Here’s What You Need To Know In 2016 In Order To Sell Your Home
If you expect to put your home on the block at some point in 2016, here are some key factors for you to keep in mind before you address issues and concerns to make the best possible deal.
It’s a seller’s market …
Since early 2012, prices have climbed higher, and the Case-Shiller National Home Price Index is coming within spitting distance of matching its highs from 2006 and 2007 before the financial crash.
Where you live is a key factor in determining just how much of a seller’s market you can expect. Areas where economic prospects are less favorable have never fully recovered from the housing bust. The more lucrative a region’s economic future appears to be, the easier you can expect it to be to sell a home.
… but mortgages could get more expensive
One key factor in how much sellers receive for their homes is how much buyers can afford. Low mortgage rates have helped fuel price increases in recent years.
But some now fear that with the Federal Reserve having begun a new cycle of rate increases, a move higher for mortgage rates could make homes less affordable.
So far, the tiny quarter-point boost that the Fed made in mid-December hasn’t pushed mortgage rates appreciably higher. Historically, though, tightening has generally led to increased rates on mortgage loans. Sellers need to be prepared for greater difficulty for prospective buyers trying to get financing.
Tax benefits still favor home sales
The biggest tax break for ordinary taxpayers is still the exclusion on capital gains for the sale of a personal residence. Single taxpayers can exclude up to $250,000 in gains from the sale of a home from tax, and joint filers get a double-sized exclusion of $500,000.
To qualify, you have to meet a couple of tests. First, the property in question has to be your main home. In addition, to get the full exclusion, you have to have lived in the home for at least 24 months in the past five years.
You can’t have claimed a home-sale exclusion on tax returns for the previous two years. In some cases, partial exclusions are available, but getting specific tax advice from your accountant or tax professional is essential to make sure you’re aware of all the tax implications of a home sale.
Get help at the right price
Selling a home is a monumental event, and it can introduce a number of complicated financial considerations. Being aware of those considerations and making a plan to deal with them will help the selling process go a lot more smoothly. Using a real-estate agent to help market and sell homes is typically the smartest move. Historically, the typical 6% commission on home sales is standard. But flat-fee brokerages offer a fixed cost that sellers can count on that’s often lower than the percentage-based commission would be. Read more > > >