Everyone needs to know –what are the costs involved with selling a home? There a few steps to this process but it’s not complicated.
Getting ready to list your home for sale:
You should keep track of your expenses for getting the home ready to sell, which may be deductible on your income tax return. I believe the time limit for deducting repairs is 6 months prior to listing the home for sale.
After the home is under contract, the buyers will have a home inspection and will likely ask you to make repairs. These cost of repairs should be tax deductible.
How much money will be made when selling a home?
When the contract is negotiated, you may agree to pay some of the buyers closing costs. This is of no benefit to you as the seller, but may be the difference in a buyer being able to qualify for financing. Some buyers feel like it’s the duty of the seller to pay all or at least a portion of the closing costs, but the advantage of the buyer being able to qualify for financing is the only advantage to the seller.
Home sale with estimates of the expenses:
Purchase price: $103,000
Seller paid closing costs $ 3,000
Real Estate Commission $ 6,000
Portion of property taxes $ 300
($1,2,00 year – 3 months taxes
Mortgage pay off $ 80,000
Profit $ 13,700
Not included in this example is the amount in your escrow account with the current mortgage company. Since you’re paying your portion of property taxes for the current year, you will get a refund of the amount in the escrow account. Property taxes are paid at the end of the year (usually October or November) and homeowners insurance premiums are paid when coverage starts. Because of that, you’ll need to contact our homeowners insurance company and cancel the coverage. This usually results in a refund from the insurance carrier.