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The very place we go to for current information that affects our real estate decision-making is often the least reliable-- the media.
The harder, the louder, the more fearful the content-- the more readership, the more listeners, the more viewers in place. The truth ... that remains subjective.
Do not look for national trends as a gage to our local market.
Never underestimate common sense. Would one consider Scottsdale the same as Chandler? Would one believe similar investment applications apply for the SouthEast Valley as they do Sedona or Flagstaff? Would Arizona real estate cycle exactly as it does in California? Absolutely not.
As the metropolitan Phoenix market has settled into its "value adjustment" there are some Buyers who remain sitting on the fence, waiting for the decline to continue. Foreclosures will be on the rise,
but how many Buyers are equipped to purchase through Foreclosure....not the majority.
Two years ago, Sellers had gold, while Buyers were golden. Available homes were far and few between, and no asking price was considered too high.
There were a segment of Homeowners then, who sat on the fence,
waiting for the home values to escalate higher before they too would sell their property. These tentative would-be Sellers sat on the fence, until the market fell as did along with their opportunity.
Now, Sellers will not recoupe the profits of two years ago. A HomeOwner may not receive as great a financial return today by selling; but as a Buyer, the opportunity is here.
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Maximize Your Real Estate Gain
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Time To Get Your Ducks In A Row.
You are anticipating receiving monies back in your pocket after your property sells. In your mind, you may already spent those funds!
Step back for a minute and remember that there are tax laws surrounding the sale of your property(s).
If you are a homeowner who has lived in a primary residence for 10 years, for example, and you originally purchased the home for $85,000-- what if it sells for $400,000? Based on these numbers the profit is $315,000 (less loan amounts to be paid off). Your tax consequences will vary if you purchased the home as a single person or a married couple.
There are also write-offs and deductions based on home improvements made and commissions paid on the initial sale and current sale of the home.
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Investors deal with an entirely different set of circumstances. Tax consequences are based on the length of time an investor owns a property. Most commonly, should a property investor sell a home and profit, say, $100,000, unless the investor purchases other property of "like kind" (real estate) and reinvest his gain of $100,000 into the next purchase(s) which must total in price for at least the same amount as the property that was just sold, the investor will pay taxes on the balance of those investment dollars.
There are also time restraints on "identified" properties for purchase as a reinvestment of the initial real estate gain as well as deadlines on when the new property purchases have to close. The above-referenced issues for "investors", fall under what is known as a "1031 Exchange".
If you lived in one property, rented it to others, and purchased another home to live in-- your first home is now considered an "investment property".
Before you decide to sell a property, please contact your Certified Accountant or Tax Attorney to find out where you stand with respect to current laws affecting your real estate transactions.
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