Through the traditional method for selling a house, you may have to spend weeks fixing your house up and staging it before you list it for sale. Selling property below market value tax. Then, you may need to endure weeks or even months of showings before a buyer is found. Negotiations ensue, and this is followed by waiting numerous weeks for the buyer’s financing request to get approved. Can you sell a house for more than appraised value, when you need to sell a house quickly, selling it at market value may not be suitable. However, if you sell a house below market value, will you face complicated tax burdens?
Understand Your Situation
Selling property for less than market value, assessed value and market value are often confused. The assessed tax value is determined by your local tax assessor’s office, and it generally is not aligned with the market value. The assessed value may only be adjusted once every few years, so it is often lower than the market value. Market value, on the other hand, may be based on recent sales data for comparable homes. The market value can be determined by your home’s appraiser. When you look at the tax implications for selling a home below its value, the market or appraised value is being used.
Pay Attention to Tax Law
There are many reasons to selling a house below market value. For example, you may need to sell the property quickly after inheriting it so that you can settle the estate. Perhaps you are going through a divorce, or you are trying to avoid a foreclosure. Regardless of the reason for selling it below market value, be aware that you cannot deduct a taxable loss in this situation. On the other hand, a loss could potentially be deducted when the home sells at or above market value. Usually, this type of situation arises when the home’s value has declined significantly since it was acquired.
Focus on Other Expenses
If you have decided to sell your house quickly by listing it below market value, be aware that some closing costs and other expenses may still be incurred. Any time you list your home on the market, you may have to pay up to or more than 10 percent of the sales price in closing costs. Real estate commissions often account for a large portion of these costs. You may also need to pay for repairs and make-ready expenses so that the home is appealing enough to attract a buyer quickly.
Request a Cash Quote for Your Home
Is there a better way to sell a house quickly? At InsightfulREI, we buy houses fast, and we are ready to make a cash offer on your home. When you sell your house for cash to us, you can sell it in its current condition and without delay. You can also avoid paying real estate agent commissions so that you keep more of your cash in your own hands. To request a cash offer for your house, contact InsightfulREI today.