Seller’s Guide

[su_button url=”” style=”3d” background=”#b39153″ size=”10″ wide=”yes” radius=”5″ icon=”icon: search”]The Answer Book for Sellers[/su_button]

 Click and the botton above and download a collection of how-tos, checklists, and worksheets to help your buyers and sellers understand what to expect during the real estate purchasing experience.


Prepare and Plan

Selling a home is a major undertaking — before taking the plunge, make sure that you’ve thought it through and are ready to proceed.

[su_spoiler title=”Deciding to Sell” anchor=”decide” style=”fancy”]

Consider your motivations for selling to help determine if you are truly ready to part with your current home.

Are You Ready to Leave Your Current Home?

Moving is a tiring and stressful experience, and leaving your home can be emotionally difficult as well – especially if you’ve lived there for many years. Make sure you’re really ready to go before you put the property on the market.

Moving Up

Probably the most common reasons for selling a home are the need for more space and the desire to move up to more luxurious property. Many homeowners find that increased income – coupled with appreciation in their current houses – makes moving up a feasible option. This strategy has proven to be a successful long-term wealth builder as housing prices have generally continued to rise over time.

Financial and Tax Implications of Selling

A home is a major investment, and the decision to sell is one fraught with financial implications. Is now a good time to sell? Is it a good time to buy another home? Have you considered the [su_lightbox type=”inline” src=”#tax-selling”]tax consequences[/su_lightbox] of the sale?

Selling for Financial Reasons

Many people sell for financial reasons. A reduction in income, increased expenses (e.g. college tuitions), and the need to save or invest more to meet goals are common reasons for moving to a smaller home.

Remodeling vs. Selling

Even if you want more space or more luxurious appointments, there is an option to selling – you can remodel your existing house. 

Selling for Retirees

Retirement is a great time to sell the old family home and purchase something smaller and more convenient. For many people, home equity is a major portion of overall savings and net worth. Reinvesting the proceeds from the sale of an appreciated home can significantly improve your post-retirement budget – and help support an active and enjoyable lifestyle.

Sell First or Buy First

This is one of the biggest questions faced by homeowners – and it’s not an easy one to answer. Review [su_lightbox type=”inline” src=”#sell-or-buy-first”]our tips[/su_lightbox] for determining which way is best for you.

Rent Our Your Old Home Instead of Selling?

If you’re moving but are reluctant to sell your old home you may have another option – renting. By renting you may be able to sustain the costs of both your old and new houses. Being a landlord is no picnic, however. Check out our [su_lightbox type=”inline” src=”#being-a-landlord”]rental guide[/su_lightbox] to get an idea of what is involved before going down this road.  [/su_spoiler]

It’s always a good idea to have as much information as possible when planning something as important as selling a home.

[su_spoiler title=”Check the Market” anchor=”check-market” style=”fancy”]

Market conditions will have a major impact on your selling experience. Understanding what is happening in the marketplace can help you develop and execute a realistic plan to sell your home. 

Gauge market Conditions

Real estate markets are highly cyclical. The current status of the market can have a significant effect on your home selling strategy and the results you are likely to see. Try to develop an understanding of the state of the market so you have some idea of what to expect – and a feel for how hard you can bargain when negotiating with buyers. 

What’s Best – Hot or Cold Market?

Unless you’re planning to rent, you will probably be buying a new home at the same time as you are selling your old one, so it’s not always easy to decide if a hot market is helpful or harmful. As a general rule, if you are moving up – looking for a new home significantly more costly than your old one – you may want to act during a weak market, when the savings on an expensive new property will more than outweigh the losses on the older one. Conversely, empty-nesters looking to switch to a smaller home may want to plan the move during a hot market, when they can maximize gains on the larger home to be sold. 

When is the Best Time to Sell?

There are two primary sellings seasons – spring and fall. Spring is the strongest, since many shoppers want to buy and move in before school begins. Summer and winter are generally very slow periods in most markets. Some areas have their own seasonality, however. If, for example, you are selling a home in a seaside vacation spot, summer is probably a great time to be on the market. 

Understanding Area Sales

Don’t listen to anecdotes and stories about bidding wars and houses being snapped up in one day. There is no substitute for hard data when you are considering selling your home. Check out actual sale and closing prices of homes in the area and try to develop a feel for the true state of the market. [/su_spoiler]


Get Ready

Selling a home is a major undertaking. If you invest the time required to get everything ready beforehand you’ll have a much easier time once your home hits the market. [su_spoiler title=”Selecting an Agent” anchor=”selectagent” style=”fancy”]

A good listing agent is a partner in your home sale, someone with whom you’ll be working closely. Spend the time to develop a strong relationship. 

Advantages of Using an Agent

Your agent can give you valuable insight into the market and help you set the right price for your home. He or she can also suggest features of your home that are potential problem areas and advise on possible remedies. Listing with an agent also gets your home posted to the multiple listing service – exposing the property to thousands of potential buyers. 

A Good Listing Agent is a Marketing Director

An experienced listing agent should be able to effectively coordinate advertising and promotion for your home. This includes running ads in the local papers, holding open houses, and publicizing the listing to area agents. 

Choosing an Agent

You want to choose an agent with experience listing homes (this is different from selling homes) and a strong knowledge of the local market. A listing agent must be available to other agents who are seeking information on the house and should be prepared to put in the time required to effectively market the property. With the Internet becoming more and more crucial to the home marketing effort, you may want to look for an agent with a strong web presence. If an agent doesn’t have the time, interest, or commitment to develop an understanding of your needs, look for one who does. 

Working with Your Agent

Make sure to take advantage of your agent’s knowledge and experience. Start with a consultation on pricing – and be honest with your agent about specific requirements (a need to sell quickly, for example). Don’t hesitate to ask the agent to suggest any repairs or improvements. While your agent may make some suggestions that are just too expensive or otherwise unfeasible, he or she can give you a good idea of what aspects of your home will turn off buyers. [/su_spoiler]

Your home is the star performer in this show. Even the best marketing and promotion efforts will fall short if your home isn’t appealing to potential buyers. [su_spoiler title=”Prep Your Home” anchor=”prep-home” style=”fancy”]

There are a number of things to consider when getting your home ready for market. By addressing these items early – before the sales effort begins – you can insure that your home will show its best side to buyers. 

