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Life Events

Places Where Americans Live the Most Balanced Lifestyles

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

U.S. Household Incomes
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As Americans, we’re often focused on status markers, such as the amount of money we make. But research indicates that the time we spend with people we care about, good health and income equality are some of biggest factors that lead to happiness. Feeling fulfilled is about so much more than how much we earn. It comes down to what we have to do to earn it, what we get in exchange for it and whether we have the time and health to enjoy our friends and family.

In other words, a balanced life.

To figure out where people are most likely to find that kind of balance, we compared seven measures in the 50 biggest metropolitan areas of the U.S.

We looked at the following (full methodology below):

  • Average commute times
  • How much of their income residents spend on housing
  • How many hours people work compared with how much they earn
  • Local income inequality
  • How many people are in very good or excellent health
  • Whether they get enough sleep at night
  • How local prices for typical consumer goods and services (excluding housing) compare with the national average

Below are the places that ranked highest — and lowest — for 2019.

Key takeaways

  • Minneapolis takes the top spot for places with the most balanced lifestyles with a final score of 77.4, mainly due to good health and high incomes combined with a moderate cost of living.
  • Kansas City, Mo., and Salt Lake City came in closely behind, with final scores of 76.0 and 75.7, respectively
  • Miami ranked as the metro with the worst lifestyle balance, with a final score of 24.0. High economic inequality, expensive housing and lower incomes are the primary hindrances to the balance.
  • New York and Riverside, Calif., filled out the bottom three, with final scores of 25.4 and 26.0, respectively. Last year, Riverside was included in the Los Angeles combined statistical area.
  • Midwesterners might find it easier to lead balanced lives. Five of the top 11 cities in this study are in this region: Minneapolis, Kansas City, Cincinnati, St. Louis and Columbus, Ohio.
  • The high costs of living in coastal cities can make it trickier to find the right balance between quality of life and financial demands. Of the 10 cities with the least balanced lifestyles, nine are on or near the coastline.

Metros that offer a balanced lifestyle

The map above includes the 11 major cities (with the last two tied) that provide the most balance to residents — where it’s less of a grind to just make a living:

1. Minneapolis
2. Kansas City, Mo.
3. Salt Lake City
4. Cincinnati
5. Raleigh, N.C.
6. St. Louis
7. Portland, Ore.
8. Denver
9. Hartford, Conn.
10. Virginia Beach, Va. (tied)
10. Columbus, Ohio (tied)

If you’re in search of a more balanced lifestyle, you might want to consider a move to the Midwest. Five of the top cities are located here.

Overall, these cities score best in some categories but not others. They score well by having low income equality, low housing costs relative to income, better health outcomes and shorter commutes. Here’s a look at which cities stand out for different factors:

  • Minneapolis was No. 1 overall, and the second-highest city for percentage of residents in very good or excellent health at 57.1%, second only to Washington, D.C. Denver was the other top city that ranked well for residents’ health outcomes, with 56.6% in optimal health.
  • Cincinnati offers the lowest relative housing costs of the top-ranked cities, with a typical resident spending 19.3% of income on housing costs. Kansas City and St. Louis also score well here, with housing costs at 19.5% of income.
  • Cincinnati’s low costs don’t stop at housing. It has the lowest prices on goods and services of any major city, with costs 7.3% below the national average. St. Louis had the next lowest costs, with prices 7.2% below national levels.
  • Hartford. (No. 9) is the city ranked in the top 11 with the highest hourly wages — on average, workers here can earn $50,000 a year with just 24.9 hours per week. Minneapolis (No. 1) also scores above-average here, with a typical worker working 26.8 hours in a week to earn a $50,000 annual income.
  • Denver is where residents are the most well-rested, as only 26.9% of residents say they get fewer than seven hours of sleep a night. Cincinnati and Raleigh locals are also among the U.S. city dwellers more likely to be getting sufficient sleep.
  • Salt Lake City (No. 3) and Kansas City (No. 2) have the shortest commute times of the top group, at 22.4 minutes and 23 minutes, respectively.

10 worst metros for a balanced lifestyle

There are also the cities where high costs can make it hard to get ahead, block locals’ efforts to build up savings and add up to more stress and a bigger mental labor load. The table above shows the 10 cities that scored the worst for lifestyle balance.

One commonality stands out: Many of these are coastal cities. From Miami and Tampa in Florida to San Francisco and Los Angeles in California, down to Houston and New Orleans in the Gulf Coast, these cities prove that it takes more than proximity to a beach.

