WHAT TO EXPECT WHEN SELLING YOUR HOUSE | CLOSING & BEYOND!
Wow! All of your hard work so far is finally paying off! You accepted an offer beyond your expectations and are finally heading to the closing table. What does that look like? And what do you need to know moving forward? Let’s dive in!
LEASEBACK – DO YOU NEED ONE?
Are you in the process of purchasing a new home? If you are and the closing for your new home can’t happen on the same day as the house you are selling, you will need what is called a leaseback. Now this is something that needs to be communicated upfront when you first start entertaining a buyers offer, but just know this is an option for you. It helps alleviate the stress of finding a new place to call home. Having a leaseback basically turns you into a short-term renter thus making the buyer a landlord. Don’t worry, these typically don’t last more than a few days or a week. Sometimes a seller may ask for more time than that, but you should expect to pay a day rate if more than a few days is needed.
TAXES – WILL YOU OWE ANYTHING?
Uncle Sam wants his money! Do you know if you have to pay capital gains tax from the sale of your house? Well, that all depends! If you have lived in the house as your primary residence for 2 years out of the past 5 years, you are exempt up to $250,000 if you’re single, or $500,000 if married filing jointly.
If you are an investor, unfortunately you are subject to standard capital gains tax current at the time of sale, unless you do a 1031 exchange. So, make sure to talk with your CPA and plan accordingly.
VACATING THE PROPERTY – KEEPING IT CLEAN
Know your final and last day that you will be in the property and plan accordingly. If you are doing a leaseback, don’t forget the day you are supposed to be completely out or you could pay a hefty penalty depending on what was negotiated. My advice, try and get everything out of the property as quickly as you can so the house can get properly cleaned. It’s not mandatory that you clean the house (unless specified in your contract), but it is customary to leave the new owners a clean house to move into. How would you feel if a seller left you with dirty toilets and a filthy kitchen? You probably wouldn’t be too happy.
WHEN DO YOU RECEIVE YOUR MONEY?
The big question, when do you get your money?! Well, if you and the buyer can both close early in the day before about 3pm, the file should fund within the hour after the last party has signed. I say should because all the signed documents have to be sent off to the lender for final approval to fund the file. There could be a missing signature somewhere and the file gets kicked back, calling you back to the title company to sign the forgotten page. It’s rare, but it happens.
You can have the title company wire the funds to your bank account, or cut you a check right there. If you are closing on your new house, the title company can wire the funds to the next location you are closing at. Just let the escrow officer know what you prefer!
CHANGE OF ADDRESS & TURN OFF UTILITIES
Make sure you notify the utility company that you are selling the house and schedule a day to have them turn off utilities. We recommend having them scheduled to turn off the day after closing to avoid any delays with closing. This is because the buyers may perform their final walkthrough the day of closing. Other services you have, like cable, internet, and landscapers, need to be notified as well. You don’t want to pay for services you are no longer using!
Also, delete your old home address from your Amazon account and any other online retailers. When we sold our last house my wife made the mistake of sending 4 packages to the new owner. Luckily, they were good sports about it and held it for us!
LEAVE YOUR AGENT A REVIEW & STAY IN TOUCH
If you thoroughly enjoyed working with your agent, whether it’s us or someone else, please consider leaving them a review. This is how we grow, and as small businesses this helps out tremendously. We live in a world filled with technology, and it’s important for an agent or firm to have an online presence as most people search online for nearly everything.
Also, communicate with your agent every now and then to touch base or if you have any questions. We stay in contact with our clients every now and then just to see how they are doing and if they are enjoying their new home. We actually have some really close friends because of that! Real estate is awesome and so are our clients!
We hope you thoroughly enjoyed this ‘What To Expect’ series. If this is the first article or video you watched, I invite you to check out the other 4 parts we did. If you found this series or article helpful, share it with your friends and family on social media. Our hope is to educate the world about real estate, making a transaction fun, exciting, and as stress free as possible.
If you need any assistance in regards to buying, selling, or simply investing in real estate – reach out to us directly. We will be more than happy to help!