Jeff and BnB... I really appreciated you going over my situation last night (buying new home and keep current home as a rental. We are under the 1% rule coming in at about .7% but we are in a slow market and would like to take the opportunity to move up in house.)
I am still lost on the tax consequences and don't want to keep pressing the issue here. I'm afraid the matter is in the same category as the "tuck" rule for me so I have woefully ignored it up to this point.
Is there a link that you could share that any caveman (yes, they still exist) could understand?
Things I need to learn:
1. Depreciation
2. Depreciation recapture if/when we sell
3. Will 100% of taxes and interest paid be able to be written off against income generated by the rents. (Believe it or not, we are not eligible to itemize- about $3,000 away from it).
Thanks a ton. PJ
RANT... am I wrong here:We signed a contingent offer to buy a home. We used the selling agent. The sale was contingent on us selling our home. The agent is giving us 1% back for buying and listing our home with her.
We get an offer last night. Home was listed at $126K after lowing $2K for (hopefully) quick sale. Offer comes in at $126K with us covering $3500 closing costs for buyer. Possession at close.
We are selling this home fairly cheap... losing a bit to move up in lifestyle (about $7K after three years of ownership). However, our bottom line all along was $125,500. This $122,500 offer is obviously below this. I tell agent I want to counter to $128K and we pay the $3500 closing fees for buyers. She does everything in the book to try to get us to take the offer including showing how all fees to close will go up (turns out to be about $75) and trying to give us 1% rebate on our selling commissions (while neglecting to tell me that this would be taking place of the 1% she offered us on the home we are buying-- a net loss of $500 to us.)
So after telling her I was pissed that she is trying to talk her clients into an offer and telling her that she must think I am stupid to try the fuzzy math we tell her that we will think about it. I call her up 30 minutes later and tell her we need $2000 more from somewhere, preferably the folks buying our home.
The home that we are buying is vacant because a previous agent talked them into buying a condo before their home sold. After being listed for six months at $199K they went with our agent at $175K. We had agreed to pay $173K. These folks are bringing $15K to the table to get it closed.
After we call our agent to tell her we want to counter she calls up the folks on the home we are buying instead. She gets them to accept $171K instead of the $173K. So we get our $2000.
Now, I know $2000 is not much but we agreed to pay $3k more for home we are buying and lowered the price on our home $2K at their suggestion. My complaint is that I never felt that this agent was working for us and certainly wasn't working for the sellers on the home that we are buying.
Aren't agents "supposed" to work for sellers?
Was I out of line to try and counter on sale of our home?
There are probably only three comparable homes for sale in our town.. All are listed between $128K-135K. Ours ends up going for $122,500. We were happy to keep our existing home if the price wasn't right.
Rant over. Thanks for the thread.