Seller Liability

Many sellers do not realize the extent of their potential liability after the sale. While local laws vary considerably, a seller is generally required to disclose any deficiencies of which he or she is aware. This is the problem – how do you prove exactly what you did or did not know? Our [su_lightbox type=”inline” src=”#disclosure-checklist”]disclosure checklist[/su_lightbox] can provide a starting point by helping you determine which items are disclosure issues. A pre-sale inspection by a reputable inspector can be an ideal way to protect yourself against disclosure related claims after the closing. 

Pre-Sale Inspections

Inspections are for buyer’s, right? That is a popular perception, but the truth is that a pre-market inspection can be a very valuable tool for a seller. Since the buyer is probably going to have an inspection anyway, why not find out about any problems upfront so you’re not taken by surprise a few weeks before the closing date? A pre-sale inspection can also help protect against potential seller liability – if the inspector didn’t find a problem it is a reasonable assertion that the seller did not know about it either.

Clean, Clean, Clean

A home for sale can never be too clean. In addition to a complete scrubbing you may want to do a little rearranging to insure that your home shows as well as possible. Review our [su_lightbox type=”inline” src=”#home-cleaning”]home cleaning checklist[/su_lightbox] for some ideas on where to start. 

Major Improvements

Most major home improvements don’t make sense for sellers, however there are notable exceptions to this rule. Required repairs, or other deficiencies that must be disclosed, will likely make it very difficult to sell your home (and you’ll probably end up agreeing to correct them anyway) – so it may be worth dealing with these items before hitting the market. 

Smaller Projects Unlike major improvements, many small home projects can be very good investments for the seller. Generally, the best projects to consider are those that are fairly low in cost yet provide a major impact to the look of the property. Check out our list of [su_lightbox type=”inline” src=”#improvement-projects”]10 improvements for sellers[/su_lightbox] for some ideas. [/su_spoiler]

Pricing is one of the most crucial aspects of your marketing effort. The figure your choose must reflect the various attributes of your home, the state of the market, and your need or desire for a fast sale.

[su_spoiler title=”Setting a Price” anchor=”setprice” style=”fancy”]

Deciding on the right price isn’t easy. Set too high a price and your home may languish on the market – too low and you may get thousands less than you could have. 

Work with Your Agent

Your agent is in the market every day – no one can offer you a better view of pricing and sales activity. Once your agent is familiar with your home and its features, he or she can prepare a comparative market analysis and propose a listing price. Seriously consider this pricing, but don’t be hesitant to disagree or suggest another figure – just try to be realistic. 

Consider Market Conditions

Real estate markets are highly cyclical. While home prices have typically risen over extended periods of time, the road is sometimes a bumpy one. The price you will get for your home – and the time it will take to get it – depend to a great extent on the overall state of the market. Our guide to [su_lightbox type=”inline” src=”#evaluating-markets”]evaluating real estate markets[/su_lightbox] can help you figure out how to proceed. 

Be Objective About Your House

It’s important to be objective about your home when setting pricing. Remember, it’s really not relevant what you paid or how much you love the property – the important consideration is what the market will bear at this time. 

How Quickly Do You Need to Sell

Setting real estate prices is not an exact science. A low asking price may generate a fast sale, while a bit of patience – and a higher listing price – may allow you to net a larger figure. It’s important to be honest with yourself about your needs when setting a price. Our [su_lightbox type=”inline” src=”#quick-sale-checklist”]quick sale checklist[/su_lightbox] can help you decide if it makes sense to accept a bit less in return for a faster sale. 

Is Your Home Overbuilt?

Generally, nicer homes yield higher sales prices. This relationship begins to diverge a bit, however, near the top of the market. [su_lightbox type=”inline” src=”#overbuilt”]Overbuilt homes[/su_lightbox] rarely sell for the prices it appears that they should. Buyers in the price range of the overbuilt home are generally interested in more upscale communities, while the typical buyer for the area cannot afford to pay a significantly higher price. If your home is overbuilt you may have to accept the fact that you won’t be able to get the price you think you should.



Find a Buyer

Preparation can get you ready for the selling process, but finding a buyer requires a well executed marketing effort. 

[su_spoiler title=”Market Your Home” anchor=”markethome” style=”fancy”] There are a number of components to a well-conceived marketing plan. Understanding each – and what it can contribute to your sales effort – is important to achieving the best possible results. 


Advertising is a key part of an effective marketing plan. Your real estate broker should advertise the property periodically in local newspapers. Generally, the cost of advertising is included in the commission, so make sure your property gets its share. Signage is also important – a prominently displayed sign on the property is one of the most effective pieces of advertising, so make sure there is a clear and visible spot available. 

Multiple Listing Service

The Multiple Listing Service, or MLS, is a catalog of available homes in a given market area. Your agent will list your home in the local MLS so that other realtors in the area can access information when working with buyers. The MLS is only available through your agent – and it is a powerful selling tool. 

Open Houses

Open houses are another major marketing tool when selling a home. There are two basic types of open house. The first, generally scheduled during the week, is for area agents to stop by and take a look at a home that is new to the market. The second type is held on a weekend – usually a Sunday afternoon – and is intended to allow homebuyers to visit the property without an appointment. 

The Lockbox

A lockbox is a small device containing a key to the house that is attached to or near the front door. Local agents can access the box to gain entry to the house at any time. Ideal for unoccupied homes, the lockbox may be problematical if you have kids or pets – or are simply uncomfortable with this arrangement. If you do not use a lockbox, make sure that your agent has a key or that you are available on short notice to open the house. 

Using the Net

The Internet has begun to revolutionize the home selling process. Shoppers (and sellers) have access to more information than ever before. It’s important to select an agent who has a significant understanding of the Internet. Your agent should have a web site where shoppers can access information about your home and should list the property with one or more major online listing services. 

Have Your Home Ready

Your home should be maintained in a constant state of readiness to be viewed. Try to keep things as clean and uncluttered as possible. Keep the yard well tended and make sure that access to the house is unfettered (keep snow cleared away in winter). 


Have potpourri or scented candles on hand to keep the house clean and fresh smelling. If you have a fireplace, consider having a fire burning during viewings (season and time permitting). Ask your agent for other suggestions on presenting your home in the best possible way. 

