Timing isn’t always perfect in the world of real estate and sometimes you end up having to buy a new home before selling your old one. This situation can become even more difficult to manage if you are having to move far away or out of state from your previous residence. Selling a house across the state line could include different laws for taxes and other real estate proceedings. In addition to knowing how to navigate the sale of a house without being physically present, you will also want to ensure you have an understanding of the stipulations involved with selling a house in another state.
Is it Possible to Sell a House from Out of State?
Yes, it is possible to sell a house from out of state. You may need to ask for extra help, but that doesn’t mean you can’t get the job done. Depending on when you moved out of the house, you may need to hire a stager to prepare the home. Having a real estate agent and broker that have experience with out of state sales will also benefit you in this situation. Overall, good communication and preparation will make for a smoother process of selling the home. You will need to be diligent about completing your part, but then trust that your hired team is doing the groundwork to help you sell the house.
Here are common reasons why people choose to sell a house out of state:
Is it Possible to Close on a House Without Being Present?
If you will not be present for closing, be sure to notify your real estate agent and lawyer of this plan as soon as possible. Sometimes an attorney will be uncomfortable with your lack of presence at closing, so it is important to bring up this issue in advance. Communicating this not only ensures that you have a lawyer willing to work with your situation, but it also gives you plenty of time to work out all of the logistics of closing from far away. If you fail to make this arrangement ahead of time, it could lead to an inconvenience when closing time comes around. The good news is that remote closings are becoming increasingly more common than they were before.
Capital Gain Taxes on a Property Sold Out of State
A capital gains tax is based on the increase in value of an investment from the date of purchase until the date of sale. This means that if you sell your house for a certain price, you will not be taxed for the full amount of the sale. You will only be taxed in the difference from the purchase price of the house and the sale price of the house, if it is greater than a certain amount.
Sometimes you are not obligated to pay this capital gains tax. By law, you can exclude up to $250,000 per individual (or $500,000 per married couple filing a joint return) upon the sale of a property. The stipulation is that the home must have been your primary residence for two years or more during the last five years. In addition, this exclusion can only be used one time every two years. When calculating the original purchase price of the home, realtor fees can be added to this cost. This will minimize the amount taxable by the capital gains tax.
The percentage of a capital gains tax can vary depending on your location and primary residence. Taxes can be implemented on a federal and state level. There are nine states in the US without capital gains taxes. If you live in one of the other 41 states, you could be faced with state capital gains taxes of some form. You can find more information about the specific capital gain tax rates in Massachusetts here.
Advice for Selling a House Out of State
Beyond knowing the laws about taxes or closing in a different state, you will also need to consider other factors that will help you to sell the house quicker and easier. Below are tips for making sure your out of state house is sold:
- Do all of the repairs ahead of time.
A great way to increase the value of your home is by carrying out any repairs that improve the condition of the property. It may be a good idea to have an inspection performed on the home while you are there. This will give you the best advice for what improvements need to be made to prepare the house to be sold. Often, cosmetic repairs such as changing light fixtures or painting walls is enough to significantly change the appearance of the house. Performing these updates on your own will save you money, so try to plan early for these repairs to be completed when you are visiting or before you move out of the house.
- Have the house staged.
It is proven that a home will sell better if it is cleaned, decluttered, and staged with furniture during showings. You want the buyer to have the ability to visualize themselves living there. That means family portraits should be taken down when preparing the home. Don’t forget to enhance curb appeal by working on the landscaping. This first impression can make a big difference when it comes to selling a home.
- Price the property wisely.
Selling an out of state house may mean you have the burden of paying two mortgages at once for a period of time. In this case, you will need to sell the house quickly to avoid such a tricky financial situation. By setting the price point wisely, your house is more likely to sell faster.
- Take out vacant home insurance.
If you know the house will remain vacant for some time, it could be beneficial to purchase vacant home insurance. An empty house is susceptible to vandalism, maintenance issues, or delayed response in the case of an emergency. A traditional insurance plan will not cover these damages if the house was vacant. That is why you might need to take out a more specific vacant home insurance.
- Consider other methods of selling your home.
You do not always have to sell your house using a realtor, especially when you are faced with selling a property out of state. One option could include selling your property to a professional home buyer. This will ensure that your house sells quickly, will avoid the hassle of showings, and will greatly decrease the amount of paperwork necessary. In addition, there will be more flexibility in the condition of your home. You will not have to pay all of the fees associated with selling your house using a real estate agent. For an easy way to sell a house out of state, this could be a great option.
Pavel Buys Houses is an ideal solution if you are needing to sell your house from out of state. Not only do we buy homes in Massachusetts, but we are also licensed real estate agents. Whether you are looking to sell your home quickly, or just need extra help with this challenging situation, we can provide you with options to help you sell your house at its maximum value. To discuss your situation or to receive a free, no obligation cash offer, call us today at 781-309-7085.