Ten
Things To Do After You Sell
Once escrow has closed without a hitch and you've handed the keys over to the
new owners, you've probably written the selling process off as over. But don't change your
state of mind too fast.
In their book, "House Selling for Dummies (Hungry Minds Inc., 1999)," authors
Eric Tyson and Ray Brown lay out a laundry list of what you can do to ultimately save
yourself money and peace of mind down the road.
Tyson is a syndicated columnist and the bestselling author of Personal Finance for
Dummies. Brown is a real estate consultant and speaker.
Once you sell your house, they suggest you:
Keep copies of all the paperwork related to closing and settlement. Although it might
be tempting to run the mountain of paperwork through the shredder or tuck it away in
storage, you'll want to have it handy for April 15. When you file your taxes you'll need
documentation for the expenses and proceeds of the sale. And once you file your return,
you'll want to keep the paperwork in case you're audited.
- Keep proof of improvements and prior purchases. This is for tax purposes, too. The IRS
allows you to add the cost of improvements to your home's cost basis during the time you
own the home, which is nice if you have a sizeable capital gain. But to use this tax
provision, you need to keep receipts of everything spent on home improvement.
- Put your cash in a money market fund. If you sell and then don't immediately buy, you'll
need a safe place to put your money. A money market mutual fund offers safety and a
reasonable rate of return. Money market funds offer daily access to your money and
check-writing privileges.
- Stay on top of tax laws. A recently passed law allows you to exclude from tax a
significant portion of the profits from the sale of your primary residence. Because tax
laws are constantly changing, you'll want to stay on top of tax laws to avoid losing a lot
of money.
- Choose your next home carefully. Scope out a variety of areas and housing options that
meet your family's needs.
- Don't feel pressured. Take your time purchasing your next home; rent for awhile if you'd
like extra time or want to try an area out first before buying.
- Reevaluate your personal finances if things change. If your situation changes before you
buy another house - you get a promotion, have a baby, go through a divorce - you'll need
to rethink your finances and how much you can afford to pay for your new house.
- Think about what you need from your agent to help you buy.
- Think through your next down payment. Brown and Tyson recommend putting at least 20
percent down on your next house in order to qualify for the best mortgage programs. If you
can make more than a 20 percent down payment, you'll want to consider whether you can earn
a high enough return if that money was invested elsewhere. "Younger home buyers
willing to take on more investment risk should lean toward a 20-percent down payment,
whereas older home buyers who tend to invest less aggressively should opt for larger down
payments," the pair recommends.
- Remember to send change of address notices. The U.S. Postal Service recommends you
complete and mail your Change of Address Order Card 30 days before you move.