Handling Kids and Pets

Whenever possible, arrange for children and pets to stay with a friend or neighbor during showings. If the children are home during a showing, explain that they should be quiet and well behaved while the buyers are in the house.[/su_spoiler]

A buyer’s early impressions are crucial, so it’s extremely important to make sure that you are prepared to properly handle showings. This entails a number of things – from being available on short notice to deflecting insensitive remarks about your home.

[su_spoiler title=”Handling Buyers” anchor=”handlebuyers” style=”fancy”]

It’s best to handle buyers in a calm, unemotional manner. Try to be as responsive as possible to requests for information or last-minute showings. Most of all, it’s important to be patient. If you appear too eager to a buyer you are only undermining your negotiating position. 

Dealing with Showings

Showings are where your home really gets sold. First impressions are of vital improtance – if the buyer isn’t intrigued at the outset there is very little likelihood that an offer will be forthcoming. Make sure your home is available on short notice and is always looking its best. Let your agent take the lead during showings. You may not even want to attend – many buyers feel more comfortable viewing a home without the owners present. 

Controlling Your Emotions

Selling a home is an emotional undertaking for many people. Listening to buyers making candid – and often insensitive – remarks about your home can be upsetting. It’s best to ignore this kind of thing, however, and not let it get to you. If you find these comments difficult to take, or are simply uncomfortable with the notion of strangers prowling around your home, arrange to be out during showings – your agent is capable of handling the situation. 

Handling Information Requests

Buyers may ask a variety of questions about your home and the neighborhood. Make sure you only provide information that you know is correct. Misleading a buyer – even accidentally – could cause problems down the road. If you don’t know the answer to a question, say so. You can always offer to check it out and get back to the buyer. 

Identifying Real Buyers

There is really no reliable way to discern whether buyers are serious or not until an offer is made. Some buyers will visit a home 3 or 4 times and never go any further, while others will make an offer the day they see a property for the first time. Our tips for [su_lightbox type=”inline” src=”#real-buyers”]identifying real buyers[/su_lightbox] offer a few pointers on spotting the serious ones.


Pricing is only one factor to consider when reviewing an offer on your home. It’s important to review the entire offer – with all of its terms and conditions – when making a decision.

[su_spoiler title=”Evaluating Offers” anchor=”getmortgage” style=”fancy”]

Consider these areas when evalutaing any offers you receive from interested purchasers. 


Obviously, price is a major consideration. How close is the offer to your asking price? Is the market strong – do you have a good chance of getting more if you wait? 


Virtually all home purchase contracts have some [su_lightbox type=”inline” src=”#contingencies”]contingencies[/su_lightbox] – and many of these are extremely reasonable. But it’s important to consider the potential of these conditions to affect or terminate the transaction. It may be advisable to accept a lower price with few contingencies over a higher figure with a large list of conditions. 

Prequalified Buyers

Buyers who are pre-approved for mortgage financing are among the strongest purchasers. Not only do these buyers already have funding in place – they are also typically among the most credit-worthy buyers. 

Beware the Home Sale Contingency

Offers are sometimes conditioned upon the sale of the buyer’s current home prior to the closing. This is an extremely onerous condition. You simply trade the risk of selling one home for that of selling a different one – and you have far less control over the marketing of the buyer’s house. 

Seller Financing

Some offers are contingent upon the seller taking back financing. The exact terms can vary considerably, however it is usually not advisable to accept this type of deal unless there are no alternatives. Apart from the fact that most sellers want to cash out in order to buy a new home, holding a mortgage can be risky, involving costly legal enforcement actions if the borrower defaults. With the number of mortgage programs available from lenders, a buyer who demands financing from the seller is probably a high-risk borrower. 

What Does the Buyer Want You to Do?

Few homes are in perfect condition, yet a buyer may expect to receive yours in pristine form. A purchaser who expects to buy a 50-year-old house in flawless condition is unrealistic – and could turn out to be a difficult buyer. While you should expect to repair any [su_lightbox type=”inline” src=”#major-repairs”]major problems,[/su_lightbox] beware of a purchaser who seems excessive in his or her demands. 

Handling Multiple Offers

If you are fortunate enough to receive multiple offers, make sure to review each one carefully. If one party is significantly stronger than the other(s), or one offer has fewer conditions you may want to try work with that buyer first. After reviewing the terms of the offers – and discussing them with your agent – you can submit a counter-offer to all of the parties. 

Counter-Offers and Negotiation

Negotiation is very common in the real estate markets. When you receive an offer for less than the asking price you have three choices – accept it, reject it out of hand, or make a [su_lightbox type=”inline” src=”#counter-offers”]counter-offer[/su_lightbox].



Close The Deal

A properly written contract sets forth the terms of the sale and protects the interests of both buyer and seller.

[su_spoiler title=”The Contract” anchor=”thecontract” style=”fancy”]

The contract specifies the terms of the sale and the rights and obligations of the buyer and the seller. A well-written document protects both parties, while a poorly drafted contract can cause serious problems. 

Get it in Writing

Oral agreements are usually difficult or impossible to enforce, so if you’ve negotiated your purchase verbally make sure to have contracts signed as soon as possible. 

Attorney Review

Always make sure that any contract you sign has an attorney review clause that allows you time (at least three business days – preferably five) to review the document and have it checked out by your lawyer if you feel it is necessary. Many states specify a mandatory review period, whether it is specified or not, but don’t take any chances – make sure it’s in writing. This gives you the chance to make sure all bases are covered before you are committed. 

Choose an Attorney or Escrow Company

In some areas it is standard practice to retain an attorney to handle the closing. In others the norm is to have the title or escrow company handle the transaction. If you do hire an attorney (which is a good idea), try and find someone local who specializes in real estate closings. An experienced real estate attorney can help you move quickly to closing and sidestep any problems or oversights. If you are using an escrow company, make sure that they have a solid track record. 

Cover All Contingencies

Make sure that the buyer’s [su_lightbox type=”inline” src=”#contingencies”]contingencies[/su_lightbox] are reasonable and that the time allowed for any required activities or testing (i.e. obtaining a mortgage, home inspections, etc.) is not excessive. Reasonable contingencies are an essential part of a fair and balanced contract – just don’t let the buyer take advantage of you. 

