Selling a Home? Like to know how Taxes work on Capital Gain?

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Beware Home-Selling Myths – NASDAQ.com

Like many folks, you sell a home only a few times in your life and so likely don’t know the potentially tricky rules and laws concerning real estate sales. Here are some half-truths, both new and established.

Recent data say that the average American buys and sells a primary home about every eight years – many move far less frequently – for reasons ranging from wanting a different size dwelling to change of a job. A lot of information about the tax consequences of selling a home fly around the Internet and other sources – some mostly bunk and much of the rest limited in applicability.

Understand a few of these half-truths before you sell your home and how they may or may not apply to your situation.

If I sell, I need to buy another home with the proceeds or owe tax.  Untrue as long as you live in the home as your primary residence for two of the preceding five years. An exemption of the tax on such a residence sale permits up to $250,000 ($500,000 for a married couple) of gain in value over the original purchase price plus improvements to the property.

For example, if you purchase a home for $100,000, update the kitchen for $10,000, live in the house for three years and then sell it for $120,000, you realize a gain of $10,000 on the sale. This sale is exempt from tax since you lived in the home as your primary residence for at least the required two years.

Roots of this half-truth reach back to a law, expired in 1996, that when you sold your primary home you needed to purchase a new one within two years with any gains from the sale. Many folks think this stipulation still applies since they haven’t sold a home in a long time.

If I sell my home, I owe an extra 3.8% surtax due to Obamacare. True only in some limited cases. This one gets traction via emails and Internet postings and enjoys a rather long life; I wrote about it more than two years ago.

Using numbers in the above example, you might owe the surtax if you wind up with a non-exempt gain on the sale of your primary home. This could happen because either you didn’t live in the home for two of the previous five years or the gain exceeded the exempted limit and your modified adjusted gross income exceeds $200,000 for singles or $250,000 for marrieds.

I can write off against income any loss on the sale of my home. Not true for a primary or secondary home. You generally don’t pay capital gains tax on a gain when you sell your home. Likewise, you can’t take a capital loss if you lose money on the sale.

This applies for all personal property not held for investment purposes. If you sell a rental property at a loss, you can write the loss off against other investment gains.

Changing homes causes enough stress. Know the truths from the myths about home selling before you even stick the sign on the lawn.

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Advanced Tips When Selling Your Home | Like what should the last number of price not be

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The Sneaky Science of Selling Your Home Revealed! – Real Estate News and Advice – realtor.com

Selling a home isn’t just about slapping down a fresh coat of paint—you need to delve into home buyers’ brains and figure out what makes them tick. From the moment they spot your listing to the instant they walk through your door, what persuades them to make an offer, and stick around to close the deal? To find out, we culled the most recent scientific studies that examine the home-buying mind to find out what turns it on—and off—and how you can use this information to your advantage.

Buyers know within seconds if they want a home

With a decision as weighty as a home purchase, one might think that buyers deliberate over all the pros and cons before they decide to sign on the dotted line. Yet studies show this is not the case.

According to the “Psychology of House Hunting” report by BMO Financial Group, 80% of prospective buyers know if a home is right for them within seconds of stepping inside. The reason? Researchers theorize that our minds process far more information in less time than we think, so a lengthy deliberation process may be a waste of time.

Take-home lesson: Since buyers know within seconds of entering your home whether it’s The One, you’ll want to spiff up the area they’ll see in that time frame—namely, your foyer.

“It can be a challenge to keep this area tidy since that’s where homeowners put their mail, keys, coats, shoes, dog leashes, and other items,” says Sissy Lappin, a real estate broker

Containers are key for keeping this mess under control: baskets or racks for shoes, bowls for keys and change—and, unless you have a nearby closet, you can never have too many coat hooks. Be sure to stash any seldom-used items elsewhere. Anywhere else.

They find aromatherapy confusing

It’s not all about what home buyers see; what they smell matters, too. But that doesn’t mean you should fill your home with potpourri or freshly baked cookies.

These “complex” scents can actually backfire in homes, according to a study by Eric Spangenberg at Washington State University, who found that shoppers will spend 32% more in stores where he piped in a simple orange scent rather than a multifaceted blend of orange, basil, and green tea. The reason? Complex scents may be nice, but they’re also more distracting as people try to figure out what they are.

As Spangenberg explained to the Wall Street Journal, “They are not there to process the smells. They are there to process whether this is a place they want to live.”

