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Should I Sell Or Rent My House In Today’s Market? | Bankrate

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FluxFactory/GettyImages; Illustration by Hunter Newton/Bankrate

Key takeaways

Deciding whether to sell your house or rent it out depends on personal circumstances, such as immediate cash needs and future housing plans.

Selling might be the better option if you need the proceeds to pay for your next home or stand to make a large profit.

Renting it out could be a good choice if you’re looking for additional income or if you’re moving temporarily and plan to come back.

There are many reasons why a homeowner might want to move. But whatever your reason, one question still applies: What should you do with your current home? Depending on your financial situation and your local housing market, you might consider renting it out rather than selling. If you’re caught in the sell versus rent debate, here are some factors to consider, including the costs.

Should I sell or rent my house?

A home is the biggest financial asset most people own, and deciding what to do with it shouldn’t be taken lightly. There are pros and cons to both options: For example, selling gets you a large windfall of cash all at once, while renting earns you smaller increments of steady monthly income from your tenants. If you have somewhere else to live and can afford to hang on to the house, renting it will also allow you to continue building equity as home values go up. Take a look at the following scenarios to determine which path is best for you.

When selling your home is a good choice
If you need the cash to pay for your next house

If your ability to buy a new home relies on accessing the money tied up in the current one, then selling is the best option. That way, you can take all your proceeds from the sale and put it toward your new down payment. Buying a new home while selling your current one can be a tricky balancing act, so be sure to work with an experienced real estate agent who can guide you through the process.

If you have no interest in being a landlord

Managing a rental property is time-consuming and often challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord or paying for a third party to take care of things instead.

If you stand to make a significant profit

Property values have risen all over the country over the past few years, and home prices remain high. Depending on how long you’ve owned your home, how much you paid for it and how hot your local market is, selling could net you a significant windfall. Take a look at nearby real estate comps to see how much homes similar to yours have been selling for.

If you are eligible for capital gains tax exemptions

If you do sell your home for a profit, you may be able to exclude up to $250,000 of capital gains from the sale (or up to $500,000 for married couples filing jointly) from your taxes. For this to apply, the home must have been your primary residence for at least two out of the last five years, among other criteria.

When renting your home is a good choice
If your move is temporary

If your move is short-term and you plan on returning to your current city in the future, you may want to keep your home and rent it out in the meantime. Knowing there will be a place for you to live when you return provides peace of mind — and when you factor in closing costs, it may even cost less than selling and purchasing another home at a later date.

If you want the rental income

Extra income can be hard to turn down! But if you decide to rent your current home and want to buy another one with a mortgage, keep in mind that lenders will consider rental income when determining your financing. In some cases, a lender will only allow a portion of your rental income to be counted as an income source. In addition, you will be carrying two mortgages at once, so make sure this is something you are financially able to take on.

If rental demand in your area is high

Is your home in a hot neighborhood with lots of buzz? Is it in an extremely desirable school district, near a vacation destination like a beach, or close to the best amenities in town? Evaluate the rental demand in your area — renting is much less stressful when finding a tenant is fast and easy. Research the local housing market to determine what other similar properties are charging in rent. You can also speak to a local agent or property management company to learn more about the rental demand in your neighborhood.

If you expect home values to rise in your area

It’s impossible to foresee with 100 percent accuracy where the housing market is headed. That being said, you may be able to make an informed prediction. If you expect that your current home’s value will increase within a few years or less, you might want to consider renting it out now and selling later, to take advantage of the price appreciation.

Selling vs. renting your home: Costs to consider

Both renting and selling a home will incur costs. One of the most important things to think about is whether the rental income you’d receive will be enough to cover the property’s mortgage and upkeep.

To determine how much rental income you can reasonably expect to earn, take a look at what other similar properties are charging and weigh that against the costs of owning and maintaining the property. From there, you can gauge whether you’ll be able to recoup your expenses, and maybe even turn a profit.

Costs of renting out a home

Mortgage: Even though you’ll be earning rental income, you’re still responsible for paying the mortgage, which may or may not be fully covered by the rent you bring in. The same goes for property taxes.

Insurance: Landlord insurance can cover certain costs, such as damage to the home or someone getting injured on the property. You can expect this to cost roughly 25 percent more than the typical homeowners insurance policy — which you’ll also still have to pay for.

Maintenance and repairs: You’ll need to keep up with routine maintenance to ensure the home is fit for tenants. As a rule of thumb, budget at least 1 percent of the home’s value every year (more if it’s an older property) to pay for maintenance.

Finding a tenant: To find a tenant, you’ll have to get the word out. Consider any marketing costs you may incur, such as taking out an advertisement. You may also need to pay for background and credit checks of potential renters — though you might be able to pass this nominal expense on to the tenant.

Vacancies: Consider, too, the cost of vacancies between tenants. If a tenant moves out and you don’t have a replacement, that’s income you’re losing out on.

Property management fees: Hiring a property manager makes being a landlord less onerous, but it will eat into your profits as well. These companies tend to charge a percentage of the rent price, typically around 10 percent.

HOA fees: If your home belongs to a homeowners association, you’ll also be responsible for HOA fees, which vary considerably depending on what type of amenities are offered.

Costs of selling a home

Agent commissions: For ages, the typical real estate commission has been between 5 and 6 percent of a home’s sale price, split evenly between the seller’s agent and the buyer’s agent and paid entirely by the seller. That is about to change, however, as a result of a legal battle recently settled by the National Association of Realtors. Beginning this summer, depending on the deal, buyers may be responsible for paying their agent’s commission directly. That said, a single agent’s fee is still a significant expense: On a $400,000 sale, for example, 2.5 percent comes to $10,000.

Home improvements: To get your home in shape to sell, you’ll likely have a few services to pay for. These might include sprucing up the landscaping, a thorough deep cleaning and making any necessary repairs. And paying a pro to stage your home can increase its desirability, potentially bringing in a higher price.

Closing costs: Sellers typically incur some closing costs beyond Realtor commissions, too, such as attorney fees, transfer taxes and title insurance.

Mortgage payoff: If you still have a mortgage on the home, once you’ve sold it, some of the proceeds will go toward paying off the remainder of your loan.

What if there’s a recession?

Some economists still predict a recession in the country’s near future. According to Bankrate’s most recent Economic Indicator Poll, the odds of a recession over the next 12 months are 33 percent. Before you make a final decision on whether to sell your house or rent it out, ask yourself how a serious economic downturn might affect your finances. Is your job stable? Is your savings strong? Would you still be able to manage two mortgages during a recession, or the possibility of less rental income than expected? If the answer to any of these questions is no, selling may be the safer option.

Bottom line

The question “should I sell or rent my house?” requires careful consideration of your financial situation, lifestyle and local housing market. To help guide your decision, consider the costs of both options, whether you’ll return to your current location anytime soon and if you’re interested in being a landlord.



This article was originally published by a www.bankrate.com . Read the Original article here. .

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How To Sell Your House In Oregon Fast | Bankrate

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The Oregon real estate market is hot, with strong demand for homes and buyers competing for limited inventory. Home prices are well above the national averages and are steadily increasing, with the current statewide median price at $513,100, up 3.6 percent from last year, according to April Redfin data.

Even amid such favorable market conditions, though, it typically takes a month for homes to go into contract. But the good news is, there are ways to speed up the process. Here’s a primer on how to sell your house in Oregon — fast.

How fast can you sell a house in Oregon?

As of April 2024, the median number of days a home spent on the market in Oregon was 28, per Redfin. That’s two days longer than the previous year, and it means it could be a month before your home even goes into contract. (Then, you’ll have to wait even longer for your buyer’s financing to be approved.)

Need to sell faster?

If you list during the window of Oregon’s best time to sell a home, which tends to be between May and July, things will likely move a bit faster. But if you need to speed things up considerably — say, if you’re relocating ASAP for a new job or you need the cash urgently — you have several options to consider.

Sell for cash: One of the quickest ways to sell a home is by working with one of the many companies that buy houses for cash in Oregon. Cash sales means there’s no need to wait on financing, and businesses of this type specialize in speed. Often you’ll have a cash offer within 24 hours and close in a matter of weeks, or even days. But there’s a caveat: You are not likely to get as much money for your home as you would selling the traditional way.

Use an iBuyer: Working on a similar model, iBuyers are known for providing instant offers on homes. However, they also don’t pay top dollar, and they may charge steep fees to boot. One of the largest iBuyers, Opendoor, buys homes in the Portland area.

Price aggressively: Pricing your home to sell is another tactic to consider. This involves studying the market and listing your home to undercut area prices — something that should be done with the guidance of a real estate agent who knows your local market very well.

Sell as-is: If you list your house as-is, you’re telling buyers “what you see is what you get.” As-is listings mean you aren’t willing to negotiate back and forth about repairs with potential buyers, which saves time.

Selling your home in Oregon

If you decide to sell the traditional way, with the assistance of a local Realtor, here are some of the factors to consider and discuss before you list the home.

How should you price your listing?

Getting the pricing right is one of the biggest challenges for home sellers. If you aim too high, you might turn off prospective buyers. And if you aim too low, you might leave money on the table. Pricing your home competitively usually involves your agent pulling and analyzing comps, or similar homes in the neighborhood that have recently sold. This helps you figure out how much your house is worth by giving you a sense of what local buyers have paid for other properties similar to yours,

What should you fix before selling your home in Oregon?

Put yourself in the buyer’s shoes to figure out what you need to repair before listing your home. Obvious issues, like a leaky shower, cracked kitchen tiles or carpeting that’s been ripped up by your dog, should be addressed before they turn off prospective buyers. But you don’t need to go crazy — ask your agent what’s worth doing and what’s not.

Is it worth upgrading your home before you sell?

