5 Things To Consider Before Selling Your Home

5 Things to Consider Before Selling Your Home – In Order

1. Know Where You Want to Go

This may be a no-brainer or could seem like the most insurmountable obstacle. So, let’s break it down into chunks. First, do you have a place in mind? Is it local, or will you be relocating? Do you need to purchase a new home, or will you be renting? If you’re buying, will you need to sell your current home first to qualify? These are critical questions to answer before you list your home.

Consider market conditions both where you are selling and where you plan to move. If you are moving locally, you’ll want to coordinate timing so that you’re not left without a place to stay. If you’re relocating to a new area, research neighborhoods, cost of living, and available homes ahead of time. The more clarity you have on your next steps, the smoother your selling process will be.

Your Real Estate Agent will be able to assist and provide greater context around these questions if you need help!

2. Taxes

“…but in this world, nothing can be said to be certain, except death and taxes.” – Benjamin Franklin

Federal Taxes

Many times, the last thing on a homeowner’s mind is “How much am I going to have to pay in taxes if I sell my home?”

In most cases, taxes are paid by the buyer when the item is purchased, but not when it comes to real estate. The difference between the purchase price, the owner’s material improvements, and the net sales price may be considered gains and taxed by the State of California and/or the Federal Government.

Since every homeowner’s tax situation is different, it is important to speak with a tax professional to confirm if, and how much of a tax consequence there may be in selling the property.

Under IRS tax code Section 121 - The $250,000/$500,000 home sale tax exclusion

If you have a capital gain from the sale of your main home, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 if you file a joint return with your spouse. You're eligible for the exclusion if you have owned and used your home as your main home for at least two years out of the five years prior to its date of sale. Generally, you're not eligible if you excluded the gain from the sale of another home in the past two years.

1031 Exchanges

If the property has been a rental, you may opt for a 1031 exchange and defer your gain to a future date. This allows you to swap one investment property for another while delaying capital gains taxes. To qualify, the new property must be of a similar nature (real estate for real estate), and strict deadlines apply. You have 45 days to identify the new property and 180 days to complete the purchase after selling your original property.

California State Tax Withholdings (Pre-Payment)

The State requires tax pre-payment at the close of escrow in an amount equal to 3.33% of the Sales Price or an Alternative Calculated Amount, unless the seller qualifies for an exemption.

TL;DR: You may have to pay taxes on your home sale profits, but exemptions exist, and in some cases, you can defer taxes with a 1031 exchange.

3. Less Mess, Less Stress

When it comes to selling your property, less is more! Buyers want to envision themselves in the space, not be distracted by clutter or outdated decor. Here’s what to focus on:

Deep Clean

A spotless home is inviting and suggests the property has been well cared for. Consider hiring a professional cleaning service for a top-to-bottom deep clean, including carpets, baseboards, and windows.

Declutter & Depersonalize

Pack away personal photos, excess decor, and unnecessary furniture. A neutral space allows buyers to picture their belongings in the home. Storage bins and offsite storage can be lifesavers during this process.

Repairs & Touch-Ups

Take care of minor fixes like leaky faucets, scuffed paint, and loose doorknobs. Small repairs can make a big difference in how buyers perceive your home’s value.

Your Real Estate Agent is happy to advise you on worthwhile repairs vs. unnecessary improvements. Also they often have great resources from verified trades people if you need to hire someone to complete any repairs or improvements.  

4. Curb Appeal

First impressions matter. The exterior of your home is the first thing potential buyers will see, so make sure it shines!

• Landscaping: Keep the lawn mowed, add fresh mulch, and plant seasonal flowers.
• Front Door & Entryway: A fresh coat of paint on the door, updated hardware, and a welcoming doormat go a long way.
• Lighting: Ensure exterior lights work properly and consider adding solar path lights for extra charm.

5. Hiring the Right Real Estate Agent

Selling a home is one of the biggest financial transactions you’ll make, and having the right real estate agent by your side can make all the difference. Here’s what to consider when choosing an agent:

• Experience & Local Market Knowledge: A great agent will have a deep understanding of your local market, including pricing trends and buyer behavior.
• Marketing Strategy: Ask how they plan to market your home. Do they use professional photography, virtual tours, and social media advertising?
• Communication & Availability: Selling a home involves a lot of moving parts. Make sure your agent is responsive and keeps you informed throughout the process.
• Negotiation Skills: A skilled negotiator can help you get the best possible price and terms.
• Client Reviews & Testimonials: Look for an agent with positive feedback from past clients to ensure they have a track record of success.

Having the right professional in your corner can help streamline the process, reduce stress, and maximize your home’s value.

Bonus Resource Guide:
Selling a home comes with many moving parts. Here are some additional resources to help you through the process:

• Home Valuation Tools: Understand your home’s market value before listing.
• Pre-Listing Checklist: A step-by-step guide to preparing your home for sale.
• Moving & Packing Tips: A resource for an organized, stress-free move.
• Local Real Estate Market Reports: Stay informed about pricing trends in your area.

Taking the time to prepare can make all the difference in selling your home quickly and for the best possible price. Need personalized advice? Contact your local neighborhood real estate expert who cares and delivers results! TOM BASHE – 951-491-5052