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Everything You Need to Know About Closing Costs for Home Sellers

What are Closing Costs and How Much Do Sellers Usually Pay?

When it comes to selling a home, you need to consider a plethora of expenses, including closing costs, which can burn a hole in your pocket. Closing costs are fees that come up during the finalization of a real estate transaction and have to be paid by both the buyer and the seller. The charges usually include appraisal fees, title search fees, survey fees, and more.

As a seller, you may have to bear a significant portion of these expenses. So, it’s crucial to know how much you need to shell out and what you’re getting into. Therefore, in this blog post, we’ll delve deeper into closing costs, including their definition, how much you can expect to pay, and why they are a crucial aspect of a home sale.

Selling a home is a major life event that requires careful planning and budgeting. One of the things that sellers need to be aware of is closing costs. These fees can be a real headache and vary in cost depending on the property size and location.

So what are closing costs, you ask? Essentially, they’re the fees associated with the sale of a home. As a seller, you’re responsible for paying a range of costs, which can add up to a hefty sum. In some cases, closing costs can be in the thousands of dollars!

The good news is that you can minimize your closing costs by understanding which fees you’re expected to pay. Generally, sellers can expect to pay between 1% and 3% of the home’s sale price in closing costs. For example, if your home sells for $300,000, you could end up paying between $3,000 and $9,000 in closing costs.

By knowing what to expect and being prepared, you can avoid any nasty surprises and budget accordingly. So if you’re planning to sell your home, be sure to factor in these additional costs to ensure a smooth and stress-free transaction.

Common Closing Costs for Home Sellers- Breakdown of All Fees & Expenses

Selling your home can be an exciting experience, but it’s important to keep in mind that it comes with a fair share of expenses. These costs, commonly known as closing costs, can sneak up on you and leave a dent in your profit.

To help you prepare for the process, we’ve put together a comprehensive breakdown of the typical closing costs for home sellers. This includes all the necessary fees associated with the listing agreement, transfer taxes, and more. By understanding these costs, you’ll be able to plan ahead and avoid any surprises down the road.

At the end of the day, selling your home is a big financial decision, and it’s important to be informed every step of the way. So, take a deep breath, grab a cup of coffee, and let’s dive into the world of closing costs.

Listing Agreement:

When you’re in the market to sell your beloved abode, it’s customary to enlist the help of a real estate agent. The two of you will work together to create a listing agreement, which spells out the details of your partnership, including the agent’s commission fee. This is usually calculated as a percentage of the sale price, and is then divvied up between the seller’s agent and the buyer’s agent. The exact amount of the commission can vary based on a number of factors, such as the location of the property and the scope of services provided by the agent.

Title and Escrow Fees:

When you’re in the midst of a real estate transaction, you’re likely to come across a few unfamiliar terms. One such term is “title and escrow fees.” These fees are essential for ensuring a smooth and successful transaction, but what do they actually cover?

Title fees are charged by the title company, and they cover the cost of researching the property’s title. This research is necessary to make sure there are no liens or other issues that could derail the sale. Essentially, it’s a thorough investigation of the property’s ownership history to ensure that the seller has the legal right to sell the property and that there are no outstanding claims against it.

Escrow fees, on the other hand, are charged by the escrow company. These fees cover the cost of holding the funds and documents during the transaction process. Escrow is essentially a neutral third party that holds the money and documents until all the terms of the sale have been met. This ensures that both parties are protected and that the transaction is fair and equitable.

So, while title and escrow fees may seem like just another added cost, they’re actually an important part of the real estate transaction process. By paying these fees, you’re ensuring that the sale goes smoothly and that everyone involved is protected.

Transfer Taxes:

When you’re buying or selling a property, it’s important to keep in mind that there may be transfer taxes involved. These are fees charged by the local government for the transfer of ownership of the property from one party to another.

The specific amount of transfer tax you’ll be charged can vary depending on where you’re located, but it’s typically calculated as a percentage of the final sale price of the home.

It’s always a good idea to do your research ahead of time and budget accordingly for any potential transfer taxes that may come up during the transaction process.

Home Warranty:

If you’re planning to sell your home, you might be thinking about ways to sweeten the deal for potential buyers. One option that many sellers consider is offering a home warranty as an added incentive.

This warranty provides coverage for specific items in the home, like your trusty appliances or your HVAC system. And let’s face it, these are the things that keep your home running like a well-oiled machine.

The cost of the home warranty can vary depending on the level of coverage you choose and the company you work with. But in the long run, it could end up saving you and the buyer a lot of hassle and money down the road.

Closing Agent Fees:

When it comes to buying or selling real estate, there are many factors to consider, including the services provided by the closing agent. This skilled professional, also known as the settlement agent, plays a crucial role in ensuring that the transaction is completed smoothly and efficiently.

The closing agent is responsible for a wide range of tasks, including the preparation and review of important documents, the distribution of funds, and the recording of the transaction with the appropriate government authorities. As you can imagine, these tasks require a great deal of expertise and attention to detail.

Of course, the cost of these services can vary depending on a number of factors, including the location of the property and the specific services that are required. However, it’s important to remember that the fees charged by the closing agent are an important investment in the success of your real estate transaction.

Other Fees:

There may be other fees associated with the sale of your home, such as inspection fees, appraisal fees, and courier fees. These fees can vary depending on the location and the services required.

The Benefits of Knowing Your Closing Costs Beforehand & Tips to Negotiate Them

It’s always a good idea to know what you’re getting into when it comes to closing costs. They can add up quickly and catch you off guard if you’re not prepared. That’s where an estimated closing cost calculator can come in handy. It gives you an idea of what to expect and helps you avoid any unpleasant surprises. Plus, knowing your closing costs ahead of time can give you the knowledge you need to make informed decisions about negotiating fees. So, don’t be caught off guard – do your research and be financially prepared for your next transaction.