Probably not. Major upgrades, like full kitchen remodels, rarely recoup their costs. Plus, supply chain issues and labor challenges may delay your sale. Look into faster (and cheaper) ways to increase your home’s value, such as adding an energy-efficient thermostat or repainting the front door.

Should you pay to stage your home?

First impressions are everything, and home staging is one way to make sure your house impresses everyone who sees it. From virtual staging that can make the property pop in online photos to in-person staging with furniture rentals and more, the costs of home staging can vary widely, so consult with your Realtor to see if your home could benefit from this service.

What do you need to disclose to a buyer?

As an Oregon home seller, you will need to complete the state’s seller’s disclosure form, a lengthy document that outlines any defects that could impact the value of the home. The buyer has five business days to revoke their offer after reviewing this disclosure statement. Additionally, if your property is part of a homeowners association, be prepared to hand over documents that share the association’s financials, bylaws and more.

The closing

Selling a home isn’t free, in Oregon or anywhere. Home sellers should be prepared to direct a portion of their proceeds to cover a range of closing costs and other expenses.

Costs of selling a home in Oregon

Realtor commissions: One of the biggest costs associated with selling a home is the money owed to the real estate agent(s) involved in the transaction. A listing agent typically receives between 2.5 and 3 percent of the home’s sale price — on a median-priced $513,100 Oregon home, 2.5 percent comes to more than $12,800. Depending on the deal you strike, you may or may not have to pay your buyer’s agent’s fee as well.

Title insurance: This expense is your responsibility as the seller, and the cost depends on the purchase price of your home. For example, a standard Oregon title policy on a $400,000 home is $1,150, while the price jumps to $1,500 for a $600,000 property.

Transfer taxes: While sellers in many states must pay real estate transfer taxes to shift ownership to the buyer, most counties in Oregon don’t charge this common tax. One exception is Washington County (home to Beaverton, where Nike’s corporate headquarters are based): For sellers here, it’s standard practice to split this fee with the buyer.

Escrow fees: You will likely need to pay a fee for the escrow account that manages funds for the transaction; this cost may be able to be split with the buyer.

Attorney fees: Home sellers in Oregon are not required to hire an attorney. But it’s smart to consider adding one to your team anyway, to oversee the legal details and make sure the paperwork is in order.

Capital gains taxes: Because property values have skyrocketed in many parts of Oregon, there may be tax implications from your home sale. Whether you will be subject to capital gains taxes depends on several factors, including how much of a profit you make on the sale.

Next steps

Ready to get moving on selling your house in Oregon? Your next step will depend on what’s more important to you: speed or price. If you need to sell quickly, and are willing to sacrifice a bit of profit to make that happen, reach out to an iBuyer or cash-homebuying company in your area. They will be able to close a deal fastest. If time is not a pressing factor and you’d rather hold out for the best price possible, start looking for local Realtors who can help you bring in top dollar for your Oregon home.

FAQs

Is it a good time to sell a home in Oregon?

Yes. Oregon is currently experiencing a seller’s market, with high prices and not enough inventory to meet demand. April 2024 data from Redfin shows that the state has only a two-month supply of available homes for sale — it typically takes a five- or six-month supply for a balanced market that doesn’t favor either buyers or sellers.

Do you need an attorney to sell your house in Oregon?

No, Oregon law does not require sellers to hire a lawyer for the transaction. However, hiring legal expertise is usually a good decision. Selling a home is complex, with lengthy contracts, legal disclosures and a lot of money at stake. A real estate attorney can make sure your interests are protected and that any issues are resolved properly.

Who pays for the title policy in Oregon?

The seller is usually responsible for paying for the title insurance policy in Oregon. The cost varies based on the price of the home: The more expensive a home is, the more expensive the title policy will be.



This article was originally published by a www.bankrate.com . Read the Original article here. .

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How To Sell Your House In 2024: A Step-By-Step Guide | Bankrate

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Key takeaways

Selling a house can take several months from start to finish, so it’s crucial to plan ahead and stay organized.

Start by setting a timeline to stick to and hiring a local real estate agent who knows your market well.

Be sure to get professional-quality listing photos taken — National Association of Realtors data shows that 100 percent of homebuyers look at listings online.

Most home sellers dream of a stress-free sale in which they simply list their house, quickly find a qualified buyer, collect the cash and hand over the keys. If only it were that simple! In reality, selling a home involves many moving parts — some that you can control, and some that are out of your hands.

For example, geography might influence how long your house lingers on the market or how high of a list price you can get away with. In locations where competition is hot and inventory is low, odds are you’ll sell faster and command a higher price. Conversely, in places where home sales have cooled, you will likely have to work harder to attract the right buyer.

The real estate market has shifted significantly since the frenzied heights of the pandemic. Today, high prices are combining with high interest rates to create serious affordability challenges: The median price for a home is more than $400,000, and mortgage rates hit a 22-year high in 2023. It’s no wonder many buyers have little choice but to stay on the sidelines until either rates or prices (or both) come down.

So, as a seller, it’s smart to be prepared and control whatever factors you’re able to. Things like hiring a great real estate agent and maximizing your home’s online appeal can translate into a smoother sale — and more money in the bank. Here’s a nine-step guide to how to sell your house successfully.

Set a timeline: Start prepping your home well before you plan to list.

Hire an agent: An experienced agent who knows the market well can best position your home for local buyers.

Determine upgrades: Take on only projects your house really needs — you don’t have to upgrade everything.

Set a realistic price: Your agent can help you find the sweet spot.

List with pro photos: Buyers look at homes online first, so be sure you have a solid digital presence.

Review offers: Consider all factors, not just the highest dollar amount.

Weigh closing costs: Keep track of how much more you’ll need to pay at the closing table.

Consider an attorney: Legal expertise can help protect this significant financial transaction.

Close: Make sure you have all your documentation ready.

1. Set a timeline for selling your home

Selling a house is a major undertaking that can take several months from start to finish — or much longer, depending on local market conditions. So it makes sense to plan ahead and stay organized.

At least two or three months before you plan to list, consider getting a pre-sale home inspection. This isn’t mandatory, but it can be wise, especially in an older home. For a few hundred dollars, you’ll get a detailed inspection report that identifies any major problems. This alerts you in advance to issues that buyers will likely flag when they do their own inspection later. By being a couple steps ahead, you might be able to speed up the selling process by doing needed repairs in tandem with other home-prep work. Then, by the time your house hits the market, it should be ready to sell, drama-free and quickly.

About a month before listing your house, start working on deep cleaning in preparation for taking listing photos. Keep clutter to a minimum, and consider moving excess items to a storage unit to show your home in its best light.

2. Hire an agent who knows the market

The internet makes it easy to delve into a real estate agent’s experience, helping you choose the right person to work with. Look up agents’ online profiles to learn how long they’ve been in the industry, how many sales they’ve closed and what professional designations they may have earned. Pay attention to how and where they market their listings, and how professional their listings’ photos look.

“Any designation they’ve earned is a huge plus, because it’s a sign they’ve taken the time to learn about a particular niche,” says Jorge Guerra, president and CEO of Real Estate Sales Force in Florida.

Some homeowners might be tempted to save on paying a commission and instead sell their home themselves, without an agent. This is known as “for sale by owner,” or FSBO. The amount sellers stand to save on that fee can be significant, usually 2.5 percent or 3 percent of the total sale price. On a $400,000 home sale, for example, 3 percent comes to $12,000.

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Keep in mind: Real estate commissions are often negotiable.

However, a listing agent does a lot to earn their fee. For example, they can expose your house to the broadest audience and negotiate on your behalf to garner the best offers possible. If you go it alone, you’ll have to personally manage prepping your home, marketing it, reviewing buyers’ offers and handling all the negotiations and closing details.

When working with an agent, keep in mind too that real estate commissions are often negotiable. As a result, you might be able to get a break at the closing table. But, depending on the deal, you may still have to pay your buyer’s agent’s fee.

3. Determine what to upgrade — and what not to

Before you spend money on costly upgrades, be sure the changes you make will have a high return on investment. It doesn’t make sense to install new granite countertops, for example, if you only stand to break even on them, or even lose money. Plus, these improvements may not be necessary, particularly if inventory levels are low in your area (which they are in most areas these days). A good real estate agent will know what local buyers expect and can help you decide what needs doing and what doesn’t.

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Keep in mind: Inexpensive DIY projects can also go a long way. A fresh coat of neutral paint and spruced-up landscaping are low-cost ways to make a great first impression.

Updates to the kitchen and bathrooms often provide the highest return on investment. But inexpensive DIY projects can also go a long way: A fresh coat of neutral paint and spruced-up landscaping are low-cost ways to make a great first impression.

4. Set a realistic price

Even in competitive markets, buyers don’t want to pay more than they have to, so it’s crucial to get the pricing right. Going too high can backfire, while underestimating a home’s value might leave money on the table. To price your home perfectly from the start, consult local real estate comps. This information about recently sold properties in your neighborhood gives you an idea of what comparable homes around you are selling for, thus helping you decide how much you might reasonably ask.

“A frequent mistake sellers make is pricing a home too high and then lowering it periodically,” says Grant Lopez, a Realtor at Keller Williams Heritage in Texas and the former chairman of the San Antonio Board of Realtors. “Some sellers think this practice will yield the highest return. But in reality, the opposite is often true: Homes that are priced too high will turn off potential buyers, who may not even consider looking at the property.”

In addition, homes with multiple price reductions may give buyers the impression there’s something wrong with it. So it’s best to eliminate the need for multiple reductions by pricing your home to attract the widest pool of buyers from the start.

5. Include professional listing photos

This step will likely involve your real estate agent hiring a photographer to take marketing photos of your home, and registering the listing with the local MLS (multiple listing service). Here are some tips to get your home market-ready:

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Keep in mind: You’ve probably heard of curb appeal, but pros say online appeal is now even more important.

