Before Putting Your Home up for Sale
Here are a few items to take care of before listing your home. This can make the sale process quicker and easier in the long run.
- Consider a pre-sale home inspection.
An inspector will be able to give you a good indication of the trouble areas that will stand out to potential buyers, and you’ll be able to make repairs before open houses begin.
- Organize and clean.
Pare down clutter and pack up your least-used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and seasonal items. Store items off-site or in boxes neatly arranged in the garage or basement. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine.
- Get replacement estimates.
Do you have big-ticket items that will need to be replaced soon? Find out how much it will cost to repair an older roof or replace worn carpeting, even if you don’t plan to do so. The figures will help buyers determine if they can afford the home, and they’ll be handy when negotiations begin.
- Locate warranties.
Gather up the warranties, guarantees, and user manuals for the furnace, washer/dryer, dishwasher, and any other items that will remain with the house. It may seem like this task can be left until closing, but you don’t want lost paperwork or last-minute scrambling to cause the deal to fall through.
- Spruce up the curb appeal.
Walk out to the front of your home, close your eyes, and pretend you’re a prospective buyer seeing the property for the first time. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? What do you see framing the entrance, if anything? Is the walkway free of cracks and impediments?
Hold a Successful Garage Sale
Garage sales can be a great way to get rid of clutter and earn a little extra cash before you move. But make sure you plan ahead; they can take on a life of their own.
- Don’t wait until the last minute.
Depending on how long you’ve lived in your home and how much stuff you want to sell, planning a garage sale can take a lot of time and energy. And that’s on top of the effort of putting your home on the market!
- Contact your local government.
Most municipalities will require you to obtain a permit in order to hold a garage sale. They’re often free or cheap, but the fines for neglecting to obtain one can be hefty.
- See if neighbors want to join in.
You can turn your garage sale into a block-wide event and lure more shoppers. However, a permit may be necessary for each home owner, even if it’s a group event.
- Schedule the sale.
Sales on Saturdays and Sundays will generate the most traffic, especially if the weather cooperates. Start the sale early — 8 or 9 a.m. is best — and be ready for early birds.
Place an ad in the newspaper, free classified papers, and websites, including the date(s), time, and address of the garage sale. Add information about what will be available, such as kids’ clothes, furniture, or special equipment. On the day of the sale, use balloons and signs with prominent arrows to grab attention.
- Price your goods.
Clearly mark rounded prices (50 cents, 3 for $1, or $5, for example) with easily removable stickers.
- If it’s junk, recycle or donate it.
If it’s truly garbage, throw it away or place it in a freebie bin. Don’t try to sell broken appliances, and have an electrical outlet nearby in case a customer wants to try plugging something in.
- Display items nicely.
Organize by category, and don’t make customers dig through boxes.
- Stock up on supplies.
Having a stock of old shopping bags that can be reused encourages people to buy more items. Newspapers are handy for wrapping fragile goods.
- Manage your money.
Obtain ample change for your cashbox, and have a calculator on hand. Assign one person to man the “register,” keeping a tally of what was purchased and for how much.
Calculate Capital Gains
When you sell a stock, you owe taxes on the difference between what you paid for the stock and how much you got for the sale. The same holds true in home sales, but there are other considerations.
How to Calculate Gain
|Your home’s original sales price when you bought it (not what you brought to closing).
|Additional costs you paid toward the original purchase (include transfer fees, attorney fees, and inspections but not points you paid on your mortgage).
|Cost of improvements you’ve made (include room additions, deck, etc. Improvements do not include repairing or replacing existing items).
|Current selling costs (include inspections, attorney fees, real estate commission, and money you spent to fix up your home to prepare it for sale).
|Add the above items to get your adjusted cost basis:
|The final sale amount for your home.
|The adjusted cost basis figure from above.
|Your capital gain:
A Special Real Estate Exemption for Capital Gains
Up to $250,000 in capital gains ($500,000 for a married couple) on the home sale is exempt from taxation if you meet the following criteria: (1) You owned and lived in the home as your principal residence for two out of the last five years; and (2) you have not sold or exchanged another home during the two years preceding the sale. You may qualify for a reduced exclusion if you otherwise qualify but are short of the two-out-of-the-last-five-years requirement if you meet what the tax law calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.
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