Seven Things to Know Before Selling Your Home
Financial Planners often focus on developing tax-free cash flow streams in order to manage taxes during retirement. While many mention the Roth IRA, few talk about the benefits you can receive by downsizing your home and moving into a lower priced one. How can one get tax-free income from downsizing? If you have met certain requirements, up to $500,000 of the gain you realize on the sale of your current residence can be tax-free. The IRS suggests that you keep the following tips in mind when contemplating a home sale:
1. You and your spouse each area allowed a $250,000 capital gains exclusion when you sell your home.
2. To qualify for this exclusion, you must have lived in the home at least two out of the last five years.
3. You must have used the home as your main residence.
4. If your capital gain does not exceed your exclusion, you do not need to report any gain on your tax return.
5. If your capital gain exceeds your exclusion, you then must file the capital gain on Schedule D of your 1040 return. You will only be taxed on the gain that exceeds your exclusion. Currently, the maximum tax for long term capital gains is 15%.
Choosing a Real Estate Agent
Basic rule in real estate is that all properties are unique and no two transactions are alike. Whether you are a first time home buyer or a repeat, it makes sense to obtain a service and to work with an experienced broker or agent who knows the community, has seen numerous homes for sale, knows local values and has spent years negotiating property transactions.
–Search. The best place to find a local agent is the internet. The others are a local builder association, open houses, local advertising, referrals from other agents, recommendations from neighbors, and suggestions from lenders, attorneys, financial planners, and past clients.
–Interview. Talk with many agents to get a personal “feel” before selecting one to work with. A good agent you eventually chosen to work with could be one of your most valuable resources. The interviewing process will help you evaluate the agent’s ethical stance and trustworthiness issues as well as his or her competency. Agents should have a thorough knowledge of the property market in their communities, familiar with local zoning and tax laws.
Practice Makes Perfect
Once you have learned all the scripts and persuasion techniques and committed them to memory, you still have one more thing to do. That’s practice! You need to practice your prospecting techniques over and over again until you know the material backwards and forwards. It’s best to practice by sitting in front of a mirror so you can watch yourself. Do you hesitate, do you move around a lot, are your confident and so on? When you feel confident that you know the material and how you are going to present it, practice on a spouse or friend and ask for feedback.
Remember, when you make a call or presentation to a potential seller, you are basically performing and will be judged based upon that performance. The old saying that “practice makes perfect” is especially applicable to the real estate business. The more you practice, the better you’ll be. The better you are, the less scripted you will appear.
Learn Why and When You Must Consider the Option of Sell and Rent Back
There are many ways available today to get money to deal with your specific needs. Payday loan is an option to get money in your bank account in not more than few hours. But, these types of loans come with a lot of interest which is the reason why some people don’t like this particular option. Also, it is not possible to use this option if you need a lot of money. That’s exactly the situation when you can actually make use of an option, called “sell and rent back” your home.
What is sell and rent back?
Although lots of people now use this option and its widespread use have helped this industry to grow in an amazing way but there are people who still no nothing about it. If you are also one of those persons, it is enough to know that it is an option where you sell your home to an investor and start living as a tenant in the same home. What it means it that you get the money you need without saying goodbye to your home sweet home.