What Downsizing From a Reston Home Costs, and What You Actually Net

by Clare Grana

Short answer: Your net is the sale price minus your mortgage payoff, commission, about 0.2 percent in Virginia and Northern Virginia transfer fees, settlement costs and any preparation. If the home was your primary residence for two of the last five years, federal law lets you exclude up to $250,000 of gain from income tax, or $500,000 for married couples filing jointly.

Most people who have lived in a Reston home for twenty or thirty years know roughly what it might sell for. Fewer know what they would walk away with. The gap between those two numbers is where most downsizing decisions get made, so it is worth seeing clearly before anything else.

"The first thing I do with a seller is put the sale price and the net side by side. Once people see what they will actually walk away with, the rest of the plan usually falls into place."

— Clare Grana

Start with the sale price, then subtract

Your net proceeds are the sale price minus everything it takes to get to closing. For most Reston sellers, that list looks like this:

Your mortgage payoff, if there is one. Many long-time owners have little or none left.
Real estate commission. Commissions are negotiable and vary by brokerage and by the services included. Ask for the number in writing before you sign anything.
Virginia and Northern Virginia transfer taxes paid by the seller. In Fairfax County the seller typically pays the state grantor tax of $0.10 per $100 of the price and the regional congestion relief fee of $0.10 per $100, about 0.2 percent combined. On a $750,000 sale, that is about $1,500.
Settlement fees, prorated property taxes and prorated Reston Association dues.
Preparation. Some homes need almost nothing. Others benefit from paint, a deep clean or a few repairs. This is the line most worth thinking through, because it is the one you control.

The costs people forget

The sale itself is only part of the picture. A move after decades in one home often includes:

Overlap. If you buy before you sell, you may carry two homes for a month or more.
Sorting and moving. Downsizing usually means deciding what goes, what goes to family and what goes to donation. Professional move managers and estate sale companies can do much of this, at a cost.
The next home's costs, including condo or HOA fees and any updates you want before moving in.

Taxes, briefly

If you owned the home and lived in it as your primary residence for at least two of the last five years, federal law lets you exclude up to $250,000 of gain from income tax, or up to $500,000 if you are married and file jointly. Whether and how that applies to you depends on your situation, so talk with your CPA before you list, not after.

What to do with the number

Once you see your likely net, the questions get easier. Can you buy the next home outright? Do you need to sell first? Is it worth fixing the kitchen, or is the money better kept? There is no right answer for everyone, only the right answer for you.

Common questions

Do I pay capital gains tax when I sell my Reston home? Often not, if it was your primary residence for two of the last five years and your gain is under $250,000, or $500,000 for married couples filing jointly. Your CPA can confirm for your situation.

Should I buy my next home before I sell? It depends on whether you can comfortably carry both homes for a month or more. Seeing your likely net first usually answers the question.

How long does a Reston sale take? It depends on the price, the condition of the home and the season. We can pull current Reston days on market for your price range, and closing usually follows 30 to 45 days after a contract.

"Sellers ask me whether they should buy first or sell first. The answer is usually in the net. Once you know what you will walk away with, the order of the move becomes clear."

— Clare Grana

Our net proceeds worksheet walks through every line above. It is free on our Buyer and Seller Resources page, with no form to fill out.

If you would like your own numbers, we are glad to sit down and go through them with you. Text Clare at 571.243.6851 or pick a time.

Sources

The Grana Group at Samson Properties. Clare Grana, licensed in Virginia, License #0225133634. Equal Housing Opportunity. General information only, not tax or legal advice.