Take professional photos: With the ubiquity of online house-hunting these days, high-quality photos are critical. A pro photographer knows how to make rooms appear bigger, brighter and more attractive. The same goes for the property’s exterior and outdoor areas.

Focus on online appeal: You’ve probably heard of curb appeal, but professionals say online appeal is now even more important. In fact, 100 percent of homebuyers use the internet to search for a home, according to the National Association of Realtors, so online listings are crucial. “Your home’s first showing is online,” Guerra says. “The quality of your web presentation will determine whether someone calls and makes an appointment or clicks on the next listing.”

Stage it and keep it clean: Staging a home entails removing excess furniture, personal belongings and unsightly items from the home and arranging rooms for optimal flow and purpose. If you’re in a slower market or selling a luxury home, investing in a professional stager could help you stand out. Nationally, professional home staging costs an average of around $1,808, according to HomeAdvisor, but prices range between $792 and $2,840.

Clear out for showings: Make yourself scarce when potential buyers come to view your home. Let them imagine themselves in the space, free from distraction. “Seeing the current homeowner lurking can cause buyers to be hesitant to express their opinions,” says Lopez. “It could keep them from really considering your home as an option.” Generally, buyers are accompanied by their real estate agent to view your home. You can also ask your own agent to be present at showings.

6. Review and negotiate offers

Once buyers have seen your home, offers will ideally start rolling in. (Keep in mind, though, that with mortgage rates currently high, the number of buyers who can still afford to buy might be smaller than you’d like.) This is where a real estate agent is your best advocate and go-to source for advice. If your local market favors sellers, buyers will likely offer close to asking price, or possibly even above. On the other hand, if sales are slow in your area, you may have to be open to negotiating.

When you do receive an offer, you’ll have a few choices: accept it, make a counter-offer or reject the offer. A counter-offer is a response to an offer in which you negotiate on terms and/or price. You can offer a credit for fresh paint and carpet, for example, but insist on keeping your original asking price in place. Counters should always be made in writing and provide a short time frame (ideally 48 hours or less) for the buyer to respond.

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Keep in mind: You might be tempted to simply go with the highest bid, but look closely at other aspects of the offer, too.

If you’re lucky enough to get multiple offers, you might be tempted to simply go with the highest bid. But look closely at other aspects of the offer, too, such as:

Form of payment (cash versus financing)
Type of financing
Down payment amount
Contingencies
Concession requests
Proposed closing date

Be mindful that if a buyer is relying on lender financing, the property will have to be appraised. If there’s any shortfall between the purchase price and appraised value, that gap will have to be made up somehow, or the deal could fall apart.

7. Weigh closing costs and tax implications

In any real estate transaction, both parties must pay at least some closing costs. It has long been the custom that the seller pays the real estate agents’ commissions, which usually total between 5 and 6 percent of the home’s sale price. This can be a big chunk of change: For example, on a $400,000 home, 5 percent comes to $20,000. However, that may soon change due to a federal lawsuit, and as of late summer, homebuyers may pay their own agent’s commission.

Some other closing costs commonly paid by the seller include transfer taxes and recording fees. Additionally, if the buyer has negotiated any credits to be paid at closing — to cover repairs, for example — the seller will pay those, too. Your real estate agent or the closing agent should provide you with a complete list of costs you’ll be responsible for at the closing table.

The good news is that you may not owe the IRS taxes on your profits from the sale. It depends on whether it was your primary residence, how long you lived there and how much you make on the sale. If you’ve owned and lived in your home for at least two out of the previous five years before selling it, then you will not have to pay taxes on any profit up to $250,000. For married couples, the amount you can exclude from taxes increases to $500,000. If your profit from the home sale is greater than that, though, you’ll need to report it to the IRS as a capital gain.

8. Consider hiring a real estate attorney

Some states require sellers to have a real estate attorney to close on a home sale, but many don’t. Regardless of your state’s laws, the expense is worth it to protect such a large financial transaction. It may cost you a couple thousand dollars, but there’s a lot more money than that at stake, and it’s always smart to have a legal expert give everything the OK.

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Keep in mind: Even if your state doesn’t require you to hire a real estate attorney, it’s worth the expense to protect such a large financial transaction.

In addition, an attorney can help fill out paperwork correctly, review contracts and documents, identify potential issues and ensure the sale goes as smoothly as possible. If you’re not sure where to find one, your real estate agent can probably recommend someone.

9. Gather paperwork and close

Lots of paperwork is needed to properly document a home sale, so keep it organized all in one place to help things go more quickly. Your agent can help you make sure you’ve got everything you need. Some of the main documents you’ll need to compile include:

Original purchase contract
Property survey, certificate of occupancy and certificates of compliance with local codes
Mortgage documents
Tax records
Appraisal from your home purchase
Homeowners insurance
Home inspection report, if you had one
Seller’s disclosure statement

Finally, bring all that paperwork — plus payment of any fees and the keys to give the new owners — to the closing. Once everything is signed and handed over, your house is sold!

FAQs

What should I do first when selling my house?

Putting your home on the market is a major step, and like most big life decisions, it’s best to get organized before you dive in. The process can take several months, so once you decide you want to sell, the best thing to do first is to consider your timeline. When do you need to move? What date do you hope to be closed by? Make sure you give yourself enough time to prep the property for showings and find a real estate agent you trust before actually putting the home on the market.

What is the fastest way to sell my house?

If you’re wondering how to sell your house in a hurry, consider foregoing a traditional agent-assisted sale in favor of selling to a cash homebuyer or iBuyer. These companies make quick cash offers and close home sales very quickly — in a matter of a few weeks, or even less. But you likely won’t get as high of an offer as you’d get if you sold on the open market.

Do I need a lawyer to sell my house?

That depends on what state you live in. Some states require a real estate attorney to manage any sale transaction, some don’t. Even if it’s not a legal requirement, though, consider hiring one anyway — real estate contracts can be very complicated, and there is a lot of paperwork involved and a lot of money at stake. It’s worth the cost to have legal expertise looking out for your interests.

Do I need a Realtor to sell my house?

No. It’s perfectly possible to sell a home on your own with what’s called a for sale by owner (FSBO) listing. However, going without a real estate agent means all the work an agent would normally do — researching comps, determining the best list price, coordinating showings, negotiating with potential buyers — is up to you to do yourself. It’s a lot of work, and a big time commitment.



This article was originally published by a www.bankrate.com . Read the Original article here. .

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How To Sell Your House In Tennessee Fast | Bankrate

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If you want to sell your home fast in Tennessee, you may find yourself facing some headwinds. The supply of homes jumped by more than 20 percent in April, according to data from Tennessee Realtors, and homes typically spend nearly two months on the market before going into contract.

If time is not on your side, don’t worry: There are ways to speed up a sale in the Tennessee housing market. Read on for everything you need to know about how to sell your house in Tennessee fast.

How fast can you typically sell your home in Tennessee?

It takes a long time for the typical home to sell in Tennessee: 53 days in April, according to Redfin data. That’s almost two months just to go into contract; after that you’ll probably need to wait several more weeks for the buyer’s financing to be approved. That might move a bit faster in late spring and early summer, which are historically the best times of year to sell, and it also varies from one market to the next. In Memphis, for example, that metric is 42 days — much faster than 53, but still a long time.

Need to sell faster?

If you can’t wait that long, or can’t afford to, there are ways to get a deal done on a tighter timeline.

Sell to an iBuyer: Depending on where in Tennessee you live, you might be able to get a quick cash offer in from an iBuyer. Offerpad buys properties throughout the Nashville metro area, for example, and Opendoor buys homes in the Chattanooga, Nashville and Knoxville markets. Be aware that you’ll pay for the convenience of speed, though: iBuyers typically offer below-market-value prices, and they may charge fees.

Sell to a cash homebuyer: There are many other companies that buy houses for cash in Tennessee, too, all of which work on a similarly speedy timeline (and offer similarly low prices). These companies usually buy homes in any condition, no matter how rough, which can make them good options for homes in serious disrepair.

Sell as-is: Another option is to list your house on the open market, but with an “as-is” disclaimer. As-is listings indicate that the seller isn’t going to negotiate with a buyer about repairs, which speeds up the process by eliminating the back-and-forth bargaining that can often hold things up.

Sell with an agent: You can also take the traditional route to selling your home, listing it with a local real estate agent — just be upfront that speed is your number-one concern. An experienced agent will be able to market your home with that in mind, which may include pricing aggressively to motivate potential buyers.

Selling your home in Tennessee

If you’re selling the traditional way, here are some topics to discuss with your agent before you list.

How should you price your listing?

How much is your house worth? Your agent will be an invaluable resource in helping you determine the right asking price for your home. By reviewing local comps, you’ll get a sense of what buyers have been willing to pay for nearby homes with similar characteristics to yours. You’ll want to put a finger on the pulse of the local market, too. For example, while prices have jumped by more than 18 percent in Morristown over the past year, according to Redfin, they declined by more than 3 percent in Memphis.

What should you fix before selling your home in Tennessee?

To fix or not to fix? That is the question that so many homeowners have as they get ready to list properties for sale. While visible issues, like water damage from a leak, should be addressed, there are some repairs you don’t need to bother making. It’s smart to ask your agent what can stay as-is, and what might turn off prospective buyers.

Is it worth upgrading your Tennessee home before you sell?

It’s tempting to think that a major renovation — a new kitchen, for example — will dramatically increase the sale price of your home. But the reality is that most big projects don’t recoup their full costs at resale. And waiting on contractors will only delay your sale further. Instead of investing a large chunk of cash in a remodel that may or may not pay off, consider cheaper ways to boost your property value.

Should you pay to stage your home?

