Bargain sales, also known as the 170 Exchange, are incredibly beneficial constructions for financial brokers. Essentially, they are type of sale of property to a nonprofit organization, which means that the seller can make a significant tax deduction, so long as the nonprofit is 501(c)3 registered. It is very similar to the better known 1031 Exchange, but the key difference is that the tax savings offered by the 170 Exchange are immediate, rather than being deferred. As a property broker, there are several reasons as to why you may be interested in 170 Exchanges or bargain sales. Let’s explore those in some greater detail.
- You Can Earn a Full Commission
As the broker of the property listing, you will receive a standard commission. Just as with a regular sale, your commission will be based on what the seller’s total cash benefit is. Just because the property is sold through a 170 Exchange does not mean it will be sold for less. In fact, it is often sold for more. This means the commission could be even higher than through a traditional sale.
- You Will Be Able to Sell More Properties
In many cases, any illiquid properties are sold by brokers for their clients at solely the current price. Some properties are also incredibly difficult to sell. However, by opting for Bargain Sales, brokers can help sellers find a quick and easy way to liquidate their properties, even if these are quite challenging. In so doing, they will be able to sell more properties as well.
- You Can Get Important Referrals
Once you have been able to sell a property that is traditionally hard to sell, you will instantly improve your online reputation. In fact, you will quickly become known as the broker who makes the impossible possible. Not every broker can do it, however, which is why not everybody deals in Bargain Sales. You need to increase your overall understanding of 170 Exchange rules and regulations. Once you do, and you make so much as one sale, you should instantly see an increase in the number of referrals you get.
- You Have the Opportunity to Relist Properties
If a nonprofit purchases a property, they may then subsequently ask you to relist it again. This means that you experience all of the above benefits a second time, on the same property. Twice the commission, twice the experience, twice the satisfaction.
- It Will Give You a Great Deal of Personal Sense of Accomplishment
Last but not least, it feels good to be part of a transaction that has such an important impact on the lives of others. Charities and nonprofit organizations work tirelessly to help the less fortunate, be they certain population groups, animals, countries, disaster survivors, and so on. Either way, you will play an important role in supporting them to do the very necessary work that they do. And you can be proud of that and give yourself a pat on the back.