When you sell, how much do you actually keep of the earnings?

nov04LIbride Posted: Apr 04, 2005 10:46 AM

When you sell, how much do you actually keep of the earnings?

Our condo went up $55,000 since we bought last June, so we are considering selling. But, if we do sell for that much more, how much do we actually keep? How much do the real estate agents take, lawyers, etc? Do you contribute to the closing costs as sellers? We just paid nearly $10,000 to close as buyers. TIA!

DjPiLL Posted: Apr 04, 2005 10:49 AM

Re: When you sell, how much do you actually keep of the earnings?

If you sell in less than two years of owning it... you pay hefty capital gains taxes.

You also pay state sales taxes in closing.

There is no real way to tell how much you actually keep unless you get quotes from RE agents and lawyers for their fees.

nov04LIbride Posted: Apr 04, 2005 10:52 AM

Re: When you sell, how much do you actually keep of the earnings?

Posted by DjPiLL

If you sell in less than two years of owning it... you pay hefty capital gains taxes.

You also pay state sales taxes in closing.

There is no real way to tell how much you actually keep unless you get quotes from RE agents and lawyers for their fees.

Have any idea how hefty? Would it be worth it if it went up the $55,000? Our attorney when we bought charged $1000, so I would assume this would be the same.

DjPiLL Posted: Apr 04, 2005 10:55 AM

Re: When you sell, how much do you actually keep of the earnings?

Not worth it IMO if you haven't lived their for two years. Capital gains can be in the thousands depending on your salary and how long you have lived there.

nov04LIbride Posted: Apr 04, 2005 10:56 AM

Re: When you sell, how much do you actually keep of the earnings?

Posted by DjPiLL

Not worth it IMO if you haven't lived their for two years. Capital gains can be in the thousands depending on your salary and how long you have lived there.

Hmm thanks! Maybe we will wait it out another year and hope it goes up even more!

DjPiLL Posted: Apr 04, 2005 10:58 AM

Re: When you sell, how much do you actually keep of the earnings?

Yeah... its so not worth paying capital gains unless you absolutely have to. Wait the two years out.

My FW wants a house... but I cannot sell my existing place till November to avoid the gains taxes. My co-op appreciated 40k. Why give the government money I don't have to?

I just hope the interest rates stay around 6% until the end of the year. I think they will as long as the job market continues to suck.

skew Posted: Apr 04, 2005 11:03 AM

Re: When you sell, how much do you actually keep of the earnings?

the realtor usually charges 5%. attorney fees can vary. there are aslo other fees associated w/ the sale. i view profit on sale as anything above the cost and fees that was spend while living in the home (mortgage payments, taxes, renovations etc...)

Kathy116 Posted: Apr 04, 2005 11:10 AM

Re: When you sell, how much do you actually keep of the earnings?

I thought you only paid capital gains if you don't reinvest the money into another home/residence in 2 years.

nov04LIbride Posted: Apr 04, 2005 11:38 AM

Re: When you sell, how much do you actually keep of the earnings?

Posted by Kathy116

I thought you only paid capital gains if you don't reinvest the money into another home/residence in 2 years.

I thought this too? My parents sold one house, and paid capital gains because we moved into a house supplied by my dad's job, and didn't buy a vacation house quickly enough. But if we buy another property soon after, wouldn't capital gains not matter?

DjPiLL Posted: Apr 04, 2005 12:06 PM

Re: When you sell, how much do you actually keep of the earnings?

Posted by Kathy116

I thought you only paid capital gains if you don't reinvest the money into another home/residence in 2 years.

Nope... that is a myth. They changed the law six years ago.

The only time you don't pay capital gains now is if there is some type of 'emergency' to sell.... like Divorce... Death... etc.

nov04LIbride Posted: Apr 04, 2005 12:10 PM

Re: When you sell, how much do you actually keep of the earnings?

Posted by DjPiLL

Posted by Kathy116

I thought you only paid capital gains if you don't reinvest the money into another home/residence in 2 years.

Nope... that is a myth. They changed the law six years ago.

The only time you don't pay capital gains now is if there is some type of 'emergency' to sell.... like Divorce... Death... etc.

So I have to either divorce DH or kill him?

DjPiLL Posted: Apr 04, 2005 12:12 PM

Re: When you sell, how much do you actually keep of the earnings?

Posted by nov04LIbride

So I have to either divorce DH or kill him?

Yup... if you divorce... you can sell the house and not pay gains. They changed the law in 1997 to be exact.

Oh... and not only do you have to own it for two years... it has to be your PRIMARY RESIDENCE for two years.

So for all you rich folk who have a secondary investment house... guess what.... you can have it for 10 years and you will still pay gains when you sell.

KimberlyBride Posted: Apr 04, 2005 03:02 PM

Re: When you sell, how much do you actually keep of the earnings?

I agree with DJPill. Wait the 2 years and then sell. Most agents charge 5% commission and lawyers fees are anywhere from $800 - $1500 and then there is a state transfer tax for the deed. You could even try to sell on your own. Your complex is so popular you could probably sell without an agent and make even more money on your condo.

IrishBride-05 Posted: Apr 04, 2005 03:25 PM

Re: When you sell, how much do you actually keep of the earnings?

Posted by KimberlyBride

I agree with DJPill. Wait the 2 years and then sell. Most agents charge 5% commission and lawyers fees are anywhere from $800 - $1500 and then there is a state transfer tax for the deed. You could even try to sell on your own. Your complex is so popular you could probably sell without an agent and make even more money on your condo.

I didn't know about the state transfer tax. What is this and what % is it? I assumed I would get to keep the profit of my sale less when I have to pay the real estate agent

KimberlyBride Posted: Apr 04, 2005 03:55 PM

Re: When you sell, how much do you actually keep of the earnings?

It is a fee you have to pay the state to transfer over the deed. After the purchase we received a document from the attorney documenting every single expense involved with the purchase. Included all the money we spent and the seller spent. I recalled seeing a transfer tax fee. I think it was around $1200. I can check the document tonight if you like. I will give you the breakdown of exactly what the seller paid in fees.

IrishBride-05 Posted: Apr 04, 2005 04:20 PM

Re: When you sell, how much do you actually keep of the earnings?

Posted by KimberlyBride

It is a fee you have to pay the state to transfer over the deed. After the purchase we received a document from the attorney documenting every single expense involved with the purchase. Included all the money we spent and the seller spent. I recalled seeing a transfer tax fee. I think it was around $1200. I can check the document tonight if you like. I will give you the breakdown of exactly what the seller paid in fees.

Okay. Thanks, Kim. I own a co-op, so there is no deed. I just have to pay a fee to the co-op attorney and management company to handle the documentation and stock certificate. Whew!!!