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LOW COST IDEAS TO BRIGHTEN UP YOUR HOME
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Trim bushes so they don't block windows and cut down on light.
Buy a new doormat.
Put a pot of bright flowers (or a small evergreen in winter) on your porch.
Put new doorknobs on your front door.
Put a fresh coating on your driveway.
Edge the grass around walks and trees.
Keep your garden tools out of site.
Be sure kids put away their toys.
Buy a new mailbox.
Upgrade your outside lighting.
Use warm, incandescent light bulbs for a homey feel.
Polish or replace your house numbers.
Clean your gutters.
Buy new pillows for the sofa.
Buy a flowering plant and put in a window you pass by frequently.
Make a centerpiece for your table with fruit or artificial flowers.
Replace heavy curtains with sheer ones that let in more light.
Buy new towels.
Put a seasonal wreath on your door.
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STEPS TO PREPARING FOR AN OPEN HOUSE
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1. Hire a cleaning service. A spotlessly clean home is essential; dirt will turn off a prospect faster than anything.
2. Mow your lawn, and be sure toys and yard equipment are put away.
3. Serve cookies, coffee, and soft drinks. It creates a welcoming touch. But be sure the kitchen has been cleaned up;
use disposable cups so the sink doesn't fill up.
4. Lock up your valuables, jewelry, and money. Although the real estate salesperson will be on site during the open house,
it's impossible to watch everyone all the time.
5. Turn on all the lights. Even in the daytime, incandescent lights add sparkle.
6. Send your pets to a neighbor or take them outside. If that's not possible, crate them or confine them to one room (a basement or bath),
and let the salesperson know where to find them.
7. Leave. It's awkward for prospective buyers to look in your closets and express their opinions of your home with you there.
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Understanding Capital Gains in Real Estate
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When you sell a stock, you owe taxes on your gain—the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations.
HOW TO CALCULATE GAIN
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:
1. Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
2. Add Adjustments:
- Cost of the purchase - including transfer fees, attorney fees,
inspections, but not points you paid on your mortgage.
- Cost of sale - including inspections, attorney's fee, real estate
commission, and money you spent to fix up your home just
prior to sale.
- Cost of improvements - including room additions, deck, etc.
Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying
a new furnace.
3 The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.
A SPECIAL REAL ESTATE EXEMPTION FOR CAPITAL GAINS
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:
• You have lived in the home as your principal residence for two out of the last five years.
• You have not sold or exchanged another home during the two years preceding the sale.
Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls "unforeseen circumstances" such as job loss, divorce, or family medical emergency.
*Call your accountant or lawyer to guide you on Capital Gains Tax*
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