Tips to Negotiate Closing Costs

While closing costs are a necessary expense, there are ways to reduce them. Here are some tips to negotiate closing costs:

  • Shop around: One of the best ways to reduce real estate transaction fees is to shop around for the best deal. This includes comparing fees from different lenders, title companies, and attorneys.
  • Ask for a breakdown of the fees: When negotiating closing costs, it’s important to understand what you’re paying for. Ask for a breakdown of the fees and question any that seem excessive.
  • Negotiate the fees: Some fees may be negotiable. For example, you may be able to negotiate the origination fee or the application fee. Be prepared to make a counteroffer if the fees seem too high.
  • Consider the timing: The timing of the closing can also impact the fees. For example, if you close at the end of the month, you may be able to avoid some fees.
  • Use a real estate agent: A real estate agent can help you navigate the closing process and negotiate the fees on your behalf.

Do All States Have the Same Regulations on Seller Closing Costs?

When selling a home, there’s a lot to consider, including the dreaded closing costs. These costs can include fees for appraisals, title searches, surveys, and more. But here’s the thing: each state has its own set of regulations and requirements when it comes to closing costs. So, it’s not a one-size-fits-all situation.

One major factor to keep in mind is the real estate transfer tax rates. These taxes are typically paid by the seller and can vary significantly from state to state. For instance, in California, the transfer tax rate is typically around $1.10 per $1,000 of the sales price. However, in New York, the transfer tax rate can be as high as 2.8% of the sales price. It’s important to note these rates, as they can impact the total amount of closing costs that you’ll be responsible for paying.

Another thing to consider is a state-by-state comparison of closing costs. While the actual costs can vary depending on the specific transaction, there are some general trends to keep in mind. According to a recent report by Bankrate, the average closing costs for a $200,000 home in 2022 ranged from around $3,700 in Missouri to nearly $6,000 in Hawaii. It’s important to factor these costs into your budget and negotiate with the buyer accordingly.

Now, here’s where it gets tricky. Some states have specific regulations when it comes to seller closing costs. For instance, in certain states, it’s illegal for the seller to pay for certain closing costs, such as the buyer’s appraisal or inspection fees. Other states have limits on how much the seller can contribute towards the buyer’s closing costs. It can be a lot to navigate, but that’s why it’s crucial to have a knowledgeable real estate agent or attorney on your side.

In conclusion, closing costs are a necessary evil when it comes to selling a home. Just remember to do your research, factor in state-specific regulations and taxes, and work with a trusted professional to ensure everything goes smoothly.

Conclusion: Preparing Yourself with Knowledge of Closing Fees Can Help You Maximize Your Profits as a Home Seller

Selling your home can be a daunting task, and navigating the world of real estate can be overwhelming. Closing costs are one of the many expenses that you’ll need to be aware of, as they can significantly impact your profits. Understanding these costs and the options available to you can help you make informed decisions and achieve the best possible outcome.

By partnering with Elite Properties, a reputable real estate agency, you can rest assured that you’ll have a team of experienced professionals on your side. They’ll guide you through every step of the home-selling process, from preparing your home for sale to negotiating with potential buyers. With their help, you’ll be well-equipped to handle closing costs and other expenses.

Don’t let closing costs catch you off guard. Contact Elite Properties today to learn more about how they can help you maximize your profits as a home seller. With their support and expertise, you can sell your home with confidence and achieve your desired results.

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Everything You Need To Know About HOA Estoppel Letter

HOA estoppel letters are a vital part of any real estate transaction. They provide information to prospective buyers, providing details such as the HOA’s name and contact information, property address, and outstanding financial obligations.

They’re also used by lenders to take real property as security, outlining the terms of the agreement between the lender and the association.

In addition to being an important document in real estate transactions, they’re also used by parties involved in a dispute over association fees or dues.

HOA estoppel letters are helpful for many reasons, but one of the most notable is that they help ease the transition from a current owner to a new one. With this letter, parties involved in a real estate transaction have all the information they would need to know.

Essentially an HOA estoppel letter is used for closing real estate deals and can help avoid potential disputes.
Let’s try to understand more about the HOA Estoppel letter and how useful can it be.

What Is An HOA Estoppel Letter?

HOA Estoppel is a legally binding document that certifies the amount of money a home seller owes to the homeowner association.

The document includes any delinquent amounts due from the seller, any amounts that may be payable to an attorney handling a collection matter on the subject property, and any fees associated with closing escrow.

In some cases, homeowners’ association estoppel letters can serve as the certificate of title for real estate.

In a nutshell, when homeowners’ association estoppel letters are used as proof of title, they are typically used by real estate agents and lenders who require additional documentation for loan approval.

Additionally, homeowners’ association estoppel letters are often included in homeowner association closing statements and closing documents when escrow is being facilitated by a real estate agent or lender.

What Does An HOA Estoppel Letter Include?

HOA estoppel letters typically contain information related to homeowner association dues and assessments, such as:

  •  dates of assessment and payment;
  •  types of fees assessed;
  •  total amount due;
  •  instructions for paying the fees;

and more. In some cases, homeowners’ association estoppel letters include a lien or deed restriction statement that certifies the owner’s current dues and assessment payments.

The HOA should include instructions on how to make payment and a note stating that newly discovered debts cannot be added to an Estoppel letter that has already been submitted.

In general, an Estoppel letter should include a comprehensive overview of the homeowners association’s financial obligations and conditions. I do not believe it should be overly detailed or tedious to read.

It should provide enough information for potential property owners to understand their financial obligations and obligations under the association’s bylaws.

