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Home » Blog » Selling a house in California and moving out of state

Your Guide to Selling a House in California and Moving Out of State

Published on October 25th, 2021 | Updated on June 22nd, 2022

Doug Van Soest

CEO | SoCal Home Buyers



At SoCal Home Buyers our vision is to provide you with a fast, safe and simple solution to selling your home without the stress and hassle of listing it on the MLS. Request a No-Obligation, All Cash Offer on your Rental home here.


DISCLAIMER: Our blog posts are meant for educational purposes only and not intended to be construed as financial, tax or legal advice. SoCal Home Buyers encourages you to seek any tax or legal professional ideally suited to your specific situation as needed.

The last few years have seen unprecedented numbers of people moving out of California to other states. Job relocation, family obligations, or simply seeking more affordable living are all common reasons for wanting to get out of California.

No matter the reason, your first step involves determining how you want to sell your house in California. As simple as it sounds, the process can quickly become complex depending on your schedule, your buyers, and other market conditions.

To help you with this we created this complete guide that walks you through the entire process, plus your different selling options, key issues, and important Tax information you maybe hadn’t considered.

Feel free to use the Table of Contents below to jump around.

Key takeaways

There are many kinds of property liens with different levels of importance to the sale process.
You can sell a home with a property lien on it, but this is unlikely unless you are very lucky.
The best way to sell a house with a lien on it is to get rid of the lien first.
Checking for liens is easy, so you should always assume that buyers will find out on their own about the lien even if you don’t tell them.
SoCal Home Buyers can help you sell your property even if it has a lien.

The Types of Liens A Property May Have

A lien is a legal claim against your property that can be enforced if you fail to pay a debt owed to the lienholder. For example, a mortgage lien gives the bank the right to take possession of your house with a lien if you do not make your mortgage payments on time. In this case, the bank can take possession of the property and sell it to recover their losses.

See: California Code of Civil Procedure section on Liens.

Liens are tied to the property and not individuals. For this reason, it is possible to transfer a property with a lien and be free of it in some cases, though most buyers will be wary of properties with liens against them.

Not All Liens Are Bad. What’s The Difference?

Liens exist to protect debtors from unpaid debt. They allow a property to change hands from a debtor to a creditor to protect the value of a loan.

There are many different kinds of liens. Mortgage liens are common and do not negatively impact you or your sale prospects. They simply exist as a form of security for the bank and will not be enforced as long as you make your mortgage payments regularly.

Others, like a judgment lien, can significantly affect your credit score or even your financial future. These liens are reportable to credit bureaus which can affect your ability to secure credit in the future, any businesses you may own, and even your ability to obtain and keep a job.

Voluntary and Involuntary Liens

A voluntary lien is a one knowingly entered into by the creditor and debtor in which a property is used to secure the value of a debt. A mortgage is an example of a voluntary lien.

Most kinds of liens are involuntary. Involuntary liens are sought in response to unpaid debts. This includes liens for things like legal judgments, unpaid taxes, or unpaid construction fees from a contractor or architect.

involuntary liens

General vs. Specific Liens

Liens can be placed against specific properties, known as specific liens, or an entirety of a debtor’s property, known as general liens.

general vs specific liens california

Primary and Secondary Liens

Liens are also classified in order of precedence. A primary lienholder will be the first to have the opportunity to recoup the value of their loss by enforcing the lien in the event that the property owner can’t pay their debt. In the case of standard mortgage liens, the bank who issued the mortgage will be a primary lienholder.

If a property owner applies for and receives a home equity line of credit with their home equity as collateral, the issuer of that loan would become a secondary lienholder. Naturally, a secondary lienholder will only be able to recoup their losses once the primary lienholder has done so.

In the case of IRS tax liens, the federal government will often take precedence even over your mortgage. This is why property taxes are usually included as part of a mortgage payment, so that the bank can protect themselves from any missed payments on the part of the debtor.

