Three Things to Consider Before Deciding to Sell Your Home

A Story by Sara Griffin | Updated 02/29/2020 12:00pm


So you've decided you want to sell - great! You probably have your own personal reasons for selling but have you considered the other factors such as market conditions, your property's value, and tax implications? In this article, I wanted to break down a few things you should consider before deciding to sell.

Assessing Market Conditions

There's a difference between what you think your home is worth and how much it is actually worth. The truth is, your home is only worth what a qualified buyer is willing to pay at the time it's on the market. The market fluctuates based on several factors such as supply and demand, interest rates, economic conditions, and so on. As your REALTOR®, I can provide you with a comparative market analysis to give you an idea of the going price for homes in your area at the time.

Tax Implications of Selling

There are numerous factors that can affect your tax liability upon selling your home. These issues include:

  • whether you purchased the home or inherited it
  • if you used your home for business or rental purposes
  • costs associated with selling your home
  • any home improvements and additions that you've undertaken

The Federal Taxpayer Relief Act of 1997 provides capital gains tax exclusions of up to $500,000 for married taxpayers filing jointly and $250,000 for single taxpayers or married taxpayers filing separately. Current capitol gains rates are 20% for those in upper tax brackets and 10% for those in lower tax brackets. Overall capital gains rates have been lowered even further -- to 18% and 8% respectively -- for assets acquired after December 31, 2000, and held five years or more.

To qualify for this tax break, you must have used the home as your primary residence for at least two of the prior five years; these two years don't have to be consecutive. If you relocate for your job but don't meet the requirement, you may be allowed to take a capital gains exclusion proportionate to your circumstances. This exclusion is not a one-time benefit; you may take advantage of it once every two years as long as you meet the qualifications. The tax rules differ when you sell a home that you've inherited. If you sell the inherited home for a profit, you're required to pay federal and state taxes on the gain. If you keep the house as a second residence and/or eventually move into it after renting it to tenants, you may take the $250,000/$500,000 capital gains tax exclusion if you meet the requirements. When you're deciding what to do with inherited property, you should consider the current estate tax laws and basis practices. Beyond these general rules, it's wise to discuss your home's sale with a tax professional who can advise you on tax benefits in more detail.

Timing Your Decision to Sell

Because most sellers finance a new home purchase with the sale of their present home, they usually put their homes on the market before they begin their search for a new home. Learning the price you can expect from the sale often sets the pricing parameters for your new home search. Of course, it's not wise to wait until the sale on your property closes completely before beginning to look for your new home. Timing your search properly with the buyers' transaction can make the difference between having the available funds to buy a new home and cutting down on the interim period between homes.

My name is Sara Griffin with the Associates Realty Group and it's my goal to not only help you buy or sell real estate but to be your REALTOR® for life. If you have any questions about selling your home and buying a new one, feel free to call me at 951-220-4491 or email me directly at sarapassion4sales@gmail.com.

 

[source]

 
 

Contact Us

Sara Griffin
Real Estate Group
Please enter a name.
Please enter an email.
Please enter a phone number.
Please enter a message.
Loading...

Related Articles

Are you sure you want to delete this?

ConfirmCancel

Request Info

Please enter a name.
Please enter an email.
Please enter a phone number.
Please enter a message.
Loading...

Log In

Welcome back! Access your account below.
Please enter a login.
Please enter a password.
New user? Create an account Forgot password? Reset it here

Create My Free Account

Search Homes, Favorite Listings, and more!
Please enter a name.
Please enter an email.
Please enter a phone.
Have an account? Log In

By submitting, you agree to our Terms & Privacy.
We make every effort protect your personal privacy.

Create My Free Account

Search Homes, Favorite Listings, and more!
Please enter an email.
Have an account? Log In
Please enter your name.
Please enter a phone number.
No thanks

By submitting, you agree to our Terms & Privacy.
We make every effort protect your personal privacy.