Finance Questions? Ask a Financial Expert for Answers ASAP
IN order to tell you what you need to sell it for to make a profit, I need to know additional information. If you can, please provide the following:
Thank you for the additional information. I really need to know the cost of those items.
So i will estimate.
The key to knowing what price to sell at to make a profit, you need to know the capital gins formula. I assume you meet the capital gains exclusion rules of having owned and lived in the property as a primary residence for 2 of the past 5 years.
capital gains formula (profit formula if you will)
Capital Gains = sale price - (original cost, + improvements and additions, + major repairs, + closing costs you did not orignally deduct,) - the cost of selling
Where cost of selling includes the realtor fees, closing costs of the seller, transporation, advertising, etc.
So for purposes of your situation, I will make some estimates. If you know the exact figures you can substitute.
Here are the estimated costs you need to recover in order to break even:
Total recoverable costs: 84,718 so you need to colect at least 1.08 X the 84,718 to break even. 91,495 dollars.
If any of my estimates are close your first dollar of profit comes when you close on the house at 91,496 dollars. So how much profit do you want to make. Lets say 15%. To get a 15% profit would be about 105,000 to 106,000 dollars.
If you never made the repairs, then your recovery cost will be:
76,900 + about 3.6% in HUD form costs that you were not able to deduct, plus 8% for realtor fees and expenses related to selling. that is a total of 11.6% average. Again, I am not able to be exact, because I do not have your hud form.
76,900 X 1.116 is your approximate breakeven point. = 85,821 dollars. with the mortgage payoff, 87,821 would cover it, but rounding to 88,000 would most likely cover all your costs.
But in this market you may not get even that. Many people are encurring a captial loss on their properties.
What happens when you list a home with a realtor, they do a Market Value study on the home, and set the price based on market values in your neighborhood.
it is a complicated formula that takes into consideration, the appraised value and the price of similar homes selling in or near your neighborhood over the past six month is any at all. If they have to they will go back one year.
The realors also incude in the pricing formula how long they figure the house will be on the market. They will typically attempt to price the home to move within 3 to 6 months. BUT in todays realestate market, even that may not move the home.
The problem you will have is that your home may not have appreciate that much form one year ago. You are most likely going to take a loss on this sell over the expenses and orignal cost.