without costs. Here is an overview of some of the major costs you'll be responsible for paying at
closing.
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Mortgage Balance is the remaining balance on your original home loan. You will need to pay off your mortgage in its entirety when your home is sold.
Home Equity Loans (2nd, 3rd Mortgages) Any loan against the value of your home will also need to be paid in full after the sale of your home.
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Prepayment Penalties
The bank or lending institution that currently owns your mortgage title may assess a prepayment
penalty depending on your loan terms and conditions. You should speak to your lender
now and ask if they plan on assessing a prepayment penalty, and figure out exactly how
much that amount is. You may be able to negotiate with your lender to reduce or waive the
pre-payment penalty, if there is any.
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You'll also want to submit a formal pre-payment notice to your lender.
Pre-sale preparations
In most cases, it's not advisable to make major investments in your home right before a sale. There
are however, a few things that can be done to increase your home's curb appeal, fix minor
problems and otherwise make your property more attractive. Together we can identify what items
should be addressed and create a budget for these pre-sale preparations that are sure to show a
significant return on investment.
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Closing Costs
All closing costs associated with the sale of your home will be listed for you and for the home buyer
in the HUD-1 settlement form. The buyer is generally responsible for all of these closing costs
which include:
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Loan Fees for the
• Buyer's home mortgage
• Insurance Premiums
• Title Costs (Examination and Insurance)
• Legal documents and services fees
• Recording/Filing Fees
In some cases, buyers make a request for you as the seller to cover their closing costs as part of their
purchase offer. We will negotiate these requests if they are made and we will help you understand why, in some case, it may be advantageous to cover the buyers closing costs, if asked, and what limitations. we can set to make sure we know the close approximate net of your home sale before closing. As the seller, you will be responsible for paying the Real Estate Broker commission fee. which covers the buyer's side and yours.
Taxes
The money that you make from the sale of your home is considered capital gains. The good news is that these profits can be excluded from your taxable income, up to $250,000 for an individual or $500,000 for a married couple, as long as your home was your principal residence.
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To exclude the full portion of those gains, you will need to have lived in your house for at least 24 months in the 5 years previous to the sale date of the property.
This is considered the "2 in 5 rule."
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If you do not meet the minimum occupancy requirement you still may be able to exclude a portion
of your gains if you are selling your house because of circumstances related to your health or to your job. You should speak with your accountant or a certified tax specialist if you believe you fall under one of the exclusions or need help in reporting your capital gains after the sale of your home.
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If this property is a real estate investment your profits will be considered taxable income and will be subject to state, federal and self-employment taxes. Again, in this circumstance you should speak to a financial specialist who can help you fully understand and minimize your tax liability.
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Moving Costs
Moving isn't only a hassle, it can also be very expensive. Whether you're moving to a new house in
your neighborhood or across the country, it's important to estimate and plan for the full cost of
moving from your home once it is sold.
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