How long do I need to own a property to qualify for the $250,000 or $500,000 capital gains exemption?
You must own a property and use it as your primary residence for at least two of the last five years prior to the date of sale. The owner-occupied exemption is $250,000 for a single person or $500,000 if married filing jointly. You may do this in two years, but if you sell in less than two years, the income that is derived from your property is considered ordinary income to be added to your ordinary income for the year in question.
Is it better to sell a house off the market or on the market?
Bidding wars occur because of a large clientele with knowledge of a property that is available. If you sell your property privately (off market), the chance of a bidding war is very rare. What if you find out later that someone was willing to pay more but you never offered your home to the public on a multiple listing service?
As a homeowner/seller of a newer luxury home, what do we have to offer that makes our home a better alternative to a brand-new home?
Every case is different, but in many cases, a home five to 10 years old on a similar lot offers more square footage due to recent code changes. These changes also result in many newer homes offering less square footage on the upper level, which can reduce bathroom sizes or bedroom count. Due to rising land, material increases and labor increases, many builders have also recently had to reduce the quality of finish materials to allow for their profit.
Do I pay more for a new home by purchasing it from a developer?
Although every case is different, a developer can generally build for at least 30% less than a private party because a developer has crews and relationships with many subcontractors. That said, a builder generally wants a 20-25% profit and then total invested dollars after paying costs and commissions. Factoring in people's tolerance for risk and their need for a reliable move-in date, for most homes other than estate properties ($10,000,000 and above), it makes better sense and costs less in the long run to buy from a developer.
What should we look out for when we do new home inspections?
Always be sure to go full throttle on inspections. Your standard physical inspection report will likely recommend further investigation in the areas of drainage, geology and environmental if anything comes up in question. Often the fireplace installations are incomplete or do not meet all current safety codes; therefore, a fireplace specialist should inspect each fireplace. If you are building a new home, there is no certainty that the sewer connection is brand-new. That being the case, I would suggest a sewer inspection as well. Ventilation can be inadequate, as can weatherproofing and waterproofing. Focus on sub areas and basements during the inspection process to determine moisture intrusions of any type.
For more information, please call Ron Wynn at 310-963-9944, or email him at [email protected] To find out more about Ron and read his past columns, please visit the Creators Syndicate webpage at www.creators.com.
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