Before you downsize or make any other changes in your housing situation, you need to think twice about some small and not-so-small charges that can take bites out of any profits.
– Move on your own and you may need just a small truck, some boxes and a strong back. But if you have a lot of possessions and are moving a distance, you`ll usually need to hire a moving company, and the cost can run into the thousands.
– If you`re selling your house, most real estate agents` commissions will run between 5 and 7 percent, depending on the strength of the market and competition in your area. If you try instead to unload your house on your own, it will involve some advertising expenses, plus a lot of time and energy.
– If your new property costs less than your old, you`ll pay a federal capital gains tax on the difference-unless you reinvest the profit from the first house in the new house within two years. The same dilemma occurs if you`re selling a house and not buying another. If you`re under 55 years old, the tax will be a maximum of 28 percent on the profit from the sale of the house. If you`re over 55, you`re allowed a onetime exemption on the first $125,000 of gain.
– Don`t forget all the fees associated with changing residences-for a mortgage, an attorney, a home inspection, a title search and other services.