When you’re ready to move from one home to another, understanding the process can save you time, money, and stress. Selling your existing property and buying a new one often involves overlapping timelines, financial qualifications, and negotiated contingencies. From preparing your home for showings to securing a mortgage on a new property, each step carries potential pitfalls.
By breaking down the transaction into clear phases—tax considerations, home preparation, financing, and closing coordination—you’ll gain clarity and confidence as you transition to your next residence.
Capital Gains Tax Exclusion Details
One of the most significant financial considerations when selling a primary residence is the capital gains exclusion. Homeowners who file jointly may exclude up to $500,000 in profit from taxable income, whereas individuals selling solo can exclude up to $250,000. This benefit applies when the property has been your principal home for at least two of the past five years.
Structuring a sale to maximize this exclusion can reduce or eliminate your tax liability, freeing up more equity to put toward your next purchase. According to the IRS, when selling a home, if both spouses sell the property together, they may qualify for a capital gains exclusion of up to $500,000 on profits. If one spouse sells it alone, the exclusion drops to $250,000.
Preparing Your Home for the Market
Before listing your property, invest time in enhancements that appeal to buyers. Declutter every room, repair visible damage, and paint walls in neutral tones to create a blank canvas. Professional photography and virtual tours can showcase your home’s best angles, attracting more interest online.
Consider small upgrades—fresh landscaping, new light fixtures, or modern cabinet hardware—to make a big impression without a large budget. Real estate agents often recommend setting a competitive but realistic asking price based on comparable sales in your neighborhood to generate offers quickly.
Highlighting Key Features
Buyers tend to remember the details that stand out during a showing. Windows provide natural light, energy efficiency, and curb appeal, so ensure they are clean and in good repair. On average, a typical single-family home includes around ten windows, meaning proper maintenance can significantly enhance a buyer’s perception of value.
If some panes need resealing or hardware needs replacing, taking care of these tasks before listing will make your home feel fresh and well-cared-for. According to Bob Vila, the average home has 10 windows.
Financing Your New Home
Securing a mortgage involves more than comparing interest rates—you’ll need to evaluate the reliability and service quality of potential lenders. Credit unions often offer competitive loan products and personalized support. Smaller credit unions with assets under $250 million have demonstrated return on assets (ROA) performance comparable to much larger institutions.
This means you can access competitive financing even from community-based lenders, potentially with lower fees or more flexible terms. According to Flexcutech, the highest-performing credit unions with less than $250 million in assets had effectively the same ROA as the peer group of $5 billion asset credit unions in 2021.
Coordinating the Sale and Purchase
Timing is critical when you’re both selling and buying. Consider including a sale contingency in your purchase offer, so you’re not obligated to close on the new home until your current property sells. Alternatively, you might explore a bridge loan to cover the overlap between closings, although this adds complexity and interest expenses. Work closely with your real estate agent and lender to align inspection, appraisal, and closing dates.
Negotiating a rent-back agreement could allow you to remain in your sold home for a short period, giving you flexibility to move without rushing.
Final Considerations
As you near the finish line, review all documents carefully—purchase agreements, loan disclosures, and closing statements. Confirm that insurance policies transfer or renew appropriately and schedule utility transfers to avoid service gaps. Plan for moving logistics and budget for expenses like closing costs, moving services, and minor repairs at your new home.
By staying organized, communicating proactively with professionals, and understanding your tax and financing options, you’ll streamline the transition and step confidently into your new chapter as a homeowner.
