August 23, 2011
Why would anyone say that any particular month is a great month for Buyers? Possibly because those of us who pursue the profession of real estate sales see some positive incentives for prospective buyers.
1) Interest rates for 30 year fixed rate mortgages are at 50 year lows.
2) You can still get a loan with a 3.5% down payment. With talk of new regulations wanting at least a 10% down payment, acting now may be a wise move
3) Home prices are almost half of what they were just 4 or 5 years ago.
4) (Here is an interesting incentive) Sellers who have been offering their houses for sale for 3 to 6 months may be ready to deal.
Yes, a number of homes offered for sale are short sales, but after three years of dealing with short sales, lenders and the government may be figuring out how to get them completed in a reasonable amount of time.
If you are some one who would like to own a home, contact a real estate agent and at least check out the inventory.
If you are thinking of making an investment, do the numbers; the rent may pay the mortgage.
If you have picked a location where you would like to retire some time in the future, check out the houses for sale. Buy one, rent it and when you are ready for retirement, convert it to your primary residence.
Just some thoughts on why this August may be a great time to buy a property.
Tuesday, August 23, 2011
Tuesday, June 26, 2007
Calculating Capital Gains
June 26, 2007
I've recently had some questions regarding capital gains. Present laws tax long term capital gains at 15%. However, the U.S. government encourages home ownership and has enacted laws which give a huge benefit to homeowners selling a principal residence. Individual sellers can exclude the first $250,000 in profit from being taxed; married couples filing jointly can exclude $500,000 in gain. This exclusionary benefit is presently available once every 2 years.Here is a simplified formula for calculating the gain on your principal residence.
Property was purchased for $250,000 and was sold for $800,000. What a bonanza, but possible if the property was held over several years and sold in a rising market. During the course of ownership and perhaps some fix-it projects to sharpen up the house for sale, $17,500 was spent. $55,000 was spent in selling expenses (real estate commission, escrow, title, etc.). Subtract the selling costs from the sale price: $800,000 - 55,000 = $745,000 adjusted sales price Now add the cost of major improvements to the orignal purchase price:$250,000 + 17,500 + $267,500 adjusted cost basis Subtract the adjusted cost basis from the adjusted selling price to determine the capital gain: $745,000 - $267,500 = $477,500.
Rather than having to pay $477,500 x 15% ($71,625) in capital gains taxes, you are allowed to totally exclude your gain from taxation. If you had sold stocks with the same kind of gain, you would have paid the $71.625. Not only were you able to enjoy a wonderful home, you were able to keep your financial gain.
I've recently had some questions regarding capital gains. Present laws tax long term capital gains at 15%. However, the U.S. government encourages home ownership and has enacted laws which give a huge benefit to homeowners selling a principal residence. Individual sellers can exclude the first $250,000 in profit from being taxed; married couples filing jointly can exclude $500,000 in gain. This exclusionary benefit is presently available once every 2 years.Here is a simplified formula for calculating the gain on your principal residence.
Property was purchased for $250,000 and was sold for $800,000. What a bonanza, but possible if the property was held over several years and sold in a rising market. During the course of ownership and perhaps some fix-it projects to sharpen up the house for sale, $17,500 was spent. $55,000 was spent in selling expenses (real estate commission, escrow, title, etc.). Subtract the selling costs from the sale price: $800,000 - 55,000 = $745,000 adjusted sales price Now add the cost of major improvements to the orignal purchase price:$250,000 + 17,500 + $267,500 adjusted cost basis Subtract the adjusted cost basis from the adjusted selling price to determine the capital gain: $745,000 - $267,500 = $477,500.
Rather than having to pay $477,500 x 15% ($71,625) in capital gains taxes, you are allowed to totally exclude your gain from taxation. If you had sold stocks with the same kind of gain, you would have paid the $71.625. Not only were you able to enjoy a wonderful home, you were able to keep your financial gain.
Thursday, May 24, 2007
Ask Shirley
May 24, 2007
I have just added this blog to my website which is www.shirleyharry.com. I am starting this blog in the hopes that I can be a resource for persons who have questions about real estatae in the Redlands Area. I have been an egent with Lois Lauer,dba asCentury 21 Lois Lauer Realty for the past 29 years. I am a research geek and am happy to search out answers.
I also write a blog for www.loislauer.com and hope that you will check it out as well.
I have just added this blog to my website which is www.shirleyharry.com. I am starting this blog in the hopes that I can be a resource for persons who have questions about real estatae in the Redlands Area. I have been an egent with Lois Lauer,dba asCentury 21 Lois Lauer Realty for the past 29 years. I am a research geek and am happy to search out answers.
I also write a blog for www.loislauer.com and hope that you will check it out as well.
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