Selling a Home in 2016? What You Need to Know

Selling a home can be a stressful experience.

If you expect to put your home on the block at some point 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.

It’s a seller’s market …

Many homeowners remember the fallout that the housing bust had on real-estate prices. Even though most investors think of the financial crisis as having hit its peak in 2008 and early 2009, it took three more years for home prices to hit bottom.

Yet since early 2012, prices have climbed higher, and the Case-Shiller National Home Price Index is coming within spitting distance of matching its highs from 2006 and 2007.

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.

By contrast, areas where economic prospects are less favorable have never fully recovered from the housing bust. The more lucrative a region’s economic future appears to be, the easier you can expect it to be to sell a home.

… but mortgages could get more expensive

One key factor in how much sellers receive for their homes is how much buyers can afford. Low mortgage rates have helped fuel price increases in recent years.

But 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.

So far, the tiny quarter-point boost that the Fed made in mid-December hasn’t pushed mortgage rates appreciably higher. 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.

Tax benefits still favor home sales

The biggest tax break for ordinary taxpayers is still 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.

Get help at the right price

Most homeowners use a real-estate agent to help market and sell their homes. Historically, the typical 6% commission on home sales was sacrosanct, but some agents have increasingly been willing to negotiate lower commissions for their services.

Flat-fee brokerages have also popped up, offering a fixed cost that sellers can count on that’s often lower than the percentage-based commission would be.

The issue raises a huge debate in the real-estate community, with full-service agents arguing that they fully earn their commissions by bringing in more potential buyers and eventually getting higher sale prices.

Yet with some agencies offering incentives to buyers and sellers that reduce net commission costs, sellers should realize that they have leverage in coming up with a deal that works for them.

About The Alfriend Group

Kyle Alfriend has been selling and marketing homes for over 20 years, successfully selling and buying homes in a variety of market conditions. He has sold over 1,200 homes, totaling over $250 million in homes sales. In Dublin, he has sold more homes that anyone ever. He has represented the areas largest builders, built his own homes, and owns and manages several investment properties. He has been awarded the "Top 10 M.A.M.E. Award (Major Achievements in Marketing Excellence) by the building and Realtor associations every year since 1993. He believes that everyone deserves the very best in knowledge, experience, and integrity when buying or selling their home. The Alfriend Group was started 5 years ago as a real estate team of professionals, specializing in buying/selling homes, property management, and real estate investments. For more information, call us today at (614) 395-1776.

Central Ohio Real Estate, Sellers

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