IRS’s top 10 tax tips for home sellers
From time to time the IRS releases tips designed to help people with their taxes. Some of these are quite useful.
Last week the agency released “Ten Tax Tips for Individuals Selling Their Home,” (IRS Summertime Tax Tip 2011-15).
As a real estate agent or broker, it is not your job to give home sellers tax advice. Indeed, it is advisable not to, since you could end up getting sued if you give wrong advice.
Instead, refer sellers to this list of IRS tips. It’s a good starting place for them to begin to understand this often complex area of tax law. You could even print it out and hand it to anyone who asks you about these issues.
Here are the IRS’s top 10 tax tips for home sellers:
1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.
2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).
3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.
4. If you can exclude all of the gain, you do not need to report the sale on your tax return.
5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.
6. You cannot deduct a loss from the sale of your main home.
7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.
8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.
9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.
10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.
By Stephen Fishman, Monday, August 15, 2011.
SB 314 Nevada Law Update to the Sellers Real Property Disclosure
If you have purchased a Las Vegas bank owned home or even a Las Vegas short sale home in recent years, chances are that you were asked to sign a NRS 113 or commonly know as the “As-Is” waiver at some point during the sale. This “As-Is” home sale waiver is going away in the state of NV and Las Vegas home sellers will now be required to provide the SRPD for just about every 1-4 unit residential sale.
SB 314 made two significant changes to the Seller’s Real Property Disclosure (SRPD) statutes in NRS 113.
First, the purchaser may no longer waiver any of the rights set forth in NRS 113.130(1). That’s right – no more SRPD waivers! (The NRS 113 waiver form will be removed from ZipForm® as of October 1, 2011.)
Additionally, the legislature went one step further in eliminating the SRPD waiver, stating: “A seller of residential property may not require a purchaser to waive any of the requirements of subsection 1 as a condition of sale or for any other purpose.” There is no question that SRPD forms must be supplied by the seller in all transactions not exempt by statute. REO properties do not fall into an exemption. REO brokers and agents should work with their clients to draw their attention to this new law and discuss compliance.
One type of transaction that is exempt from the SRPD is the actual “courthouse steps” foreclosure auction sale (i.e., the Trustee’s sale). SB 314 also amended what must be provided to the successful bidder. Previously, the trustee or beneficiary of the deed need only supply written notice of any defects they were aware. This disclosure has been broadened to include the contact information of the asset management company who provided asset management services to the property if any defects were repaired or replaced – or attempted to be repaired or replaced – in the home prior to the Trustee sale. The asset management company is required to provide the successful bidder with a copy of any service report upon request.
If you are looking to buy or sell Las Vegas real estate, contact Travis Breton at 702-501-2752 or visit http://vegaslistingservice.com.
Information provided by LasVegasRealtor.com
A Good Reason to Google Your Home Address
With virtually any type of information imaginable online, it makes sense to do regular internet searches for your San Diego homes address. There are many compelling reasons why it makes sense to do so, especially if it’s an address you’re thinking of renting out or selling, but one of the major reasons is to detect scammers trying to rent or sell your house.
Internet scammers have taken to running internet scam by ripping off home information and putting together fake listings offering other people’s homes for rent or lease-to-own. Craigslist.org is one of the more popular websites where internet housing scams can be found, but is not the only internet site out there where this type of fraud exists. They often list the San Diego home on extremely cheap and easy terms, then ask the would-be-buyer or tenant to please wire or send the deposit money overseas. These scams often come to light only after the homeowner or current resident notices bargain-hunters checking out the place. If you start getting an inordinate amount of foot traffic to your San Diego home, or someone knocking on your door asking if they can see the place, you may want to Google your home address. If you find a fraudulent listing, identify yourself as the San Diego home’s rightful owner and as the home’s rightful owner ask the offending site to take the scam posting down - stat!
Another home selling tip offered by Summit Realty Group, the future of real estate today!
Information provided by Ginger Wilcox - Head of Training at Trulia.
In a buyers’ market, sellers should opt for inexpensive upgrades
Fixing up your home for a sale or refinance appraisal in order to get out of a negative-equity situation brings many homeowners difficult decisions. For a long time, the rule of thumb was that the best return on investment was putting money into updating kitchens and bathrooms. But with a buyers’ market in full swing, the rules have changed. We asked some experts how they would spend $10,000 to spruce up a home for a possible refinance, sale, or simply in hopes of increasing the home’s value. The answers were unified in one regard: maintenance, maintenance and more maintenance.