The 10 worst cities scored poorly across several ranking factors: housing costs relative to income, prices on goods and services, income inequality and commute times. Some of these cities do manage to pull ahead with higher wages — meaning a typical worker can earn $50,000 per year in fewer hours.

Here are some key points on the worst cities:

  • Miami, Los Angeles and Riverside earned their spots thanks to high housing costs. Miami has the highest housing prices relative to local incomes, with these living costs eating up 28.8% of earnings. But Los Angeles is right behind it at 28.7%, followed by Riverside with 27.0%.
  • New York City is ranked second worst for a reason. Of all the 50 major metropolitan areas we studied, the Big Apple has the highest costs on goods and services at 12.9% higher than the national average. It also has the worst commutes and least favorable score for income inequality.
  • The worst cities had some of the worst health outcomes, too. Houston, in particular, has the fewest proportion of residents reporting very good or excellent health — just 39.2%.
  • Some of the worst cities have high costs but also offer higher incomes. That put a few of them among the cities where it takes fewer weekly hours to earn $50,000 per year: San Francisco, New York and Philadelphia. In San Francisco, earning that amount can be done in just 20.5 work hours.
  • Philadelphia and Memphis, Tenn., are among the cities where people are less likely to get enough sleep. In both cities, around 41% of locals get less than seven hours of sleep each night.

How the 50 biggest U.S. cities stack up for balanced living

Our rankings show how local labor markets, pay, costs and other living conditions can add up to have big effects on residents’ lifestyles.

In more balanced cities, locals can more easily cover bills without overworking and economic opportunity is more accessible, which helps create positive health outcomes. But in cities that rank poorly for balance, residents have to make significant personal sacrifices: working more, accepting longer commutes or spending more of their income on housing.

Here are the full rankings:

4 tips to balanced finances and living — in any city

Leading a balanced life is easier when you’re managing your money well and your finances are functioning as they should be. No matter where you live, you can find ways to build a better financial foundation to lead a balanced life. Here are some suggestions to get you started.

Keep recurring living costs affordable. While you can’t decide what your local housing market and rent costs are doing, you do have some control over how they affect your budget. When choosing a home, for example, prioritize affordability over other factors.

Look for other major costs to cut out, too. Can you get a cheaper phone plan that still meets your needs? Would it be cheaper to use public transit than continue to keep and make payments on a car? Lowering these kinds of costs will help you save now, and in the months going forward.

Check your discretionary spending. On top of inspecting monthly costs, track your spending day to day, too. Pay attention to where you tend to spend a lot on “wants.” These could include categories like dining out, purchases on alcohol or tobacco, entertainment and apparel and accessories.

These optional expenses could be opportunities to rein in costs a little to build more of a buffer into your budget. You can cancel subscription services you rarely use, whether it’s video streaming or a neglected gym membership. Cutting back on eating out just once a week could be a fairly painless way to free up $50 or more per month, for example. Instead of heading to a bar or club and paying upward of $10 per drink, you might host a bring-your-own-booze get-together instead.

Limit and pay down debt. Paying down debt can be a burden on your budget and your stress levels. It’s wise to avoid debt whenever possible and prevent taking out new loans or racking up balances on credit cards.

Already have debt? Focus on paying it down. The most effective way to pay debt off quickly is by making extra payments above the monthly minimum. You can also look for ways to lower your debt costs, such as refinancing or consolidating debt. If you consolidate credit card balances, for instance, you can combine them into a single loan that could have a lower interest rate. You’ll also have the chance to choose a different loan term that could lower monthly payments to keep them more affordable.

If you’re truly struggling with debt and don’t see a way you can reasonably afford to pay it back, it can be hard to find a way out. Consider working with debt relief programs that can help you manage debt more effectively and lift some of the burden.

Focus on more than financial health. Working toward raises and making progress on money goals can be worthwhile investments in your financial future. But these objectives don’t have to come at the expense of your health and well-being.

Building strong relationships and a sense of community can help you establish a life of connection and meaning, for example. And investing in physical health through sufficient sleep, nutritious eating and an active lifestyle will help you feel better now and is a worthy investment in your long-term wellness.

Living a balanced life, after all, is about giving appropriate attention and resources to important areas of our lives. Balance efforts at work and in your finances with care for your physical, mental, emotional and social health.

