How do I handle capital gains on a rental property I’m selling?
When you sell a rental, your taxable gain generally equals sale price minus selling costs, your adjusted basis, and plus any depreciation you claimed over the years. Part of that gain may be taxed as depreciation recapture at higher rates, with the rest treated as capital gains. Some investors use a 1031 exchange to defer […]
What is a 1031 exchange and can sellers use it?
A 1031 exchange lets real estate investors defer capital gains tax by selling one investment property and reinvesting the proceeds into another “like-kind” investment property. To qualify, you must use a Qualified Intermediary, identify the replacement property within 45 days, and close within 180 days, reinvesting all proceeds and matching or increasing your debt and […]
How does selling affect my property tax proration?
At closing, property taxes are usually prorated so you only pay for the portion of the year you owned the home. If taxes are paid in arrears or in advance in your area, the closing statement will adjust with a credit or debit between buyer and seller so each side covers their share. Understanding your […]
Should I pay off my HELOC before selling?
You don’t always need to pay off a HELOC in advance; most sellers simply pay it off at closing along with the main mortgage from sale proceeds. However, knowing your HELOC balance and any early closure fees helps you estimate your net and avoid surprises. If your equity is tight, you may want to reduce […]
How do I handle negative equity when selling?
With negative equity, you owe more than the home is worth, so you’ll either need to bring cash to closing, negotiate a short sale, or delay selling until values or your balance improve. Talk with your lender and an experienced agent about options like loan modification, deed in lieu of foreclosure, or renting the home […]
How do I calculate my net proceeds from a home sale?
Net proceeds are what you actually walk away with after paying off your mortgage and all closing costs. Start with your expected sale price, subtract commissions, closing fees, repairs or credits, taxes or transfer fees, and your loan payoff plus any prepayment penalties. The remaining amount is your estimated net—your agent can prepare an estimated […]
What happens if I sell for less than I owe?
If you sell for less than your loan payoff and don’t cover the difference in cash, you’re typically looking at a short sale, which requires lender approval. The lender may forgive some or all of the remaining balance or pursue a deficiency, depending on laws and your agreement. This can affect your credit and possibly […]
What closing costs should I expect as a seller?
Typical seller closing costs can include agent commissions, title and escrow fees, transfer taxes, recording fees, and any agreed credits to the buyer. In some areas, sellers also pay for home warranties, HOA transfer fees, or local inspections as part of the deal. Your estimated seller net sheet will list these line by line so […]
Can I sell my home during bankruptcy?
In many cases you can sell during bankruptcy, but the court and trustee may need to approve the sale terms and how proceeds are used. The process differs between Chapter 7 and Chapter 13, and timing, exemptions, and equity levels all matter. You’ll need to coordinate closely with your bankruptcy attorney and a knowledgeable real […]
How do transfer taxes affect my sale proceeds?
Transfer taxes are fees charged by states, counties, or cities when property changes hands, often calculated as a small percentage of the sale price. In many markets the seller pays this tax, which comes out of your proceeds on the closing statement. Knowing the rate in your area helps you price correctly and avoid surprises […]