How to Sell a Home You Bought Outright

Selling your house can take some time.
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Buying a house outright means you paid cash for it and don't have a home loan or mortgage to pay off. Your only payments other than utilities will be real estate taxes and homeowner insurance. That gives you a valuable asset which you can convert into a substantial amount of cash if you sell it. You'll get the entire sales price without having to pay off any loan.

Prepare the House

Spruce up your house for sale by making any repairs or improvements. Find a good real estate agent. You may think you'll save money by selling your house yourself, but most experiences indicate you'll sell it more quickly and get a better price if you use a good broker. Agent advertising and networking are an asset. Your agent will help you set a sales price that's comparable to what similar houses in your area are selling for. Get your own appraisal if you've owned the house a while and aren't sure of its value.

Pick Your Time

Time your sale. If you own the house outright, you're probably not under pressure to sell immediately to get rid of mortgage payments. Most people think of moving near the end of the school year so late spring and early summer are usually good times. Most real estate agents say your first offer is your best offer, but if you own your house outright and are under no time or financial pressure, be patient until you get a good offer.

Think About Taxes

Compute the tax implications of your sale. Profits are exempt up to $250,000 if you're single, $500,000 if you're married, on the sale of your primary residence. You'll have to pay capital gains taxes on profits above those limits. If you bought a house outright for $250,000 and sell it for $350,000, you won't have any gain if you're married and file your tax return jointly.

Finance It Yourself

Consider owner financing if you don't need all the cash from your house immediately. This will save both you and the buyer some money on closing costs. This may save you some taxes, too, if you get paid over several years rather than all at once.

Lease to Own

Use a "lease-to-own" option if you don't need all the cash from the sale of your house to buy another one. This is a variation on owner financing in which part of a monthly rent payment goes toward buying the house. If you can be patient about recovering what you paid when you bought outright, a lease-to-own arrangement might make it easier to find a potential buyer in a slow market.

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