Methodology

The top 50 metropolitan statistical areas (“MSAs”) are ranked on a 100-point scale on the following seven measures:

  1. Average commute time, as reported in the 2017 American Community Survey (“ACS”) from the U.S. Census.
  2. Percentage of income spent on housing, calculated as (the median monthly housing cost) / (median household income / 12 months), as reported in the 2017 ACS.
  3. The average number of hours per week a person would have to work to earn $50,000 a year, calculated as (average earnings for full-time workers) / (average hours worked per week), as reported in the 2017 ACS.
  4. Gini coefficient to represent income inequality, as reported in the 2017 ACS.
  5. Goods and service costs, relative to the national average, calculated as a simple average of Price Index for Goods and Price Index for Other, as reported by the Bureau of Economic Analysis in the “Real Personal Income for States and Metropolitan Areas, 2016” release.
  6. Share of the population in very good health, calculated as (percentage of the population in very good health) + (percentage of the population in excellent health), as reported in the 500 Cities Project (2017) from The Centers for Disease Control and Prevention (“CDC”). Data was missing for the following MSAs, and so the state averages were used: Raleigh, N.C.; Las Vegas; Dallas; Detroit; Seattle; San Diego; San Jose, Calif.; Boston; Philadelphia; San Francisco; and New York.
  7. Share of the population that gets fewer than seven hours of sleep a night, as reported by the CDC.

The sum of all ranks was then divided by seven, for a maximum possible score of 100 and the lowest possible score of zero.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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Life Events, Mortgage

The Risks and Rewards of Out-of-State Investment Properties

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Mortgage

They say real estate is all about “location, location, location.” That’s especially true when it comes to investing in rental properties. Where you choose to buy can have a significant impact on your return on investment.

For example, in a state like New York, where the median mortgage exceeds the median rent by nearly $250, buying a property to rent out doesn’t make much financial sense. If you consider buying rental property in a different state, such as North Carolina where rents in the city of Charlotte top mortgages by $84 per month, you’ll net a profit instead of a loss every month your tenant pays rent.

Before you start the interstate home search process, you should know the risks and rewards of out-of-state investment properties.

Potential rewards of buying an out-of-state investment property

Very often, the primary reason to buy an out-of-state rental property is investment properties where you live are too expensive. There are some other more strategic reasons that we’ll cover next.

Diversify your real estate assets

Real estate markets rise and fall. During the housing boom of 2003 to 2007, many of the “sand” states, such as California, Arizona, Florida and Nevada, experienced home price appreciation at rates well above historic levels.

Investors learned a painful lesson in the danger of not diversifying when the housing markets in those states crashed during the housing crisis. Investors who had investment real estate concentrated only in these states lost big, while those who spread their portfolios out to other states fared better.

Purchase future vacation or retirement residences

If prices and rents are competitive in a state you’ve always wanted to vacation in, you may want to purchase the property first as a rental and allow tenants to build some equity for you while you generate income. After a few years, you may decide you want to spend a few months a year vacationing in the home and rent it out seasonally with a rental plan from a service such as Airbnb or VRBO.

Alternatively, you may live in a cold-weather state, such as Massachusetts, and want to retire to the warm winters of Arizona. You could put the wheels in motion on your retirement plans by buying a rental property there first that has the amenities you would want in a home for retirement.

Once you’ve pocketed some rental income and equity from renters, you can pack up for the cross-country move into the rental, throw out the snow shovel and enjoy wearing shorts instead of parkas during the holiday season.

Buy where the laws suit your rental strategy

Short-term rentals have become very popular for real estate investors, but they face legal challenges in some places. For example, New York City subways are covered with signs warning riders to avoid short-term rentals.

If you are interested in renting out your property through a service like Airbnb, buying in a state that has more flexible laws about short-term tenants is your best bet.

Net more income monthly with lower property taxes

According to a recent LendingTree study, homeowners in San Jose, California, paid on average $9,626 in property taxes each year. In Salt Lake City, homeowners pay only $2,765 per year — which means you’d have to get an additional $567 per month in rent in California just to cover the property tax expense before you could make any profit.

Risks of buying an out-of-state investment property

Like any investment, there are risks associated with buying out-of-state rental properties. We’ll discuss those next.

Long-distance property management problems

If you have a rental in the city you live in, you can deal with an unexpected tenant move-out or a late-night plumbing problem by driving over to the property and taking care of the issue yourself. But you’ll need to make some decisions about how to manage an out-of-state rental.

