Selling a vacation home has specific peculiarities that do not apply to selling a primary residence. These differences may make a homeowner and their agent vary their approach when it comes time to sell a vacation property. This is a good thing as knowing how to prepare to sell a vacation property can help sell it faster and with less of a tax burden.
Are you or someone you know planning to sell their vacation property? Keep in mind these differences between selling vacation homes and primary residences to help with the process today.
An Emotional Process
Think of the prospective buyer. Different emotional aspects go into purchasing a Ridge at Hangman vacation home. A buyer is often looking for a vacation property as a getaway, a place where generations of family may come to connect and kick back. Considerations like quality schools in the area or a work commute rarely compute when it comes to deciding on a vacation home. Whether it is a ski town chateau or a lake front property, a vision of a lifestyle and a dream pops into the heads of prospective buyers. Making this vision a reality is what is most important to those buyers. Sellers need to realize how to take advantage of this shift of priorities and desires in a buyer. Working with an agent that can sell the benefits and highlight how a home can be used to achieve this vision can make a huge difference.
Buyers want to know about popular attractions in the area and how close they may be. Fishing and boating launch sites, the ski town attractions, beach and lake locations - this will be of interest to an individual or couple looking to buy a vacation home. The type of local entertainment, local amenities and a history of an area may help them select one property over another. Work with a local and experienced agent when selling a vacation home. They will have insight on when to show a home to get the most traffic and be able to highlight attractions most likely to be of interest to vacation home buyers.
There may be times when it is not possible to show a vacation home due to community restrictions. Some who own a condominium or another type of a home in a community may need to comply with such restrictions before putting a home on the market. Community stipulations may require that homeowners work with a specific company or show only during a designated time of the year. Adhering to such policies often makes for a better selling experience. Review any community policies on the matter before selling vacation property. Homeowners who are selling a primary residence often have fewer of such limitations.
Capital Gains Tax
Understand more about capital gains tax and how some individuals may reduce or eliminate their payout to Uncle Sam when a vacation property is sold. With a little careful planning, it may be possible to have a vacation property designated as a primary home and in that away reduce tax obligations on an appreciated asset. This can save homeowners thousands of dollars when it comes time to report the sale to the IRS. When it comes times to sell a home, primary residences can receive exclusions when it comes to paying their capital gains tax. Vacation homes are not automatically applicable but can also benefit when such a property can be designated as a primary home and meet specific criteria. Speak with a tax agent to learn more about this before selling a vacation home.