Common Questions Asked When Selling a Home

  1. Do you need a real estate agent?
  2. Will you owe taxes when you sell your house?
  3. Can you finance the sale for the buyer?
  4. When is the ideal time to sell your house?
  5. How do I set the selling price for my house?

1. Do you need a real estate agent or an attorney to sell your house?

Other than the amount of work required to sell your home, there is no need to hire a real estate agent or an attorney, except in some states where you need an agent or attorney to proceed with the closing. The amount of work that goes into selling a home is immense and often hard to handle if you are new to the procedure or the whole experience. You may consider hiring someone to help with paperwork or use an online source to advertise your home.

2. Will you owe taxes when you sell your home?

In the past, home sellers would have to pay a tax on the money made from selling their home, however, because of the Taxpayer Relief Act of 1997, many home sellers no longer owe taxes on the gain they make when they sell their home. Single persons and married taxpayers who file separately get to keep up to $250,000, married couples who file together get to keep, tax free, $500,000 in profit on the sale of their home, as long as they have lived in the house for two of the previous five years.

3. Can you finance the sale for the buyer?

If you find the need to spread out your income from the sale, you may want to consider lending part or all of it to the home buyer, if the home buyer cannot borrow enough money from their lender or bank.

This can be executed in one of two ways. The first way is, you, the seller, take back a mortgage on the house. You then sign a deed transferring the title to the buyer, who then signs a promissory note and the mortgage or a deed of trust, which allows you to foreclose if the buyer fails to pay.

The other option keeps you in title of the property for however long it takes for the buyer to pay off the loan. There is a contract required for this option that states that you, the seller, will keep title to the property until the buyer pays off the loan. After the buyer pays the entire loan, you sign a deed transferring title to the buyer. This contract means the buyer can not sell or refinance the property until all payments have been completed.

4. When should you sell your home?

There are several factors to take into consideration when selling your home. You really want to examine the economy first for obvious reasons. Other factors to take into account are:

  • If mortgage rates are low.
  • If there is a jump in home buying in your area (often in the spring).
  • If the overall feeling in your town or area is excitement over the future of that area.
  • If your town has a low crime rate, good schools or a growing school benefit program, is close to a major area and employment opportunities, you will have a better experience selling your home.

5. How do you set the selling price for your home?

The first thing to do when determining how much your home should cost is to have it appraised, which means determining how much your property is really worth. Real estate agents can often give a good estimate of what your house should sell for because they have been around the market and know local sales, but because no two houses are exactly the same it is hard to come to a concrete number immediately.

You can look online for a real estate agent to appraise your home. Most houses are put on the market at a price that is 10% more than what they should be to ensure a good sale, however checking local records, other neighborhood homes and other homes selling in the area may be a good way to come to a conclusion about the listing price of your home.