The Different Types of Liens

There are several different types of property liens, but all are nearly identical in function. The most common example as mentioned earlier is the mortgage lien which is the least complicated and also not considered a burden on the sale of a home.

All other types of liens are the result of unpaid debt. Some of these are reportable to the credit bureaus, meaning they can and will affect your credit score in addition to the sale of your property.

types of liens

Some of the different kinds of liens are:

Mortgage Lien: The most common kind of lien, usually held by a bank to secure the value of a home loan.
IRS Tax Lien: Can be placed on a home if the owner has past due property taxes. An IRS tax lien can take precedence even over a mortgage.

NOTE: even without paying your back taxes. If you have other properties, the IRS may be willing to transfer their property tax liens to one of them so that you can sell the property in question.

Property Tax Lien: Like IRS tax liens but for county property taxes.
Judgment Lien: Issued via court order. These types of liens are reportable to credit bureaus. Includes things like child support and alimony debt.
HOA Lien: In some cases, your HOA may be able to put a lien on your property for failure to pay dues or fees. Check with your covenant and local laws to determine if this is possible.

Mechanics Lien: Also known as a construction lien. Will be placed on a property by a contractor or home designer for unpaid work.

Issues to Consider After You Know How You'll Sell Your Home

When you’ve figured how you plan to sell, a few additional questions and issues may come up that're worth considering:

#1: "Should I Move Out of My House Before I Sell It?"

Moving out of your house before putting it on the market presents a mixed bag of benefits and drawbacks. It may make sense in your situation if you can work out a couple of logistical issues first.

One advantage of moving out before listing is that you won’t have to work around the schedule of your real estate agent for open houses, prospective buyer showings, or other inconveniences.
Selling an unoccupied home may also increase the frequency of private showings from other real estate professionals who won’t have to worry about scheduling issues with the homeowner.
Additionally, you won’t have to worry about keeping the house in a continuously clean and well-kept state, which is difficult when you're living there.

However, other concerns about moving out before selling your home are worth mentioning:

You still will likely have to pay for utilities to stay on (even though the home is unoccupied).
The home may be at an increased risk of crimes like burglary, theft, vandalism, squatting, etc.
An inability to stop or limit property damage that could arise during an emergency such as a flood or fire.
Some studies also show that empty homes may take longer to sell and will ultimately sell for slightly less than an occupied home.
The reasoning behind this may be the confidence that a homebuyer has knowing their purchase is “battle-tested,” which may decrease the chances of future habitability problems occurring.
To counteract some of this effect, you may consider working with a staging company to furnish the home and present it in a way to maximize its potential value and garner attention from buyers.


leaseback-selling-home-in-california

#2: Is a Leaseback Worth Considering if You Need More Time to Buy?

If you decide to sell your home before buying the next one, a leaseback may be an important term to negotiate into your sale contract.

What is a Leaseback?

A leaseback is where you complete the sale of your home to the buyer, but the buyer agrees to temporarily lease the property back to you.

Why Consider a Leaseback?

This is a common sale contract term in cases where you, as the seller, need extra time to find or close on your next home.

How Does a Leaseback Work?

You can structure a leaseback in a couple of different ways.

  1. One option is to take the rental value and subtract it from the sale proceeds held in escrow after you move out.

  2. The other option more closely resembles a traditional lease where you make monthly payments to the new homeowner who becomes your landlord.

As the seller, you may find the first option preferable because you won’t have to worry about paying for rent out of pocket. However, your buyer may push for monthly payments because they will need to cover their future mortgage expenses that begin shortly after closing.

How Long Can a Leaseback Last?

Leasebacks generally last weeks to months after closing but won’t usually extend much longer than a year in extreme cases.

In many cases, a leaseback won’t be an issue, but you should understand that demanding one may limit your pool of prospective buyers.

Should I Consider Incorporating a Leaseback?

Incorporating a leaseback into your sale contract can give you some relief but may also further complicate the transaction and create additional risk, complication and headache for you.