How Does A Buyer Obtain An Estoppel Letter?

To obtain an estoppel letter, a buyer typically obtains one from the homeowners association board through the title search company they are working with.

This letter provides information regarding the seller’s annual fees and any outstanding payments due at the time of sale.

The HOA is obligated to provide the estoppel letter, and an authorized representative from the association must complete and sign the document within 10 business days. The association must designate a person or entity with a street or email address for the receipt of a request for an estoppel letter, and this information must be publicly available online.

This information can help buyers make informed decisions about purchasing a property in an HOA jurisdiction. A buyer can also contact the association for additional details about their estoppel letter.

What Happens If The Seller Doesn’t Owe The HOA Any Fees?

If the estoppel letter does not indicate any outstanding fees owed by the seller to the HOA, the buyer is not responsible for any fees belonging to the current owner.

Additionally, the buyer is provided with a warranty deed from the seller, which ensures that the title of the property is clear and that the seller holds a clear title to it.

However, the party who demands it must provide the estoppel letter and pay the fee, even if the seller has no unpaid balance.

The estoppel letter ensures that there are no additional costs associated with purchasing a property with an outstanding HOA balance, while also serving as proof of ownership upon closing. In this way, it provides additional assurance to both buyers and sellers of property with an outstanding balance.

What Does An HOA Estoppel Letter Cost?

The cost of preparing an estoppel certificate normally cannot exceed $299 as of July 1, 2022. If the estoppel certificate is requested urgently and provided in less than three working days, an association may charge up to an extra $119.00. The association may also impose an extra fee for delinquent accounts, not to exceed $179.

Bottom Line

Homeowners’ associations commonly use estoppel letters to support claims regarding the terms of association agreements.

It typically contains specific facts and information about a particular situation, such as the date of the agreement, the scope of the agreement, or any other relevant information.

As a buyer, you must get an HOA estoppel letter from the association before purchasing into an HOA. This will let you know if there are any unpaid fees related to a property before closing.

The HOA estoppel letter allows the buyer to take possession of the property free of any encumbrances and protects against any claims by the HOA after closing.

An estoppel letter protects all parties and allows you to restart without having to pay someone else’s expenses right away.

When you have extensive support from professionals, real estate transactions become simpler. The goal of New York-based Elite Properties is to simplify the buying and selling process.

For more in-depth guidance on HOA estoppel letters, get in touch now!

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The Ultimate Checklist For Selling Home in 2023

The Ultimate Checklist For Selling Home in 2023

Right from getting the home in good condition to preparing the papers to sell your home and detaching your emotional attachment to it, can all be a complicated process.

In a situation where there are too many things going on at once, there is a probability of making some wrong decisions or missing out on something very important. That is why it is always a wise idea to have a handy yet ultimate checklist for selling your home.

The process of selling your home can be chaotic and intimidating, depending on your familiarity with the process.

Understanding what must be done before selling your home right from the prerequisites to the acceptance of an offer will help to streamline the process. And the easiest way to achieve that is to put everything on a helpful list that can be easily accessed.

Here is the go-to and ultimate checklist that will help you with the smooth process of selling your home in 2023. So, let’s jump in!

Prerequisites For Selling Your Home

Before you make the list of things to put up into your checklist make sure you are ready with the below prerequisites:

–  Identify your long-term goals.
–  Consider the benefits and drawbacks of selling your home.
–  Assess your ability to move, sell your current house, and purchase a new one.
–  Make a home equity calculation.
–  Do some local housing market research.
–  Determine your selling expenses.

Checklist For Selling Your Home

  • Hire a real estate agent.
  • Make all necessary repairs.
  • Consider the curb appeal.
  • Remove your personal items.
  • Prepare for home staging.
  • Get a pre-sale home inspection.
  • Have a fair price for your home.
  • Prepare closing documents.
  • List your home.
  • Evaluate and negotiate the offers.

Let’s dive deep into these steps one by one.

  • 1. Hire A Real Estate Agent

    Hiring a real estate agent should be the first and one of the most important things on your checklist. Look for real estate agents who have a good reputation, strong sales records, and local real estate experience.

    This will help you get the best recommendations on how to make your selling process smoother. It is advisable to contact a real estate agent one to three months before you plan to list your house.

  • 2. Make All Necessary Repairs

    You’ll want your home to be in good shape as a wise seller so that it can sustain a higher asking price.

    Check for any essential repairs before the inspection to save money and improve your chances of selling your house at the price you want. Never overlook including necessary fixes on your checklist, such as:

    –  Address serious plumbing concerns.
    –  Replace shabby curtains and damaged blinds.
    –  Fix damaged handles.
    –  Fix sloppy cabinet hinges

  • 3. Consider The Curb Appeal

    The exterior of your property will be the first thing a prospective buyer notices while touring it. Spend some time making upgrades that will raise the curb appeal of your house before putting it on the market.

    Increasing curb appeal can be simple and affordable. You can focus on activities like painting the front door, power washing the exterior, landscaping, and so on.

  • 4. Remove Your Personal Items

    The home needs to appear roomy. Remove anything personal from your home in this regard.

    Remove all of your personal belongings from the house, including excess furniture, excess personal care items, religious items, and family photos. Also, clean up the cabinets and other storage spaces.

  • 5. Prepare For Home Staging

    Your property can stand out from the competition by being staged. Take a staging consultation from an expert, if necessary.

    Based on current trends that buyers are seeking, a stager will select furniture and decor to improve the design of your property. Although staging your house costs money, it could help you sell it more quickly.

  • 6. Get A Pre-sale Home Inspection

    Home inspections are typically paid for by buyers, but it’s best to have your house inspected before listing it for sale. Potential buyers get the sense that you have carefully inspected their future house when you conduct a pre-sale home inspection.