Professional staging can bring some star power to your property. Think of it as dressing up for a big date: You want to turn that special someone’s head. Staging your home might be as simple as decluttering and organizing, or it might mean renting furniture to make an empty room come to life. Your agent will be able to tell you if your home could benefit from some extra love.

What do you need to disclose to a buyer?

Like many states, Tennessee requires home sellers to complete a residential property disclosure form. This lists any defects that could impact the value of the property, including any past history of flooding and whether the new owner will need to pay for flood insurance. It’s a standard form, and you simply need to be honest about what you know. You may also need to update it just before closing to verify that nothing has changed in the interim. In addition, if your property is part of a homeowners association, be ready to hand over documentation about the HOA’s finances and bylaws.

The closing

Closing is the final step in the sale process — you’re almost there! But first, there are closing costs to consider. Closing costs in Tennessee are some of the cheapest anywhere in the U.S., but it’s still smart to budget for the amount you’ll have to shoulder.

The biggest line item for sellers has historically been real estate commissions, which usually means handing over 2.5 or 3 percent of the sale price to your agent. Traditionally, the seller has paid the buyer’s agent’s commission fee as well — but that may change at the end of the summer as a result of a major lawsuit settlement. Here are a few of the other closing costs Tennessee sellers typically pay.

Title insurance: There isn’t a set standard for which party covers the cost of title insurance in Tennessee. It can be costly — more than $2,500 on a $500,000 property — but your agent can try to negotiate for the buyer to split the cost with you.

Attorney fees: The state of Tennessee does not require that you hire an attorney to sell your house. However, it’s wise to hire one to represent your interests in the deal. You’ll need to pay for their time, but the peace of mind you’ll get knowing that the contract is buttoned up is priceless.

Seller concessions: If the buyer’s home inspection unearths any problems with the property, they may ask you to help cover part of their closing costs. It’s up to you whether to agree with the concessions, but this is not unusual.

Mortgage payoff: If there is still an outstanding balance on your home’s mortgage, that will be paid off from the proceeds of your sale. Again, this is not unusual.

Next steps

It’s time to figure out what matters more to you: Do you want to sell your house in Tennessee as fast as possible? Or do you want to make as much money as possible? Typically, you’ll need to sacrifice one part of that equation. If speed is crucial, reach out to a cash-homebuying company or iBuyer in your area. If maximizing your profit is more important, reach out to a local real estate agent.

FAQs

How long does it take to sell your home in Tennessee?

Homes spent a median of 53 days on the market before selling in April 2024, according to Redfin data. After that, you typically have to wait a few more weeks for the buyer’s financing to come through before you can close. If you want to move faster, iBuyers and cash-homebuying companies can close an entire deal within a few weeks, and sometimes a few days — but they won’t pay you as much as you’ll make on the open market.

How much do homes sell for in Tennessee?

As of April 2024, the median sale price for homes in Tennessee was $387,500, according to Redfin. Location makes a big difference here, though — for example, the median price in Nashville was a much higher $485,000, while in Jackson it was just $263,500.

How much are closing costs in Tennessee for the seller?

You’ll need to pay your real estate agent his or her commission fee when you sell your home in Tennessee, and depending on the details of your deal, you may have to pay your seller’s agent as well. Beyond that, closing costs for sellers here will likely add up to a few thousand dollars. According to a recent study from Assurance, the average closing costs for a home sale in the Volunteer State come to $3,090.



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Should I Sell My House Now Or Wait? A Guide | Bankrate

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Key takeaways

Late spring and early summer are generally considered the best times to sell a house.

Traditionally, low mortgage rates and short supply make it a good time to sell.

While today’s rates are relatively high, low inventory is still keeping sellers in the driver’s seat in most markets.

If you’re considering selling your home, it’s critical to understand the current real estate market dynamics. The volatility that dominated the market amid pandemic-related pressures may have eased, but there are still serious challenges.

For one thing, mortgage interest rates shot up recently, reaching highs not seen in more than 20 years. While they have backed down from the 8 percent threshold seen in October 2023, Bankrate’s weekly survey of large national lenders shows that, as of late May, the average 30-year fixed mortgage rate was 7.17 percent. That still-high reality makes mortgage payments more expensive and is driving more than a few potential buyers to the sidelines — certainly not ideal if you’re on the selling side of the equation.

Complicating things further, home prices are very high as well. April 2024’s nationwide median sale price was $407,600, a record high for the month of April and very close to the National Association of Realtors’ highest-ever monthly median of $413,800, recorded in June 2022. While high prices are typically good news for sellers, they obviously require buyers who can afford the purchase, and the high interest rates are making that harder. Regardless of pricing trends, though, with housing inventory still at a low 3.5-month supply, the nation overall is still solidly a seller’s market.

However, if you were wary of a home sale last year, that may have been wise. ATTOM Data Solutions’ 2023 U.S. Home Sales Report shows that, while prices did rise throughout last year, they did so at the slowest pace in more than a decade.

So, amid all these mixed signals, is now a good time to sell your house? Here are some insights to help you sort through the question.

Should I sell my house now?

There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market. If popular opinion is any guide, now may still be a good time to sell despite the evolving market. According to Fannie Mae’s April 2024 Home Purchase Sentiment Index, about two-thirds of respondents — 67 percent — feel it is a good time to sell.

Local market dynamics also play a large part in whether it’s a good or bad time to sell, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida, and author of “The Brilliant Home Buyer.” Some markets may be riding high, while others remain sluggish. “In some areas, selling now is the right thing to do because prices are still climbing,” Severance says. “In other markets, it might be best to wait to sell until interest rates come down and stay down, which will spur sales once again.”

When is a good time to sell a house?

Historically, spring and summer are usually the best times of year to sell a house. But beyond seasonality, there are many factors that might make selling your home a wise decision. Often the reasons are based on financial calculations, cost of living expenses and other considerations, but there may also be other factors that make selling your home the right choice. These include:

If rates are low
This is not the case currently, but low interest rates entice more prospective buyers to enter the market, which is advantageous for sellers. An increased number of buyers shopping for homes often leads to bidding wars and drives up home prices, meaning you can likely sell your home for a solid profit.

If supply is short
A shortage of housing inventory — which is the case currently — also drives up demand and prices for available homes. What’s more, when housing supply is low, homes on the market tend to sell faster.

If you’re ready to downsize
Downsizing may be a more budget-friendly choice than continuing to maintain a larger, costlier home. For older homeowners, downsizing may even be a necessity: “If you can’t handle the stairs anymore, or if there are more repairs than you can manage, it may be a good time to sell,” says Rick Albert, a broker and director of business development for Lamerica Real Estate in Los Angeles.

If you need to relocate
If you’re relocating to a new state for a job or want to enjoy your retirement in a new area, and you need the profits from the sale to put toward your next place, selling may be unavoidable. “The time to sell is when you need to sell,” says Severance. “It’s a no-brainer to sell if you have somewhere to go.”

When is a good time to wait?

Here are some common factors that might make prospective sellers hold off on listing their home for sale:

If rates are rising
Rising mortgage interest rates often mean a smaller pool of buyers who can afford the price you want. Selling a home isn’t free, so if you can’t maximize your price, you might want to wait.

If you’ve recently refinanced
If you recently refinanced your mortgage, it may not make financial sense to sell just yet. You may actually lose money by doing so, when considering the closing costs and other fees typically paid as part of the refinancing process.

If you’re upsizing
The cost to purchase a new, bigger home may be unaffordable, particularly in a hot market. Don’t get in over your head — take the time to be sure your finances can accommodate the type of home you want. Bankrate’s home-affordability calculator can help you crunch the numbers.

If your home is in poor condition
Got a long list of repairs waiting to be completed around your home? You may want to postpone selling until some of the work can be done. It’s important to show your home in its best light in order to land the most favorable offer possible. If the home is in disrepair or there’s unfinished work, you are less likely to get a good price.

If you have no game plan
If you’re simply trying to time the market to make a profit and have no plan for after your home is sold, it may be best to wait. “It doesn’t make sense to sell if you don’t know what your next play is,” says Albert. “Where are you going? Where is that money going to be spent? If you don’t have a plan, then you shouldn’t sell.”

What about the NAR lawsuit?

There are also upcoming commission changes to consider when deciding whether to sell now or wait. New rules are set to take effect at the end of the summer as a result of a federal lawsuit settlement involving the National Association of Realtors and several large brokerages.

Longstanding tradition has held that a home seller paid the commission fees for both real estate agents in the transaction, their own and their buyer’s. But under the new rules, a buyer might be responsible for paying their own agent, which could save the seller money. However, these changes have not yet received final court approval, and waiting for them to take effect could be risky — and would mean missing out on prime selling season.

What if there’s a recession?

According to Bankrate’s most recent Economic Indicator Survey, the U.S. economy has a 33 percent chance of entering a recession by early 2025. While that is very far from a sure thing, it’s worth asking: Should you sell your house during a recession? Or even just before one?

The answer really depends on your personal circumstances. “If you’re concerned a recession is coming, it’s generally better to sell now instead of waiting,” says Jade Lee-Duffy, a San Diego–based broker. However, “selling during a recession might be beneficial if you’re looking to downsize or rent. This could cut your overall costs, and you could put the proceeds into a retirement account, go on vacation or invest.”

Remember, recessions typically bring with them job losses and general belt tightening, which can severely limit the number of house-hunters looking to buy. More buyers will be able to afford a home, and qualify for a mortgage, before a recession than after.

Tips to sell your home

If your answer to “should I sell my house now?” is yes, here are some steps you can take to get the best deal possible.

Find a good local agent: Advice and guidance from a professional real estate agent can be invaluable, particularly amid a hot or unpredictable housing market. Take the time to interview several candidates in your area, and ask friends or family members to recommend agents they’ve had a good experience with. “A Realtor can help you create a game plan to get your home organized and in shape to present it in the most favorable light,” says Jen Horner, a Realtor with Masters Utah Real Estate.

