For most people, buying a home is the biggest purchase they’ll ever make in their lifetime; so naturally, there’s a good amount of planning and preparation that goes into the process. On the flip side, deciding to sell your property is also a milestone financial decision in any homeowner’s life. Choosing whether to buy or sell a home depends on your situation, the market and property value. Here are some factors that should go into making your big decision.
How Property Value Can Influence Home Sales
The Best Time to Buy a Home
Before you get into all of the usual prep work, take a good look at the housing market and decide if it’s worth it to buy now. Luckily, 2016 is a great year for home purchases.
For the first time in years, property values will level out and slow down their astronomical surge. People who have been holding out for a fair market might finally choose to buy.
A Wider Selection
As home prices stagnate, people will sell their property as an attempt to avoid any further fluctuation, ensuring they get the best return-on-investment. Because there will be a wider pool of homes to choose from, bidding wars and competitive prices will be less common.
Financing a Home
This will be supplemented by the expected increase in interest rates from the Federal Reserve, which will close the door on the recent string of record low mortgage rates. Buying now will ensure a better rate than any time in the near future.
Also, nationwide rent prices are still predicted to rise. So, in some cities, buying may even be less expensive than renting in the long run.
Selling a Home in 2016
Although it is becoming a prime time to buy a home, it’s still primarily a seller’s market. While it’s true the nationwide property values are beginning to slow down their rise, homes are still as expensive as ever.
So naturally, homeowners who are in the market to sell can likely expect a nice return-on-investment. This is especially true in bustling areas like New York that have a favorable economic future.
Get Smart with Taxes
In our current economy, the biggest tax break available for average taxpayers is the exclusion on capital gains on the sale of a home. While single-taxpayers can expect a $250,000 exclusion in gains on a home sale, joint filers can exclude almost twice that amount.
You may qualify for the tax exclusion if:
- The property in question is your main residence.
- You have lived in the home for at least 24 months out of the last five years.
- You haven’t claimed an exclusion on a home-sale in the past two years.
Partial exclusions are also available if you do not qualify for a full one.
Whether you’re looking to buy or sell your home, make sure you take these important factors into mind. It could make a world of difference.
