While the deal on the home has been closed on, and is officially sold, you still have a few more things to do. Here are some things you can do to save money post-sale.
Keep copies of all paperwork that was accumulated throughout the sale. You’ll want these papers for taxes in April. This is because to file them properly, you’ll need documentation for the expenses and proceeds of the sale. And after you file your return, you’ll want to keep the paperwork in case you’re audited.
You’ll need to keep documents of all improvements you performed on the home. This is because the IRS allows you to add the cost of improvements to your home’s cost basis during the time you own the home. However, in order to do this, you’ll need to keep receipts for everything you spent on home improvement.
Be sure to be up-to-date on tax laws, because they are always changing. This is why you’ll want to keep your paperwork. A recent law permits you to exclude a significant portion of the profits from the sale of your primary residence from your taxes.
If you sell your house without purchasing another directly after, you need to keep your money somewhere in a secure place. This usually is a money market mutual fund.
Don’t feel like you need to buy another house right away. Even if you have to rent, you should wait until you find something you really like, that’s in your price range. Many people don’t know this, but you have two years to defer tax on your house-sale profits. Again, this is why you should stay educated on tax laws.
Think about which realtor you’ll choose to purchase your next house. Some realtors are more experienced in buying houses, while others are more experienced in selling them. You don’t have to use the same realtor you did to sell your house. Keep in mind as well, that if you’re moving into a different neighborhood, then that agent likely won’t know the market or comps well enough to help you get the best deal.
If you can afford to put more than 20% down on your next home, consider whether it’s better to put that money in the down payment or to invest the money elsewhere. Last but not least…don’t forget to change your address!