When you rent, you are throwing away the money every month. When you own a house, a part of your monthly payment goes to increase your equity in the house, and the other part is the interest. But you are not throwing away the money you pay for the interest either - you get to deduct it from your taxable income. You also get to deduct the real estate property taxes. You pay less taxes when you own a house, than if you rent one.
Tuesday, March 12, 2013
About Capital Gains
Whenever something you own is exchanged for a profit, that profit is called a capital gain.
When you sell your principal residence, you don't have to pay capitol gains tax up to a gain of $250,000 if you are single, and $500,000 if you're married. In order for it to be considered a principal residence, you must live in it for two years. You can only use this exemption one time in two years on a sale of one house.
If you are selling a rental, you have to add total Depreciation as well to the capital gain.
Depreciation = Cost of house (Puch. Price + Closing Costs) X cost of the building percentage (using the tax assessment divide the value of the house assessment portion by total assessment) divide it by 27.5 multiply by the number of years you had the property
When you sell your principal residence, you don't have to pay capitol gains tax up to a gain of $250,000 if you are single, and $500,000 if you're married. In order for it to be considered a principal residence, you must live in it for two years. You can only use this exemption one time in two years on a sale of one house.
If you are selling a rental, you have to add total Depreciation as well to the capital gain.
Depreciation = Cost of house (Puch. Price + Closing Costs) X cost of the building percentage (using the tax assessment divide the value of the house assessment portion by total assessment) divide it by 27.5 multiply by the number of years you had the property
Listing Agreements and duties of a listing agent
TYPES OF LEGAL LISTING AGREEMENTS:
Exclusive-right-to-sell listing - The listing broker is paid commission no matter who sells the property, even if the seller finds the buyer all by himself.
Exclusive-agency listing - The seller retains the right to sell the property and doesn't have to pay commission if he finds the buyer on his own without using the brokers advertisements and/or materials
Open listing - The seller can sell the property and not pay commission. Any broker can sell it and get commission.
The agent must ask that both husband and wife sign the listing agreement, even if one of the couple owns the property separately by himself or herself.
Exclusive-right-to-sell listing - The listing broker is paid commission no matter who sells the property, even if the seller finds the buyer all by himself.
Exclusive-agency listing - The seller retains the right to sell the property and doesn't have to pay commission if he finds the buyer on his own without using the brokers advertisements and/or materials
Open listing - The seller can sell the property and not pay commission. Any broker can sell it and get commission.
The agent must ask that both husband and wife sign the listing agreement, even if one of the couple owns the property separately by himself or herself.
Contracts
To be valid, contract must contain these elements:
Both parties must be 18.
Offer and Acceptance, also known as Mutual Assent or Meeting
of the Minds. An offer must be made by an offeror (buyer) and accepted without changes
or additions by offeree (seller). If something is changed or added, it is called an
addendum, which is added to the contract, and both parties must sign it.
Statue of Frauds requires that deeds and real estate
contracts must be in writing to be legally enforceable.
Must be entered in for legal purpose.
There must be a legal consideration – something of value,
but legal (can’t be a stolen painting or a ball of weed).
Reality of Consent – the contract must be entered into
without duress, misrepresentation, or fraud. The parties cannot be drunk or
high, or incompetent (incompetent doesn’t mean illiterate. An illiterate person
can sign by a cross, and it would be legal). The innocent party is not
obligated to perform.
Wednesday, October 3, 2012
Tacoma Down Payment Assstance
City of Tacoma has a down payment assistance program for 1st time buyers using FHA loan. Here is the link: http://www.cityoftacoma.org/page.aspx?nid=454
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