If you hire a property management company, they’ll take 8% to 12% of your monthly rent as a fee, eating into your monthly rent profit. If you self-manage, you’ll need to make sure you build relationships with local handymen, roofers, plumbers and pest control professionals so you have their numbers handy if a tenant emergency comes up.

State laws that restrict how you rent your property

Short-term rentals, such as Airbnb, may be a great way to generate a higher monthly income than you would get with a 12-month lease, but some cities and neighborhoods aren’t too keen on having a lot of different people coming and going through a nearby house. If the laws prohibit short-term rentals in an area you’re interested in, you’ll have to crunch the numbers to see if market rents for long-term leases provide you with a good return on your rental investment.

What to look for when considering an out-of-state rental property

When you’re buying in another state, take extra precautions to make sure you understand everything about the local housing market, building standards and how the local economy is doing before you start making offers. The last thing you want to do is end up with an out-of-state money pit.

Get a thorough home inspection

No matter how nice the home may look in pictures or at an open house, there can always be problems beyond the smell of new paint and carpet. Building standards and practices may vary from state to state and city to city, and you don’t want to be caught by surprise because you didn’t know polybutylene pipes behind the walls of homes built in Tucson, Arizona, have been known to burst without warning.

A good local home inspector will also help you understand whether a property has been built and maintained according to local building standards and identify any issues, such as an unpermitted room addition, that could cause you trouble with local housing inspectors down the road.

Interview several property management companies

Depending on the town, you may find very high-tech, organized property management shops with decades of experience or small mom-and-pop shops that offer real estate property management services. Either way, you want to know what they do for their fee. The graphic below provides a list of questions you should ask to make sure the property manager is a good fit for your out-of-state rental.

  • How many rental units do you manage? Ideally, you want a manager who has between 200 and 600 rental units. This indicates that the management company has a solid enough client base to understand the local market but not so extensive that they won’t be able to handle managing yours.
  • What experience does your company owner have managing rentals? When the long-distance plumbing hits the fan you don’t want to be dealing with a company that’s never managed rentals. There is no college of rental property management, and you don’t want to have your rental managed by someone who’s still learning the ropes.
  • Are you actively investing in real estate in your market? If you are buying in a housing market you’ve never purchased in, you may want to have a property manager who understands the nuances of the local rental market. This is especially important intel when you’re dealing with an out-of-state investment property in a neighborhood that may be going through changes that only an experienced local investor would know about.
  • How do you collect rent? In order to track cash-flow of a rental property, you should be able to easily track payments. The best method is through an online payment system that gives you real-time information about any late payments. If you took out a mortgage to purchase the rental property, you want to know as early as possible if a tenant is going to miss rent, so you can move money to cover the mortgage payment.
  • What is your average vacancy time on rentals? The correct answer should be two to four weeks. An experienced property management company should have the marketing and rental pricing know-how to make sure your property is not vacant for more than a month. It’s bad enough having a rental vacant, but when it’s out-of-state, you want to know the company managing the property has a track record of getting renters quickly to minimize the expenses you incur when a rental is without a renter.On the other hand, a property manager that rents out your place in less than two weeks may be pricing it too low.
  • How do you handle maintenance and repairs? It’s not uncommon for a property manager to have “preferred” vendors to help with the inevitable issues that come up with maintaining and repairing a rental. You’ll want to get a list of these preferred providers and keep track of their expenses.Also be sure to put a cap on the cost of repairs that can be done without your authorization. You should trust the company to handle a $100 fee, but you may want to cap them on anything more than $200 so you can have a chance to see if you need a second opinion with a different vendor.

Track property tax trends in the neighborhood

Property taxes are a fixed expense you can’t get around paying, so be sure to track the last five years of property taxes to see what the average increase has been. If you’re seeing an acceleration in the tax rate, figure that into your return-on-investment analysis, so you don’t end up in a situation where your monthly expenses are more than the rent you’re taking in.

Make sure you understand the rental market in the area

Rental markets ebb and flow as new homes are built, new employers set up shop nearby or new schools are built in the area. A good property manager or experienced real estate agent should be able to give you a good idea of where the market is headed with a comparable rental analysis.

When you bought your first home, you may have gotten a comparable market analysis (CMA), which analyzes what homes are selling for in the area you’re thinking of buying. A comparable rental analysis looks at rentals nearby to give you an idea of what your monthly income is going to be.