  • 7. Have A Fair Price For Your Home

    Your home’s price depends on a variety of factors. By looking up the public data, obtain information on comparable properties in your neighborhood with similar square footage, construction, age, and condition that have recently sold or are now on the market.

    When in doubt, set your home’s price lower. This will invite price competition. However, lowering the asking price is not always a good idea.

  • 8. Prepare Closing Documents

    Ensure that all of your closing documents such as seller disclosure, closing statement, and so on are secure and available in case they are required in the future.

    Ideally, all paperwork will be provided to you at closing by your closing agent or an escrow officer. While they can be a great help, you shouldn’t rely on them entirely.

  • 9. List Your Home

    Make sure you have a solid plan for marketing your real estate listings.

    Taking top-notch, professional shots of your home’s exterior and interior should be on your checklist for selling it. Additionally, you must give a thorough description of the property.

  • 10. Evaluate And Negotiate The Offers

    You’ll enter the negotiation phase once the offers begin to come in. To settle the terms of an offer, there may be a lot of back and forth.

    Take into account every aspect of the offers, including the purchase price, the closing date, and contingencies if any. Choose the best offer, and then your agent and title company will begin the closing process.

The Final Say

It takes time and is typically a big decision to sell your house. Understand what will occur at each stage of the procedure and keep yourself informed to reduce stress. From the first listing until closing day, using a checklist will help you keep organized and get ready for what lies ahead.

For more expert suggestions to simplify your selling process get in touch with us today!

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How Much Does A Home Appraisal Cost?

How Much Does A Home Appraisal Cost?

Home appraisal are widely utilized in real estate to establish property worth for a range of objectives.

A home appraisal plays a crucial role in any transaction, whether you are applying for a mortgage to buy a home, refinancing your current mortgage, or selling your property to a buyer other than an all-cash buyer.

Even without an active real estate transaction, homeowners can benefit from the effort of determining how much to ask for their home on the market or evaluating the financial worth of their estate.

No matter what the purpose is, understanding and considering the cost of a home appraisal is important. So, let us try to understand what a home appraisal is, how much it costs and what factors affect its cost.

What Is A Home Appraisal?

A home appraisal is an assessment of the worth of a home by an appraiser who is licensed or certified to do so. Research into previous sales of nearby comparable homes, a property analysis, current market trends, and the appraiser’s professional opinion support the evaluation.

In simple terms, a house appraisal is a professional’s estimate of the market value of a residential property at a certain time.

Every time a mortgage, refinancing, or sale of real estate is involved, an appraisal is necessary. A home appraisal is an unbiased and objective professional opinion about a home’s value.

The law requires independent, third-party contractors or companies not connected to a bank or lending organization to perform appraisals.

If the transaction involves a purchase and sale of the property, assess the contract price for the home in light of its condition, location, and attributes using the appraisal.

If it is a refinance transaction, the appraisal ensures the lender that he/she isn’t lending the borrower more money than the house is worth.

How Much Does A Home Appraisal Cost?

The lender typically requests that the appraisal be performed since the appraisal mainly serves to secure the lender’s interests.

The borrower often pays the fee. However, if the homeowner requests a private appraiser, they become responsible for paying the fee. You can’t negotiate to lower the price because you can’t change the fixed cost of the home appraisal fee.

The cost of an appraisal can range from $600 to $2,000. But you’ll pay less for a single-family appraisal than a multifamily one.

Due to their size, multifamily properties typically take longer to appraise, bringing their assessment fees closer to $600.

A single-family house evaluation typically costs between $300 and $450. However, this can change depending on a variety of factors. These factors include the size of the home, the property’s value, its condition, and so on.

As mentioned above, a large property will typically cost more to appraise. In bigger cities or in locations where the cost of living is higher the range could be $500 to $800 or more

The Dodd-Frank Wall Street Reform and Consumer Protection Act regulates professional appraiser fees in part. These rates must be reasonable and customary for the geographic market.

The Appraisal Institute, an association of professional real estate appraisers, recommends that qualified appraisers are licensed or certified in each state and have a good understanding of the neighborhood. Federal regulations stipulate that the appraiser must be impartial. He should be free from any direct or indirect financial interests in the deal.

What Does A Home Appraisal Fee Cover?

A home appraisal fee usually covers the expertise of the appraiser, his/her visual on-site inspection of the home. This involves taking pictures and measurements, the appraiser’s analysis of recent comparable sales. The home appraiser provides the appraisal report summarizing the unbiased assessment of value.

Factors Affecting The Home Appraisal Cost

There are various factors affecting the cost of appraisal. We have listed some common factors below. So, let us jump on to these factors:

  • Property Size – If the property size is small, conducting the home appraisal will not take much time. As a result, the cost of the home appraisal will be lower. Similarly, if the property size is larger the appraisal would cost higher.
  • Property Type – The type of property also affects the cost of home appraisal. Whether you own a single-family or multi-family house both will affect the cost. A property often costs more to appraise the additional bedrooms and bathrooms it has. Multi-family homes would also probably deviate from the typical sales comparison approach to value estimation, which can raise the price.
  • Location – The type of property location also determines the home appraisal cost. Big cities and areas with greater than average living expenses have higher appraisal fees.
  • Mortgage Type – Lenders raise the home appraisal cost for jumbo loans. It is because these loans are riskier and not insured or guaranteed. As for the other loan categories, effective from December 2021, the Department of Veterans Affairs increased appraisal fees for VA loans by anywhere between $25 and $400 depending on the region. According to Chase Bank, the typical cost of an FHA loan is the same as that of a standard appraisal.
  • Seasonal Conditions – The appraiser may charge you more during certain times of the year if the situation makes it harder for them to access the property.