Learn About Deeds and Title

The deed is a legal document that transfers ownership of the home. There are several [su_lightbox type=”inline” src=”#types-of-deed”]types of deed[/su_lightbox] that can be used for your transfer, as well as a number of special provisions that may apply. Your attorney or escrow agent can answer any questions you have on title and deeds. 

Know Your Deposit Obligations

The contract should specify the due dates and disposition of earnest money and deposits. Typically a small amount is posted at the signing of the contract with the balance of the deposit (usually 10% of the purchase price) due within 1-3 weeks. Make sure that the deposit monies are posted as required – they are your primary security in the deal.


You’re almost there — but there is still some work to do before the deal is closed.

[su_spoiler title=”Preparing to Close” anchor=”prep-close” style=”fancy”]

There’s a lot to do in the weeks leading up to the closing, so good organization is a must. Proper scheduling can reduce your stress and prevent any mistakes or delays. 

Get Organized

Create a schedule of the items you need to complete before closing. Set up a file with all of your purchase and closing related documentation so you have it readily available. 

Confirm Payment of Deposit Funds

The contract probably calls for the balance of the deposit to be paid to the escrow agent within a certain period of time. Confirm that this has been done as required. The deposit is your major security until the closing – make sure it is posted as required. If the buyer seems unable to produce the required funds it could be a sign of trouble – so find out what is going on. 

Monitor Inspections and Contingencies

The contract is probably subject to a number of inspections and contingencies. These conditions are intended to allow the buyer to check things out and make sure there are no problems – not as an open ended delaying tactic. Confirm that the buyer schedules the inspections in a timely manner, and make sure access to the property is available. 

Deal with the Inspection Reports

The buyer’s inspection reports will usually list a number of sub-standard items – few homes are without defects. The buyer may provide you with a list of things to be corrected before the closing. You may or may not agree that you are responsible for items on the list. At this point another negotiation may result. Although each deal is different, typically the seller will repair (or provide a credit to cover the cost) any major or structural problems. The seller is usually responsible for the cost of radon remediation, if required. Normal wear and tear items, on the other hand, are not usually corrected by the seller. 

Address Your Contingencies

The contract may include contingencies or conditions requiring the seller to take certain actions – removing debris or an old shed, for example. Make sure to attend to these matters early so they do not become a problem at closing time. 

Get a Payoff Letter

If you have a mortgage on your home you will be paying it off at the closing so you can transfer clean title to the buyer. Your lender should provide you with a payoff letter specifying the exact amount required to completely retire the loan. The payoff letter should also specify a per diem, an additional amount required for each day after the payoff letter is dated. For example, if your payoff letter states a figure of $95,000 with a per diem of $20 you would owe $95,200 if the closing occurred 10 days after the date of the letter. Your attorney or escrow agent may request the payoff letter from the lender – but it’s still a good idea for you to make sure it gets done. 

Review the Closing Costs

Consider your closing costs so you have a good idea of what proceeds you will net from the sale. Our guide to closing costs can give you some idea of what to expect. 

Provide Information to the Buyer

Provide the buyer with copies of any relevant documents you have – surveys, septic designs, service records, building permits (from past projects), etc. The contract may specify that you are to provide these items, but even if it doesn’t, it may help the buyer conclude the inspection phase – and it is a basic courtesy. 

Get Ready for Moving Day

You probably be moving out right before the closing (or just after if you’ve arranged this with the buyer), so now is the time to start preparing. You need to hire a mover (unless you plan to handle the move yourself) and start packing your possessions. It’s also time to make arrangements for utility shutoffs and installations at your new address – our [su_lightbox type=”inline” src=”#utility-checklist”]utility checklist[/su_lightbox] can help you organize these tasks. 

Do the Walkthrough

The final walkthrough should be conducted the day of or before the closing. The walkthrough allows the buyer to confirm that the house is ready and that any required repairs have been completed. Conducting a walkthrough reduces the chance of confusion or problems at the closing. [/su_spoiler]

It’s almost finished. The preparations are all complete – now it’s time to finalize the sale.

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Check with your attorney or escrow agent a day or two before the closing date to confirm that everything is on schedule. Remind the attorney or agent to complete the closing statements and other documentation in advance – this may seem obvious, but closings often become protracted affairs because the professionals are unprepared. 

Have Your Paperwork Available

Bring all of your documentation to the closing in case you need something at the last minute. Your closing file should include the contract, receipts for any repairs made, and copies of all correspondence relating to the purchase. 

Understand the Closing Documents

Review the closing statement (HUD-1) and other documents beforehand so you understand the purpose of each. Your primary documents are the closing statement, the deed, and the mortgage cancellation paperwork. 

Deal With Any Problems

Closings frequently proceed without a hitch, but problems are not uncommon. Don’t panic if the closing hits a snag – most issues can be resolved by simple means, such as [su_lightbox type=”inline” src=”#escrowing-funds”]escrowing funds[/su_lightbox] to cover a contingency or unfinished repair. Even if the closing has to be postponed, don’t overreact – chances are the matter can be resolved in a few days. 

Execute the Documents

At this point the parties should execute the closing statements and other documents – and you will then sign over the deed. Congratulations, you’ve just sold your house! 

Give Keys and Documents to the Buyer

You should have the keys available to give to the buyer at the closing. Additionally, you should provide all warranties, repair records, etc. pertaining to the house – either bring these to the closing or leave them in an accessible location in the house.


Congratulations! It’s done – you’ve sold your house!

[su_spoiler title=”Moving Out” anchor=”moving-out” style=”fancy”]

It’s finally time to leave the old place and move on. Depending upon your arrangements with the buyer, you will probably be moving out either right before or after the closing. 

Be Prepared for the Movers

Make sure the moving van has room to park and easy access to both houses. Movers expect payment upon delivery, so you’ll also need to have a certified check and/or cash available to settle the bill. Many movers accept credit cards as well, so inquire in advance if this is your chosen payment method. Tipping is customary – usually about $20 per mover – though this is obviously highly variable with the length and difficulty of the move. 

Work With the Movers

Be available to answer questions about packing order and fragile items. Point out any items you intend to move yourself, and keep these things separated from those to be handled by the movers. Make sure the movers have clear directions to your new house as well as a phone number to reach someone if they get lost or have any problems. Make sure someone remains at the old home until the movers are packed and ready to leave. 

Do a Final Walkthrough

Make one last inspection to insure that nothing has been forgotten and left behind. It’s OK to have a few minutes to yourself if you are feeling emotional at this point. 

