By: Raymond James
Selling a home is a long and arduous process. You’ll want to celebrate as soon as the ink is dry on the mound of that paperwork, and you should. Then prepare for what comes next with these 10 things you should do immediately after selling your house to avoid future problems.
1. Review the Settlement Statement
The settlement statement is a standardized mortgage lending form that itemizes all the charges for both the buyer and seller. Review your settlement statement carefully. Even if you totally trust everyone involved mistakes can be made. Check the payoff amounts for accuracy of any unexplained fees.
2. Keep Paperwork in Order
Hang on to all of the paperwork even after the dust has settled. Organize any related documents and keep them in a safe place such as a fireproof lockbox. You’ll need to have it available when the time comes to file your taxes for proof of expenses. Keep these records even after taxes are filed in case the IRS wants to audit you.
3. Know the Tax Laws
Speaking of taxes, know the laws related to selling a home. This can be tricky because tax laws can change frequently. Currently, you don’t have to report profits up to $250,000 if you are single. Married couples who file jointly are allowed $500,000 as long as the house sold was your primary residence for two out of five years. Look for capital gains law updates.
4. Record of Home Improvements
Be sure to keep records and receipts for every dollar spent on home improvements. You may be able to use these expenses to help your tax situation. Audits can and do happen, so be prepared. Remember though, general maintenance isn’t considered as an improvement by the IRS. The work must add value to the house. For example, replacing an entire roof is an improvement but replacing a few shingles is a repair.
5. Take Utilities Out of Your Name
Contact all of your utility providers with a move out date. This includes landline phones, electricity, cable, and any other services you pay for here at this address. This way, you won’t be responsible for any accrued fees after the move out date. If you use oil, have a tank reading done. Most oil companies give you credit for any oil left in the tank. Take the receipt to the closing so the buyer can give you credit.
6. Prepare a New Homeowner Packet
Although not a requirement, providing the buyer with a packet is a nice gesture that the homeowner will appreciate. Include manuals for appliances and any warranties. Provide the names of any contractors you’ve used for renovations and repairs. (This is a smart way to market your home in the beginning of the real estate process).
7. What to Do With Your Money
If your home’s value is greatly appreciated, chances are, you’ll have a good chunk of change left over. If you aren’t going to use all of it for a downpayment on your next home, you’ll need to find a safe place for it, ideally one that will pay returns. Consider something like a money market mutual fund.
8. Looking for a New Home
Are you immediately in the market for your next home? You may be tempted to use the same real estate agent. But even if they did a great job, this might not be the best idea. Different skills are needed for buying and selling real estate. Some agents are comfortable with both while others specialize in one or the other. And if you’re moving to a new area, it’s best to have an agent familiar with what’s available in that area.
9. Change Your Address
Don’t wait until the last minute to change your address. Notify the Post Office a few weeks ahead of time to avoid delays. Ideally, you should make a list of any individuals, companies, or organizations that may need to contact you by mail. Don’t forget your bank and the IRS!
10. Contact a Mover
Do the research for a good moving company before you begin packing up. Services and prices offered can vary greatly. Get advice from friends, family, or even the real estate agent you used.
About Author: Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.