treated as sole proprietorship would keep the business’s accounting very simple—and it would also mean that unique tax planning opportunities available to sole proprietorships can be used.

A larger real estate investment fund—perhaps one with several partners—might decide to operate as a C corporation or as an S corporation in order to take advantage of some of the unique tax planning advantages of these entity choices. A C corporation, for example, often lets businesses provide rich tax-free fringe benefits to employees including shareholder-employees. And an S corporation often lets a business dramatically reduce the self-employment, social security and Medicare taxes paid on the owner’s profits.

Note: While a limited liability company is not difficult to set up by yourself—you can have the paperwork done less than a quarter hour from now—you should be aware that paying a few hundred dollars to an accountant to pick the right taxation for your new LLC might be the best investment you ever make. It’s common that the right taxation choice for a new LLC can save the owner or owners of a small business $10,000 to $20,000 annually.

The Drawbacks of the Limited Liability Company Choice:

When you consider the two big benefits of a limited liability company—limited liability but with less red tape and tremendous tax flexibility—you have almost the perfect investment entity choice. So an obvious question is “Why wouldn’t every investor use an LLC or limited liability company?”

Perhaps predictably, there are some costs and headaches associated with operating as an LLC.

An LLC may increase your banking, accounting and insurance costs. For example, while the bank account for a sole proprietorship or informal partnership may be free if you keep a large-enough balance, the bank account for a limited liability company probably won’t be free. The bank may charge $10, $20, even more each month.

While a sole proprietorship or informal real estate partnership may be able to keep its bookkeeping and income tax return preparation very simple, an LLC probably needs to file its own tax return if the LLC operates as a partnership, a C corporation or an S corporation. And this LLC tax return may cost anywhere from a few hundred dollars to a few thousand dollars annually.

Finally, it’s worthwhile to note that an LLC may involve several hundred or even a few thousand dollars of startup expense. For example, you may spend money on publications like this. You may buy the services of accountants and attorneys. You will need to print new letterhead, business cards, and envelopes (if you use these) that use the new LLC’s name in order to show the world that you’re now operating as a limited liability company.

So where does all this leave you? How should you balance the big benefits of forming an LLC with all the costs and drawbacks? Unfortunately, I can’t give you a one-size-fits-all answer. You’ll need to carefully consider the benefits and costs as they add up in your specific situation.

I will share these thoughts, however. In my opinion, an LLC is uneconomical for very small real estate investments—unless there is only a single owner. For example, a real estate investor who owns one single-family home may not want to shoulder the hundreds of dollars of cost (or more?) incurred in setting up and operating an LLC. (Remember that this investor can use liability insurance to reduce his or her risk, too.)

On the other hand, any time you’ve got a large real estate investment—say multifamily housing—or any time you’ve got substantial wealth, an LLC economically reduces investment risk and as an added bonus can even save the owners thousands of dollars a year in income or payroll taxes.

Bellevue WA accountant Stephen L. Nelson, CPA is the author of both Quicken for Dummies and QuickBooks for Dummies and an adjunct tax professor for Golden Gate University’s graduate tax school.

By Stephen Nelson
Published: 11/28/2005