Take-home lesson: If you go for a scent, keep it fresh and simple. Spangenberg recommends lemon, basil, or pine. You have no time to grab scented candles?

“As a quick fix, I splash Pine-Sol down the sink,” says Lappin. “While certain scents might appeal to one gender but turn off the other, everyone loves the smell of clean.”

They’re wary of the number 9 in a price

On just about any shopping spree, we’re wooed by “charm prices”—in other words, T-shirts or towels priced at $9.99 rather than a round $10—because consumers tend to think that prices ending in 9 are a way better deal. Only with big purchases like homes, charm pricing makes buyers wary.

 

According to a study by Old Dominion University, 9’s near the end of a home price—say, $199,000 versus $200,000—are a turnoff. Why? Because these homes appear to be trying too hard to look like a bargain, and buyers don’t like that whiff of desperation when it comes to such a big purchase.

Take-home lesson: Avoid 9’s near the end of your asking price, because buyers may have a knee-jerk impulse to turn away.

“Charm pricing may be fine for T-shirts, but it looks sleazy on a home,” Lappin says. “You feel like you need a shower after seeing the price.”

Prices with round numbers are a turnoff, too

Another number no-no? Pricing your home with round numbers with lots of zeroes, like $200,000, seems like you pulled this number out of a hat. A more specific number like $217,000, on the other hand, makes it look like you’ve really done your homework and know exactly what your home is worth.

One study by Columbia Business School found that negotiators who ask for specific amounts are more successful than those who make rounded offers.

Take-home lesson: Avoid the round number trap and make sure your asking price is specific.

“It will sound like you’ve run the numbers on your home, right down to the exact square footage,” says Lappin. “Oftentimes buyers will ask, ‘Where does this number come from?’ and I’ll say, ‘This seller has done their research and it will take an hour to explain it.’ That’s usually enough to convince them to fall in line.”

Buyers fall hard for staged homes

Staging a home to sell is all the rage these days, and research shows it works: A study by the Real Estate Staging Association looked at 63 unstaged homes that sat on the market for an average of 143 days. Once those houses were professionally staged, they sold, on average, 40 days after their makeover.

Take-home lesson: Pay attention to presentation. But you may not have to open your wallet for a professional stager; the basic premises are simple ones that anyone can put into practice. For one: If you’re already moved out, get some furniture back in the house.

“Seeing a house without furniture is like seeing someone naked in bright light: You can see all their flaws,” says Lappin. Or, if your home does have furniture, make sure it’s the right furniture for each room.

“If you turned your college kid’s bedroom into an office/workout room, change it back to a bedroom,” says Lappin. “I don’t care if it’s four-bedroom—if you only have a bed in one room, it will be perceived as a one-bedroom house. It may sound weird, but that’s how people think. They may say they have imaginations, but they really don’t. On a subliminal level, they take what they see to heart.”

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Tips for Holiday Season House Hunting | Available Homes Have Motivated Sellers

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Tips for Holiday Season House Hunting – SFGate

This time of year typically marks the unofficial time people begin thinking about the holidays. After Halloween, time seems to speed up and before we know it the seasonal frenzy begins. Real estate activity during the holiday season is typically discouraged because of the challenges posed on both sides of a transaction.

For sellers, there is the inconvenience of having to keep the home clean; leaving on a moment’s notice for showings; and limiting holiday entertaining. For buyers, there may be limited access to houses if sellers place showing restrictions due to personal schedules and commitments.

There are other considerations that both sides should keep in mind.

Buyers will find fewer homes on the market, but the homes that are available have motivated
sellers. This may provide a better negotiating climate, and there is less likely to be the type of
competition for homes you see during high season. In turn, sellers will find equally motivated
buyers, and may find that offers and closings move more quickly.

Holiday sellers should table any plans to entertain, have houseguests, or do excessive decorating. Focus on showing off the features of your home that will appeal to a buyer – not your family decorations and holiday traditions.

The good news is, those buying and selling during the holiday season are serious about their real estate agendas. Despite the warnings about the timing, they are committed to getting the transaction done and seasonal notions or other challenges do not deter them.

