If you're looking at homes for sale you may think you don't need to know much about selling a house. You'd be wrong. Even in a buyer's market, knowing what sellers are doing to make homes for sale more attractive will give you a leg up. Homes for sale in your market can look better or worse than they are- depending no the steps sellers take.
Homes for Sale: Great Expectations Meet Buyer's Expectations
While most everyone knows that buyers set the prices of homes for sale, this is a truth sellers often tend to forget. Your tour of homes for sale in your desired market is bound to uncover overpriced houses where hopeful owners set prices based on wishful thinking rather than reality. The good news for you? Typically, these are the listings that eventually show up under ?Reduced Homes for Sale? banners. Most buyers suspect that a reduced price, or being on the market for a while, means that there is something wrong with a home. But often, the only problem was that it was overpriced in the first place. Keep an eye open for these reduced homes for sale; you can stumble upon a real bargain, as the owner gets less greedy and more desperate to sell.
Homes for Sale: First Impression
Informed sellers will make a real effort to give a good first impression. That's why so many homes for sale have freshly paved driveways, just-planted flowers, and newly mulched flowerbeds. You do want to have a good first impression- but don't be too swayed by it. Curbside appeal of homes for sale has nothing to do with the structural integrity and overall care of the home. On the other hand, a well-maintained gem may not shine if the owner wasn't savvy enough to address those outer details. You job is to look at homes for sale with a critical eye: water damage, wood decay and mold are far more important than a fresh coat of paint.
Homes for Sale: Picture Perfect
The other thing to be aware of is how homes for sale are portrayed in those glossy real estate magazines you're bound to pick up. Unless the seller is working with an experienced and wise realtor, cars in the driveway or junk in the yard may clutter the photos of homes for sale. Does this matter to you? It depends. The car in the photo doesn't matter. It just tells you a novice was taking the picture. What about clutter in the yard? Well, it may tell you about how well homes in the area are maintained. But you won't really know until you visit for yourself. Again, your job is to look beyond the picture the seller and his or her realtor are trying to paint in order to get the real picture. Visit other homes for sale in the same neighborhood to get an idea of comparable prices. Look closely at walls for signs of water or wood damage. Finally, remember to have an inspection done of any homes for sale you are seriously considering. It's easy to plant a few flowers- but not so easy to replace damaged floorboards.
Homes For Sale With
The new Internal Revenue Service rules are more advantageous to sellers of homes for sale. You can no longer roll a gain into the new home; however, not all gain is taxable as in the past.
Now, homes for sale have the first $250,000 of profit exempt from any taxes, if you are the owner and filing single status. If you file jointly with your spouse, your homes for sale gain is tax exempt up to $500,000 ? this is a half-million dollars, tax-free profit. This means that if you purchased a home for $200,000, you could sell it for $450,000 as a single or $700,000 as a couple and incur no taxes on the profit.
There is, however, a time and resident test that must be met in order to receive this tax exemption for your homes for sale profit. You must have lived in the home for two out of the past five years in order to qualify for the tax exemption.
What If You Don't Meet the Time & Resident Test
So, does that mean that if you do not meet the time and resident test you then owe taxes on all of the gain? Not necessarily.
The tax code allows for several specific exemptions to the time and resident test, when you must move due to certain qualifying events. Here are a few of those events:
? You must move due to the health of one of the residents in the home (your immediate family) or the health of a relative who is in your care.
? A death in your immediate family that incurs the move, such as a breadwinner dies and the spouse cannot afford to keep the home.
? Divorce that forces a move.
? The unemployment of a breadwinner (must be qualified for and receiving unemployment compensation) and cannot afford to keep the home.
? A new job that is 50 miles further away from the home than the current job. Otherwise, if you drove 20 miles to your current job, then the new job must be at least 70 miles from the home to qualify for an exemption.
? Your home was damaged from a natural or manmade disaster, and you were forced to sell it.
? Perhaps an act of war or terrorism has caused the move.
? Even the birth of twins, triplets and so on, made the current home for sale too small and impractical to keep.
IRS publication 523, ?Selling Your Home?, covers many other unforeseen events that would qualify you for an exemption.
When you do not meet the time and resident test but qualify under one of the unforeseen event exemptions, you receive only a partial exemption for the gain on your home for sale. You will be taxed on a pro-rated amount of the gain, based upon how long you actually resided in the home.
If you lived there less than a year, then the profit from your home for sale is considered to be a short-term gain. This means, on the pro-rated amount you owe taxes, you will pay the same tax rate as you do on your 1040 income tax form.
If you have lived more than one year but less than two in your home for sale, the profit is considered to be a long-term gain. Rather than paying the generally higher income tax rate, most people are taxed at 15 percent. So, if you have lived in the home for less than one year, it is to your advantage to remain there until you pass the one-year time mark ? if at all possible.
The changes in the tax code for profit on homes for sale is much easier now to calculate and typically are more advantageous to the seller now, than in the past. Of course before making any home selling decisions or plans, consult a Certified Public Accountant or other tax professional.
J Harris has sinced written about articles on various topics from Camping, Real Estate and Home Management. John Harris is a researcher and writer on applicable real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more information please visit. J Harris's top article generates over 368000 views. to your Favourites.
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