Get the buyer knocking
Putting yourself in today’s buyer’s shoes is key; you’re trying to get people to the front door, so the first place you start is landscaping. Remove dead shrubs and plant appealing low-maintenance landscaping, all fixes for under $1,000. Once inside, a clean look is a priority. When you’re walking through the front door, make sure there’s no paint peeling on the wood jambs. Caulk your tubs and showers. Declutter. Shampoo the rugs. If you don’t, the buyer will form a psychological bias against you. Paint and freshen up. Things like ceiling fans, cabinet handles and faucets are small touches that can add to a home’s appeal.
Market value vs. marketability
Confusing marketability and market value is easy for today’s sellers who often cringe at hearing the current market value of their home. Therefore, it’s important to look at upgrades from the perspective of attracting buyers instead of how much the upgrades will add in value. In this market, it’s impossible to figure out any kind of [monetary] return on investment for a home remodel project. Replace the “long-lived, worn-out” items in a house. For example, older homes could benefit by upgrading to dual-pane windows. Small touches in the bathroom could also help market your home. Replace an old sink or toilet and out-of-date fixtures with shiny new ones, upgrades that can give the space a new look and cost only a few hundred dollars. It’s important to remember in an up market where the seller is in control; your upgrades will return more of their original cost. In a down market, buyers will discount things to nothing and maybe even [make it] a minus.
5 Cheap DIY Projects to Help Your Home Sell Faster
The San Diego real estate market is competitive and sellers need their listing to stand out. Hiring a San Diego real estate agent with a good marketing plan and being reasonable with the listing price will help the home get more showings, but doesn’t mean it will get an offer. These simple, yet inexpensive projects can help you get top dollar for your San Diego homes in a shorter amount of time.
Cleaning and decluttering the home always makes a big impact and is free to do. Uncluttering countertops, organizing closets and cabinets, and arranging shelves are all great places to start to help the home show it’s best. Make the home sparkle by dusting ledges, cleaning mirrors, cleaning the grout in tiled surfaces, and cleaning or polishing the wood cabinetry throughout the home. Be sure to also wipe down walls, doors, and light switches in the areas where they get used and touched a lot.
Dirty carpets can cause a potential buyer to turn right around and walk back out the front door. A simple carpet cleaning can have a high impact on how a home shows, and even how a home smells.
Dark rooms of a home tend to feel small and uninviting. Brighten a room by cleaning the windows, replacing dark or old curtains, or by updating light fixtures and replacing burnt out light bulbs. Be sure to move furniture and other objects from in front of windows as they can block sunlight.
Minor repairs can make big differences. Repairing or replacing leaking pipes and dripping faucets is important as buyers always fear the worst when they see these types of things in a home. Buyers always over-estimate repair costs and this will reflect in the price they offer for the home! Make sure plumbing and electrical fixtures are in good working order.
Get curb appeal fast by trimming trees and shrubs, replacing dead plants, keeping grass mowed, and sweeping walkways and driveways. Also consider adding color by planting small flowers in planters or near the entrance to make it more inviting.
These are just a few of the simple, inexpensive ways to keep a home at the top of the list of every potential buyer that walks through the door. The San Diego real estate market is competitive, so make sure your competing!
For more home selling tips and information on San Diego real estate contact Travis Breton at 760-470-2752 or visit www.sdhomesource.com
Sellers: 5 Questions to Ask When Reviewing an Offer
You made the decision to list your home with a San Diego REALTOR®. You worked hard to get the house in tip-top shape, the curb appeal shines, and you’ve priced it well.
Some might say that’s the easy part. When an offer comes in, your San Diego real estate agent will review it with you. It’s important that you read and understand all of its terms – not just the purchase price. Here are five things to keep in mind when reviewing offers to help you choose the one that’s best for you.
1. What contingencies are involved? A contingency is something that has to happen before the contract is fully enforceable against the buyer and seller. If a contingency is not met, the party benefited by that contingency can walk away. Common examples include the buyer seeking a mortgage loan to purchase the home; selling the buyer’s current home; conducting inspections; and in a short sale, approval of the seller’s lender.
2. What’s the bottom line? Can you afford to cover everything the buyer is asking for? Your San Diego real estate agent can provide you with a “net sheet” that takes all of the financial terms – such as requests for closing costs and repairs – and calculates what the net proceeds will be, based on the offer price. This is especially important for owners who are short selling their homes.
3. What timeframes are involved? Be available for your San Diego real estate agent to present offers. Every offer has an expiration date, and it’s important to meet that expiration date or get an extension if you need more time to review the offer. When is the buyer proposing to close escrow? How long is the buyer asking for due diligence? The purchase agreement will have a “time is of the essence” clause, so it’s important to pay attention to all contractual deadlines.
