For most of the country, it’s a seller’s market. Houses are going fast with some being bought up as fast as they go on the market. If you’re Manteca home sellers, that is good news. You can get a higher price for your Manteca house which means you might have money in your pocket after the deal is done. But experts say to hold on and have a plan for that cash.
There’s no right or wrong way to spend the money you make from the sale of your Manteca house. It really just comes down to your priorities and making sure you don’t pay out too much in taxes.
So if your house is on the Manteca market, home sellers need a plan for what to do with that extra cash you’ll get after closing. With that in mind, consider the following:
You may be selling your Manteca home to buy another house. If that’s the case the profit of the house will go as a downpayment on your new house.
But not everyone goes that route. Some people decide they no longer want to be homeowners and rent instead. People looking to live more freely might not want the responsibility of homeownership.
If you aren’t buying a Manteca home, tackling high interest debt is a good solution for spending the cash. Or you could add to your retirement savings.
But some Manteca home sellers want to have a little fun with their house profits. They might buy a vacation house or go on a luxury trip. As long as the plans align with your long term goals, there is nothing wrong with splurging a bit.
Now that you know how you want to spend your money, you need to figure out your purchase timeline. How long it will be until you spend your money will affect where you should keep it until you are ready to make your purchase.
If you will be spending it immediately, you can just put it in a savings account to keep the money safe and liquid. But if the money is going to stay put for a while there could be better options.
For example, if you are going to rent after you sell your Manteca house, it can be worthwhile to put it in a growth mutual fund where you’ll see better returns than on a money market account or bonds.
Even if you have enough from a home sale to purchase a new house with cash, you might only want to put down a down payment. The interest rates for mortgages are still low enough that it might make more sense to finance a house sale and invest the rest.
Before you make plans for all of the money you are going to get from selling a house remember that you’ll have to pay taxes. The money above the purchase price that you make from the sale of your house – your gains – are subject to tax.
There are some exemptions so make sure you speak with a tax professional to go over your exact scenario. Taxes and regulations can also vary so it is always good to research these things up front before moving to a new Manteca home.