Make repairs if needed: To land the best offer for your home, know what needs fixing first. “Sellers need to understand that they only have one chance to make a first impression,” Horner says. “Your Realtor can walk the property with you and make suggestions for preparing your home to hit the market.”

Declutter and stage the interior: You should also make an effort to tidy your home, allowing prospective buyers to see the spaces clearly. “Less is always more,” she says. “The fewer items in a room, the larger it will feel. Remove any personal items and unnecessary furniture.” If tidying is not enough, consider hiring a home stager. “Staging can help show the buyer how to optimize the space.”

Add curb appeal outside: Your home’s exterior is another part of making a good first impression, and it’s worth freshening up the curb appeal before buyers see it. That can include upgrading landscaping and walkways, or even something as simple as a fresh coat of paint on the front door.

Alternative ways to sell

If you need to sell your home quickly and don’t have time for the often-lengthy process of a traditional sale, iBuyers and cash homebuying companies may be worth considering.

An iBuyer — Opendoor and Offerpad are two of the biggest — typically makes an offer on homes within 24 to 48 hours. If you accept it, the entire process can often be completed within a few weeks or less. Cash homebuyers also allow you to sell a home remarkably fast, sometimes in as little as one week, and they usually buy as-is, meaning there’s no need to make repairs at all.

Before proceeding with either method, though, it’s important to understand one major downside: While you gain speed and convenience when you sell to these companies, you sacrifice profit. They usually offer much less money for your home than you could get through a traditional sale. And iBuyers may charge steep fees as well, so be sure to read the fine print before signing anything.

Bottom line

Deciding to sell your home, whether now or later, is a major decision that requires careful consideration. Your future plans and goals should be a significant part of the equation, as well as your financial needs and the realities of the local market in your area. If you decide to proceed with listing your home, working with an experienced real estate agent who knows your community well can increase your chances of a smooth (and lucrative) sale.

FAQs

Is it a good time to sell a house?

Deciding whether to sell your house depends on your personal circumstances and the specific dynamics of the market in your area. “It depends on where you are selling,” says Katie Severance, a Florida Realtor. “Interest rates are up, causing prices in some markets to go down, and yet in other areas, prices are still climbing. It’s all geographically driven.” If you need to sell now, whether it’s a good time or not, an experienced local agent can guide you through the process.

What are the hardest months to sell a house?

Typically, spring and summer are considered the best times to sell, when there’s the most activity from buyers and the most listings entering the market. The worst times to sell are typically the dead of winter, when bad weather keeps people off the roads and holiday planning occupies their minds. December, January and February are probably the hardest months for home sellers — but activity picks up again in the spring.

Should I sell my house now, before there’s a recession?

Recessions mean belt tightening and potential layoffs. If your area is hard-hit by job losses, the number of qualified buyers will be severely limited — if you’re concerned, it might be best to sell before that (potentially) happens. However Bankrate’s most recent Economic Indicator Survey shows only a 33 percent chance of a recession.

Do I pay taxes when I sell my house?

If you make a very substantial amount of money on the sale of your home, you may be subject to capital gains taxes. The exact tax rate you’ll pay is impacted by various factors, including how much of a profit you make, how long you’ve owned the home, your marital status and more. You’ll also have to pay any outstanding property taxes still owed at the time of sale, and many states have a real estate transfer tax that may be owed as well.



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10 Tips To Sell Your Home For More Money | Bankrate

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Even in a seller’s market, where inventory is scarce and bidding wars are common, it still pays to invest some time and energy in positioning your home to sell for top dollar. This can involve a variety of steps, from working with a real estate agent who truly understands your local market to spending some money to make sure your home looks its best for buyers. Here are 10 tips for selling your home that Realtors say will separate you from the competition — and help you bring in a higher price.

1. Find a real estate agent

Working with a skilled local real estate agent who knows your area inside and out can help you sell your home more quickly, and often, for more money. In fact, data from the National Association of Realtors shows that between July 2022 and June 2023, homes listed without the assistance of a Realtor sold for a median price of $310,000, while those sold with one fetched a median of $405,000. Interview several candidates before you commit to one agent — the better you get along, the smoother the process is likely to be.

2. Invest in value-adding improvements

Determining which home improvements to invest in can be daunting, and the costs can add up quickly. The key is to spend your money on projects that will provide the most return on your investment.

Minor kitchen upgrades are typically a wise choice, says San Diego–area Realtor Jade Lee-Duffy. “The heart of the home is the kitchen, and many buyers will judge a property by its kitchen,” she says. Just don’t go overboard: “While a complete overhaul of this space can run into the tens of thousands, a minor update is where you can gain the greatest return,” she says. “Think about resurfacing cabinets, replacing countertops, a fresh coat of paint or updating the fixtures and hardware.”

Updating a bathroom is another smart investment, says Katie Severance, a Realtor with Douglas Elliman in Palm Beach, Florida, and author of “The Brilliant Home Buyer.” “Renovated kitchens and baths are the ‘money rooms’ — those that add the most value to a home,” she says.

3. Up your curb appeal

As the saying goes, you don’t get a second chance to make a first impression. “Make sure your front yard is free of debris, the bushes are pruned and the grass has been cut,” says Lee-Duffy. “Also, add some bright potted plants by the front door to make buyers feel welcome.”

Some other easy updates that can improve curb appeal include:

Touching up exterior paint
Adding window flower boxes
Installing a new mailbox
Adding new mulch around shrubs and trees

4. Get a pre-listing inspection

Investing in a home inspection before putting your property on the market is another step to consider. “You don’t want any unexpected surprises,” says Lee-Duffy. “It’s best to find out beforehand if there are any issues that you can fix, before buyers find out on their own.” That would give them negotiating power for a lower price or, worst case scenario, a reason to back out of the deal. So it may be worth a few hundred dollars for the peace of mind.

There is, however, a downside to a pre-listing inspection: “Beware, because once a seller becomes aware of an existing defect and does not correct it prior to listing, they are obligated to disclose it to a buyer,” says Severance. “Defects that a buyer learns were known but not disclosed, prior to accepting an offer, can kill the deal.”

5. Highlight the positive with professional photos

Spending a bit of money on high-quality photography can go a long way toward helping your home sell for a higher price. “The majority of people search for properties online,” says Lee-Duffy. “If the photos pop, it can translate into a higher sale price — and sell faster, too.”

It’s OK to leave some things to the imagination when it comes to your home’s online listing, though. “I advise against photographing every square foot of the home,” says Severance. “The goal of photographs is not to give all the goodies away online; it’s to make a buyer want to see more — to whet their whistle enough to entice them to see it in person. If they don’t come see the house, they probably aren’t making an offer.”

6. Stage your home

When it comes to home staging, says Severance, there are two rules of thumb: less is more and keep it neutral. “It’s very important to capture buyers’ interest from the front door,” she says. “Pay extra attention to the entry: Repaint; place flowers; buy a new area rug, an impressive mirror or a dramatic piece of art.”

Remove objects and clutter that visually shrink a room, such as large ottomans or too many plants, and remove everything from the kitchen counters except for one or two new-looking appliances. “And don’t forget to stage the deck or patio, because that is an extension of the house that can make a small home feel much larger than it is,” Severance adds.

You can do the staging work on your own or up the ante by hiring a professional stager.  A pro will average around $1,800, according to HomeAdvisor.

7. Set the right asking price

Identifying the best price for your home can be critical to your success. “Setting the price too high can be detrimental and prevent buyers from walking through your front door,” says Lee-Duffy.

How do you find that sweet spot of pricing for profit but not overpricing? The expertise of your agent can be truly valuable here. A knowledgeable agent will understand fair market value in your area, how much your house is worth and how much you might reasonably expect to get for it in the current market.

“Good pricing requires the expertise to thread the needle,” says Severance. “List at a number that is lower than comparable properties, in order to draw attention to it, but not so low that you will be disappointed if you only get one offer right at list price.” If enough buyers are enticed, you might even set the stage for a bidding war.

8. Remove personal items

“The goal of any showing is for the buyer to envision their own belongings in the space,” says Severance. So, while family photos and other knickknacks might seem like they have no bearing on how much money your home commands, they really do matter — especially if you are still living in the home while you’re trying to sell it.

If buyers are distracted by personal items, then chances are they won’t be able to see themselves in the space, and will not end up making an offer. “Buyers are thinking of their own furniture, where it will go and how it will fit. It’s the house they came to see, not the items inside of it,” she says.

9. Be ready to move fast

Once your property is listed on the market, things can happen quickly. It’s important to be well prepared ahead of time so that you can be as responsive as possible to potential offers. “Fill out all the necessary documents, such as any seller disclosures, and have paperwork for recent repair work, home renovation costs and utility bills on-hand for any buyer requests that come in,” says Lee-Duffy.

Sellers who are slow in reaction time or unresponsive can lose buyers, adds Severance. “If the buyer feels that they are not being dealt with fairly, they are very likely to walk away,” she says.

10. Use your head, not your heart

Finally, try to remove emotion from the equation and see the process as a simple transaction — your home is no longer “home” but a product for sale. It’s not unusual for prospective buyers to request credits or repairs, and it’s easy as a seller to take offense, so try to have a clear understanding of what issues and items you may be willing to make concessions on.

“It’s important to take emotion out of it and remember that the buyer usually doesn’t expect to get everything they ask for,” says Severance. “Take a closer look at which requests are valid and fair, and offer something. The cost to you is not in giving the concession — it’s the expense of losing the buyer, putting the property back on the market, starting all over again and getting a potentially lower offer.”

FAQs

How can I maximize my net proceeds from selling my home?

