How to Get Ready to Sell a Vacation Home

How to Get Ready to Sell a Vacation HomeAs a homeowner, it can become a burden to maintain a property or deal with tenants year after year without making full use of the vacation home. When it comes time to sell, what should homeowners know to get a vacation home sold quickly and reduce their tax burden?

Consider the following questions when planning to sell a vacation home in the next few years.

When Can You Sell?

A vacation home such as those located within resort communities may have guidelines for when to list a property for sale. Be aware of any restrictions pertaining to community condos or timeshares when selling a vacation home. Speak to a local real estate agent experienced in selling vacation homes to get more details on the best time to bring a property to the local market. Sellers may want to list during the busiest season in the community—for instance, many vacation homes are listed during the summer, but other homes near popular ski towns may have their busy season during the winter. A seller may face more competition during the busiest season, but with more buyers available, sellers have a good chance of making more money on a sale and selling faster.

What Should You Do Before Showing the Property?

Much like selling a primary home, a vacation property should undergo a good cleaning and any minor repairs should be made prior to listing. The carpets need to be cleaned, walls painted a neutral color and the interior and exterior of the property needs to be cleaned and made as inviting as possible to attract interested buyers.

How Can You Minimize Your Tax Burden?

According to tax experts, it is possible to reduce a seller’s tax bill by planning ahead. Homes that have appreciated in value and are sold may result in a considerable tax bill without planning ahead. A tax expert can go into more details about the $250,000/$500,000 exclusion that allows individuals and married couples to recoup more of their profit from the sale of a vacation home. However, in order to benefit, a homeowner must claim the property as a primary residence for 2 out of the last 5 years of home ownership before selling the property. Vacation homes that may qualify for this exclusion include:

  • Houses
  • Condos
  • Apartments
  • Stock-cooperatives
  • Fixed mobile homes

This important exclusion can help a seller keep more of the profit on the sale of an appreciated home. Another option to avoid a tax bill on the appreciation of a sold property is to use a tax-deferred Section 1031 exchange. The untaxed gain would be rolled over into a new property that would replace the recently sold vacation home. However, those looking to sell a vacation home must plan in advance and work with a tax accountant in order to make the most from such exclusions and deferments.

Learn More Before Selling a Vacation Home

Prospective sellers need to know how to make the most from the sale of their vacation property. Working with an experienced real estate agent and tax accountant can help reduce a seller’s tax burden and get vacation homes sold quickly near popular recreation areas.

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