If you finance the property with a mortgage, you’ll likely need a rental analysis form 1007, which is an additional report in a residential home appraisal that provides an opinion of the market rent for the home you’re buying. In some cases, the appraiser’s projected market rent can be used to help you qualify for the new mortgage, even if you don’t have a lease on the property you’re buying.

Special mortgage considerations for out-of-state rental property

If you’ve been buying investment property in your hometown, you already know financing a rental property comes with higher down payments and interest rates. There are a few more factors to consider.

Are transfer taxes due and who pays them?

Depending on what state you are buying property, transfer taxes may be charged for you to take ownership of the property you are buying. Unlike property taxes, these are a set lump sum percentage of your sales price, added to your closing costs.

Transfer taxes are often paid by the seller, but in some cases they may be payable when buying a home, adding to your total closing costs. It’s also good to at least know how much they are so they don’t end up being one of those hidden costs of selling a home. In places like New York City, that could mean an extra 1% to 2.625% of your sales price subtracted from your profit, in addition to real estate fees that usually run between 5% and 6%.

Are you buying in an attorney or escrow state?

Depending on where you purchase your rental property, you may need an attorney to handle your contract negotiations. That means higher costs than you’ll find in an escrow state, where an escrow offer can handle the signing usually at a much lower cost.

Are you buying in a community property state?

If you’re currently married or have a domestic partner, the community property laws could affect what happens to the property in the event of a divorce. Community property states require a split of equity down the middle, whereas the equity can be split up in negotiable amounts in a non-community-property state.

Final considerations

A little due diligence and research will help you avoid unpleasant surprises if you’re considering buying an out-of-state investment property. While many real estate companies offer “virtual tours” of homes, there’s nothing like an in-person tour to soak up the light, views, smells and feel of a home before you buy it.

If you can, budget enough time to take a trip to the state you’re considering buying in to inspect the top contenders before you start making offers on an out-of-state investment property.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Denny Ceizyk
Denny Ceizyk |

Denny Ceizyk is a writer at MagnifyMoney. You can email Denny here

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Life Events, Mortgage

The Hidden Costs of Selling A Home

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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When you decide to sell your home, you may dream of receiving an offer well above your asking price. But putting your home on the market requires you to open your wallet, which could cut into your potential profit.

While some line items probably won’t come as a surprise, you may find that there are a handful of hidden costs.

Below, we highlight those unexpected expenses and everything else you need to know about the cost of selling a house.

The hidden costs of selling a home

It’s easy to fixate on the money you expect to make as a home seller, but don’t forget the money you’ll need to cover the cost to sell your home.

A joint analysis by Thumbtack, a marketplace that connects consumers with local professional services, and real estate marketplace Zillow, found that homeowners spend nearly $21,000 on average for extra or hidden costs associated with a home sale.

Many of these expenses come before homeowners see any returns on their home sale. Money is spent in three main categories: location, home preparation and location.

Location

Your ZIP code can influence how much you pay to sell your home. Many extra costs are influenced by regional differences — like whether sellers are required to pay state or transfer taxes.

For example, if you’re in a major California metropolitan area like Los Angeles, you may pay more than double the national average in hidden costs when selling your home.

Below, we highlight 10 of the metros analyzed in the Thumbtack/Zillow study, their median home price and their average total hidden costs.

Metro Area

Median Home Price*

Average Total Hidden Costs of Selling

New York, NY

$438,900

$33,510

Los Angeles-Long Beach-Anaheim, CA

$652,700

$46,060

Chicago, IL

$224,800

$18,625

Dallas-Fort Worth, TX

$243,000

$19,350

Philadelphia, PA

$232,800

$21,496

Houston, TX

$205,700

$17,477

Washington, D.C.

$405,900

$34,640

Miami-Fort Lauderdale, FL

$283,900

$24,241

Atlanta, GA

$217,800

$18,056

Boston, MA

$ 466,000

$35,580

Source: Thumbtack and Zillow analysis, April 2019.


*As of February 2019.

Generally, selling costs correlate with the home price, so expect to pay a little more if you live in an area with a higher-than-average cost of living or one that has a lot of land to groom for sale.

Home preparation

Thumbtack’s analysis shows home sellers may spend $6,570 on average to prepare for their home sale. These costs can include staging, repairs and cleaning.

Buyers are generally expected to pay their own inspection costs; however, if you’ve lived in the home for a number of years and want to avoid any surprises, you might also consider paying for a home inspection before listing the property for sale. Inspection fees typically range from $300 to $500.

