Appraisals provide an objective opinion of value, but it’s not an exact science so appraisals may differ.
For buying and selling purposes, appraisals are usually based on market value — what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.
Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.
Appraised value doesn’t take into account special considerations, like the need to sell rapidly.
Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.
Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com
Check references. If possible, view earlier jobs the contractor completed.
Check with the local Chamber of Commerce or Better Business Bureau for complaints.
Be sure the contract states exactly what is to be done and how change orders will be handled.
Make as small of a down payment as possible so you won’t lose a lot if the contractor fails to complete the job.
Be sure that the contractor has the necessary permits, licenses, and insurance.
Check that the contract states when the work will be completed and what recourse you have if it isn’t. Also, remember that in many instances you can cancel a contract within three business days of signing it.
Ask if the contractor’s workers will do the entire job or whether subcontractors will be involved too.
Get the contractor to indemnify you if work does not meet any local building codes or regulations.
Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.
Guarantee that the materials that will be used meet your specifications.
Don’t make the final payment until you’re satisfied with the work.
According to Zillow’s 2017, 10 Hottest Housing Markets list, Knoxville, Tennessee ranked #7. The list also revealed that Knoxville’s expected home value appreciation for 2017 will be 4.4 percent, projected income growth will be 1.1 percent and it will have a projected unemployment rate of 4.7 percent.
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When you sell a stock, you owe taxes on the difference between what you paid for the stock and how much you got for the sale. The same holds true in home sales, but there are other considerations.
How to Calculate Gain
Your home’s original sales price when you bought it (not what you brought to closing).
Additional costs you paid toward the original purchase (include transfer fees, attorney fees, and inspections but not points you paid on your mortgage).
+
Cost of improvements you’ve made (include room additions, deck, etc. Improvements do not include repairing or replacing existing items).
+
Current selling costs (include inspections, attorney fees, real estate commission, and money you spent to fix up your home to prepare it for sale).
+
Add the above items to get your adjusted cost basis:
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The final sale amount for your home.
The adjusted cost basis figure from above.
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Your capital gain:
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A Special Real Estate Exemption for Capital Gains
Up to $250,000 in capital gains ($500,000 for a married couple) on the home sale is exempt from taxation if you meet the following criteria: (1) You owned and lived in the home as your principal residence for two out of the last five years; and (2) you have not sold or exchanged another home during the two years preceding the sale. You may qualify for a reduced exclusion if you otherwise qualify but are short of the two-out-of-the-last-five-years requirement if you meet what the tax law calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.
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