Bottom Line

Home appraisals can help understand the financial value of a home for making informed decisions.

Any situation you come across while buying, selling, or refinancing a property would benefit from having a basic understanding of how home appraisals works and how much they cost. The cost of home appraisal varies depending on factors such as the size and complexity of the property.

Get an appraisal from a qualified professional appraiser for accurate and reliable information on your home’s value. Connect with us today for more details!

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How Does An Escrow Holdback Help You Sell Your Home?

You are preparing yourself to close the deal and enjoy the proceeds through the property sale. On the other hand, the buyer just wants to move into his or her new home.

But, guess what?

The landscaping of the home is incomplete or maybe some significant repairs to it are yet to be done.

There is trouble and you really do not want the closing date to be pushed back.

Well, you need not! As you can definitely close on time by requesting an escrow holdback.

If you have never sold or bought a house before, you probably might not be familiar with this real estate term called escrow holdback.

But we have got your back, so let’s dive into understanding what escrow holdback is and how it helps you sell your home on time.

What Is An Escrow Holdback?

In the property selling process, there could be times when the house might not be yet ready, despite the nearing move-in date for the buyer, and this may also put you under the pressure of closing the deal on time.

Similar to this, there are times when a builder or contractor delays completing a new home as the move-in date draws near.

However, the closing can still be done with the help of an escrow holdback, which entails money set aside to reassure the buyer that the seller or contractor will complete specific work at a later date.

In simple words, an escrow holdback is a legal arrangement where a sum of money is kept in an escrow account that is owned by a third party. A holdback escrow account is funded by the seller’s portion of the closing proceeds.

An escrow account is a third-party account where money is held until the specific transaction is finished in accordance with predetermined terms. Its main function is to shield buyers from project delivery delays and sellers from late payments.

A sufficient amount of cash must be kept in the escrow account for the seller or contractor to encourage them to complete the project and prepare the home for the buyer’s move-in.

What Is An Escrow Holdback Agreement?

An escrow holdback agreement will state that a portion of the selling proceeds will be kept in an escrow account, usually by a closing attorney, while repairs or renovations are made.

These holdbacks can be applied to certain defects in the property, including unfinished construction work.

For instance, if a seller lacks the money to buy a new septic system for the home, as per the agreement the repairs could be funded by using a certain portion of the sales proceeds. The sum designated for installing the septic system will be retained by the escrow holder.

The seller will not necessarily have to pay for the work before receiving the proceeds from the sale of the property. Also, an appraiser may occasionally need to look through the work required to request a holdback.

To bring the escrow agreement into action, your lender must approve and sign it at closing. Both you and the buyer must sign the agreement before it can be submitted to the lender.

How Does Escrow Holdback Work?

An escrow holdback begins with an addendum to the real estate contract. It specify the repairs that must be completed, their anticipated cost, a completion date, and the method of payment for the seller or contractor.

Further, the escrow holdback agreement must be signed by both the buyer and the seller. This is done before it can be presented to the lender. If the escrow holdback is permitted by the loan underwriter. The lender will either work with a title company to set up an escrow account or take care of it internally.

With some exceptions, the seller is often obligated to provide the funds for the escrow holdback. The account will be filled with the proceeds from the sale of the property if the seller needs to sell the house to pay for the repairs.

The lender will generally demand that the account balance of an escrow holdback be greater than the expected repair costs.

The additional funds are set aside in case the project’s repair costs rise. Besides, repairs must be finished in a predetermined amount of time.

Lastly, comes the verification part. A final inspection is performed once repairs have been made to the property. It is to ensure that the work has been completed. The escrow account will release the funds if the repairs are accomplished promptly and satisfactorily.

What Reasons Qualify For Escrow Holdback?

For exterior repairs that an appraiser deems necessary, an escrow holdback can be employed. Usually, escrow holdbacks can cover the driveway, deck, fence, landscaping, porch, sprinkler system repairs, pest control, lawn seeding, and so on.

You must finish interior improvements and repairs necessary to ensure the property’s health, safety, and habitability before closing. They are not eligible.

In a nutshell, escrow holdbacks cannot be used for all home repair issues. Lenders generally won’t fund a property with safety and health issues. Typically, escrow holdbacks are used for outdoor or weather-related problems.

Bottom Line

The process of collecting funds from the seller’s proceeds at closing, known as escrow holdbacks. This will return the funds once the property has undergone the required repairs or improvements.

It reassures you that the buyer is committed to the purchase. On the other, the buyer gets the money, if the repairs aren’t completed on time.

Escrow holdbacks are a common occurrence in the real estate market. You can consider requesting an escrow holdback from your lender if necessary repairs are putting your closing date in trouble.

If accepted, it might help you make the repairs quickly and keep your real estate transaction on time. And the selling process smooths enabling you not to push back the closing date. Your lender can assist you in understanding the escrow holdback procedure.

You can also seek advice by getting in touch with Elite Properties today!

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Tax Implications Of Selling A House

Your Absolute Guide To Tax Implications Of Selling A House

The tax implications of selling a house vary depending on different circumstances such as your income level, type of capital gain, and so on. In some cases, they are minimal, while in others, they could be significant.

If you are planning to sell your house or have already done so, knowing the rules and provisions of these tax implications is crucial.

Selling your home is a big decision that can have a long-term impact. Ideally, before you put your home on the market, it’s important to know all the tax implications involved.

Your home is considered a capital asset and any net profit gained after selling the asset is assessed as capital gain hence, capital gains are subject to taxes. However, you may also get an exemption up to a specific limit under the IRS rules in certain circumstances.

Let us dive deep into the following guide about the main tax consequences of selling a home. By understanding these tax implications, you’ll be able to make an informed decision.