4. What is most important? This is a question that only you as the seller can answer. If maximizing proceeds is most important, you’re more likely to stand firm on your financial terms, whereas if a quick closing date is most important, then you may be willing to compromise in other areas.
5. What are my options? The seller always has the right to accept, reject or counter every offer that’s made on the property. Selling a home can be a very emotional time for a homeowner. It’s important to stay flexible, look at it as the business transaction it is, and for each provision in the offer decide whether it’s a deal breaker or if you’d be willing to compromise. Working through the offer with your San Diego real estate agent, decide what course is best for you.
Looking to buy or sell San Diego real estate? Contact Travis Breton at 760-470-2752 or visit http://sdhome source.com
Small Projects Have Big Impact When Selling
It’s a buyer’s market, and even small things can set your San Diego house apart from the competition. The problem is, over time, homeowners no longer see small projects like fixing a hinge on a seldom-used cabinet door or cleaning scuff marks off the back door.
But in a home buyers eyes, those little projects put questions in their minds, not only, “how much will these repairs cost?” but also, “if the little things aren’t done, are there big things that haven’t been done as well?”
A clean and clutter-free San Diego home is a great start. But it’s important to take a more critical eye to your home before listing it for sale. If you can afford it, have a pre-listing home inspection to identify problems ahead of time. Fix the problems that you are able to, and be prepared to disclose and/or negotiate the ones you can’t fix up front. Here are five areas where a small fix can make a big impact on how a buyer sees your San Diego home.
Heating and cooling is a critical component to San Diego homes and one of the most costly repairs to make on a home. A heating and cooling system that appears to poorly maintained can raise concerns with potential San Diego home buyers. Be sure to replace the furnace filters to ensure optimal air flow to the HVAC system. Clean all the air vents and ceiling fan blades.
Electrical. Replace any burned out light bulbs in all fixtures inside and outside. Replace cracked or missing outlet covers and switch plate covers. These are simple, inexpensive items that improve the overall appearance of any home for sale in San Diego.
Walls and windows. Repair and touch up dings, scratches and holes in the walls, even small holes from picture hangers. Clean scuff marks off base boards, walls and doors. Clean the windows and vacuum the window tracks inside and outside to get rid of debris.
Flooring is an item that every San Diego home buyer immediately notices. Shampoo the carpet if it is still in good condition. Where possible, replace broken floor tiles or boards. If the carpet is looking worn or stained, get estimates to replace it so you will be armed with information if the buyer tries to negotiate a concession.
With all the recent news and health concerns about mold, it is important to have the plumbing in tip top condition. Fix any leaky faucets or pipes. Besides being clean, bathroom fixtures should function properly. Check the faucets for water flow and temperature. Make sure the toilets flush properly and don’t “run.”
Finally, if you started home improvement projects that you haven’t quite finished, finish it! Not only will it be one less thing on your to-do list, it could improve your chances of standing out to potential San Diego home buyers.
Looking to buy or sell San Diego real estate? Contact Travis Breton at 760-470-2752 or visit http://sdhomesource.com
How to get an offer on your home
Selling your San Diego home can be much easier if you follow a few basic guidelines. Even in a slow real estate market you can get a good offer in a minimal amount of market time if you are a realistic seller.
The most important factor in getting a good offer on your San Diego home (in my opinion) is to price it right from the get go. Set a price at the lower end of your property’s realistic price range. Pricing your San Diego home at the upper end of the property’s price range “hoping to leave room for negotiating” can deter potential buyers from viewing your property if there are similar lesser priced property’s in your neighborhood.
Prepare for visitors. Get your San Diego house market ready PRIOR to listing it in the MLS and showing it. You want your home to be ready to show the day it hits the market. Listing your San Diego home in the MLS and stating it cannot be shown for a week due to clean up will only frustrate potential buyers and lead them to believe the home is in poor condition.
Be flexible about showings. It’s often disruptive to have a house ready to show at the spur of the moment but the more amenable you can be about letting people see your home, the sooner you’ll find a buyer. Having a lockbox on the property, even if you want to be present during every showing is also a big plus. A San Diego Realtor who is preparing a list of properties to show their client may choose to skip your property if they think it will be difficult to show due to not having a lockbox present.
Anticipate the offers. Decide in advance what price and terms you’ll find acceptable. A quick response back to the potential buyer will keep them interested in the property.
Don’t refuse to drop the price. If your San Diego home has been on the market for more than 30 days without an offer, you should be prepared to at least consider lowering your asking price. Despite declining prices, there are still a lot of San Diego home buyers out there. If you have little to no showings and no offers with-in the first 30 days, your list price is most likely too high.
Looking to buy or sell San Diego real estate? Contact Travis Breton at 760-470-2752 or visit http://sdhomesource.com
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