Home Buying in Garden Grove>Question Details

hongtracy81, Home Buyer in Garden Grove, CA

I want to sell & buy a new house. I do not have any downpayment until I sell the house. What is the best way to sell the house and buy the new house?

Asked by hongtracy81, Garden Grove, CA Fri Feb 22, 2013

I live the house only 6 mons. I heard somepeople say I should live in there at least 2 years before I sell the house so that I do not have to pay capital gain tax after I sell the house?

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Answers

12
Hello,

You can list your current home contingent upon you finding a replacement home.

This can be tricky. You will have to find a buyer for your home who knows the sale will not go through unless you find another home. You also will need a seller willing to accept an offer from you knowing it is contingent on you selling your current home.

Perhaps, you can sale your home, and move into a rental (month to month) then search for your new home. If you rent month to month you will only be required to give a 30 day notice when you decide to move into your new home.

Best of Luck to you!!!!

Kawain Payne, Realtor
0 votes Thank Flag Link Fri Feb 22, 2013
Hi,

No problem can I buy you lunch and explain it would take 30-60 minutes about how I can help you, no obligation.

I do not think you will have any huge capital gains, because capital gains tax is based upon the sales price you hire me to sell it for, minus the purchase price of what you bought it for. You then deduct loan costs, commission costs, improvements, and other types of deductions which will lower your profit aka capital gain..

If you only lived there 6 months, how much could it have gone up, and even if you did make a $20,000 profit, capital gain and had to pay 35% +/- Federal & State capital gains tax and made $13,000 +/- in your pocket, it wouldn't be that bad, now would it? You can laugh all the way to the bank!!!

Another benefit you have for letting me sell your home for that you don't want to be in anymore at this point in your life, is that when I find you your perfect home which might be a Bank REO, Probate, Foreclosure or other distressed property at a great price, would you still be my friend?

Another benefit of hiring me is I get my sellers a higher than average sales price for my sellers in their neighborhoods, and work distressed properties to get you a great property at a low low price when you buy.

What day in the next week can we meet for lunch or coffee, I'm buying lunch or coffee my treat, and on my laptop I can do a customized evaluation of the worth of the property that I am selling for you, and also show you distressed properties for sale on the computer, and schedule a time to look at some properties .

I can do it all in 30 - 60 minuts.

Thanks for the interview.

I appreciate your business

Al Goldberg Broker
30+ Years Experience
ALYourBroker@yahoo.com
800-765-3609 Toll Free Cellular
0 votes Thank Flag Link Fri Feb 22, 2013
Hi,

No problem can I buy you lunch and explain it would take 30-60 minutes about how I can help you, no obligation.

I do not think you will have any huge capital gains, because capital gains tax is based upon the sales price you hire me to sell it for, minus the purchase price of what you bought it for. You then deduct loan costs, commission costs, improvements, and other types of deductions which will lower your profit aka capital gain..

If you only lived there 6 months, how much could it have gone up, and even if you did make a $20,000 profit, capital gain and had to pay 35% +/- Federal & State capital gains tax and made $13,000 +/- in your pocket, it wouldn't be that bad, now would it? You can laugh all the way to the bank!!!

Another benefit you have for letting me sell your home for that you don't want to be in anymore at this point in your life, is that when I find you your perfect home which might be a Bank REO, Probate, Foreclosure or other distressed property at a great price, would you still be my friend?

Another benefit of hiring me is I get my sellers a higher than average sales price for my sellers in their neighborhoods, and work distressed properties to get you a great property at a low low price when you buy.

What day in the next week can we meet for lunch or coffee, I'm buying lunch or coffee my treat, and on my laptop I can do a customized evaluation of the worth of the property that I am selling for you, and also show you distressed properties for sale on the computer, and schedule a time to look at some properties .

I can do it all in 30 - 60 minuts.

Thanks for the interview.