Staging is often another unavoidable expense for sellers and can cost about $1,000 on average, according to HomeAdvisor. Staging, which involves giving your home’s interior design a face-lift and removing clutter and personal items from the home, is often encouraged because it can help make the property more appealing to interested buyers.

It also helps to have great photos and vivid descriptions of the property online to help maximize exposure of the property to potential buyers. If your agent is handling the staging and online listing, keep an eye on the “wow” factors they include. Yes, a virtual tour of your house looks really cool, but it might place extra pressure on your budget.

You could potentially save hundreds on home preparation costs if you take the do-it-yourself route (DYI), but expect a bill if you outsource.

Closing costs

Closing costs are the single largest added expense of the home selling process, coming in at a median cost of $14,,281, according to Thumbtack. Closing costs include real estate agent commissions and local transfer taxes. There may be other closing costs, such as title insurance and attorney fees.

Real estate agent commissions range from 5-6% of the home price, according to Redfin. That amount is further broken down by 2.5-3% being paid to the seller’s agent and the other 2.5-3% being paid to the buyer’s agent.

The taxes you’ll pay to transfer ownership of your home to the buyer vary by state.

Other closing costs include title search and title insurance to verify that you currently own the home free and clear and there are no claims against it that can derail the sale. The cost of title insurance varies by loan amount, location and title company, but can go as high as $2,000.

If you live in a state that requires an attorney to be present at the mortgage closing, the fee for their services can range from $100 to $1,500.

There are also escrow fees to factor in if you’re in a state that doesn’t require an attorney. The cost varies and is usually split the homebuyer and seller.

If you have time to invest, you could try listing the home for sale by owner to eliminate commission fees. One caveat: Selling your home on your own is a more complicated approach to home selling and can be more difficult for those with little or no experience.

Other home selling costs to consider

Now that you have an understanding of the costs that may get overlooked, remember to budget for the below expenses as you prepare to sell your home.

Utilities

It’s important that you make room in your budget to keep the utilities — electricity and water — on until the property is sold. (This is in addition to budgeting for utilities in your new home.) Keeping these services active can help you sell your home since potential buyers won’t bother fumbling through a cold, dark property to look around. It may also prevent your home from facing other issues like mold during the humid summertime or trespassers.

Be sure to have all of your utilities running on the buyer’s final walk-through of the home, then turn everything off on closing day and pay any remaining account balances.

Homeowners insurance

Budget to pay for homeowners insurance on the home you’re selling as well as your new home. You’ll still need to ensure coverage of your old property until the sale is finalized. Check the terms first, as your homeowners insurance policy might not apply to a vacant home. If that’s the case, you can ask to pay for a rider — an add-on to your insurance policy — for the vacancy period.

Capital gains tax

If you could make more than $250,000 on the home’s sale (or $500,000 if you’re married and filing jointly), take a look at the rules on capital gains tax. If your proceeds are less than the applicable amount after subtracting selling costs, you’ll avoid the tax. However, if you don’t qualify for any of the exceptions, the gains above those thresholds could be subject to a 15% capital gains tax, or higher. Consult your tax professional for more information.

How to save money when selling your home

Keep the following tips in mind when you decide to put your home on the market:

  • Shop around and negotiate. Don’t settle on the first companies and professionals you come across. Comparison shop for your real estate agent, home inspector, closing attorney, photographer, etc. It could also work in your favor to try negotiating on the fees they charge to save even more.
  • Choose your selling time carefully. The best time to sell your home is during the spring and summer months. If you wait until the colder months to sell, there may not be as much competition for your home.
  • DIY as much as possible. Anything you can do on your own to spruce up your home — landscaping, painting, minor repairs, staging — can help you cut back on the money you’ll need to spend to get your home sold.

The bottom line

There are several upfront costs to consider when selling your home, but planning ahead can help you possibly reduce some of those costs and not feel as financially strained.

List each cost you’re expecting to pay and calculate how they might affect the profit you’d make on the home sale and your household’s overall financial picture. If you’re unsure of your costs, try using a sale proceeds calculator to get a ballpark estimate of your potential selling costs. Be sure to also consult a real estate agent.

If you’re starting from scratch on your next home, here’s what you need to know about the cost to build a house.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Crissinda Ponder
Crissinda Ponder |

Crissinda Ponder is a writer at MagnifyMoney. You can email Crissinda here

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