To maximize how much you earn from the sale, it’s important to put in some work to get your property market-ready. This includes improving your home’s curb appeal, investing in professional listing photos and staging your home before opening it up to buyers. Your real estate agent can provide home-selling tips based on your specific situation.

Do I need a real estate agent to sell my home?

No, you don’t necessarily need a real estate agent to sell your house. Selling without one is called a “for sale by owner” transaction, and they are not unusual. However, partnering with an agent can make the process much easier for you — agents help with important tasks like determining the right asking price, creating a listing that will attract buyers and hosting showings and open houses. Later in the process, they’ll negotiate with buyers and guide you through the closing, ensuring your interests are protected.

How can I sell my house fast?

If you’re in a hurry to move, consider selling to a cash homebuying company or iBuyer. These businesses buy properties for cash, often in as-is condition, and they can close deals far faster than a traditional market sale — often in just a couple of weeks or less. The downside is that you’ll likely earn less money selling this way than you would with a traditional home listing.



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Selling A House In Massachusetts | Bankrate

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In a hurry to sell your Bay State home? The odds of selling relatively quickly are in your favor: Homes here spend much less time on the market than in most parts of the country, according to Redfin data.

But everything is relative, and if you need to relocate for work right away, for example, or need the proceeds from the sale ASAP, you may be hoping to speed the process along. There are a variety of ways to do just that, including working with one of the many cash-homebuying firms in the area. Here’s what you need to know to sell your house fast in Massachusetts.

How fast can you sell your home in Massachusetts?

The Massachusetts housing market is quite robust. Home prices here are high and getting higher: February Redfin data shows that the state’s median home price was $576,000, a nearly 10 percent jump from February 2023. And homes typically spent a median of 28 days on the market before going to contract — five days less than last year and a much quicker timeline than the national median of 48 days on market.

Your Massachusetts home won’t necessarily sell in this exact amount of time, though. A variety of factors can impact how fast a home sells: The time of year, your home’s size and condition and your exact location in the state all factor into the equation.

Need to move faster?

If you want to sell your home even faster, here are some options to consider that can expedite a sale:

Cash homebuyers: For maximum speed, your best bet is forgoing the traditional listing process and selling directly to a cash homebuying company, whether it’s a nationally known name like We Buy Houses or a smaller, local firm. These operations can often close a sale in just a couple weeks, or sometimes even faster. However, you will likely make less of a profit than you would on the open market.

iBuyers: Online homebuying firms known as iBuyers operate in a similar manner and with similar speed. Opendoor, one of the biggest, buys homes in the Boston area.

Listing as-is: Selling your home in as-is condition makes the process move faster because you don’t waste time on back-and-forth negotiations over repairs — the buyer knows upfront that what they get is what they see.

Flexibility: You can still sell relatively fast by listing your Massachusetts home in the traditional way. Be direct with your real estate agent about your need for speed, so that they can market it accordingly. This may require a bit of flexibility on your part, like being willing to price the home slightly lower to attract buyer attention or offering seller concessions to sweeten the deal. Your agent will know what is likely to work best in your specific market.

Selling your home fast for fair market value

If you want to ensure your home sale brings in the highest price possible, but you’d still like to move relatively fast, work with a local real estate agent. Look for someone who has experience in your specific area — and ideally, in your specific neighborhood — so you’ll have the best possible idea of your home’s market value. And discuss these topics before you list:

How should you price your listing?

Your agent will be instrumental in developing your pricing strategy. While you can take steps on your own to estimate what your house is worth, a pro agent will walk you through detailed local comps to understand what area buyers have recently paid for properties similar to yours.

Is it worth upgrading before you sell?

If you’re thinking about investing in a big renovation project, keep in mind that it could cost a pile of money, which you aren’t likely to fully make back — and take a long time, which you are trying to avoid. Rather than delay your sale with a major undertaking, consider quick and inexpensive upgrades, like a fresh coat of paint or upping your curb appeal.

What should you repair before selling?

As you think about what to repair versus what not to bother with, take a simple approach: Are there any glaring issues that would turn you off as a buyer? Put those at the top of your priority list. They will likely be worth the investment. If you’re anxious about potential problems, you might even want to consider a pre-listing inspection. Essentially, you’ll hire a home inspector to identify any issues, which gives you the option to address them before a potential buyer finds them.

Should you pay to stage your home?

First impressions are crucial in real estate. If you have the interior-designer touch, your home might already look open-house-ready. But if not, or if you’ve already moved out and the place is totally empty, it might be worth hiring professional stagers to help it shine. This can really make a home come to life and impress potential buyers, which in turn can help you sell faster, and maybe even for more money. Ask your agent whether your home could benefit from staging.

What do you need to disclose to the buyer?

Unlike in many states, which require home sellers to fill out lengthy property disclosures, Massachusetts law requires that you share just two pieces of information: whether the home has lead paint in it and whether it uses a septic system. If the buyer asks you a specific question, though, you must be honest. For example, if you know there have been problems with the plumbing in the bathroom and the buyer asks about it, you must tell the truth.

If you live in a property that belongs to a homeowners association, you will also need to hand over documents detailing the association’s financial health and the bylaws that a buyer will need to follow.

Closing day

Once you start preparing for closing, the deal is almost done — but it’s important to understand how much it’ll cost you to get to the finish line. Here are some common closing costs for sellers in Massachusetts:

Realtor commissions: The way real estate commissions work will change in July 2024, thanks to a major lawsuit that was recently settled. Until then, at least, the seller typically pays commission fees for both their own agent and their buyer’s. This expense usually comes to around 5 or 6 percent of the home’s sale price — for a median-priced $576,000 Massachusetts home, 5 percent is $28,800.

Title insurance: There is no law or set standard for who covers this cost in Massachusetts, but it’s customary for sellers to pay for title insurance in many states. The cost varies depending on the home.

Transfer taxes: The seller also usually covers the cost of real estate transfer taxes in Massachusetts. The rate depends on several factors but is typically $2.28 for every $500 of value. On a $576,000 sale, that adds up to around $2,626.

Escrow and wire-transfer fees: You may be charged nominal fees to cover the cost of the money being held in escrow and any money that needs to be wired in payment (for example, if you are paying off your mortgage with part of the sale proceeds).

Attorney fees: A lawyer must be present at real estate closings by Massachusetts law. This is often the lawyer representing the buyer’s lender, though — you as the seller are not required to hire your own lawyer. However, it’s smart to do so anyway when dealing with legal contracts and large amounts of money. Attorney fees will vary for each transaction.

Find a real estate agent

Massachusetts real estate can be complex. Selling to a cash homebuyer makes it simple, and fast. But if selling for top dollar is more important to you than sheer speed, working with a knowledgeable local real estate agent is your best path. To find the right agent, interview multiple candidates. Look for an agent who not only has experience, but has a working style that makes you feel comfortable.

FAQs

What’s the fastest way to sell my house in Massachusetts?


The fastest route to a sale is to work with a cash-homebuyer or an iBuyer. These companies can make offers within 24 hours, or sometimes even more immediately, and most can close the entire deal within a couple weeks. Keep in mind, though, that in exchange for this speed, you will likely make less money from the sale.

Can I sell my house without a Realtor in Massachusetts?


Yes you can. Selling your home without a professional agent is called a for sale by owner or FSBO transaction, and while it saves you from having to pay a listing agent’s commission, it is also quite a lot of work. Any tasks that would normally be done by a Realtor, including creating and marketing the listing, coordinating showings and negotiating with buyers, fall on your shoulders as a FSBO seller.



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How To Sell A House By Owner In Colorado | Bankrate

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Key takeaways

You don’t have to work with a real estate agent to sell your house in Colorado. However, doing so can make the process much easier.

If you take the “for sale by owner” route, you won’t pay a listing agent’s commission, but you’re still on the hook for the buyer’s agent’s fee.

Without agent representation, it’s a good idea to hire a real estate attorney to review the contract and other important paperwork.

Realtor fees are one of the biggest expenses homeowners face when selling their home, no matter what state they’re located in. If you’re trying to cut costs, you might have considered not hiring one and instead taking the “for sale by owner” or FSBO path.

There are pros and cons to this method: Owner-sellers are responsible for all the work a listing agent typically handles, which is significant. On the other hand, you’ll have more control over the process and won’t have to pay the commission for that agent. Here’s an overview of how to sell by owner in Colorado, so you can decide if going it alone is right for you.

Selling a house without a Realtor in Colorado

When you sell your house without a real estate agent’s help, you take on all of an agent’s usual duties yourself. This includes everything from creating the listing to preparing the closing paperwork — and everything in-between. Here are some of the main responsibilities you’ll assume with a FSBO sale.

Create your listing

Putting together a listing is one of the first things you’ll need to do to get the word out about your home. This involves writing a compelling description of your property that covers:

Basic information about your house: Its age, lot size, square footage and number of bedrooms and bathrooms are all important to include.

Special features: Got a hot tub for post-skiing soaks, or an impressive mountain view? Be sure to play them up.

Other relevant details: You’ll also want to add information about the neighborhood and local school district. Distance to amenities, shopping or main roads might be important in smaller towns, too. And if your property is part of a homeowners’ association (HOA), go into detail on that, too.

To bring your listing to life, include high-quality photos — taken by a professional, if possible — depicting both the inside and outside of the house. Buyers will see your listing online first, and if they aren’t impressed, they’ll keep on scrolling and never bother to come see it in person, so photos matter more than you might think.

But of course, the most crucial part of your listing is the asking price. How much is your home worth? To determine the answer, you’ll need to research local comps, or how much other, similar homes in your area are selling for.

Try to set aside your feelings as the owner and be as objective as you can when setting your price. The median sale price of a single-family home in Colorado was $548,950 as of January 2023, according to the Colorado Association of Realtors (CAR). However, prices vary widely across the state, so prices in your area may be lower or higher.