So, keep reading!

What Are Capital Gains Taxes?

As mentioned above in brief, capital gain taxes are the taxes imposed on capital gains. In other words, a capital gains tax is the tax that you pay on the net profit gained after selling your capital asset.

Securities, such as stocks and bonds, as well as tangible assets, such as real estate, vehicles, and boats, are subject to capital gains taxes.


 2023 Tax Rates for Long-Term Capital Gains

Here’s how much you’ll pay for profits from taxable assets held for a year or more.


The difference between the price you paid for an asset (your cost basis) and the price you receive when selling it (your selling price) is subject to capital gains tax by the IRS and many states.

How Does Capital Gains Tax Work?

Capital gains tax mainly depends on two main factors – your income level and how long have you owned your home. Considering these factors, you need to understand the two main categories that the IRS has divided capital gains into. These are:

1. Short-term Capital Gain – The profit that is realized from the sale of a capital asset that is held for a year or less is what we call short-term capital gain.

2. Long-Term Capital Gain – The profit that is realized from the sale of a capital asset that is held for more than a year is known as a long-term capital gain.

If you own your house for less than one year, the capital gain that you receive is consider as a short-term capital gain. Whereas, if you have owned the house for more than a year, it will be a long-term capital gain.

As a result, your tax implications will majorly depend on these circumstances and your income.

How Much Is The Tax?

You will be subject to taxation at your standard tax rate if you have a short-term gain. With preferential tax treatment, long-term capital gains are on tax at a rate of 0%, 15%, 20%, or 28%.

However, your income and tax filing status affect these rates.

According to, if your taxable income is less than or equal to $40,400 for single filers, $80,800 for married couples filing jointly, or qualifying widow(er), then some or all of your net capital gains may be subject to 0% tax.

How To Avoid Capital Gains Tax On The Sale Of Your House?

Homeowners are also eligible for a write-off from the IRS, which allows single filers to exclude up to $250,000 of profits and married couples filing jointly to deduct up to $500,000.

You are require to pay capital gains tax on the excess gain if you sell your house for a net profit exceeding $500,000 (for couples filing jointly) or $250,000 (for singles).

For instance, capital gain would be $800,000 if you and your spouse purchased your home for a cost basis of $200,000 and sold it for $1,000,000 many years later.

If you qualify for the specified exclusion, then $500,000 of this would be tax-free, but the remaining $300,000 would be a taxable capital gain.

To qualify:

  • You must have owned the property for at least two of the previous five years.
  • You must have lived in it as your primary residence for at least two of those five years to be eligible. The ownership and residence requirements do not have to be met simultaneously in the same two years.
  • Additionally, you cannot have used the exclusion on a different house within the two years before the sale.

When Is The Capital Gains Tax Due?

You need not need to pay the capital gains tax until you sell your property. You owe any capital gains taxes for the sale of your house at the tax deadline associated with the year the sale closes.

The IRS recommends following their guidelines on this matter because there are several situations that may require you to make estimated tax payments.

Want to avoid writing a sizable check at tax time? Hence, it could be a good idea to report your estimated capital gains tax to the IRS as soon as the sales transaction closes.

The Final Say

When you sell your house, it’s important to be aware of all the tax implications of selling a house. The amount of tax you pay depends on various factors such as the value of the property, your income level, the period for which you are holding your property, and so on.

To reduce your tax burden, do your research to lay out all of your tax options and make sure that you are fully aware of your obligations.

As a last note, it’s important to emphasize that capital gains taxes can be a tricky subject with a lot of grey areas. It’s crucial to seek advice from an expert, licensed tax professional, specifically one who specializes in real estate matters. For more questions on Tax Implications Of Selling A House  you can contact us.

Looking for more profound guidance? Get in touch today with Elite Properties!

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Here’s What You Need to Know About Selling a Vacation Home

Selling your vacation home can be exciting and challenging too!

Well, if you know the right process, you are good to go.

Your vacation home could be your second home. If you are planning to sell your vacation home, you must first need to understand that selling a vacation home is different from selling a primary home where you usually reside.

Understanding this difference in the first place is how you can get started with proceeding to sell your vacation home.

Let’s take a deep dive into this difference and how you can sell your vacation home effectively. So, keep reading!

Understanding the Key Differences Between Selling a Vacation Home and a Primary Residence

The place where you live the majority of the time during the year is your primary home. This period could be six or more months per year.

  • Your primary residence is a place that provides more convenience to you such as it could be near your location of employment. Usually, the address of your primary residence is also listed on your important documents such as your driving license.
  • A second home or recreational residence could be your vacation home. It is generally situated elsewhere than the owner’s primary home. Vacation homes are typically only used during certain times of the year.

The IRS classifies a second home as a “personal capital asset,” unlike your primary home, which is normally exempt from capital gains taxes (with a few exceptions).

Hence, you are required to pay capital gains tax after you sell your vacation home and abide by IRS rules when you file your taxes for the year you sell your second property or vacation home.

In addition to tax implication differences, there are also many other differences in selling vacation homes and primary homes. Also, vacation home homeowners are more dependent on real estate agents for selling than the homeowners of primary homes.

How Can You Sell Your Vacation Home?

Before you sell your vacation home, you need to ensure that you are ready with the prerequisites with other steps. So, here we go!


  • Selling a vacation home can be a daunting task, but with the right preparation and strategy, it can be a rewarding experience. Before listing your vacation home, it’s important to get an accurate estimate of its value. You can use home inspection services, or a real estate agent. You can also use online tools to get an idea of the home’s market value.
  • It’s also important to have all the necessary paperwork ready, like title documents, repair estimates, and marketing materials. Once you have a good idea of the home’s value, it’s time to get it in shape.
  • Make minor repairs and clean up the clutter. Finally, target potential vacation home buyers who are interested specifically in vacation properties.

