Tips to Recover When You Lose out on a Home

Losing out on a home you wanted stings, but these tips help you react in the right way.

It’s easy to get emotionally attached to a home before you even own it. In fact, that’s a key component of successful real estate sales—the agent needs you to envision your family in the home, and to picture all of the great moments and occasions you will celebrate there. Then you will be more motivated to buy that house, perhaps even going beyond your intended price limit.

You want to find a house that you instinctively love, one that feels like home. That’s the ideal—if it all works out. The downside is that you might be in for a letdown if the sale ends up falling through and your would-be dream house slips through your fingers.

For most people, buying a home is one of the most important decisions you will ever make. It is also likely the biggest financial purchase of your life. Such a significant milestone naturally has a lot of emotional ties. But real estate can be tricky and often unpredictable, so you may find yourself on an emotional roller coaster before you finally get the keys to your next place.

How to get over losing out on a home

1. Don’t waste time on what might have been.

Once a house is no longer an option for you, put it behind you and move on. Obsessing over it is just a waste of valuable time—and isn’t great for your state of mind.

2. Focus on your next opportunity.

One of the best ways to get over a house you wanted is to take the “one door opens when another closes” perspective. For whatever reason, that house just wasn’t meant to be. Think of this as a sign that it wasn’t the right fit for your family. That means your perfect home is still out there, waiting for you to discover it.

3. Reevaluate your approach.

This missed opportunity may be a good time for you to assess your search criteria and buying strategy. Perhaps you weren’t focusing on the most important priorities, so consider whether you need to adjust your search parameters. Also, consider whether your budget is realistic for the type of houses you’re checking out. There’s no sense setting yourself up for disappointment by browsing homes that are way beyond what you can afford.

4. Understand your market.

In certain areas, the chances that your offer (at least, your first offer) will be accepted may be relatively slim. In a competitive marker, sellers may have their choice of offers—and popular homes may go quickly, perhaps at a significant amount above the list price. Knowing the current landscape in your local market helps in knowing whether the odds may be stacked against you—and whether you should prepare yourself that you may have at least a few false starts before you are successful.

5. Choose the right real estate agent.

A real estate agent who keeps up with the local market fluctuations will be able to offer insight about how things like for buyers there right now. They may also be able to suggest the best time to look, if there are local trends when inventory tends to be higher. Plus, they can help you narrow your search to houses that would be a realistic possibility for you.

6. Know when you should and shouldn’t haggle.

Everyone loves a bargain, but you don’t want to risk losing out on a great house by trying to haggle when it’s a big risk. If you are truly in love with a house, go in with your best offer first. This is especially important if there are other buyers in the mix. Don’t risk letting the house slip through your fingers if someone else submits a better offer first.

What is the Capital Gains Tax?

If you make money on a home sale, you may have a tax bill coming.

Selling your home and finding a place can be exciting—especially if you anticipate making some money in the process. But as anyone who has received a paycheck knows, earning income and paying taxes go hand-in-hand. If you stand to profit from selling your home, you may be subject to the capital gains tax. And if you’re wondering, “What is the capital gains tax?” then you’ve come to the right place.

Factors That Affect Capital Gains Tax

How Long You Lived There

There are two rates for the capital gains tax: the short-term capital gains rate and the long-term. If you’ve owned your home for one year or less when it sells, those earnings may be subject to the short-term capital gains tax. The short-term tax corresponds to your regular income tax bracket.

If you’ve owned your property for more than a year, your earnings may be subject to the long-term capital gains tax instead. These rates tend to be much lower than the short-term rate—ranging from 0 to 20 percent.

Amount of Profit

You might think an expensive home will be subject to a higher capital gains tax, but the actual cost of the real estate doesn’t matter. What’s important is how much you profit from the sale. A house purchased for $800,000 and sold for about the same amount could be taxed next to nothing, while a house purchased for $350,000 and sold for $500,000 will rack up a much bigger tax bill.

Amount You Invest Into Your Home

Did you renovate the kitchen, replace the orange shag carpet or add a pool? It’s always a good idea to keep detailed notes of the improvements you make to any real estate holding, as the money you put into it counts towards the overall cost of your property. This could close the gap between what you paid for the house and its selling price—meaning you could pay less in taxes when it sells.

Your Income and Marital Status

You don’t pay capital gains tax unless you make a certain amount of income, and the rate you pay increases as your income increases. That “certain amount” is different depending on whether you’re single, married and filing jointly, or married and filing separately.

For example, for 2018, a single person’s long-term capital gains rate is 0 percent if they make $38,600 a year or less. For married people filing jointly, the 0 percent rate goes up to $77,200 in annual income. If that single person brings in between $38,601 and $425,800, they’ll pay a long-term capital gains rate of 15 percent. The married couple’s 15 percent rate will qualify when their income is between $77,201 and $479,000. When both categories of people make more than those income levels, their rate will increase to 20 percent.

If You’re a Real Estate Investor

If you’re a house-flipper by trade, your sales are considered inventory rather than capital assets, and all gains earned are taxed as income. On top of that, house flippers aren’t allowed to simply avoid the tax by rolling profits over into their next home purchase.

If It’s a Primary Residence

If your home is your primary residence, you could get a big capital gains break. If you lived in the home for two of the five years prior to the sale, you could exclude sales income up to $250,000 if you’re single and up to $500,000 if you’re married filing jointly.

The flip side is that if you’re selling a vacation home or rental property, you won’t qualify for this exemption. Instead, you’ll be subject to the regular capital gains tax—either the short-term or long-term rate, depending on how long you owned the property.

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Blog Post Title Four

It all begins with an idea. Maybe you want to launch a business. Maybe you want to turn a hobby into something more. Or maybe you have a creative project to share with the world. Whatever it is, the way you tell your story online can make all the difference.

Don’t worry about sounding professional. Sound like you. There are over 1.5 billion websites out there, but your story is what’s going to separate this one from the rest. If you read the words back and don’t hear your own voice in your head, that’s a good sign you still have more work to do.

Be clear, be confident and don’t overthink it. The beauty of your story is that it’s going to continue to evolve and your site can evolve with it. Your goal should be to make it feel right for right now. Later will take care of itself. It always does.