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Check Things Carefully Before Declaring a Home Ready for Listing to Sell

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You’re Ready to Sell Your House. Really? – Courier Journal: Randall On Real Estate

Why are you considering selling? Is it because you know you’re ready, and can visualize yourself in another house? If not, there may be external reasons. You have to decide if those reasons are valid. If there’s no way around it, I’m sorry. That happens sometimes. People sometimes have to move before they are ready, and it is emotional. But just know that you get to take the most important parts of your home with you, no matter what: your family and the memories you’ve made there. The people living inside are what makes a house a home. As hard as it may be to accept now, you will make new memories at a new location, and will take the memories you made in your current home with you wherever you go.

If your home has been on the market a while, could you be the reason your home hasn’t sold yet? If so, are those reasons emotional ones? Would it actually put you out if it sold? Or would it be a relief, an open avenue to new beginnings? Think back on suggestions your Realtor made before listing, and feedback you have received from showings. The items in feedback may not be important to you, but the buyer pointed them out to their Realtor as reasons why they would not buy your house. Obviously, you can’t do much about the floor plan. But if you get multiple mentions of carpet needing to be replaced, then replacing your carpet may be the only thing holding you back. If it’s a suggestion from your Realtor, why haven’t you done it? For example, most people have to de-personalize their homes in order for them to show well. You want the buyers to be able to picture themselves in the house, not you. Above all, that means taking down pictures. If that is tough for you, you may not be ready. 

You might have even done these things partially, but are not 100% committed. Being ready to sell means being willing to make it work. Are you willing to do whatever it takes, within reason, to sell it? Know that, whatever your answer is, it’s ok. But if you are still emotionally invested and not ready to let go of your home, and you don’t HAVE to move, then maybe it’s not quite time to list it

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Six Toasty Autumn Homeselling Tips | Stage Your Home for the Season

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Six Toasty Autumn Homeselling Tips – TheMountainMail.com: Real Estate

You may think that autumn isn’t the best time to showcase your home, but you’d be wrong. Yes, fall days are shorter, with fewer hours of daylight for buyers to see your home. There may be many days of grey skies, rain, or early snowfall.

But autumn has a unique appeal that’s all its own. You can look forward to gathering with friends and loved ones by a crackling fire, play winter sports in the backyard, or walk on the beach without all the tourists. Most important, homebuyers are motivated; they want to move in before winter. Here are six tips to selling your home during the changing season.

Say welcome with fall decorations

One nice thing about fall décor is that you can put out pumpkins, gourds, scarecrows, and mums now, and they will last through Thanksgiving. Put a nice new welcome mat out for buyers and their agents to wipe their feet, and if it’s been raining or snowing, provide booties that can be slipped on over shoes so mud or road salt aren’t brought into your home. It’s worth paying the neighborhood kids to keep your driveway and sidewalks clear of snow and slush.

Air out your home

As the weather cools, you may tend to shut windows and doors, but closed homes tend to hold odors, so make sure you open the windows for an occasional airing. Run the fans after cooking meals. Moisture also holds odor, so use the exhaust fans in the bathrooms after every bath and shower. While buyers are inside, keep temperatures moderate and even — not too warm or cool.

Let the light in

We already know there’s less sunlight in the fall and winter, so leave lights on for showings. It won’t hurt to pump up the wattage in areas you really want buyers to see details, such as kitchens and baths. Open the drapes and keep windows as clean as possible for showings.

Cut out clutter

When your household spends more time indoors, it’s natural for clutter to accumulate, but too much can have a smothering effect on buyers. Take special care to put coats and all-weather boots away.

Keep a basket in every room so that if you get a sudden showing, you and the rest of the family can do a five-minute cleanup before leaving the premises so your buyer can have some privacy. Store the baskets under the bed or some other place out of sight.

Stage Your Home for the Season

If you’re selling a home in a ski resort, it’s easy to play up the fun of cold weather. Otherwise, you may need a little imagination to stage your home. Ask your real estate professional for ideas, but consider these few to make your home cozy, toasty and inviting.

If you have a fireplace, turn it on, but low. Stage the seating with a comfy Fair Isle throw. If you can find one with snowflakes and reindeer, that’s even better. Put some big fluffy pillows on the floor. Boil some apple cider with cinnamon, and let the delicious aroma waft through the house. Make a beautiful wreath for the front door out of the gorgeous gold and red leaves that have fallen in your neighborhood.

Family photos are supposed to be a no-no with one exception — when they show the home to advantage. Make a quick-flip buyer’s album that includes your beautiful garden in the spring, the backyard pool in the summer, and the gorgeous fall colors of your trees.