Arrange for Mail to be Forwarded

You’ll actually want to make these arrangements a week or two before moving day. Go to your old post office and arrange for mail to be forwarded to your new address (if you had a P.O. box you may want to retain it for a period of time). Send out change of address cards with your new location. [/su_spoiler] [/su_accordion]

[su_lightbox_content id=”escrowing-funds” text_align=”left”]

An escrow account holds funds that are deposited for a specific purpose (to pay for a required repair, for example). The funds are held by an escrow agent – often an attorney representing either the buyer or seller. The escrow agent is only allowed to disburse the funds in accordance with the provisions of a written document or with the consent of all parties to the transaction.


[su_lightbox_content id=”utility-checklist” text_align=”left”]


Some utilities require more lead time than others to terminate service at your old residence and activate at the new. While the time required varies, you can use this checklist as a starting point.

One month or more before closing… 

Cable Television and/or cable modem

Contact the cable company early, in case the new home needs any wiring or hook ups to accommodate your service. Call especially early if you are installing cable modem service. 

Phone service

With today’s often complicated home phone set-ups it is important to give the phone company some extra time – especially if you will need several extra numbers and/or jacks in specific locations. 

Satellite television and Internet service

Unless your new home has a compatible dish already in place, you will require installation services. Depending upon demand in your area this could entail a wait of a month or more, so put your order in early. 

DSL Internet service

DSL installation is subject to large backlogs in most area, so put in your order as soon as possible.

One to two weeks before closing… 

Fuel deliveries

If you receive automatic deliveries of heating oil or propane you should contact the supplier and terminate the service (and transfer the account to your new home if you still require deliveries). 

Automatic deliveries

While they are not, strictly speaking, utilities, any automatic delivery services (bottled water, pool suppies, etc.) you may use should be contacted 1-2 weeks in advance of your move to terminate deliveries or change the service to your new address.

Several days to one week before closing… 

Electrical service

Contact the electric company and switch your account to the new address effective on the closing date (make sure you have electrical service at both locations on moving day). 

Gas service

Contact the gas company and switch your account to the new address effective on the closing date (make sure you have gas service in both locations on moving day). 

Water service

Notify the water company several days before the closing. 

Sewer service

Notify the sewer authority several days before the closing. 

Garbage pickup

If you pay for private garbage pickup you should notify the service provider a few days before the closing. Even if you have public garbage service at your old location you may need to arrange for private pickup at the new house. Check it out – you don’t want to end up without garbage service just after you move in. If you want to have a special pickup – either at the old address or the new – make the arrangements at least a week in advance.



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Warranty Deed

Often used for residential real estate sales, a Warranty Deed acts as a guarantee to the buyer that the seller has the right to sell the property, and that the property is free of debt or other liens. The seller must defend the title against any and all other claims, and compensate the buyer for any unsettled debts or problems. 

Special Warranty Deed

Differing from a Warranty Deed, the seller’s guarantee does not cover the property’s entire history.  Generally, the seller only guarantees against problems or claims created during the seller’s ownership of the property. A Special Warranty Deed is often used in commercial property transactions or residential real estate sales.

Quit Claim Deed

Most often used by family members, divorcing spouses, and people well-acquainted with each other,  a Quit Claim Deed allows one party to transfer property rights and claims to another party. Usually there is no monetary exchange. The extent and authority of the grantor’s interest or claim to the property is unspecified, and the grantee is not provided with a guarantee.

Bargain and Sale Deed

Typically used in residential real estate sales or sales of court-seized properties, the Bargain and Sale Deed transfers ownership of a property from the seller to the buyer. It generally does not guarantee to the buyer that the seller owns the property free and clear. A Bargain and Sale Deed resembles a Quit Claim Deed, but the property is sold rather than relinquished. 

Grant Deed

A Grant Deed transfers interest in a property from the seller to the buyer in exchange for an agreed-upon price. While the Grant Deed guarantees that the seller owns the property and is legally able to sell it free of debt, it does not provide a guarantee against defects of title (unlike the Special and General Warranty Deed). This type of deed is commonly used for residential real estate sales.


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Counter Offers

Review these considerations when deciding on how to counter an offer to purchase your home.

How long has your home been on the market?

If your home has been on the market for an extended period without producing a sale, it may be time to consider becoming a bit more negotiable.

What kind of response have you had?

Consider the results you’ve seen from your marketing effort when you are formulating your counter-offer. If you haven’t had many showings (or offers) your asking price may be too high.

Are market conditions improving or worsening?

Consider the state and direction of the market. If conditions are worsening, it may make sense to try and make a deal now. Conversely, if things appear to be improving you may want to hold fast at your asking price – or counter just below that level.

Are you under pressure to sell?

If you are under significant pressure – or if you face financial trouble if a deal is not forthcoming, you are well advised to consider these facts in your counter-offer.

Does the buyer seem strong?

If the offer is relatively straightforward – with few contingencies – and the buyer seems strong, you may want to consider this when countering. [/su_lightbox_content]

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Major Repairs Checklist

Whether or not to spend the money to get your house in tip top shape is a marketing decision – but repairing major problems isn’t. Try to correct any of the following issues before your home hits the market. If you don’t, any offers will probably be on the low side – and contingent upon your repairing the items anyway.

  • Leaking roof.
  • Malfunctioning heat or air conditioning.
  • Problems with electrical or alarm systems.
  • Leaking or broken plumbing system.
  • Malfunctioning septic system.
  • Broken windows.
  • Structural problems.
  • Correct any code violations.


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Contingencies checklist

A home purchase contract should include contingencies to protect against uncertainties and allow the buyer the time to complete the required checking and other tasks prior to closing. All of these contingencies should be included. 

Attorney Review

Every home purchase contract should be expressly contingent upon review and approval by an attorney. Many states provide for an automatic review period regardless of the specifics of the contract. 


The contract should be contingent upon the purchaser obtaining a mortgage commitment within a set period of time. The contract generally stipulates that the loan should be at “market” rates and terms – so the buyer can’t be compelled to accept an unfair loan if that is all that is available. 


The contract should allow the buyer a reasonable period of time to arrange for required inspections. The exact inspections necessary may vary with area, but typically include a general home inspection (always!), termite/pest inspection, and a radon test. 