You may also have to endure a final inspection once your lease ends and you could be liable for any property damage or issues that arise post-close.

Moving Out of State But Need to Sell Your Home?

Selling your home in CA to be with family or job relocation can be tricky. If you need to sell without the stress, hassle and headache of listing we can help!

Click the button below to request a guaranteed all cash offer within 48 hours and close on your home within 7 days. You may be one click away to moving on with your life sooner than later. 

#3: Do You Need Sale Proceeds for Your Next Home Purchase?

We previously discussed how most people elect to sell their home in California before buying the next one because they need the sale proceeds to finance the purchase. However, the risk is that you may be rushed into a home purchase simply because you need a place to live.

To prevent this, you could consider buying your next home first but make the purchase contingent on the successful sale of your current home.

This is what real estate agents call a “home sale contingency.”

Contingency clauses are common in most home sale contracts and generally protect buyers in several different ways (e.g., appraisals, inspections, financing, etc.). The failure of the parties to comply with a contingency can be a legal reason to terminate the home sale.

As the buyer, you're effectively stating in the agreement that you will only complete the purchase if you can sell your old home by a specific date.

The home sale contingency gives you comfort and insurance that you won’t be liable for owning two homes in the event you can’t sell the current one.

1. A Sale and Settlement Contingency Versus a Settlement Contingency

Expanding on the above, you generally have two options available to you for stating a home sale contingency in the offer.

2. Pure Settlement Contingency

The second is a pure settlement contingency, which states your current home is under a contract for sale but is awaiting close.

Important to Know: Sellers are often reluctant to accept offers contingent on another home sale because of the perceived risk that the deal will fall through. This is especially the case when you're competing with other offers.

In these cases, having a settlement contingency will appear more valuable because you're further along in the process of selling your current home.

home sale contingency plan

What Happens When You Sell Your House in California?

If this is your first time selling a home in California or it’s been a while, you could benefit from our quick reminder of how the process works. The process can most easily be explained in three phases: before listing, getting under contract, and closing.

what happens when you sell your house in california

Steps You’ll Take Before Listing Your California House for Sale

1. Hiring a Real Estate Agent

The things you do before listing your home for sale in California will have the greatest impact on your ability to sell quickly and on favorable terms.

Of course, current market conditions will play a role but there is a lot you can control when it comes to how you approach the listing.

Before listing, you will usually need to complete the following tasks:

Your realtor is the one who will help organize and manage the listing, the review of offers, contract and compliance items, and other administrative parts of the closing.

2. Choosing a Listing Price

Price your home too high and you might deter potential buyers but list it too low and you might miss on potential gains. You’ll want to consider recent comps and other motivating factors to choose a list price that will fit your needs.

3. Advertising Your House Listing

You will want to advertise your listing on a multiple listing service (MLS) and other platforms (e.g., Zillow, Redfin, etc.) to attract buyers. Part of this will include creating a description of the property supported with professional, well-lit photos.

4. Getting Your House Under a Sale Contract

After listing the property, your next steps will be doing everything necessary to find an acceptable offer on your house and get under contract. Again, market conditions and your list price will influence how long this part of the process takes, but you could reasonably expect it to take a couple weeks or longer.

During this time, you may have scheduled showings with individual buyers throughout the week. Your real estate agent should also offer open houses on the weekend because that is when serious prospective buyers are most likely to have the time to look at homes.

Eventually, you will start receiving offers, which may present opportunities for counter offers, negotiating terms (e.g., a home sale contingency), or attempting a bidding war if you have multiple offers.

5. Completing the Closing Process

After you accept an offer, your contract will state a date when the transaction becomes final, which is known as the closing date. This is the day when you will receive the buyer’s funds from escrow, and the buyer will take possession of the property (unless you negotiated for a leaseback).

If you had a mortgage or other loan tied to the property, then sale proceeds will divert to repay those obligations first.

