The cost of selling a home in today's market
The housing-market slump means sellers are agreeing to cover some or all of buyers' closing costs. A big savings for buyers -- and a big expense for sellers.
Doris Hall-Scheeler, senior vice president at Sage Title Group in Baltimore, sees sellers contributing up to 6 percent of the sales price to buyers in closing-cost assistance. That's $18,000 on a $300,000 house. And it's just part of what homeowners have been paying to move on.
Add taxes and real estate commissions, and sellers can end up forgoing more than 12 percent of their sales price, Hall-Scheeler said.
That's frustrating for folks who were counting on that money to help buy a new home. But it's especially rough for sellers whose home values haven't increased more than 12 percent since they bought.
A lot of people are in that boat: Practically half of the Baltimore-area homeowners who bought during this decade and sold in the first half of 2009.
That's what I found when I re-crunched sales data from the state Department of Assessments and Taxation this week. (You've seen the first bite already -- that more than a third of those homeowners sold for less than their purchase price.)
As I mentioned in that story, it's roughest for homeowners who bought in 2006. Sales peaked in 2005, but prices were still rising the following year. Of '06 buyers who sold in the first half of this year, nine in 10 didn't end up with enough appreciation to get past the 12 percent mark. (Most saw values fall, not increase.)
Hall-Scheeler, the title company official, said she's not seeing many sellers bringing a check to settlement in cases where the home value can't cover their selling costs. But short sales -- in which lenders forgive the difference between the mortgage balance and the sales price -- are "big."
"It's a huge percentage of what we're doing," she said.
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Comments
If anyone is a victim of foreclosure or short sale, don't be worried about that 1099-C the lender sends you. Consult your attorney or CPA, but as long as the property was your primary residence, you should qualify under the Debt Forgiveness Act. Fill out a tax form and you are able to write off the income on the 1099-C. You do not have to pay income tax on that money or file a Bankruptcy. Don't be misinformed!!!!
http://www.irs.gov/individuals/article/0,,id=179414,00.html
Posted by: Frank Rizzo | October 26, 2009 11:54 PM