Tout the neighborhood

Whereever your home is, it’s part of a community. Show it off! If your neighborhood offers a bike path, playground or community center, list them for the buyer in a feature sheet, and include pictures for your buyer’s album.

Create a map to add to your feature sheet that shows how quickly the buyer can get to various amenities like the nearest grocery store, train stop, and other services. Be sure to point out places unique to your area like the corner book shop or dog groomer.

You can bring out the cozy best in your home by showing buyers that this is a great place to make pleasant memories.

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Improve your credit score for homebuying | 6 Tips to Good Credit

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Improve your credit score for homebuying

Looking to buy a home soon, or just want to be sure you’re mindful of a good credit score, Holly Henbest has the top six tips to make you look good on paper!

 

  1. Revolving Credit
    1. Your credit score is impacted most significantly if you keep your balance at two different tier levels – the two are:
      1. 50 percent or less of the limit or
      2. 30 percent or less of the limit
    2. So, if you have a credit card with a $10,000 limit, keep your balance at under $5,000 or even better under $3,000.
    3. You would be better to have three credit cards with a total limit of $30,000 and a total balance of $9,000, then one credit card with a limit of $10,000 and a balance of $9,000.
  2. Authorized User Status
    1. Did you get included on a family members credit card for convenience? Get yourself removed. Call the credit card company and ask to get yourself removed and ask to have them send you a letter to confirm you’ve been removed.
  3. Checking your Credit
    1. Don’t get your credit pulled to check things on a frequent basis.
    2. It’s good to be aware, but the more you have your credit pulled, it can hurt your score.
  4. Paying Off/Closing Credit Cards
    1. We hear it all the time and its true, don’t close your credit card account.
    2. You may get excited when you pay it off and just want it gone, but don’t close it.
    3. Instead just shred your card and don’t use it.
  5. Have a collection?
    1. Contact a Mortgage Banker and they can coach you on getting this removed.
    2. Remember, once you pay a collection, you have no negotiation power.
    3. Ideally you want the collection removed.  Getting it paid doesn’t really help your score.  You need it removed to help your score.
  6. Use a credit simulator.
    1. Some Mortgage Bankers have a credit simulator and they can plug in scenarios of if you pay down a credit card, how much will your score go up. 
    2. So, before you decide who and how much to pay, have the Mortgage Banker check it out on the Simulator.
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Newly Built Home in Modesto – Owner Occupied or Investment

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Newly Built Home in Modesto – Owner Occupied or Investment

List Price $249k. Contact Yajnesh Rai for more details.

New home built by owner contractor with approved plans and permit, completed in Aug 2015. Features 3 beds and 2 baths. Laminate floors, granite counter tops, nice cabinets, new SS appliances, dual pane windows, Floor to ceiling tiled shower wall. Private fenced yard, well maintained and tastefully designed landscape. Excellent primary home or investment property. Close to Main Shopping Street and Schools. Nice and Quite neighborhood. New split AC system.

Pictures: https://plus.google.com/115712399711900339522/posts/V5tQ1iQ9Mm4

 

Yajnesh Rai

YRai@KW.com

408-547-7845

Keller Williams Realty Silicon Valley

CalBRE# 01924991

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Six Things Determine How Fast A Home Will Sell

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6 Things That Determine How Fast A Home Will Sell : Home : Realty Today

You are selling your home and you would like to know how soon you will make the sale especially that you have already moved into your new home.

 
 

You can go for a psychic reading or you can look at these 6 things that determine how fast a home will sell according to Trulia:

The price

Your pricing could directly affect the amount of time your property sits in the market. Of course you can price it at or below market value and people searching for a lower price will most likely flock on your listing. But if time is not a factor, then you can choose to price higher.

“The best time to get noticed is the first few days your property hits the market,” says Mor Zucker, a Denver real estate agent.

Your willingness to negotiate

If you are dead set on your full asking price, then expect your listing to stay on the market for a longer period of time. Aside from pricing too high, “a reluctance to negotiate is the second reason homes stay on the market a long time,” says Trip duPerier, owner of Texas Landman LLC. “A solid offer is nothing to scoff at,” he adds.

The photos

Good listing photos are sure to entice more potential buyers. So apart from addressing repairs and home staging, you also want make sure that you hire a professional photographer. “Having good photos of your home can definitely shorten the amount of time your property sits on the market,” says Zucker. 