I appreciate your business

Al Goldberg Broker
30+ Years Experience
ALYourBroker@yahoo.com
800-765-3609 Toll Free Cellular
0 votes Thank Flag Link Fri Feb 22, 2013
Great questions! If you need money for your down payment on the new house, we can make the sale if your property contingent upon buying the new. That way it will be a smooth transaction and you will be able to use money from your currently property. You may pay some capital gains though buying now while rates and prices are low will most likely be better than waiting when prices are expected to rise. Right now, it's best to think of yourself more of a buyer than a seller since the buy will be your end result. If rates and prices continue to go up, then you will be paying the higher price later. I would suggest selling sooner than later. Please let me know if you have any other questions. Thanks and good luck!!
0 votes Thank Flag Link Fri Feb 22, 2013
Clearly, you need to sell before you can buy. You've received some solid responses. Have an idea where you wan to buy so you can save time on the buying side.

Your home will likely sell more quickly than you you find a home in today's market...As others have mentioned...put on the mls and in your contracts that the escrow time frame should be negotiable until you find suitable housing.

Best of luck.
0 votes Thank Flag Link Fri Feb 22, 2013
Pacwest Properties has a large data base of ready to purchase buyers for orange county properties.

For a fast transaction contact them at 800-316-5913 ext 0.

They will be able to help you with all the information that you need, including getting pre-qualified for your new home purchase.

Scott Fredrickson
PacWest Properties
0 votes Thank Flag Link Fri Feb 22, 2013
The best way to approach this is to prepare your home for market and begin looking at where you'd like to move. You won't be able to make an offer on a home until your home has an accepted offer in escrow.

Because of the high demand for homes right now, you shouldn't have an issue getting a buyer to agree to allow you additional time to move, and accept the contingency of your sale to be based on finding your new home.

In regards to capital gains, you should talk to a licensed tax professional.
0 votes Thank Flag Link Fri Feb 22, 2013
As stated below you can put a contingency in the contract saying that the sale of the property is contingent upon you finding a home.
As for taxes; yes you do have to pay capital gains tax, however if you hold the property for over a year you are only subject to long term capital gains instead of short term. If you live in the house as your primary residence for 2 out of the 5 years before you sell, you are exempt from 250,000 capital gains or 500,000 if you are married. If you are an investor and the IRS sees you as a "dealer" then you get taxed at your normal income bracket. I am not a CPA but that is what i have seen and learned. Hope this helps.

http://www.RoyLhanie.com
818-642-3449
0 votes Thank Flag Link Fri Feb 22, 2013
Hi HongTracy,

Regarding taxes, it sounds about right. But, I strongly advice you to consult with your accountant.

You can certainly sell your house and use equity from a pending sale as down payment on your purchase. There are several ways to arrange this. A team of experienced agent and loan officer should easily help and/or explain different options to you. You can then decide which option best applies to your situation.

If you need further assistance, please let us know.


Regards,

David Pham
National Brokers
714-530-3331
0 votes Thank Flag Link Fri Feb 22, 2013
Tracy,

You can do a couple of things. Place the home on the market with a contingency that you need to find a replacement home. You can also sell and rent back from the new buyer for a period of time. Let me know if you need help selling and buying. I have an investor looking actively for homes now

Joe Homs, Realtor
Joe@joehoms.com
949-625-4533.
Web Reference: http://Www.Thehomsteam.com
0 votes Thank Flag Link Fri Feb 22, 2013
Separtate questions and answers:
You present mortgage may have a pre-payment penalty attached.
You probably will not have an offer accepted with a Contingency to sell attached.
I don't thing that you have a tax penalty if you immediately use the money to buy another principle residence; (this should be checked with your tax person).

The two sales probably will never meet; you should plan on renting in between.
It is also a lot of stress to try to do both at once.
Let your Realtor help you with both. (It's not stress to him; Okay, maybe a little stress).
0 votes Thank Flag Link Fri Feb 22, 2013
Hi Tracy,

Yes if you have only lived in the house for 6 months, you will have to pay a capital gains tax. Here is a little more info about this capital gains tax: http://taxes.about.com/od/taxplanning/qt/home_sale_tax.htm

If you don't have a down payment until you sell the house, you may be able to borrow from your 401k. You should try to talk to a mortgage broker to find out your options. I would be happy to refer one to you if you would like.

Please feel free to contact me at (310) 717-1321 or JamieTian@RodeoRE.com if you have any questions.

Best,

Jamie Tian
Rodeo Realty
(310) 717-1321
JamieTian@RodeoRE.com
DRE #01920120
Web Reference: http://www.JamieTian.com
0 votes Thank Flag Link Fri Feb 22, 2013
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