One Buckhead Plaza, Suite 1570 Atlanta, GA 30305

Sellers - Closing Information

Information About The Hudson Law Firm

Reasons to Use The Hudson Law Firm to handle your important closing.

First and most importantly, we really care about you and your home sale, and our high level of service reflects our care.

Second, we have 17 convenient closing offices.

Third, we use the latest technologies to make your closing efficient and secure.

Fourth, we keep our fees and expenses reasonable.

The Hudson Law Firm represents the Lender.

It is important to understand that our law firm represents the lender that makes the loan to the home buyer. We do not represent the buyer or the seller. In Georgia, buyers and sellers of residential real estate are typically represented in the home selling and buying process by their respective real estate agents. The real estate agents complete the Purchase and Sale Agreement and make amendments, as needed to the Agreement. If there is a dispute between the seller and the buyer, they should try to resolve the dispute with the assistance of their real estate agents or if necessary hire an attorney other than The Hudson Law Firm, LLC.

How to send secure/encrypted information to us.

We want to protect private information like your bank account number and your social security number. So, we send encrypted emails to you and provide the means for you to send encrypted emails to us. In the signature block of emails sent from our employees to you, there is a tab that allows you to send a secure, encrypted email to us.

Preparing for Closing

Why we need your social security number.

As a settlement agent, we are required to report the sale of the property to the Internal Revenue Service by preparing IRS Form 1099 and in order to prepare the form, we must have the social security number for each seller. If a seller is a trust or LLC, the taxpayer identification number of the entity is required.

Information About Closing Day

How to get directions to the closing office.

We have a number of closing offices. Please go to the locations page of this website to obtain directions to the closing office for your closing.

What you should bring to the closing.

(i) A valid driver’s license or valid passport. Plus, another form of ID such as an insurance card (home, medical or auto). (ii) If you are bringing funds to a closing, they must be sent to us via wire; please wire the funds to us the day before the closing, at least. For wiring instructions, please telephone our office: 678-999-6030. (iii) If your spouse or another person is selling the house with you, that person must attend and he/she must bring a valid driver’s license or valid passport.

Do you want your sale proceeds wired to you or by check?

At the closing, we will pay over the net proceeds due you. Fewer and fewer people wish to have a check issued to them because banks place a “hold” on large checks for several days. For this reason, many sellers prefer to have their funds wired immediately after the closing. When funds are wired, the funds are “available” after your bank receives the wire, which is usually within hours of the closing. In order for us to wire funds to a seller's bank account, the seller’s name must be on the account and the seller must give us the account number and the routing number.

If you want your funds to be wired, please give us the wire instructions before the closing. We will send a "Seller Information Sheet" to you weeks before closing, and you can let us know then if ou want a wire, and if so, you can supply your wire instructions then.

Information About Income Tax Implications

If you are not a resident of the state of Georgia, we are required to withhold 3% of your proceeds unless an exception applies.

When a seller is not a resident of the state of Georgia, settlement agent like our firm to withhold 3% of the proceeds unless an exception applies. One exception is when the seller has no gain on the sale of the property. We turn over the withheld funds to the Georgia Department of Revenue. Withholding 3% of the sale proceeds is how the state of Georgia makes sure that out-of-state sellers file income tax returns with the Georgia Department of Revenue.

What are the income tax consequences of selling a principal residence?

Section 121 of the Internal Revenue Code provides for the exclusion of $250,000 of gain when you sell your “principal residence” if certain requirements are met; for a married couple the gain exclusion is $500,000. The seller must have owned and used the home as her principal residence for at least two of the previous five years. However, the tax law allows a home seller to claim a partial exclusion if the sale results from a change in employment, a need for medical care or other "unforeseen circumstances". For more information on Section 121, check out IRS Publication 523, Selling Your Home https://www.irs.gov/pub/irs-pdf/p523.pdf

In addition to the gain exclusion rules, there are certain selling expenses, such as payment of commissions, that can be used to reduce your tax liability. Commissions reduce that amount of your gain. For example, if you sell a house for $100,000 and pay 6% or $6,000 in commission, your “amount realized” is $94,000, not $100,000. So, if you paid $60,000 for the property, your taxable gain is $34,000, not $40,000.

