Posted by michaela-ATL on January 24, 2006 at 17:25:50:
Wade,
the market normally picks up in Spring. You’re so close to the 2-year mark. Why not wait another 3 or 4 months and put it on the market then? If you do happen to get it under contract right away, maybe you can make an arrangement to lease optioning it to them for 2 months, so that you’d get your 2 years.
Michaela
Should I sell my house before having it 2yrs - Posted by Wade
Posted by Wade on January 24, 2006 at 16:41:50:
Hello Investors,
I need advice here are the facts:
1.Already have a primary residence bought a year and half ago for 200k in Seattle, WA
If I sell now for say 290k after selling costs what will I walk away with? And should I sell now or wait to clear the 2 year holding period?
Wade
Re: Should I sell my house before having it 2yrs - Posted by Brian (UT)
Posted by Brian (UT) on January 24, 2006 at 23:18:40:
Wade
You need to occupy the property for 2 years to get the IRC 121 exemption.
Do you feel the market in Seattle is going to drop? Plus the famous question is what do you plan to do with the proceeds? Will the return on the use of the funds exceed your capital gains taxes.
Brian
Re: Should I sell my house before having it 2yrs - Posted by JT-IN
Posted by JT-IN on January 24, 2006 at 18:42:48:
Common for sellers in hotter markets to stipulate that they will Lease the property for 4 months, (or whatever the period needed for the 2 yr horizen), and close on or after May 15, 2006… or whatever your date is.
Sweeten the Lease somewhat so the Buyer may come out a few bucks ahead, applying a larger portion from the Lease payment toward the payoff, than they would be receiving in a typical mtg… If the market conditions are right, and the Buyer benefits in doing so, they will likely go for that arrangement. If not, then you are looking at LTCG (15%) Long Term Capital gains on a gain of maybe 80K, after selling and moving expenses, if moving further than 50 miles… (You didn’t actually state what you paid for the property, and the gains is calculated by what you paid, as opposed to what you owe. They could be the same thing, or different, but we can only assume without the data). So postponing the sale a few months may save you 12K to 15K in taxes… by doing the Lease with delayed closing.
Depending upon which market you are located, a slowing of the market could hurt you worse than the tax bite, if prices drop off by 10%. Many markets are experiencing that or more in declines of prices… due to excessive inventory on the market. Turning into a Buyers market rather rapidly our there. So evaluate both sides, and choose the best direction. (Bird in hand… is worth ___ ? in the Bush).
JT-IN