Preparation with your Realtor
Your agent will discuss these in more detail but here are some considerations:
- Always provide the agent with a key. In Vermont, we often don’t lock our homes but once you are on the market, the agent should use a key.
- Try to leave during all showings. Private viewings are more relaxed and buyers can be vocal about their likes and dislikes.
- Listen to your agent as to how they will enter your property. Coming in through the garage might not be a good first impression.
- Clean and tidy up. Buyers will like a neat home but don’t obsess on it either. A buyer isn’t going to rule you out just because a bed isn’t made.
- Remember smells. Smoking, cooking strong fish, stale kitty litter, or even heavily scented candles or cleaning agents can be a subliminal turn-off.
- Keep the outside lawns, garden beds mowed and looking good. Likewise, driveway ruts and washboards on steep driveways should be smoothed.
- Discuss pets with your agent. You’re not going to have a good showing if the dog barks the entire time. Tell the agent which pets should stay in or out.
- While it’s your home and you want it to personally express yourself, consider the wide range of people who might see it. Strong political or religious displays or ‘off-color’ humor might offend some buyers.
- Too many possessions can make rooms look small. Consider thinning out extra furniture, wall hangings, and shelf clutter.
Your agent can give you more tips if you’d like. You’re both trying to present your home in the best possible light, help make a showing a positive experience and increase the odds of a good sale.
Smoke and CO Detectors
Smoke detectors have long been required in single family homes and apartment buildings. The old ionization detectors have to be replaced with a newer photoelectric type. These have been shown to be more effective in detecting a smoldering fire. They can be obtained in hardware and general merchandise stores. Look for a P icon on the label for the photoelectric type. Placement and number of detectors are discussed in the links below. Carbon monoxide detectors are also required in homes and apartments prior to a transfer of property. CO detectors warn occupants of lethal levels of this invisible, odorless gas.
Sellers will need to certify in writing at closing that they have installed smoke and CO detectors required by law.
Ask your agent where to find the detectors you’ll need. Most hardware stores carry them and many offer smoke and CO combination detectors.
Besides a P inside a circle, showing that it’s photoelectric, you’ll need to provide the year of manufacture at closing, so save the literature and/or your receipts.
For fire and safety codes, here is the 2015 Vermont code.
In Vermont, real estate agents actually practice law and we take this very seriously. Usually the agent writes the contract called the Purchase and Sale Agreement (P&S), a binding agreement between you and the buyer. It’s also not unusual to have an attorney review it as part of the terms.Your agent will discuss the specifics to this multi-page contract. It will include the buyers’ specific information, a selling price, deposit amount, closing date, a financing clause if needed. Other typical contingencies include a structural inspection prior to a sale or other needs you or the buyer need in order for you to transfer title.
Often attached to the P&S will be a copy of the Seller Property Information Report (SPIR). This is a questionnaire that you filled out, usually when you listed the property with the agent. It has become the norm for buyers to request these and for sellers to provide them. It asks about roof leaks, rights-of-ways, permits, town assessments and other information about the property. The reason it’s attached to the contract is so that you and the buyer acknowledge your disclosing this information.
If your home was built in 1978 or before, by state and federal law, you’ll also need to disclosure the existence of any lead paint tests you may have done. (See our Lead Paint Page .)
The P&S will also have legal language about the title, fees, pro-rations and other various taxes like the Property Transfer and Withholding if you are an out-of-state owner. It will also detail agent representation. It is a specific sequential road map for the ultimate transfer of the property. Your agent and your attorney will represent your interests throughout the process.
The sequence and timing are critical for a smooth transition. Often you’ll need to know the major contingencies have been satisfied before committing to expenditures associated with your move. Your agent will help coordinate all this, communicate with you, the buyer or the other agent if there is one and the attorneys for the parties to make sure the transaction goes as smooth as possible.
Advising you how to prepare, effectively marketing your property and showing your property, putting together the contract and finally helping your attorney prepare for the closing and transfer of the property, your agent will earn their ultimate commission.
IRS Rulings on Residential Sale Tax Exemptions
In 2003, the IRS issued new rules interpreting the $250,000 principle residence sale tax exemption (up to $500,000 for a married couple filing jointly). To qualify, the seller(S) must have owned and occupied their principle residences an “aggregate” of two of the five years before the home sale. Occupancy doesn’t have to be continuous. The residence doesn’t have to be the seller’s principle residence at the time of the sale. This tax exemption can be used over and over again without limit, but it can’t be used more often that every 24 months. Only one spouse‘s name needs to be on the title as long as both spouses meet the occupancy requirements. If title is held in a living trust, the full tax exemption is still available.
You must be able to prove that it is your principle residence to get the exemption. Proof includes automobile registration, local bank accounts, voter registration, employment, and income tax returns. A partial $250,000 exemption is available for home sales with less than 24 months of ownership and occupancy if the reason for the sale is a change of employment location, health reasons for illness treatment or to care for a family member, and unforeseen circumstances.
Unforeseen circumstances include death, divorce, unemployment, change of employment leaving the tax payer unable to pay the mortgage or basic living expenses, multiple births from the same pregnancy, damage to the residence, condemnation, and involuntary conversion of the property. Partial exemptions are available based on the percentage of the 24-month occupancy time.
Inter-spousal real estate transfers, either during the marriage or as part of a divorce or legal separation, are tax-free. If the couple retains ownership, but just one spouse remains living there, each spouse can claim up to $250,000 tax free sale profits if the spouse living in the home meets the two out of five year occupancy test.
You can also use a principle residence exemption in the sale of adjoining land – even if the home isn’t sold at the same time. The land sale can qualify for the exemption if the parcel is sold within 24 months before or after the sale of the principle residence.
A surviving spouse can claim up to $500,000 principle residence sale tax-free profits if the home is sold in the year of the spouse’s death. If the house is sold after the year, the exemption reverts to $250,000.
When a principle residence co-owner sells all or part of their interest, that sale can qualify for the $250,000 exemption.
A vacation home or second home normally doesn’t apply. If the owner converts it to a rental property however, they can make a Starker tax-deferred exchange, an exchange for another qualifying investment or business property at a later time than the sale of the relinquished property. The Starker exchange rules are that the sales proceeds must be held by a third-party intermediary, the replacement property must be designated to the intermediary within 45 days of the sale, and the acquisition must be completed within 180 days after the sale of the old exchanged property.
When buying, selling, or transferring a property or business, we recommended that you discuss your plans with an accountant, tax consultant, or estate planner to advise you on specific implications.