A good agent

One of the keys to a successful home sale is hiring the right real estate agent, and that means someone who has worked and sold homes in the area.  “The right real estate agent can make a huge difference in how long it takes to sell a home,” says Pamela Colombana, a California real estate agent. The right agent has the experience to properly prep your home and knows exactly how to market a property in your location.

Your sales strategy

It is important to be honest on your sales strategy. Establish the amount of time you find considerable for your property to stay on the market and let your real estate agent know. This way, the agent can do the necessary steps to sell your property according to your need and at the best price.

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Six Things Determine How Fast A Home WIll Sell

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6 Things That Determine How Fast A Home Will Sell : Home : Realty Today

You are selling your home and you would like to know how soon you will make the sale especially that you have already moved into your new home.

 
 

You can go for a psychic reading or you can look at these 6 things that determine how fast a home will sell according to Trulia:

The price

Your pricing could directly affect the amount of time your property sits in the market. Of course you can price it at or below market value and people searching for a lower price will most likely flock on your listing. But if time is not a factor, then you can choose to price higher.

“The best time to get noticed is the first few days your property hits the market,” says Mor Zucker, a Denver real estate agent.

Your willingness to negotiate

If you are dead set on your full asking price, then expect your listing to stay on the market for a longer period of time. Aside from pricing too high, “a reluctance to negotiate is the second reason homes stay on the market a long time,” says Trip duPerier, owner of Texas Landman LLC. “A solid offer is nothing to scoff at,” he adds.

The photos

Good listing photos are sure to entice more potential buyers. So apart from addressing repairs and home staging, you also want make sure that you hire a professional photographer. “Having good photos of your home can definitely shorten the amount of time your property sits on the market,” says Zucker. 

A good agent

One of the keys to a successful home sale is hiring the right real estate agent, and that means someone who has worked and sold homes in the area.  “The right real estate agent can make a huge difference in how long it takes to sell a home,” says Pamela Colombana, a California real estate agent. The right agent has the experience to properly prep your home and knows exactly how to market a property in your location.

Your sales strategy

It is important to be honest on your sales strategy. Establish the amount of time you find considerable for your property to stay on the market and let your real estate agent know. This way, the agent can do the necessary steps to sell your property according to your need and at the best price.

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3 Home Inspection Deal-Breakers

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3 Home Inspection Deal-Breakers | Realtor Magazine

3 Home Inspection Deal-Breakers

Home inspectors are hired to perform an objective evaluation of a home’s condition, but at times, their discoveries can prompt the buyer to terminate a sale contract.

Dylan Chalk, owner of Seattle-based Orca Inspection Services LLC, writes on Redfin’s blog that, in his experience, the following three issues kill the most deals:

  1. Cover-ups. The house may look great, but a deeper inspection may reveal short-cuts on repairs or renovations made by a prior home owner. These commonly occur in homes that were purchased to be flipped. “I sometimes find flips in need of structural repairs or discover chronic moisture problems that were covered up in an effort to sell the house,” Chalk writes. “On the outside, everything looks new and shiny, but there may actually be deep dysfunction lurking in the bones of the house.” He also finds problems with vacation homes that have been remodeled multiple times over the years. “There can be a hodgepodge of foundations, additions, and rooflines that make them fundamentally different than they appear,” Chalk notes. “These are not ‘bad houses,’ but they are often quirky and may present risks that buyers weren’t anticipating. One tip that often gives these homes away is a quirky roofline that shows obvious additions.”
  2. More repairs than anticipated. This is a common scenario with younger homes, Chalk says. The clients may say, “It’s only 20 years old!” But while most 20-year-old houses are in good shape, they often require expensive replacements for systems that last only 15 to 20 years. Systems that usually need to be replaced after 20 years are a deck, furnace, roof, and appliances. Carpets, the home’s siding, and even hardwood finishes may need special attention at that point, too. The maintenance list may come as a surprise to some buyers.
  3. The home has bad bones. Buyers go into fixer-uppers knowing they intend to do a host of repairs, such as the furnace, kitchen, bathrooms, flooring, paint, and appliances. But buyers may not have taken into account the foundation, frame, roofline, floorplan, and drainage. A home inspection that turns up structural problems or drainage issues will add a significant amount to the buyer’s budget — even pushing them out of their price range.
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