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Considerations For Outer Banks North Carolina Real Estate
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Selling vacation rental property in North Carolina is different than selling a primary residence. North Carolina was the first state in the country to have laws specifically related to the transfer of vacation rental property. Part of the reason these laws were established was to protect the tenants' rights to the property. Years ago, before vacation rental property transfers were regulated; a buyer could purchase a home at the beginning of the summer and move in. Many times, this left tenants without a place to stay. Imagine driving hours to the beach for your two week vacation only to find the locks changed or the current owner turning you away! Today, the new owner must honor the tenants' vacations that end less than 180 days after the cottage is purchased.
In an effort to streamline the sale of vacation-rental homes and to help buyers, sellers, and agents follow these transfer regulations, the local association of Realtors developed a form that each seller of vacation rental property should receive with the listing agreement. It is called the Property Management Disclosure (PMD) form. This form allows the agent to receive the home's rental information as well as notifies the property management firm that the property is for sale. Having the rental history is critical to the successful marketing of the property. Buyers usually count on the rental income to help them pay for the house. Having a sizable rental income will incite more buyers to make an offer.
The PMD is also used when the property goes under contact, so the rental company can contact the buyer to get an approximate closing date. The rental company needs to know the closing date because rental funds must be prorated, and work orders have to be paid by the appropriate owner. The rental company also will want to establish a relationship with the new owner. Vacation rental management on the Outer Banks is a big business. Rental companies do not want to lose the income generated by sold properties.
The seller may also be responsible for paying a cancellation penalty to the property management firm if the new owner switches management firms. This penalty occurs because the property management firm has spent time and money marketing the property and will not receive the benefit of the rental commissions. Recently a buyer decided to switch real estate companies and it cost the seller thousands of dollars at closing. There is not a set penalty amount for the beach; each company has its own rate, but penalties have been up to $5,000. As the seller, you need to take the possibility of a penalty into account when negotiating with the buyer. Sometimes, a buyer will not make a decision until the day of closing as to which rental company he will choose. If this occurs and a change is made, you will be held responsible for the cancellation penalty. Realtors familiar with selling North Carolina vacation rental property can help you make the best-selling decisions.
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Outer Banks Realty Companies
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