still selling

[sdcellar]

All good points PS, and that last one is really key.

kaycee, you could lose a lot more in capital gains taxes than what you might from accepting a lowball offer. Maybe meet the potential buyer somewhere in the middle next time?

That said, I understand the frustration with regards to having the best price on the block and still getting no offers. Then again, if those aren’t selling either, then maybe they’re just totally out of whack.

Dig as much as you can to see what things in your area are really selling for _today_ and reset your price expectations based on that.

[PD]

That capital gains point is a big one. I bet a lot of people who decide to rent ranther than sell have not thought about the tax consequences.

[VCJIM]

PS or PD, I’m unclear on capital gains after two years of renting. Would you mind elaborating on the calculation?

[powayseller]

If you live in your home for 2 out of 5 years, you are not subject to capital gains taxes at the time of sale on $250K/person or $500K/couple. So if you rent out your house today, and sell it November 2008, you would not meet the exemption and thus have to pay taxes on the profit from your sale. I don’t know how the profit is calculated (sale price – purchase price – expenses)? Paying taxes on the profit would really suck if you some of the profit was already spent via refinancing.

[lendingbubblecontinues]

Actually, PS…

If you have lived in your home for two years through today, for example, and then rent it out for three years, you will qualify for the cap gains tax exclusion, if you sell it before the end of the three years is up.

This is because you will have lived in your house for 2 out of the preceding 5 years, which meets the standard.

[VCJIM]

Ah, I see now. Thank you.

[powayseller]

lendingco: that’s what I said. “If you live in your home for 2 out of 5 years, you are not subject to capital gains taxes…”. It doesn’t matter where the 2 years occur. It just has to be a total of 2 years within the 5 years. I used the example of someone renting out today, who would only be able to rent for 2 years before being hit with the tax at time of sale. I did not mean to suggest you had to live in the house the last 2 years. Sorry if I was misunderstood.

[socalarm]

question for the wise ones regarding seller’s settlement charges. i just received my estimated closing costs and some line items seem ridiculous. close of escrow is supposed to be 10/31. i have two lenders, 455k and 60k.
the first one decided to prorate my stay till 11/22 and has tacked $3200 of ‘interest’.
the second one decided to prorate my stay till 11/11 and tacked on an extra $600?
this looks extremely suspicious because those are my two regular monthly payments. could it be they reverse engineered these fees to get an extra month or are they entitled to prorate as they please ?
i asked my title company but i’m not sure how much they would care. title earns $2200 and escrow $1800 for this herculean task of filling out 3 forms.
thanks

[sdappraiser]

Um.. why don’t you ask your agent? That’s what your paying him for. Or are you trying to sell this FSBO, I forgot.

Title and escrow do care, and there is a bit more to it than filling out 3 forms. What you have is an ‘estimate’. It is not set in stone. Escrow received the payoff amounts from your 2 lenders. Nobody is trying to pro-rate your interest charges into their pockets. When your sale records it will all get pro-rated correctly based on your sale date.

Your agent, should however review this estimate very closely with you. I have found typo errors and incorrect entries in the past. If you have a good agent with a relationship with the title/escrow company, they can sometimes get some of the bogus junk fees waived. Good luck.

[socalarm]

thanks much. i’m using an agent and she’s been very professional. i’ll ask her too. i didn’t mean to be so harsh on title and escrow. they sent me 3 revisions 15 minutes apart with typos and errors. they’ve also been pretty tardy at answering my agent’s queries.
they’re ok. i just don’t trust my mortgage lenders one bit. they’ve slipped me mysterious charges before and backtracked immediately when i questioned them.

you said “When your sale records it will all get pro-rated correctly based on your sale date.”
thank you for that. does that the sale date coincide with close of escrow ? both lenders are using very different dates to estimate.

[sdappraiser]

The recording date is the official close/sale date.

Tell escrow to fix the two dates on the estimate to the correspond with your COE that’s stated in your purchase agreement. Your agent should be on top of this. Little things that could cost you hundreds or thousands can be easily overlooked…

just another pro-reason for using an agent to help protect your interests. If your escrow/title co. are local, your agent should do a face to face to get these items corrected. Title and escrow rely on agent repeat business and will usually bend over backwards to keep everyone happy, but like everything else, there are layers of incompetence everywhere.

[socalarm]

sold. closed end of the month.
cheers everyone. and thanks for the amazing data and help.
socalARM is now a socalrenter, and another one in the sidelines…

[PerryChase]

Way to go, socalrenter. 🙂

[sdcellar]

Yeah, congratulations! Thanks for keeping us posted throughout the process. I’m sure it was stressful. Now you get to join some of us and see how things progress from here. Keep in mind it’s like somebody else posted today, “like watching paint dry.” Yes, super slow drying paint, the slowest you’ve ever seen. Then again, I’ll bet the last couple of months seemed like an eternity to you at times.

[socalarm]

thanks perry, sdcellar.
i was pretty stressed at the prospect of a single offer. the agony of planning the next month while the idea that escrow could derail at the slightest pretext, was unnerving. the buyer had deep pockets and probably needed a tax shelter. can’t say, but he’s in the movie industry and probably spent a lot more in his hollywood apartment.
most of our friends here still describe the market as ‘slowing down’, and are flabbergasted we didn’t list it for a million. because “that’s what i would pay for it”.
all talk, imo. when i ask them quietly about the last downturn, they have no clue we had one.
to co-opt from our own sun tzu feld, you go with the offer you have, not the one you wish you had.

[Author]

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