All this will increase your chances of selling your vacation home quickly!

Researching Your Market

  • There’s no question that vacation home selling can be a lucrative endeavor. But it’s important to do your research first. This includes understanding the market conditions and what properties are currently for sale.
  • You can also interview the real estate agents in the area where your vacation home is to get an idea of the real estate market.
  • Lastly, you also need to do research about the pricing and ensure to determine the fair market value of your vacation home.

Preparing The Vacation Home for Sale

  • When it comes to selling your vacation home, preparation is key. Make sure to clean it and make any necessary repairs before listing it. This will give buyers a good first impression of the property and set the tone for what they can expect.
  • Next, make some changes to the decor that will appeal to buyers. This can help sell your home faster.
  • Finally, keep buyers informed about any changes or updates that happen throughout the home sale process. And we go! By making these enhancements, you’ll be well on your way to a smooth sale!

Marketing For Selling Your Vacation Home

  • After you have a general idea of pricing and the market, and after your home is ready to be sold, start marketing your vacation home.
  • There are a few different ways to market your home, and it all depends on what you’re looking for. Some popular choices include online listings, contacting local agents, or visiting homes in person.
  • Make sure you have all the necessary paperwork ready, including an updated copy of your property tax statement and, as mentioned above, accurate information about any renovations or updates made to the home since purchase.

Listing Your Vacation Home

  • Listing your vacation home for sale can be a demanding but gratifying experience.
  • Before you get started, make sure you have a realistic idea of its market value. This will help you set a fair price for your home.
  • Once you list your home, maintain a marketing campaign throughout the process and be ready to handle any inquiries or offers that come in.

Negotiating And Closing the Sale

  • Once you start interacting with your potential buyers, you need to make sure that you are acing the game with great negotiation skills.
  • The goal of negotiating and closing the sale of your vacation home needs to be to reach a mutually beneficial agreement.
  • Correctly price your home and be ready to answer any questions a potential buyer may have to help them feel confident about making an offer.
  • Before you put your home on the market, make sure all the paperwork is completed and ready to go to speed up the process.

Bottom Line

Selling a vacation home can be a smooth process if done right.

By following the above steps, you’ll be on your way to a thriving sale. Additionally, ensure to consider some essential details before listing your home for sale, especially the tax consequences of selling a vacation home.

Need more expert advice? Reach out to Elite Properties today!

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Cash Offer In Real Estate

A Guide To Cash Offer In Real Estate

In real estate, Cash Offer in Real Estate are often a go-to-choice, whether the buyer wants to compete with other buyers or take fewer financial risks, the seller wants to sell quickly, or both parties want to simplify the transaction.

As a result, it are often the best option, especially for buyers in certain circumstances. Buyers do not need a mortgage or any other financing when proposing a cash offer because they are not required to take on any financial risks.

To understand more about what a cash offer is, whether making a cash offer is a good idea or not, and what you need to do to make one, read on!

What Is a Cash Offer?

A cash offer in real estate means that a buyer offers to purchase a property where he or she is not using financing to pay the price of the property. This helps to bypass many time-consuming and expensive stages in the process that might make the house stay on the market longer than a seller would want.

In simple words, when a buyer can buy a house outright without taking out a mortgage loan, it is what we call a cash offer in real estate. Sellers usually prefer all-cash offers because they frequently close more quickly and have fewer risks than mortgage-contingent offers, which can experience delays and rejections.

Who Makes a Cash Offer?

A buyer is one who can make a offer to buy in cash in real estate. Particularly, this is a traditional buyer who has ready cash in hand or liquid assets to buy the house. It could also be a case where the buyer would have sold his or her previous property and kept the proceeds to avoid taking out a mortgage on their new property.

How is it Beneficial to Buyers?

There are many reasons why making a cash offer for a real estate property can be a wise decision for a buyer.

You can beat your competitor buyers and convince the seller to accept your offer by making a offer, which is usually accepted more quickly than other types of offers. Assure the seller that their property will sell as soon as possible.

For a buyer, one of the benefits of giving a cash offer is that it allows you to negotiate with the seller directly. Plus, another advantage is that closing the deal is usually easier if you’re able to come up with the full amount right away.

So, if you’re looking to buy a house while taking advantage of the latest market conditions along with an easy process, consider making a cash offer!

How Is Cash Offer Beneficial to Sellers?

Having cash offers makes the entire selling process quicker and smoother for sellers. Cash offers can delight the sellers mainly because of two reasons, the parties would close the deal sooner and the other that there is less risk.

The average time it takes to close on a standard sale is 49 to 56 days. It can be significantly shortened through cash offer sales involving direct purchasers.


Selling house to cashbuyer


Offer the seller the entire amount of the property without any mortgage loan or other financing. It becomes tempting for the seller with a quick sale and fewer closing expenses. The risk factor for the seller is low regarding the failure of the deal, as the buyer need not require appraisal and mortgage underwriting.

How To Make a Cash Offer?

Purchasing and selling homes with a cash offer differs from those with a mortgage. Here, the seller receives the offer from the buyer where the buyer may offer to purchase the property with a cheque or electronic transfer of funds.

However, as a buyer apart from the cash offer, and purchasing price you also need to prepare to incur expenses like property tax, insurance, and moving expenses.

Apart from all this, a seller may simply not accept the cash offer and as a buyer, you may require to show documentation and proof that you can pay the cash amount.

Once the seller accepts your offer, you’ll need to come up with an agreement on terms and conditions. Make sure to consult with an experienced real estate agent before making a cash offer – they can help you prepare the paperwork and ensure everything goes smoothly in the process!

