What Is A Real Estate Bargain Sale For Business, Industrial And Retail Properties?

What is a Real Estate Bargain Sale for Business, Industrial and Retail Properties?

by

Mercyrealestatefound

You\’ve probably noticed in the news that real-estate markets across the country are beginning to see some rise in activity and sales prices. That\’s wonderful news for the common seller, but for sellers having distressed property sale prices and definitely days on market figures may not be looking up much. The truth is it\’s difficult to sell an underutilized or distressed property in any market as conventional buyers view it as a high risk investment given its condition and the amount of capital that will be necessary to get it into good running condition. So what\’s an owner of distressed commercial, industrial or retail property to do? Consider a real estate bargain sale!

What\’s a Real Estate Bargain Sale?

A bargain sale real estate transaction is an alternate to regular selling methods that allows the seller to pocket cash at closing while getting a substantial tax deductible donation which usually saves them from paying more in taxes on their normal income than they would receive cash at closing. These sorts of sales are cash, meaning no contingencies to meet and a fast, comparatively painless closing. In a real estate bargain sale transaction the seller is given a small amount of cash at closing to cover their assessment and closing costs, additionally they receive a charitable donation deduction which could be used on a quarterly return if they\’ve sufficient income, or it could be applied to their tax returns for around six years. Real estate bargain sales often bring a greater sales price for the property than traditional buyers would offer due the IRS Rules about assessing bargain sale real estate in Publication 561 . So between the fast cash, charitable donation and higher sales price these sales actually are a great alternative for sellers of distressed properties!

IRS Publication 561

As we know in this day and age if it sounds too good to be true it normally is. Sellers pursuing real estate bargain sales don\’t have to worry about a scam. The Bargain Sale Exchange was created by the govt in Section 170 of the IRS Code and predates the 1031 Exchange, making it a long-running safe and proven approach to selling distressed or underutilized business, industrial and retail properties. How does the bargain sale offer a greater profit for sellers than a standard sale in the real estate market? These sales are bound by the IRS Code Section 170 and are further explained in Publication 561 requirements for real estate appraisals. This type of appraisal permits the appraiser to assess the value by a combination of three techniques of valuation: the Replacement Cost Approach, the Market or Sales Approach as well as the Income Strategy. They then take a weighted average from those techniques and can also consider the highest and greatest utilisation of the property when determining its value even if that use differs from its current use. Based on IRS Publication 561:

\’Fair market value (FMV) is the price which property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the related facts.\’

Valuing a property in this way removes the factors of time constraints and carrying costs on the seller\’s part. So the property can be appraised for a higher value than it might be in more conventional sales which use only the Market or Sale Approach or the quick bank .

Bargain sales of real estate offer an excellent alternative to more conventional selling strategies to owners of underutilized or distressed property. Because real estate bargain sales are cash transactions, closing is fast and uncomplicated. Under the terms set by the government the seller is eligible for a charitable donation deduction resulting from the sale and also pays minimum capital gains taxes on the cash obtained at closing. So all that cash saved by not paying as much in income taxes from gifting real estate via a bargain sale to charity could be reinvested in your business!

For more details visit http://mercyrealestate.com and http://mercyfoundation.org

If you have a property and want to sell it fast, Mercy Real Estate Foundation is THE Bargain Sale expert and is the global leader in acquiring underutilized business, commercial and retail properties. Using the IRS Approved Real Estate Bargain Sale they offer sellers with a strategy to keep more money in their pocket than they\’d from a regular sale. They\’ve a fast research process that lets them acquire your real estate property in 30 – 60 days.

Article Source:

ArticleRich.com