If you're selling your house, whether it's a home for sale in Jacksonville, FL, or Colorado Springs, CO, you probably want to make as much of a profit as possible. But how to do that is not always obvious. Besides pricing your home just right — not so high as to scare away buyers and not too low as to cheat yourself out of some dough — there are some other considerations for making money that might not be on your radar. Read on for seven ways to make money the next time you move.
1. Understand capital gains
When you sell something for more money than you spent to buy it, you have the makings of a successful entrepreneur. But you also have something else: a capital gain, which catches the attention of the Internal Revenue Service. The IRS expects you to report such gains on your income tax return with one huge exception: your home. If you sell your primary home (the one you live in) for more than you paid, you don't have to tell Uncle Sam! (There is one exception. If you make a profit of more than $250,000 and you're single, or $500,000 if you're married and filing jointly, you'll have to pay capital gains tax.)
2. Negotiate your real estate agent's commission
By not spending money unnecessarily, you may not exactly be making money — but you're holding on to your money, which is just as important. One way of keeping more of your money is to pay your real estate agent less. Everything in life is negotiable, including your real estate agent's commission. If an agent tells you their commission is 6%, for example, you can always offer up less. The agent might come down or they might not. Then it's up to you to decide if you want to shop for a less expensive agent.
3. Sell FSBO
Now that anyone can list their home for sale on Trulia, many people are selling without using an agent at all, called "For Sale By Owner," or FSBO. You either pay no agent fee whatsoever or pay only the fee of the buyer's agent. You can determine how to price your home by looking at what neighboring homes have sold for and/or hiring an appraiser. You would then list your home and show it to all those interested buyers. Be ready to negotiate a selling price, have a real estate attorney review or draw up a contract, and then have an attorney or a title company coordinate closing. There are still fees involved when you sell FSBO, and you will put in more of your own time, but your savings could be significant.
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4. Hire an aggressive agent
Paying your agent as little as possible or not using an agent at all aren't the only strategies for getting beaucoup bucks for your home. If you're not getting the offers you want, or if you don't have time to mess around, hire an aggressive agent right from the start.
"People can make the most out of their move by being realistic with price on the front end and working with a real estate professional with an aggressive online marketing plan on the back end," says John McLaughlin, a north Florida real estate agent. "Location, condition, price, and marketing plan are the determinants of what will net you the most amount of money — three of the four can be changed. Be competitive on price and hire an agent with a strong track record and strong marketing plan. That's your best opportunity to get multiple offers and buyers competing to get your house."
5. Sell your furniture
It's expensive and time-consuming to move furniture. Jamie Novak, a personal organizer and author of Keep This Toss That, lists five things that are usually better to sell or donate before you move: old books, oversized furniture, cleaning supplies, small kitchen appliances, and glassware.
"If you're using a moving company to relocate, adding stuff to your inventory adds cost — especially when you move long distance," says TJ Peterson of Oz Moving & Storage, a New York, NY, moving company. "The more you offload, the more you save. In some cases, it might even cost more to move your item than it costs to buy a new one."
You also could try to sell your furniture along with the house. Pro tip: Make the home sale separate from the furniture transaction. "With furniture, most lenders will not fund a loan if there is personal property included with the sale," says McLaughlin. "Having a written agreement or mutual understanding of items to include in a sale, off the purchase contract, is the best way to deal with furniture."
6. Peddle unwanted items
Hosting a garage sale not your thing? You can still make money off belongings you no longer want or need by bringing them to a consignment shop or selling online. "Consignment shops are a great way to sell your items," says Sharon McRill, owner of The Betty Brigade, an organizing and relocation company in Ann Arbor, MI. Her tips: Use a reputable shop that has a high volume, and make an appointment. It's also a good idea to ask if you can send in pictures to make sure the shop will take your stuff. No sense hauling it over there only to be turned down.
If you're moving out of the area, you might want to forgo the consignment route. "Skip the consignment shop unless you know you have the time to drop off the item and you'll be in town long enough to pick up your check if or when [your item] sells," says Novak. "Instead, consider Amazon.com's Trade-In program. They accept just about everything."
7. Donate your stuff
Although you aren't exactly getting paid when you donate your belongings, you can still come out ahead in two ways. First, you're not paying to move extra stuff. Second, you could get a tax break. Make sure you're contributing to a qualified organization, not to a specific person or a political candidate. Then just itemize your deductions on your 1040 tax form. Pro tip: If you donate an item worth more than $5,000, you'll need to have it appraised first.