<\/span><\/h3>\nThe #1 mistake investment property sellers make. If you claimed $29,091 in depreciation over 5 years, you owe $7,273 in recapture tax at 25% \u2014 whether or not you remembered to factor it in. Even worse: the IRS charges recapture on depreciation you should have claimed<\/em>, even if you never actually took the deduction.<\/p>\n<\/span>2. Using Listing Price Instead of Net Sale Price<\/span><\/h3>\nAfter negotiations, most properties sell for 2\u20135% below listing. If your net sheet is based on $250K but you sell for $238K, your net drops by $12K plus reduced tax savings. Always model at 95\u201397% of listing price as a realistic scenario.<\/p>\n
<\/span>3. Ignoring Mortgage Payoff Interest<\/span><\/h3>\nYour mortgage statement shows the current balance, but the payoff amount includes interest accrued through the closing date plus any prepayment penalty. The payoff is typically $200\u2013$500 higher than the statement balance. Request a formal payoff letter from your servicer.<\/p>\n
<\/span>4. Not Accounting for Prorated Expenses<\/span><\/h3>\nAt closing, property tax and HOA dues are prorated between buyer and seller. If you paid property tax for the full year but close in June, you receive a credit for July\u2013December. This can be a $1,000\u2013$2,000 positive adjustment. The reverse: if you owe back taxes, they are deducted from proceeds.<\/p>\n