Lastly, also remember that you would pay a big cash amount for the home price. Ensure the property is free from any problems by investing in a home inspection if your cash offer is going to accept.

Weighing the Advantages and Disadvantages

To sum up, here are some pros and cons of of it in real estate that you can consider.


  • Quicker closing for both parties.
  • Lower closing expenses are incurred.
  • Interest charges on the mortgage is saved.
  • As a seller, you may end up selling your property quickly.
  • As a buyer, you can have better-negotiating power.


  • The possibility of lower selling price due to lack of competition in buying the property.
  • Great loss of liquidity on the buyer’s end.
  • Without a mortgage, buyers lose out on certain interest or tax deductions.
  • Investor buyers may unnecessarily bid up the price.
  • A lack of trust may disrupt the whole transaction.

The Final Thoughts

A cash offer is a great way to ease up the buying and selling power in real estate. However, you also need to consider individually how beneficial it is to you as a buyer or seller.

Apart from this, you should also ensure to properly analyze the pros and cons of getting into a this transaction. Lastly, it is not too overstate that you need to do in-depth research before taking a decision.

Alternatively, you may also consult a real estate agent or real estate solutions companies. Looking for more expert guidance? Get in touch with Elite Properties today!

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5 Best Ways to Increase the Value of Your Home

Increasing the value of your home can get you a great deal! But what is the heavy lifting that you are required to do to increase this value?

Regardless of whether you plan to sell it or renovate it, making appropriate improvements can increase the value of your home. Especially when selling your home, it’s essential to ensure that the value of your home is as high as possible.

There are several factors that impact the value of homes such as the location of your property, the age, size, space, and condition of the house, market conditions and the list go on. However, irrespective of these factors you can still increase your home value by making new improvements and upgrades to it.

Wondering where to start? We have got your back!

Let’s jump into the 5 best ways that can help you raise your home value.

Repaint Your Home

Home improvement or renovation can be a daunting task, but it’s definitely worth it to increase the value of your home. One of the best ways to do this is by repainting the home.

There are many types of paints and stains available that will perfectly match your home’s décor. It’s a smart investment to have a painter come out and paint your house – you’ll surely see a noticeable improvement.

If you’re looking to spruce up any dull areas, try adding new trim or curtains to bring a little color to your home.

Repainting your home is a great way to upgrade it without spending a fortune – and the best part is it is comparatively easier than other major home improvement options.

Add New Features to Your Home

One of the best ways to increase the value of your home is to add new appealing features.

There are many different options available, so it’s important to find the right one for you considering your spending budget and the condition of your home. Some popular features include porches, in-ground pools, and gazebos.

Other trendy options are to add smart features such as fire detectors, smart lighting, carbon monoxide detectors, smart doorbells, door locks, and smart speakers.

It’s important to consult with an expert before making any such decisions, as the right feature for your home can make a real difference.

Adding an attractive feature to your home is yet another effective way to see the home value jump up!

Update Your Home Flooring

Updating the home flooring is a common yet compelling improvement that homeowners make, but it’s often overlooked.

Having suitable flooring for the home is important for its look and feel, so ensure it is updated at the right time whenever required. Be sure to select the type that fits your needs and budget from the available options.

We have listed a few quick tips for updating your flooring to productively increase your home value:

  • Add new carpet to the area wherever required.
  • Change out the door mats or stair runner with trendy ones.
  • Update your blinds and curtains that suit best with your décor.
  • Last but not least, share good pictures of your renovations on social media!

Eliminate Unused Furniture

When it comes to making improvements to your home, there’s no better way to add value than by getting rid of unwanted furniture.

By freeing up space and making room for new captivating items and useful furniture, you’ll see your home’s value rising significantly in no time.

Not to mention, selling your unwanted items online or through a consignment shop can be a great way to make some quick cash. And of course, don’t forget to keep your eyes open to garage sales and estate sales to score the best deals on furniture!

Install New Lighting

One of the simplest and most cost-effective ways to do home improvements is by replacing old lighting with stunning yet energy-efficient options.

Various types of lights are available, so you can find one that fits your style and home. Additionally, installing light fixtures in strategic locations can help boost the aesthetics of your home.

Get creative and experiment with different types of light to make your home look its best!

You Can Also Read: 5 Reasons That May Reduce The Value Of A House

How To Improve Home Without Spending Much?

There are many ways to update the look of your home without having to spend extensively. Here are a few fantastic ideas that you can consider:

– You can change the décor and furniture under your budget. This can involve updating the paint colors, buying new pieces of furniture, or swapping out old pieces of furniture for newer versions.

– You can upgrade to hardwood, laminate, tile, or cork floors.

– You can also update the wallpaper, accessories, and other décors.

– Purchase new paintings, throw pillows, or lamps to add a more modern or stylish look to your home.

– Install smart thermostats, LED lighting, and other home appliances. This can help you save energy and improve the efficiency of your home overall.

Bottom Line

Enhancing your home effectively is crucially essential to increase its value. You can implement the most convenient yet appropriate options from the above-mentioned suggestions to raise your home value.

To sum up,

  • You may start by painting your exterior and interior walls with a fresh coat of paint, this will instantly add value to your home.
  • Next, you may upgrade any unfinished or non-functional features of your home – such as adding a new bathroom, kitchen, or deck.
  • Further, you may update the flooring in your home to give it a fresh look and feel.
  • Lastly, eliminate and replace unwanted furniture and add new compelling lighting to give a delightful look to your home.

These simple steps will help you raise the value of your home effectively and you’ll be able to upgrade your home without having to spend a fortune.

Looking for more expert advice? Get in touch with Elite Properties today!

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