Are you relocating and need to sell your house fast? The list of things to do is long and time is of the essence. Don't get stuck with two mortgages. Find out the Do's and Don'ts before taking the leap of faith into the Real Estate Market.
Selling your house and relocating are probably one of the two most stressful things an adult has to deal with in life. Now, put them together and you have a recipe for disaster. So before you even hire a real estate agent to start looking for that new house, you should probably consider that the timing will make it almost impossible to sell your old house in time to sign the mortgage for the new one. In fact, this dilemma has the expert divided on what should be done first. Should you sell your old house before relocating or buy your new house and then sell the old one? Instead of telling you what should be done first, we will tell you what to expect so that you may plan accordingly.
How Much Will It Cost To Relocate?
It’s easy to get overwhelmed with the long list of things to do but, you should not let the difficulty of relocating stop you from getting that new job. According to a survey of people who’ve gone through the process, 71% report to enjoy the new experience & 51% said that the move set their career back on track.
Yes, the point of selling your house is to put money in your pockets to use for your new mortgage but don’t forget the costs that come with that process. You should take into account expenses like paying for repairs to get the house ready, agent commissions, and extra fees while budgeting for the relocation. Depending on your state’s customary fees, and condition of your property, you should budget a minimum of 7% of the total sale price of your property to go towards those costs.
Other things that you will have to budget for depending on what you decide to are the following:
The cost of hiring a moving company or renting a truck will depend on your budget and situation but both scenarios have their pros and cons. Hiring a moving company makes things smoother and allows you to focus on other things such as getting ready for your new job or the sale of your old house but it can be expensive. According to HomeAdvisor, renting a truck will cost you approximately $4,500, compare to $10,000 that a moving company will charge you depending on how far you are moving.
The expenses that come with settling in a new town are not the most extravagant but can add up so it’s important to factor in all this costs so they don’t catch you by surprise such as, utility bills that will vary on the sizes of your new home, Storage unit rentals that can cost you up to $225 a month, and furnishing your new place.
The costs of getting there like transportation, food and temporary housing is another thing to consider while planing for your relocation. The good news is that you might be able to deduct these expenses for your taxes as long as you are moving more than 50 miles. Deductible expenses include flights, lodging and gases. For more information, you should review the IRS Publication 521.
Paying Taxes for the Sale of your House
How much you will be paying the Internal Revenue Service for the sale of your home will depend on how much you gain on the sale, if you’re filing as an individual and whether this was your primary residences for at least 2 years of the past 5 years.
You will not be require to pay taxes on up to $250,00 of capital gains from the sale of your home if you are fling as an individual and have lived in that house for the minimum of two years. However, if you are married the exclusion gets bumped up to $500, 00 for couples that filing jointly.
Keep in mind that if you do qualify for the IRS exclusion, you might still be responsible for other taxes like municipality and state taxes. You should talk to a professional about qualifying for the Capital Gain Exclusion and what other items you can deduct for any out- of pocket expenses that have to do with your job relocation.
Selling your house and moving may seem like a stressful process, but as long as you are well-informed and know what to expect, you can better prepare yourself and your family to make the process as easy as possible. Learn more about the process by visiting our blog often, or reach out to a representative at Smart Fox Investment to find out more about how we can help you.