SELLERS OF REAL ESTATE
Sellers of Real Estate
Selling a home is often a very stressful time and understanding your rights and responsibilities as outlined in the Purchase & Sales Agreement is critical to ensuring a smooth transaction. Pursuant to the standard Rhode Island Purchase & Sales Agreement all transactions must be conveyed with clear and marketable title. This conveyancing standard means that the sellers must cooperate with all parties in a closing to provide a deed and residency affidavit at closing. Hiring an attorney as soon as you decide to sell your home will ensure that you are fully prepared with an understanding of the selling process. The costs of representation can range from $600.00 - $1,200.00; depending on the circumstances. For a free, no-obligation quote, contact us today.
Frequently Asked Questions
Can a Power of Attorney be used?
Yes, in the event that a one or all Sellers are unable to attend the closing, then usually a properly appointed Power of Attorney can sign on their behalf at closing. It will be expected however that the actual owners sign the Deed conveying ownership, as the appointed person is not generally allowed to sign that document unless there are extenuating circumstances.
What are Tax Stamps?
When selling real estate in Rhode Island, all transactions have a real estate conveyance tax, pursuant to RIGL 44-25-1. This payment is collected at closing and a portion of these funds are remitted to the State of Rhode Island and a portion is remitted to the local city or township. The tax stamps are reflected on the face of the deed at the time of recording.
The rate of tax stamps as of 2022 is Two Dollars and Thirty cents per five hundred ($2.30/$500.00) for sales up to Eight Hundred Thousand ($800,00.00) Dollars. All sales in excess of Eight Hundred Thousand ($800,000.00) Dollars, are now subject to an additional tax stamp cost in the amount of Two Dollars and Thirty cents per five hundred ($2.30/$500.00).
EX: If the property sells for $900,000.00 then in that case the tax stamps are calculated accordingly:
$900,000.00 * $2.30 / 500 = $4,140.00
$100,000.00 * $2.30/ 500 = $460.00 *
*Difference between $900,000.00 and $800,000.00
All costs are subject to change; so please be sure to contact our office for the most current rates.
Out of State Seller Considerations:
When there is a sale of real estate by a non-resident then there is a withholding tax imposed by the State of Rhode Island, pursuant to RIGL 44-30-71.3.
The imposed tax rate is 6% for individuals and 7% for corporations. The law imposes an automatic lien on the property which impacts the title for the buyer therefore the closing attorney is responsible for confirming residency at closing, and remitting the withholding tax to the State, as may be applicable.
There are tax exemption opportunities that will allow out of state sellers to minimize and in some cases avoid the tax altogether, provided that the Rhode Island Division of Taxation has confirmed said exemptions, in advance of the closing. Contact us today so that we can discuss your eligibility and prepare a tax filing for the Division of Taxation to review and approve, prior to your closing.