There are many important steps to selling a home. With Real Estate One behind me, I can make your experience easier. Use the tools available through me to make the process easier, and follow these basic steps toward a successful sale.
for the week of March 15th
Understanding Capital Gains in Real Estate
When you sell stock, you owe taxes on your gain—the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations.
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:
- Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
- Add adjustments:
- Cost of the purchase, including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
- Cost of sale, including inspections, legal fees, real estate commission, and money you spent to fix up your home just prior to sale.
- Cost of improvements, including room additions, deck, etc. Improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.
- The total of this is the adjusted cost basis of your home.
- Subtract this adjusted cost basis from the amount at which you sell your home. This is your capital gain.
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you have lived in the home as your principal residence for two out of the last five years and haven’t sold or exchanged another home during the two years preceding the sale.
As of 2003, you also may qualify for this exemption if you meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.
Step One: Prepare Yourself
You should never sell your home without learning about the current market conditions, competition and local trends. There is no better way to get prepared than to schedule a pre-marketing consultation with a Real Estate One professional.
Step Two: Know your Home’s True Value
A Competitive Market Analysis (“CMA”) will help determine the value of your home in today’s market. Ensuring that you market your home at a price most advantageous to you is what I, a Real Estate One professional, am trained to do. For a CMA on your home, please contact me.
Step Three: Reach the Right Market
A successful sale, one that happens in a timely and profitable manner, doesn’t happen by luck. It happens as a result of using the right tools to reach the most potential buyers for your home.
Step Four: Give your Buyer Added Value
Our Home-Link home services give you a distinct advantage over sellers with other companies because your buyer will get all the help they need with home related services like appliance purchases, landscaping, moving, re-decorating, and more. These services are FREE to YOU as well as your buyer. For more information, please contact me
Step Five: Moving to or from Michigan?
If you are considering a move from Michigan to another state, a move to a new area within the state or even a move from any state to Michigan, we can help! If you would like information on neighborhoods, schools in Michigan and/or other information, contact me.