This is partially covered with a financing contingency – since the buyer will not obtain a mortgage if the property fails to appraise. Nevertheless, it is sometimes worth including a separate contingency – if, for example, the buyer does not require a mortgage but wants the appraisal anyway. 

Repairs and cleanup

If the purchaser’s willingness to buy is based upon certain action by the seller – making a repair or removing excessive garbage or debris, for example – the contract should contain an express contingency to that effect. 

Sale of buyer’s home

Some contracts are contingent upon the sale of the buyer’s home to another party. While it is often difficult to get a seller to accept this type of condition, a buyer who cannot otherwise afford to proceed has little choice but to try. 

Special contingencies

Some transactions require special conditions. For example, if the home needs a significant work the buyer may want a contingency period to get pricing from contractors.


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Identifying Real Buyers

Serious buyers purchase homes. It may seem like a painfully obvious fact, but there are many lookers and marginal buyers out there as well. Consider these characteristics of the strongest purchasers.

Mortgage Prequalification

A buyer with a prequalification for mortgage financing is extremely attractive to a seller. Prequalification eliminates (or significantly lessens) the prospect of a deal collapsing for lack of financing.

Does the Buyer Have to Sell a House?

A buyer whose home is already sold – or one who does not require a sale to compete the new purchase – is preferable to one who is depending upon finding a buyer for his or her current house.


Transferees are typically extremely strong buyers. They are usually under time pressure to make a purchase, so they will probably make a fast decision and move swiftly to closing. In many cases their employer is providing assistance in selling the old home or purchasing the new one. [/su_lightbox_content]

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Overbuilt Homes

A home is consider overbuilt when it has been expanded or improved to a level beyond that of most homes in the area.

An overbuilt home can be difficult to sell for a reasonable price (based on its size and features) because it has been improved past the affordability level of the typical area buyer.

An owner who has overbuilt or over-improved a home may have to accept a significant loss on the funds invested into the property. [/su_lightbox_content]

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Quick Sale Checklist

In many instances, a quick sale is advantageous, or even essential. If any of the following situations applies to you it may be worth pricing a little lower in order to obtain a buyer more quickly

You are closing on a new home

If you’ve already found a new home, carrying both properties will quickly add up to more than you can realize by waiting for a higher sale price on your existing property.

You are under financial pressure

If you are under pressure to sell your home to meet other financial requirements it may make sense to secure a quick sale and attend to these issues.

You are moving out of the area.

If you are being transferred or are relocating to another area you probably want to complete a sale before you leave. Dealing with the marketing effort from a long distance – and probably travelling back and forth – may be more trouble and expense than it is worth.

You think the market is about to drop off

If you think that the real estate market is going to decline soon it is probably worth pricing for a quick sale. If you are right about the market, it’s likely that you’ll end up getting no more – and maybe less – if you wait.

You don’t want to wait.

Depending upon your situation and frame of mind, you may simply decide that it is worth taking a few dollars less to be done with the whole thing. If this makes financial sense to you – and promises to improve your quality of life – it is probably the smart move. [/su_lightbox_content] [su_lightbox_content id=”strong-market” text_align=”left”]

Selling in a Strong Market

Selling a home in a strong market is usually not too difficult. Nevertheless, there are a few things to consider, even when homes seem to be selling like hotcakes.

Don’t believe everything you hear. All homes are not selling in one day for more than the asking price – in any market.

Don’t get discouraged if your home doesn’t sell instantly.

If your home doesn’t sell in a reasonable period despite an apparently strong market, ask your agent why. Your price may be too high even for a hot market or your home may have some problem that is turning off buyers.

If you are not under extreme pressure to secure a quick sale, price aggressively and see if the market will bear it.

Be realistic about the market – try to get a high price, but don’t get carried away.

Be careful about being the last one standing when the music stops. Excessive booms are usually followed by weak markets and falling prices. Make sure you get a buyer while things are still strong.

A combination of patience, rationality, and aggressiveness is required to make the most out of a strong market..

[su_lightbox type=”inline” src=”#evaluating-markets”]return to Evaluating Real Estate Markets[/su_lightbox] [/su_lightbox_content] [su_lightbox_content id=”weak-market” text_align=”left”]

Selling in a Weak Market

A weak market is a challenging environment in which to sell a home. With the availability of homes for sale – and the lack of buyers – sellers need to be realistic.

Be realistic on your initial pricing – if homes are moving slowly you are very unlikely to secure a premium price unless your home is extraordinary (or you get very lucky).

Consider lowering the price if you are not getting showings or offers. Don’t take offense at insulting offers – simply counter-offer or politely decline. Remember that buyers are being constantly told the market is weak and they should “get a deal.”

Consider a buyer’s quality level when assessing sub-standard offers. If a buyer is pre-qualified and ready to close it may be worth accepting a little less.

If you have the flexibility, consider waiting. These markets are usually followed by recovery periods, when more buyers enter the market and prices stabilize and begin to rise.

Selling a home is a major financial move, and.a weak market can make it a real challenge to get a good price.

[su_lightbox type=”inline” src=”#evaluating-markets”]return to Evaluating Real Estate Markets[/su_lightbox] [/su_lightbox_content] [su_lightbox_content id=”evaluating-markets” text_align=”left”]

Evaluating Real Estate Markets

Real estate markets are extremely cyclical, and pricing and demand are highly influenced by interest rates and economic conditions. Flexible buyers and sellers can often do very well by timing their entry into the market.

Choose a Weak or Strong Market?

Most people who sell a home also have one to buy. Thus, except for those palnning to rent it can be difficult to choose the optimum time to sell. It’s important to consider all aspects of the transaction – the homes being bought and sold, interest rates, time pressure, etc. – to determine what is best for you.

When is a Weak Market Best?

Generally, it is advisable to act during a weaker market when moving up – purchasing a more expensive home – since a bargain on an expensive new home will offset losses on the old one.

When is a Strong Market Best?

If you are downsizing – moving to a smaller home – you may want to act during a strong market to maximize gains on your larger current home. Retirees and empty nesters are primary members of this group. Since a home is a major asset, choosing the right time to sell and buy a smaller property can have a major impact on retirement savings.