What are the income tax consequences of selling an investment property?

When you sell investment property, your profits are subject to either capital gains tax or depreciation recapture tax. Your tax gets calculated on the difference between your cost basis and your selling price.

Your cost basis isn't the purchase price of your investment property. The initial cost is what you actually paid at the closing, including your closing costs. To the initial cost, add the cost of any improvements you made to the property. “Improvements” are anything that changes your property's use, increases its value or extends its useful life. Regular maintenance is not an improvement.

While you own your investment property, the tax code lets you claim a small portion of its cost basis every year as a depreciation write-off. If you sell the property for more than the depreciated value, though, you must pay a portion of the money that you saved by claiming depreciation. To properly calculate your capital gains liability, you will need to total all of the depreciation that you were legally entitled to claim.

Your capital gains taxes is calculated on the difference between your adjusted cost basis and your net selling price, that is the contract prices less closing costs. In addition, if you sell for a profit you will have to pay depreciation recapture taxes on all of the depreciation. If you sell for a loss, you will pay recapture tax on the difference between your net selling price and your depreciated basis.

Capital gains on assets that you hold for at least one year are considered long-term gains and taxed at 15 percent. But if you are married and your taxable income exceeds $450,000 or single and your income exceeds $400,000, the rate is 20 percent. Short-term gains (gains from the sale of property held less than a year) are taxed at your marginal income tax rate. In addition, depreciation recapture is taxed at 25 percent. You may also be subject to a 3.8 percent Medicare surtax if your income exceeds $200,000 if you are single or $250,000 if you are married.

You should have your accountant calculate your taxes BEFORE you negotiate to sell your property.

Is it possible to turn an investment property into a primary residence and use the Section 121 gain exclusion rules (discussed above)?

Yes it is possible, but there are many requirements to be met.

Use a “1031 exchange” to defer income tax on the sale of an investment property.

In general, Section 1031 of the Internal Revenue Code allows a seller of investment property to avoid tax if the seller reinvests the value of the property sold into another investment property. There are a number of requirements under Section 1031 that must be met to avoid tax. A few of the requirements are: (a) the seller must enter into an “exchange agreement” with a “qualified intermediary” BEFORE the closings; (b) the sale proceeds at the closing must be paid to the “qualified intermediary”; (c) the seller must identify in writing the new investment property he wishes to purchase within 45 days of the closing; and (d) the closing of the new investment property must occur within 180 days of the closing.

Working With a Real Estate Agent

Who is the best real estate agent to list your home?

There are thousands of agents to choose from. How do you find the best agent to list your home for sale? We asked several real estate agents to give sellers advice on selecting an agent for selling a home. Below is some of the advice.

Can you fire your real estate agent?

Sometimes a seller and their real estate agent do not mesh, and in that case the best solution is to end the relationship. Just about every real estate agent that lists your house for sale is going to require you to sign a listing agreement that protects the agent. The listing agreement has a term, for example 3 months, 6 months, etc. so that if the seller is not happy with the agent at the end of the term, the seller can freely engage another agent. Since the agent makes money only when the closing occurs, the listing agreement is going to prohibit a seller from dismissing an agent before the end of the term if the agent procured a buyer, or the seller can dismiss the agent if the agent still gets paid her commission. Some agents will consent to a seller’s wish to fire the agent before the term if the seller will pay the agent’s out of pocket expenses.

As with all contracts, read the listing agreement BEFORE you sign it.

17 Metro Atlanta Closing Offices

OTP and ITP locations. Complimentary parking provided at all offices.

For Real Estate Closings and Title Orders

Please send an email to: titleorder@thehhfirm.com
Or telephone: 404-863-5338 or 678-999-6030

For earnest money checks and postal mail: One Buckhead Plaza, 3060 Peachtree Road, N.W., Suite 1570, Atlanta, GA 30305