Between signing the sale contract and closing, you and your buyer will need to complete several important steps. Your buyer will likely want to complete an inspection of the property in addition to getting an objective appraisal.

On your end, you will have to complete disclosure schedules and make other certifications about the property’s condition.

Tax Consequences: Is the Money from the Sale of the House Considered Income?

Another important point to understand when selling your house in California is the federal tax consequences of the transaction.

Real estate is often heralded for being an asset that tends to appreciate over time. When you sell the house at a profit, you have a capital gain that the IRS considers taxable income.

Depending on the length of time you’ve owned the property, you will have a short-term capital gain (if owned for less than a year) or a long-term capital gain (if owned for a year or longer).

The IRS taxes short-term capital gains at the ordinary income tax rate (i.e., whatever your tax rate is in the year of the house sale up to a rate of 37 percent). Long-term capital gains, however, receive a slightly more favorable tax rate that maxes out at 20 percent but can be lower based on your tax bracket.

selling home california capital gain exclusion

Do You Have to Pay Capital Gains If You Reinvest in Another House?

First-time sellers of a personal residence are often surprised to learn about a commonly used capital gain exclusion within the federal tax system.

The IRS allows homeowners to exclude a certain amount of the capital gain from their taxable income so long as certain conditions are met.

Taxpayers who file single can exclude up to $250,000 worth of capital gains while taxpayers who file joint returns as a married couple can exclude $500,000.

To qualify for the exclusion, you must have used the home as your primary residence for two out of the five years preceding the date of sale.

In other words, the exclusion doesn’t apply if you used the home as a vacation property, a rental, or for another commercial purpose.

If you have any questions about the tax implications of selling your home in California, we recommend consulting with your accountant, lawyer, or other tax professional.

Final Logistics to Consider When Moving Out of California

A final topic worth mentioning is the logistics of storing and transporting your property during the home sale and moving process.

The options available to you and their appeal will likely depend on the length of your move.

In some cases, you may wish to tackle the move yourself and simply rent a truck to transfer all your personal property.

However, many other options exist for longer trips such as hiring a moving company, moving pods, or other businesses that will help transport your belongings for you.

Stressed about selling and moving?

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SoCal Home Buyers Can Make the Sale of Your House Fast, Easy & Painless...

If the process of selling your California home sounds like a lot of work, that’s because it is. Unfortunately, no true shortcuts exist when it comes to selling your home and moving out of state.

It can be a long, tedious process that you'll be thankful to be finished with once it's done. Regardless, you must weigh your options and choose the route that will get you where you want to go as quickly and efficiently as possible.

At SoCal Home Buyers we've helped over 500+ happy sellers do exactly this. Our goal is to relieve some of that home selling stress of your shoulders with our simple 3-step “Selling Made Simple” home selling process.

In short, we'll help you sell quickly (e.g. in as little as 7 days if needed) and help you avoid many of the headaches, hassles and costs associated with a typical real estate listing on the MLS by paying you cash for your home.

Our company provides home sellers with quick and flexible closing dates, a fair cash offers for a smooth and painless transaction.

Don't take our word for it though, here's what one of our happy sellers said about selling to us prior to moving to Idaho:

If you'd like to receive a fair cash offer on your home and sell without the hassle of Realtors, simply call one of our agents to learn more about how our services can help you in your home selling and moving journey.

sell my house and move to another state

Contact a SoCal Home Buyers agent today and get one step closer to selling your house in California.

Or, watch the short video below to learn more about us.

We buy houses from homeowners that need to sell property fast in Los AngelesRiversideSan BernardinoSan Diego, and Orange County. You can either fill out our online form below or give us a call at: 951-331-3844 to find out how we can help you with selling your house today!

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Selling a house in CA can be a complicated process. At SoCal Home Buyers we make the process fast, simple & easy, while paying you the highest off-market price possible. Click the button below to Request a fair, no-obligation cash offer on your Home Today.

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