Signs of a Weak Market

A weak market is characterized by large numbers of homes on the market and stable or declining prices. During weak periods homes tend to sit on the market for fairly long periods, and sellers may have difficulty finding buyers. While it’s obviously not an ideal time to be selling, there are a few things you can do to [su_lightbox type=”inline” src=”#weak-market”]cope with a slow market[/su_lightbox].

Signs of a Strong Market

A strong market is characterized by appreciating prices, tight inventories, and short selling times. Sellers may find a buyer quickly – and at a high price. A strong market is a seller’s dream, so consider these tips for [su_lightbox type=”inline” src=”#strong-market”]maximizing the benefits.[/su_lightbox]

Signs of an Overheated Market

Overheated markets are characterized by rapidly increasing prices, extremely low levels of inventory, and bidding wars for attractive properties. While obviously an ideal time to sell a home, sellers should act quickly in this environment – prices almost always contact sharply when the economy falters.

Market Lag

Popular perceptions and pricing often lag behind the actual turn of a market. For example, prices are often slow to react to the onset of adverse economic conditions, as sellers and agents are reluctant to accept the change until properties have languished on the market long enough to force price reductions. [/su_lightbox_content] [su_lightbox_content id=”improvement-projects” text_align=”left”]

10 Improvement Projects for Sellers

Each of these ten projects can be completed at a reasonable cost – and all contribute considerably to a home’s curb appeal and salability.

Interior painting

A fresh coat of paint can really brighten the interior of your home at a reasonable cost – especially if you do the job yourself. Choose neutral, popular colors that will appeal tomost buyers.

Exterior painting

An old, peeling coat of exterior paint can really ruin the curb appeal of your home – and turn off potential buyers before they even get through the door. A new paint job can work wonders to restore a home’s outward appearance.


You will probably have to repair any broken or malfunctioning household systems before you close anyway – so why not do it upfront before the problems detract from your sales effort?

Refinish wood floors

Damaged or stained wood floors can really make a home look shabby, but with a relatively inexpensive refinishing job they can look as good as new.

Quick kitchen fixes

The kitchen is a critically important part of your home to most buyers. A dated or unfashionable kitchen can really hurt a home in the marketplace. While a full (and expensive) kitchen remodel is unfeasible, any small and inexpensive projects that jazz up the room are probably a good idea. Painting cabinets, replacing hardware, changing faucets, and installing new flooring are all reasonably priced projects that can make a huge difference in the look of your kitchen.

Replace old linoleum floors

If your kitchen (or laundry room or bath) has old or unattractive linoleum it may be worth replacing the flooring. The cost is generally reasonable and the impact on the room can be significant.

Add landscaping

Installing some well selected plantings can really improve the look or your yard and curb appeal of your home. Avoid costly projects involving earthmoving or extensive plantings. Instead, select shrubs that will look their best during the anticipated selling period. If the time of year permits, choose plants that will be in bloom when buyers are viewing the home.

Lighting maintenance

Check all of the lighting fixtures in your home and replace any that are not working or are dated and unattractive. Make sure all fixtures have working bulbs and that all light switches are in operating order.

Fix “sticky” doors

Check all of your interior doors. Do they open easily and close all the way? If not, have them planed or adjusted so they function properly.

Fix “sticky” windows

Check all of your windows. Do they open and close easily? Do they lock properly? Are there any cracks or broken panes? Fix any problems and make sure that all windows have screens. [/su_lightbox_content] [su_lightbox_content id=”home-cleaning” text_align=”left”]

Home Cleaning Checklist

A spotless home makes a strong impression on a buyer. While some level of dirt and clutter is endemic to life in the home, the fact is that the less “lived in” your home looks, the better it will show to buyers.

Consider a furnished model in a new home development – the furnishings and appointments give the look of a finished home – without the wear and tear of actual occupancy. Try to come as close to that level as possible – you’ll notice the difference in your sales effort.

Kitchens and baths

Clean all kitchens and baths thoroughly and keep these areas spotless during the selling period.

Rugs and floors

Shampoo rugs and vacuum frequently during the selling period. Consider refinishing stained or discolored wood floors.


Wash all windows and keep these clean during the selling period. Wash all screens.

Cut down on clutter

Consider removing some furnishings and personal possessions if any rooms seem cluttered (you can rent a storage space if you need somelace to put excess items).

Clean out messy closets.

Tidy up children’s rooms and play areas and try to keep these areas clean during the selling period. Impress upon your children the importance of cleaning up after play sessions.

Garage and basement

Clean out the garage and basement. Organize stored items neatly and remove clutter. Sweep both areas clean

Clean up outside

Clean up outside areas. Neatly store any ladders, lawnmowers, or other tools and equipment. Make sure that bicycles and children’s toys are stored in an appropriate place.Wash the exterior of the home is your siding is dirty.

Check your landscaping

Make sure your yard is well tended. Keep the grass neatly mowed and edged. Check your shrubs and plantings to see if they need to be weeded or trimmed.

Maintain a fresh, pleasant scent in the home

Purchase some potpourri or scented candles to use when the home is shown. Consider keeping firewood on hand during the winter if your home has a fireplace. [/su_lightbox_content]

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Seller’s Disclosure Checklist

Sellers are legally required to disclose any known deficiency to the buyers. Unfortunately, not all parties will agree on exactly what constitutes a deficiency, so your safest bet is to disclose everything that may be considered a flaw. While it is by no means a complete listing of potential problem areas, this checklist provides a good starting point for identifying possible liability problems in your home.

General Information

Disclose the age of the house and any major problems you’ve experienced (including any you believe have been corrected). Provide a complete list of all known repairs and improvement projects that have been completed. Specify any variances or other zoning actions affecting the property.

Mechancial systems

Disclose any known problems with the home’s heating, plumbing, electrical, and air conditioning systems. List the ages of all furnaces, air-conditioning units, and water heaters. Provide copies of the service records on all systems. Disclose any known problems with alarm systems (fire, smoke, and security) and intercoms.

Roofing, siding, and windows

Disclose any known problems or leaks. Specify age of roof, siding, and windows, if known.

Well and septic systems

Disclose any known problems with these systems. Provide all service records. Make sure that purchaser acknowledges any special factors (e.g. pump septic system).


Disclose any known problems. Specify age of each item and provide service records, if available.

Code violations

Disclose any and all known violations of current building code standards. Consider all house systems and structural components.

