Selling Your Home in Retirement: How to Manage Deed and Title Transfers

Retired and thinking of selling your home? If so, you’re not alone. According to the National Association of Realtors, baby boomers are the largest group of both home sellers and buyers in the country.

Here are some considerations for handling your deed and title transfer during your home sale.

Handling Your Deed and Title Transfer

Have you decided to handle your title transfer with a deed you create yourself? It’s a legitimate option. Still, the party who’s buying from you will need to work at least to some degree with professionals:

• Title companies handle the search of public records, ensuring no claims exist on the home that could be clouding your title.

• A licensed inspector and a licensed appraiser do reports on the condition and value of your home.

• A real estate lawyer in your area can draft the purchase agreement.

• The Recorder of Deeds accepts fees and files the new deed in the public record.  

Be sure you retrieve and complete the state-issued seller disclosure form — even if you’re selling to a relative. This is part of the important paperwork in the home’s history, and the next owner needs to have it.

At Deeds.com, you can be confident that the deed forms you select are up-to-date and compliant with the county where your home exists.

Maximizing Profit From Your Home Sale

Most people start by looking at the online real estate sites to see what their homes are worth. This isn’t an official appraised value, but it’s based on recent sales of similar homes. Then, they find an agent to run price comparisons, monitor the market for potential homes to buy, and offer advice and guidance on maximizing their current home’s profit potential.

Sellers already have significant power over the agent fees. Brokers and agents this year dropped the rule that says people listing their homes for sale must pay the buyer’s broker fees.

But some sellers save on agent fees altogether, by getting a lawyer to support document needs, guide negotiations, and handle possible disagreements between sellers and buyers.

Whichever way you proceed, know that demand for homes is high. An agent can help you make the most of this market. We encourage you to do so, because neither downsizing nor moving into a 55+ community is getting any cheaper.

Once you get to your new home, look for ways to hold onto your profit. A homestead exemption could be available to cut back your taxes. And check to see if the government makes property tax rebates available to seniors.

You’ll want to factor in the costs and fees involved in getting your home ready to sell, and then in selling it. More costs are involved in moving. These costs can add up to tens of thousands of dollars.

Note: Seniors and those with mobility challenges can seek out moving managers for special guidance.

Anticipating Impacts on Your Tax Returns

Calculate your home’s cost basis: what you paid for it originally, plus what you invested in it: repairs, renovations, additions. The selling price of your home, over and above your cost basis, amounts to capital gains.

If you’re fortunate enough to expect profits of more than $250K ($500,000 for couples), you’ll need to calculate taxes on your gains.

Social Security retirement payments won’t be impacted by the money from the sale of your home.

Note that you might be looking at higher property taxes on your next home. If you’re buying another home, the taxes may rise when you take title, triggering a new property value assessment.

As you might expect, tax officials examine home sales to relatives. If you sell to someone close to you, sell for fair market value as determined by a professional appraisal.

Wrapping Up

One more thing. Did you complete and record a transfer on death (TOD) deed for your current home before you decided to sell? Know that your home sale will automatically cancel out the TOD.

If your next home’s state allows transfer on death deeds for real estate, you may use one to leave your new home to a designated beneficiary. Keep a copy of the TOD deed with your will.

Please note: This column provides general information only, not personalized advice. Bring case-specific questions to your tax and legal professionals.

Best wishes and congrats on approaching this significant stage in a deed holder’s lifetime.