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Help the Sellers, Help Yourself - Cultivating Business for the Long Term

By Niman Singh

Services for Real Estate Pros with SimplifyEm

September 26, 2008 07:48 AM

Help your Sellers, Help Yourself

Help your sellers minimize the taxable gain from the sale of their property by helping them account for sale expenses, like closing costs. It's as easy as sending a copy of their settlement statement and circling a bunch of numbers. This will help you cultivate relationships with past clients, and increase future business. Read this blog to learn why this is important and why it works!

What are Closing Costs?

Closing costs are expenses (above and beyond the cost of the property itself) that are incurred by the buyer and seller during "closing," when title of the property is transferred.

Where are my Closing Costs?

Closing costs that you need to consider can be found on the property's settlement statement.

What Should I do with Closing Costs?

To minimize your taxable gain from the sale, follow these steps:

Locate the Contract Sales Price (Line 401) on the settlement statement.
Subtract Commissions Paid (Line 703).
Subtract Title Charges (Lines 1100-1110), Recording and Transfer Charges (Lines 1200-1205) and Additional Settlement Costs (Lines 1300-1302).
Subtract the property's adjusted cost basis (after depreciation deductions), which will be found on the prior years' tax return.

Following these steps will help your seller minimize the taxable gain from the sale of their home by accounting to deductible sale expenses. They are likely to use your services again in the future because you've gone out of your way to help them save money. This is certainly a good way to cultivate relationships with your clients.

By all means, I am not saying that you should give tax advice to your clients - that's what tax advisors are for....but it certainly is a great feeling when you know what you are talking about, understand the resources that are available, and are able to point clients in the right direction.

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Jeff Rogers

retired - Manchester, TN

Interesting I would love to know more about this.

Sep 26, 2008 07:57 AM

Charles Stallions

Charles Stallions Real Estate Services - Pensacola, FL

850-476-4494 - Pensacola, Pace or Gulf Breeze, Fl.

Great idea, I mail one one to my sellers every December and remind them. I also mail one to the buyer letting them know to file for homestead as well. The customers really love it.

Sep 26, 2008 08:07 AM

Niman Singh

SimplifyEm - Fremont, CA

Property Management Software

Hi Jeff, you can read more about Tax Laws specific to real estate investors by going to RealTaxTips.com. I hope that helps!

Charles, you're a pro!

Oct 02, 2008 11:36 AM

Help the Sellers, Help Yourself - Cultivating Business for the Long Term

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Niman Singh

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