IF YOU’RE THINKING OF SELLING YOUR HOME IN 2016 HERE ARE SOME THINGS TO KNOW
Thinking of putting your home up for sale 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. For one thing it is a good time to sell as the market indicates that it is a “sellers” market. Since early 2012, prices have climbed higher, and the Case-Shiller National Home Price Index is coming very close of matching its highs from 2006 and 2007. Of course where you live is a key factor in determining just how much of a seller’s market you can expect. Hot markets like San Francisco have seen some housing-boom-era practices return to favor, with many reports of bidding wars that result in offers well above the asking price.
Low mortgage rates have helped fuel price increases in recent years. Low mortgage rates are a key factor in how much sellers receive for their homes and how much buyers can afford.
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. 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.
And then there’s 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.
Looks like selling a home in 2016 is a good idea.