mmurphy384 asked: My wife an I bought our house 6 years ago for $235,000. It is now appraised at $550,000 and we are considering either moving to a nicer house or renovating our current house (that we currently owe ~ 190,000 on). If we stay, we would renovate our kitchen and bathrooms for an estimated $75,000.
If we were to sell our house for 550,000 house, can someone help me understand the costs:
1) approximate realtor fee
2) approximate closing costs
3) Would we pay any taxes on the $300k provide we stand to make?
If we were to purchase a $650,000 house, what would the estimated closing costs.
The only other thought I had is that by moving now, we get a break on some percentage of the capital gains over our lifetime(I beleive 170K per move) and then the counter starts over in our new house (so that we could move again in 6 years and still be within any grace period amount). Perhaps I misunderstand this whole concept of being able to write off a certain amount from capital gains???
2 more tidbits.
The primary reason for moving to a modestly more expensive house is to avoid the intrusive construction associated with a major kitchen/bath renovation.
Also, we wouldn’t mind moving into a different neighborhood (with more kids). It’s not just a financial decision.
I talked to a realtor and the info wasn’t pretty.
1) Typical realtor fee when selling it 5.5-6%
2) Throw in another 11,000 for closing costs on a 500,000 house.
3) When purchasing a new house, a reasonable estimate for closing costs is 3.5% (which would include property tax for the first year ($5000 in MD for a $600,000 house).
4) Capital gains is such that the first 250,000 is tax free (for a married couple). Anything over that is taxed.
I guess I’ll be renovating.