Market your property

When your listing is ready, your next task is to get it seen by prospective buyers. Start by putting it on your local multiple listing service (MLS), a database of for-sale properties in your area. Usually, only real estate professionals can access the MLS, but there are local and national services that will list it on your behalf, usually for a flat fee. In Colorado, these companies include Home Savings Realty, Flat Fee Group and Houzeo. Some firms have multiple packages to choose from, which might include yard signs, photos and more.

On top of that, you can promote your property in local community groups, on websites like Craigslist and on social media. Be mindful about how much personal information you share online, though — you don’t want to attract scammers or compromise your safety.

Next up: Scheduling open houses or private viewings to get home shoppers onto your property. Ask interested buyers to include their mortgage preapproval letter with their offer so you can confirm that they have the financial means to back it up.

Close your deal

Ideally, you’ll bring in a few offers so you can compare them and pick the best one. This part of the process often involves negotiating pricing, contingencies and seller concessions, so be prepared for some back and forth with the buyer’s agent.

Once you’ve agreed on a price and other details, you’ll draft a purchase and sale agreement. It’s a good idea to have a real estate attorney review this legal document — or even better, draw it up. An attorney can also look over other important paperwork to make sure your interests are protected.

Required disclosures for Colorado home sellers

As a home seller in Colorado, you must complete the state’s seller’s property disclosure form. In it, you’ll describe any previous or current problems with the house, including the building itself or its appliances and major systems (such as electrical and water). If the property is part of an HOA, you’ll also need to disclose that, and provide the buyer with information about its rules, bylaws and finances. Other required forms may include a green disclosure, which details your property’s energy-efficiency features, and a lead-based paint disclosure.

Do I need a lawyer to sell my house in Colorado?

No, you don’t need a lawyer to sell a house in Colorado. But hiring one anyway is a smart idea for all sellers, especially those who are going it alone. Navigating a real estate transaction can be tricky, with a lot of paperwork and complex contract language, and any misstep can have serious implications. A local real estate attorney will know your area’s laws, look after your interests and ensure the deal is completed correctly.

Pros and cons of selling a house by owner in Colorado

If you’re on the fence about selling without an agent, consider the benefits and drawbacks as they apply to your situation:

Pros

You’ll pay less in commission: Without an agent representing you, there’s no need to pay their commission. Agents typically receive between 2 and 3 percent of a home’s sale price, so based on the median price in Colorado, you’d save between $10,979 and $16,468. You’ll still have to pay the same amount to the buyer’s agent, though.

You call the shots: With a FSBO listing, you’re free to do things however you’d like. From pricing to marketing to negotiating, it’s all up to you.

There’s less back-and-forth: Real estate agents usually have multiple clients at the same time, so there might be delays in scheduling and communication. You don’t have to worry about this if you sell independently.

Cons

It’s hard work: As licensed professionals, agents know the ins and outs of the Colorado housing market and have extensive experience with creating listings, attracting buyers and managing the closing process. Without this knowledge, selling a home can be challenging.

You might earn less money: There’s a lot of money at play in a real estate transaction, and a negotiation misstep or mistake in your paperwork can be costly. In addition, according to NAR data, you might not earn as much on your home sale: In 2023, they say, FSBO homes sold for a median of $310,000, while agent-assisted properties had a median sale price of $405,000.

It can be harder to find buyers: Agents work hard to promote your property, and they often tap into their network of fellow agents to do so. Without these connections, you might struggle to attract buyers. In fact, NAR data shows that 57 percent of FSBO sellers sold to someone they already knew.

FAQs

Can you sell a house in Colorado without a Realtor?


Yes, you’re free to sell a home without hiring a Realtor in Colorado. But a FSBO sale require a lot of work, including creating and promoting your listing, showing your home to buyers and negotiating a deal, so make sure you’re ready for the time commitment.

Do I need a lawyer to sell my house in Colorado?


No, Colorado does not legally require you to hire an attorney to sell your house. However, it’s advisable to do so anyway to protect your interests in such a big financial transaction — especially if you don’t have an agent guiding you through the process.



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The Best and Worst Time To Sell A House | Bankrate

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Key takeaways

Broadly speaking, spring is generally the best time of year to sell your home.

Many families need to be in their new home by the start of the school year, and house-hunting is easier when days are warmer and longer.

Fall and winter typically see the lowest amount of homebuying activity.

During the height of the pandemic, normal seasonal patterns all but disappeared from the housing market. There was so much demand for homes that any time was a good time to sell. But now that the market has settled back into a more normal cadence, timing is once again becoming an important consideration for home sellers.

Some patterns and trends usually do hold true throughout the year, and one is that late spring and early summer are the best times to sell. Sellers can net thousands of dollars more if they sell during the peak months of May, June and April compared to the three slowest months of the year, October, November and December, according to a 2023 report by ATTOM Data Solutions.

Best month to sell a house

Spring — specifically, the month of May — is the best time to sell a house. Homes sold in May net a 12.8 percent seller premium (the amount above the home’s market value), based on ATTOM’s analysis of single-family home and condo sales over the past 10 years.

Best and worst times to sell a house, by month

To determine the premium or discount sellers realized on a given day, ATTOM compared the median sale price for homes with a purchase closing on that day with the median automated valuation model (AVM) for those same properties at the time of sale. Here’s how each month of the year ranked for the best time to sell a house.

May
$220,000
$195,000
12.8%

June
$228,000
$206,000
10.7%

April
$215,000
$195,000
10.3%

March
$210,000
$191,357
9.7%

July
$227,500
$207,537
9.6%

February
$200,000
$184,000
8.7%

August
$225,000
$208,000
8.2%

September
$223,504
$207,000
8.0%

January
$200,000
$186,000
7.5%

October
$220,000
$206,000
6.8%

December
$220,000
$206,000
6.8%

November
$220,000
$207,000
6.3%

The highest-earning months are, in ranking order, May, June, April and March. Just over 18 million purchase transactions took place during this period, according to ATTOM.

June edges out April for second place, with a 10.7 percent seller premium compared to May’s 12.8 percent. March and April usher in prime homebuying season with premiums of 9.7 percent and 10.3 percent, respectively. By October, seller premiums have tapered off, falling to 6.8 percent.

These stats underscore the conventional wisdom about selling a home: Spring and summer attract the most buyer attention. Conversely, that can be a challenging time to buy, owing to high prices and more demand.

Seasonality is important

While all regions experience seasonality, it is more or less pronounced depending on where you are in the country.

For example, in the South and West — where temperatures are largely more moderate — there’s less discrepancy between the peak and slow seasons, according to the National Association of Realtors. However, there’s more disparity between summer and winter in the Midwest and Northeast.

These seasonal patterns can help give sellers an indication of what to expect throughout the year.

Spring and summer are the best seasons to sell

Typically, sellers list their homes in the spring and summer because the weather is good, especially for people in colder climates. In addition, families want to buy their next home before school starts, says Realtor Liede DeValdivielso, one half of the DeValdivielso Team with the Keyes Company in Coral Gables, Florida.

Daylight savings time might also play a part in why the warmer months stimulate buying activity. “One of the reasons buyers are more eager to view properties during spring and summer may be due to the longer days,” says Marilyn Blume, a real estate agent with Sotheby’s International Realty in New York City. “By getting more exposure for your listing through more traffic, you increase the chances to receive more offers.”

Homebuyers on a deadline — for example, those who want to acquire a house before the school year begins — should make sure they’re in top financial shape before spring. That means checking your credit score and debt-to-income ratio to ensure you’re in a strong position to get a mortgage preapproval. Otherwise, your efforts might be delayed.

“April is plenty of time to get a house before school starts, as long as your financing is in order,” DeValdivielso says. “The best thing to do is shop around for a loan before you start looking for a house. This will give you a good idea of what you can qualify for.”

Fall and winter are the worst seasons to sell

The decline in seller premiums typically begins in September, when the average premium drops to 8 percent — significantly less than the peak in May. By then, many buyers with school-aged kids have likely found a home, so the sharp drop is no surprise.

Combine the new school year with the start of the busy holiday season, and homebuying goes on the back burner during the latter part of the year. Just like in the warmer months, the weather plays a factor in the winter months, too. As the days get dark earlier and temperatures drop, people tend to stay closer to home. This means less foot traffic for sellers.

November is the worst month to sell

The worst month of the year to sell a house is November, with a 6.3 percent seller premium, according to ATTOM. And those premiums stay pretty low in ensuing months. Homebuying activity typically comes to a near-standstill in December, when people tend to travel and are busy with holiday celebrations.

Of course, if you’re a buyer, the opposite holds true: The cooler months can actually be a hot time to house-hunt. There’s less competition from other buyers, and antsy sellers might be more willing to negotiate on price or offer other concessions.

The best day of the week to list your home

Want to get even more specific? If you really want to maximize your profits and sell quickly, list your home on a Thursday. Data from Zillow suggests that Thursday is the sweet spot for new listings to appear on the market, as both house-hunters and real estate agents tend to plan their weekend showings toward the end of the week. Friday is a good bet as well, per Redfin data. Avoid listing at the beginning of the week, as that raises the likelihood that the listing will sit for a few days before most buyers are ready to look — newly added listings look fresher to buyers.

What if there’s a recession?

As happened during the pandemic, the possibility of a recession might see established housing-market trends fly out the window. Recessions can be a dicey time to sell — or buy — a home. When the economy contracts, unemployment rises and potential buyers may experience a decline in income, making it more difficult for them to be approved for a mortgage.

In addition, selling a home requires paying real estate commissions and closing costs that will likely total tens of thousands of dollars. So it’s only worth doing if you really need to. If you’re worried about a recession and can afford to hold off until the economy stabilizes a bit, that could be the smarter financial option.

