Closing Costs All closing costs associated with the sale of your home will be listed for you and for the home buyer in the Closing Disclosure form. The buyer is generally responsible for all of these closing costs, which include: • The real estate broker commissions • Loan fees for the buyer’s home mortgage • Insurance premiums In some cases, buyers make a request for you as the seller to cover their closing costs as a part of their purchase offer. We will negotiate these requests if they are made and I will help you understand why it may be advantageous to cover the buyers closing costs (if it is), and what limitations we can set to make sure we know the exact net of your home sale before closing. Taxes The money that you make from the sale of your home is considered capital gains. The good news is that these profits can be excluded from your taxable income, up to $250,000 for an individual or $500,000 for a married couple, as long as your home was your principal residence. To exclude the full portion of those gains, you will need to have lived in your house for at least 24 months in the 5 years previous to the sale date of the property. This is considered the 2 in 5 rule. If you do not meet the minimum occupancy requirement, you still may be able to exclude a portion of your gains if you are selling your house because of circumstances related to your health or to your job. You should speak with your accountant or a certified tax specialist if you believe you fall under one of the exclusions or need help in reporting your capital gains after the sale of your home. If this property is a real estate investment, your profits will be considered taxable income and will be subject to state, federal and self-employment taxes. You can defer all capital gains taxes in a 1031 exchange if you are planning to reinvest the proceeds of your real estate sale into a new property. • Title costs (examination and insurance) • Legal documents and service fees • Recording/filing fees
Again, in this circumstance, you should speak to a financial specialist who can help you fully understand and minimize your tax liability.
Moving Costs Moving isn’t only a hassle, it can also be very expensive. Whether you’re moving to a new house in your neighborhood or across the country, it’s important to estimate and plan for the full cost of moving from your home once it is sold. If you’re working with a moving company, you’ll want to get a full idea of what you’ll be charged for what services. If you’re moving yourself, you’ll most likely need to rent a van. And don’t forget the packing materials including boxes and tape. The more preparation you do in planning your move, the more likely you are able to avoid overpaying for your move expenses.
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