What Are the Tax Benefits of Owning a Home?

Owning a home comes with some major advantages when it comes to your taxes.
 

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Owning a home comes with many benefits, especially when it comes to your taxes. It’s especially true for anyone thinking about buying their first home. 

Let me start by saying that I’m not a tax professional, but I’ve sold my fair share of homes, and I’m pretty proficient in this area.

The biggest tax advantage of homeownership is tax and interest deductions.

For starters, when you sell your principal residence, you can claim up to $250,000 tax-free as a single person. Married couples can claim up to $500,000 tax-free. This is a huge bonus that allows you to take advantage of appreciation over time. 

However, the biggest advantage is mortgage interest and real estate tax deductions. Say you owned a $600,000 property that you put down 20% on with a 4.25% interest rate. You’d pay $20,244 in interest the first year, which you can write off against your income. If you’re in the 33% tax bracket, the actual savings amounts to $6,680, or $556 a month. That’s an advantage you don’t get as a renter.

If you’re an investor interested in taking advantage of the 1031 exchange before it’s gone, I’d love to sit down and speak with you about the potential tax benefits you could utilize. 

If you have any other questions about the tax benefits of owning a home or you’re thinking about buying your first home here in the D.C. area, give me call or send me an email. I’m here to help.

How to Beat Out Your Competition in the D.C. Market

The Washington D.C. area is firmly in a seller’s market, and here’s how homebuyers can get ahead by making their offers on a home more attractive.
 

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We’re definitely in a seller’s market in the Washington D.C. area right now, making writing a competitive offer more important than ever when buying a home.

Price is obviously very important in an offer, but you can only go so high and still have the price make sense. There are a few other ways to make your offer compelling outside of price alone.

1. Settlement date: Make sure the settlement date corresponds with what works best for the seller. If the house is vacant, a 30-day deadline is very important. If the home seller is looking for a home, you should consider giving them 60 days plus post-settlement occupancy. You need to be open to the needs of the seller in those situations.
2. Contingencies: The standard contingencies are an appraisal contingency, a financing contingency, and a home inspection contingency. I’m currently seeing offers with no contingencies at all, but as a homebuyer, it’s important to write an offer you’re comfortable with. It’s also important to have a conversation with your real estate agent to understand the implication of this. Once you do, it’s important to write an offer that will be a winning offer, whether that means waiving your home inspection contingency but doing a pre-inspection before the offer deadline so you know of any adverse conditions with the property and you’re comfortable moving forward without that inspection in place. You can also speak with your lender before making an offer to make sure you’re fully approved.
3. Creative things to make your offer stand out: This could include paying the seller’s transfer taxes or things like that to give them a higher net without impacting the price of the home.


You can only go so high on offer price and have it make sense.

These are all successful techniques that I’m currently implementing to help buyers get into the home they want. If you have any questions or you’re looking to sell a home in the Washington D.C. market, give me a call or send me an email. I’d be happy to help.

D.C. Market Update: Spring 2017

What's going on in the D.C. market as we transition from winter to spring? I've got an update for you today.
 

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I wanted to bring you an update on the Washington D.C. market as we transition from the winter market to the spring market.

We've got a lot of pent-up demand from people looking to buy a home who held off on their purchase since the election. Whether it was for economic or political reasons, people wanted to know what would happen. We're seeing this segment of buyers hitting the market, which already had low inventory.

From 2016 to 2017, the average sale price in D.C. has increased 11.1%.

This has had an impact on the market in that the average days on market here in D.C. is down nearly 5%. In Montgomery County, the average number of days on market is down 15% and in Arlington County, it's down 19.7%. This has an immediate impact on the price of these properties because they're ending up in multiple offer situations.

From 2016 to 2017, the average sale price in D.C. has increased 11.1% year over year. That number is up 6.8% in Montgomery County and up 3.4% in Arlington County. This means that if you're looking to buy a home, you need to work with a competent real estate agent and be prepared to write a competitive offer. If you're looking to sell your home, now is a terrific time to maximize your return by working with a professional who will stage your property the right way, market it efficiently, and negotiate on your behalf. Make sure your agent knows your area well.

If you have any questions about the D.C. market or you're looking to buy or sell a home at this time, give me a call or send me an email. I'd be happy to help!