More tips for sellers

Here are a few more suggestions for homeowners hoping to maximize their selling success:

Real estate is very localized, so speak with an experienced real estate agent in your market who understands local sales trends. Agents can give you neighborhood-specific information to help you make the most strategic decision about when to list your home.
Keep prep time in mind. Sellers should consider making key repairs and updates to their homes to maximize their return, but this can be a lengthy process. Even simple decluttering can be time-consuming, so plan accordingly and finish these projects before putting your home on the market.
Make sure you get expert, professional-quality listing photos taken. All homebuyers search for homes online these days — a full 100 percent, according to National Association of Realtors data — so it’s important to put your home’s best foot forward right from the beginning.



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Capital Gains Tax On Real Estate And Selling Your Home | Bankrate

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Key takeaways

Capital gains tax is a levy imposed by the IRS on the profits made from selling an investment or asset, including real estate.

Primary residences have different capital gains guidelines than rental and investment properties do.

It’s possible to lower the capital gains tax you owe by taking advantage of available deductions, exemptions and exclusions.

Naturally, you want to make a nice profit on your home when you sell it. But beware a bite in your earnings when tax day rolls around: the capital gains tax. If your home has substantially increased in value, you could be liable for a substantial sum when you pay your annual income tax.

Fortunately, there are ways to avoid or reduce the capital gains tax on a home sale to keep as much profit in your pocket as possible. Here’s everything you need to know.

What is the capital gains tax on real estate?

Key terms

Capital gains tax
A levy imposed by the IRS on profits made from the sale of an asset, such as stocks or real estate — that profit is considered taxable income.

Long-term capital gains
A tax on assets held for more than one year.

Property value
The amount a buyer is likely to pay for a real estate asset (i.e., property).

Broadly speaking, capital gains tax is the tax owed on the profit (aka, the capital gain) you make when you sell an investment or asset. It is calculated by subtracting the asset’s original cost or purchase price (the “tax basis”), plus any expenses incurred, from the final sale price.

Special rates apply for long-term capital gains on assets owned for over a year. The long-term capital gains tax rates are 15 percent, 20 percent and 28 percent (for certain special asset types, like small business stock collectibles), depending on your income.

Real estate, including residential real estate, counts as a taxable asset. Therefore, any financial gains from a home sale must be reported to the IRS: You calculate and pay any money due when filing your tax return for the year you sold the property.

While its rates are typically lower than ordinary income tax rates, the capital gains tax can still add up, especially on profits for big-ticket items like a home — the largest single asset many people will ever own. The capital gains tax on real estate directly ties into your property’s value and any increases in its value. If your home substantially appreciated after you bought it, and you realized that appreciation when you sold it, you could have a sizable, taxable gain.

How much is capital gains tax on a primary residence?

Calculating capital gains tax in real estate can be complex. The tax rate depends on several factors:

Your income tax bracket
Your marital status
How long you’ve owned the house
Whether the house was your primary residence, a secondary residence or an investment property

Star Alt

Keep in mind: The tax is only assessed on the profit itself. If you purchased a house five years ago for $250,000 and sold it today for $500,000, your profit would be $250,000. (Though there are deductions you could take that would effectively reduce your net profit.) You would need to report the home sale and potentially pay a capital gains tax on the $250,000 profit.

For the 2023 tax year, you are not subject to capital gains taxes if your taxable income is $44,625 or less ($89,250 if married and filing jointly). If it’s between $44,626 and $492,300 as a single filer, or between $89,251 and $553,850 if married and filing jointly, you would pay 15 percent on the $250,000 profit. Above those top amounts, the capital gains rate would be 20 percent.

However, the IRS gives home sellers multiple ways to avoid or reduce their capital gains taxes, principally if their property is a primary residence. You can exempt a certain amount of the profit — up to $250,000 or $500,000, depending on your filing status — from the tax if you meet certain conditions.

An ill-timed sale could result in a significant tax bill that could have otherwise been avoided.
— Greg McBride, Bankrate Chief Financial Analyst

“Before selling your home, familiarize yourself with the capital gains tax exclusion rules and consult a tax advisor,” says Greg McBride, Bankrate’s chief financial analyst. “An ill-timed sale could result in a significant tax bill that could have otherwise been avoided. If the property has been your primary residence for less than 24 months, for example, you may decide to hold off until you’ve reached that threshold to avoid capital gains tax.”

If you sell a house or property in one year or less after owning it, the short-term capital gains is taxed as ordinary income, which could be as high as 37 percent. Long-term capital gains for properties you owned for over a year are taxed at 0 percent, 15 percent or 20 percent depending on your income tax bracket.

How much is capital gains tax on a rental property?

A rental property doesn’t have the same exclusions as a primary residence when it comes to capital gains taxes. You would have to pay a 25 percent depreciation recapture tax on the portion of your profit from previously claimed depreciation and 0, 15 or 20 percent in long-term capital gains taxes, depending on your income and filing status on the balance.

Suppose the property you bought for $250,000 and sold for $500,000 was a rental. If your profit included depreciation you claimed as a business expense, the IRS would levy a 25 percent depreciation recapture tax on that amount. Your profit balance would be taxed at a 0, 15 or 20 percent capital gains rate, depending on your income.

If you plan to sell a rental property you’ve owned for less than a year, try to stretch ownership out to at least 12 months, or your profit will be taxed as ordinary income. The IRS doesn’t have a ceiling for short-term capital gains taxes, and you may be hit with up to 37 percent tax.

How to avoid capital gains tax on a home sale

Capital gains taxes can greatly affect your bottom line. Fortunately, there are ways to reduce or avoid capital gains taxes on a home sale altogether. It depends on the property type and your filing status. The IRS offers a few scenarios to avoid capital gains taxes when selling your house.

Bankrate insight

When does capital gains tax not apply? If you have lived in a home as your primary residence for two out of the five years preceding the home’s sale, the IRS lets you exempt $250,000 in profit, or $500,000 if married and filing jointly, from capital gains taxes. The two years do not necessarily need to be consecutive. If you become disabled, receive a job offer in a new area or are forced to sell your home before you have lived there two years, you may qualify for an exception to the two-out-of-five rule.

Avoiding capital gains tax on your primary residence

You can sell your primary residence and avoid paying capital gains taxes on the first $250,000 of your profits if your tax-filing status is single, and up to $500,000 if married and filing jointly. The exemption is only available once every two years. But it can, in effect, render the capital gains tax moot.

Let’s say a single filer bought a home for $250,000, lived in it for three years, and then sold it for $400,000. Their profit is $150,000. But that’s exempt from any capital gains tax because it’s under the $250,000 threshold allowed for gains.

Of course, there are conditions. To qualify as your primary residence, the IRS requires that you prove the property was your main home where you lived most of the time. You’ll need to show that you owned the home for at least two years and lived in the property as your primary residence for at least two of the five years immediately preceding the sale.

However, there is wiggle room in how the rules are interpreted. You don’t have to show you lived in the home the entire time you owned it or even consecutively for two years. You could, for example, purchase the house, live in it for 12 months, rent it out for a few years and then move in to establish primary residency for another 12 months. As long as you lived in the property as your primary residence for 24 months within the five years before the home’s sale, you can qualify for the capital gains tax exemption. And if you’re married and filing jointly, only one spouse needs to meet this requirement.

Avoiding capital gains tax on a rental or additional property

If you own an additional property that you plan to sell, you will need to plan to lower your tax liability. There are several ways to mitigate any capital gains tax:

Establish the rental as primary residence

You might find that an investment property you rent out and plan to sell has spiked in value. Moving into the rental for at least two years to convert it into a primary residence to avoid capital gains may be a good idea. However, you won’t be able to exclude the portion you depreciated while renting the property. You’ll lose primary residency status on your main home, too, but that can be regained later by moving back in after the sale of the rental property. If you don’t plan to sell the main home for at least two years, you can re-establish primary residency and qualify for the capital gains exclusion later.

1031 exchange

You can also take advantage of a 1031 exchange. Known as a like-kind exchange, it only works if you sell the investment property and use the proceeds to buy another similar property. If you keep putting the sale proceeds into another investment property, you can put off capital gains tax indefinitely.

Opportunity zones

The 2017 Tax Cuts and Jobs Act created opportunity zones — areas around the country identified as economically disadvantaged. If you choose to invest in a designated low-income community, you’ll get a step up in tax basis (your original cost) after the first five years. And any gains after 10 years will be tax-free.

Deduct expenses

If you still have capital gains after taking advantage of exemptions and exclusions, focus on lowering the amount of the taxable profit or gains. Some qualifying deductions include:

The cost of repairs to a home or investment property
Improvements and upgrades, such as adding a bedroom or renovating a kitchen

Losses in investment property income due to tenants unable to pay rent
Cost of legal, professional and advertising fees to evict a tenant or find a new one

Closing costs from the property sale

Remember to keep organized records and documents, including receipts, bills, invoices and credit card statements, to support your expense claims in case you’re audited.

FAQs

How much is capital gains tax on real estate?


The capital gains tax rate on the sale of a primary residence can be as high as 20 percent of the profit on a home owned for more than a year, and as high as 37 percent on one owned for a year or less. If you own and live in the home for two out of the five years before the sale, you will likely be exempt from any capital gains taxes up to $250,000 in profit, or $500,000 if married and filing jointly.

Is there a way to avoid capital gains tax on the selling of a house?


You will avoid capital gains tax if your profit on the sale is less than $250,000 (for single filers) or $500,000 (if you’re married and filing jointly), provided it has been your primary residence for at least two of the past five years. For investment properties, capital gains taxes can be deferred with a Section 1031 like-kind exchange, in which you use the profit from the sale of one investment property to buy another of equal or greater value.



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