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Taxes on Your Home When You sell

What Taxes Do You Pay When Selling Your House?

Speaker 1:

Let’s talk about what taxes you need to pay when you’re looking to sell your house in Berks County. Whether you are selling with a real estate agent or selling with a cash buyer, it’s a little bit different. So let’s talk about that. At Berks County House Buyers, when we are purchasing a house, cash, no inspections, no contingencies, we are always giving an offer that is what the seller will net. Sometimes they actually make a little more than what we tell them. Let me tell you why. It all has to do with taxes. What taxes are you responsible for? What do you have to pay and what do you not have to pay when you sell your house cash?

When we make sellers an offer on their home in Berks County, we are paying what’s called transfer tax. Typically, the seller pays a percentage of transfer tax and the buyer pays a percentage of transfer tax. But when we buy, we pay all the transfer tax. So we are not making you pay your transfer tax, which is just tax that you get charged to transfer the property from you to our company, Berks County House Buyers. So our company takes care of paying your side of the transfer tax and our side of the transfer tax.

So outside of transfer tax, there are some closing fees. There’s paperwork the title company does and things that they record. And a lot of times the seller during a normal transaction also gets charged for those. But when you sell to Berks County House Buyers, our goal is to make the process as easy as possible, and we want you to know what amount you’re walking away from the settlement table with. So we pay transfer tax, and we pay all of your fees so that you don’t have to pay any of the title company fees.

Now, there are property taxes. If you are behind on property taxes, those will have to be paid off at settlement before the house can transfer from you to our company. So the property taxes will come out of your proceeds. So say I make you an offer of $100 000 cash on your property in Berks County, and we do a title search and we find out you owe $10,000 in back taxes, back property taxes that you have not paid. The title company has to pay off those back property taxes before they’re allowed to transfer the property from you as the seller to us as the buyer.

So instead of getting $100 000 at settlement, you’ll get $90,000 at settlement, the 100 000 minus the 10,000 that you still owe in property taxes. If all your property taxes are up to date and paid for the whole year and say, we come in and we’re buying the house in the middle of the year, the title company will prorate your property taxes. That means if you have paid your property taxes through the end of December and we come in and we buy the home in October, the title company’s going to give you money back. Meaning, we are going to pay you money to reimburse you for the property taxes that you have already paid. So it’s not like you’re paying your property taxes for us. We are giving that money back to you to reimburse you for property taxes you paid because you won’t be living in the property at that time. So you’re getting that property tax money back.

So just to recap, we pay all your transfer tax and fees so you don’t have to worry about any of that. Any backed property taxes will come out of your proceeds and be paid off at settlement, so don’t pay them in advance. Sometimes we have sellers that’ll say, “I borrowed money from family and I’m trying to pay my property taxes to get caught up before I sell it.” And I say, “Don’t catch up. They will get paid off at settlement when we buy the property.” And if you’re up to date on your taxes and you’ve already paid them through the end of the year or midway through the year, don’t worry about having money out there for the time you’re not living in the house. Because at settlement, we’re going to pay you back for any property taxes that you’ve already paid.

If you have more questions about your tax situation and selling your home in Berks County or you want a free no obligation consultation, give us a call at Berks County House Buyers 610 816 6205, or check out our website where you can find testimonials and more videos with frequently asked questions at berks610.com.

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