Sub-standard system performance

Disclose any household systems that perform in an inadequate manner. Examples – poor availability of hot water or water pressure, air conditioning inadequate to properly cool the house, etc.

Environmental issues

Report any and all known environmental issues, including, but not limited to, underground tanks, abandoned septic systems, lead paint, tainted water table, asbestos insulation (usually around pipes), and radon. [/su_lightbox_content]

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The Realities of Being a Landlord

Owning and renting real estate can be extremely lucrative, but for the small property owner the hassles and risks often outweigh the rewards.

Rental Costs and Vacancy

Finding a tenant can take time – and you are carrying the mortgage and other costs each month. Are you financially able to make these payments if you can’t find a tenant quickly? Don’t forget to consider commission costs if you use a realtor or rental agent to find a tenant – this can cost a month’s rent or more.

Maintenance is a Headache

If the heat fails or the plumbing breaks down it’s you who has to deal with the situation, so make sure you are prepared to handle this before you decide to rent.

Legal Problems

Laws applicable to landlord-tenant rights and relationships vary with location, but many seem to share an almost overt hostility toward the landlord. If a tenant refuses to make rent payments it could take you months (even years!) to complete an eviction – at a cost of thousands in legal fees. During this time you will be paying the mortgage, taxes, insurance, and maintenance costs – with no rental income to offset these obligations.

Beware of Damages

In most areas a landlord is allowed to collect a security deposit equal to one or one and one-half month’s rent. While this amount will generally cover the cost of minor repairs or clean up, it is grossly inadequate to protect against any major damage. Disgruntled or malevolent tenants can cause thousands of dollars in damage, and your only real options are to sue – at considerable additional cost – or to absorb the repair expense yourself.

Make Sure Your Finances Add Up

Ideally, the rent will cover the mortgage costs and taxes on your old home, allowing you to apply your own income to a new purchase. Your lender, however, will probably view this arrangement with some scrutiny. Before you decide to rent your old home, make sure that you will not have any difficulty obtaining financing for your new house. [/su_lightbox_content] [su_lightbox_content id=”sell-or-buy-first” text_align=”left”]

Sell or Buy First?

Most people try to buy and sell simultaneously, which is almost certainly the best way to go – if the market cooperates. But ultimately you’ll probably have to decide whether to accept an offer on your home before you’ve found a new one – or to buy a new property before yours is sold.

Can You Carry Both Properties?

If you buy a new home before your old one is sold you’ll be faced with carrying two mortgage payments for an undetermined period of time. Can you handle this financially? Will you be able to fund the down payment on your new home without the sale proceeds from the old one? If your income is sufficient to carry the payments, a bridge loan may help you get through this period.

Are You Willing to Rent?

If you accept an offer for your home before you’ve bought a new one you may have to move into a short term rental until you find something to purchase. Are you prepared to move twice, with all the hassle this entails?

Contingent Contracts

The ideal situation is to make the first contract contingent upon the other. For example, you agree to purchase a home but not to close until you’ve sold yours. Unfortunately, few sellers will agree to this kind of condition (and few buyers will agree to wait until you find a new property). You may be able to negotiate the right to stretch out the closing date by a reasonable period, however. This gives you more time to try to match up the closing dates.

Buying a New Home

Purchasing a home that is under construction (or not yet started) gives you considerable time to sell your existing property. Don’t forget, however, that you are still committed to close on the new house when it is completed. Make sure you are able to do so even if you can’t sell your present home – or if you have slash the price to do so. [/su_lightbox_content] [su_lightbox_content id=”cost-basis” text_align=”left”]


Basis is the adjusted cost of a house, consisting of the purchase price plus the cost of capital improvements that have been made. To calculate basis, add the amount you paid for your home to the cost of any capital investments (not repairs) made since that time.

For example, if you purchase your home for $150,000 and later add an addition at a cost of $25,000, your new basis is $175,000. You would need to realize net sales proceeds in excess of $175,000 to have a capital gain on the sale.

Basis can also be reduced from the original purchase price if a portion of a property is sold (for example, if the land was large enough to create an extra building lot that was later sold). Always keep proper records of improvement expenses on your home in case you are ever called upon to justify your cost basis.

[su_lightbox type=”inline” src=”#tax-selling”]return to tax consequences of selling[/su_lightbox] [/su_lightbox_content] [su_lightbox_content id=”tax-selling” text_align=”left”]

Tax Consequences of Selling

Homeowners enjoy some of the most lucrative tax breaks available – one of many factors that makes appreciated housing a major wealth builder. 

Consider Taxes Before You Sell

While homeowners typically enjoy favorable tax treatment when selling a home, there are a number of exceptions. Make sure you understand your exact status with regard to taxes before you place your home on the market – it’s too late once you get a buyer. Check with your accountant or tax professional if you’re unsure where you stand.

The Home Sale Exclusion

Generally, financial gains you realize from the sale of your primary residence are excluded from capital gains taxes up to $250,000 for single filers and $500,000 for married taxpayers filing joint returns. In fact, if you qualify for the full exclusion you don’t even have to report the sale on your returns.

Ownership and Use Tests

The primary qualification for the exclusion consists of the ownership and use tests. To pass these tests the following conditions must apply (to you or to your spouse).

You have owned the property for two out of the last five years.

You have lived in the property (as your primary residence) for two of the last five years.

You cannot have used the exclusion on another home sale during the past two years.

If the ownership and use tests are not passed then the entire profit from the sale of the home is generally taxable. 

Calculating Your Capital Gain

The capital gain on a home sale is the excess of the net sale proceeds (after deducting marketing, sale, and closing costs) over your [su_lightbox type=”inline” src=”#cost-basis”]cost basis[/su_lightbox] in the property. The net sale proceeds do not include any portion of the price that is attributable to extra items included in the sale (e.g. furniture).

What if Your Profit is Greater than $500,000

Gains in excess of the excluded amount ($250,000-$500,000), or all of the gains if the ownership and use tests are failed, are taxable as a normal capital gain. This income is reportable on schedule D of your return. Anyone expecting to realize a gain of this magnitude should probably consult with a tax advisor. 

Handling a Loss on the Sale of a Home

A loss on the sale of your home is a capital loss and is not deductible against ordinary income. If you have a substantial loss on a home sale it probably makes sense to discuss the implications with a tax professional. [/su_lightbox_content]

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