DEAR BOB: I am trying to buy a house for about $400,000. At
the moment, I am not working with a realty agent. But the seller has the house
listed with an agent for sale. I want to make a purchase offer. So I can make a
reasonable offer, what is the average sales commission rate for the listing
agent? – Sirisak A.
DEAR SIRISAK: As a home buyer, you need not be concerned
about the home seller's sales commission arrangement with the listing agent.
Purchase Bob Bruss reports online.
However, as a general rule, home sellers signing listings
with realty agents agree to pay a sales commission of 6 percent or less. The
listing agent might have agreed to accept a discounted commission such as 5
percent or even 4 percent of the sales price.
Some "discount brokers" charge fixed-fee
commissions, such as $3,000 or $5,000, regardless of the sales price. According
to Real Trends, the nationwide average home sales commission is now 5.1 percent
of a typical home's sales price.
HOW MUCH PROFIT TAX ON RENTAL PROPERTY SALE?
DEAR BOB: I own a rental income property purchased 30 years
ago. I may want to sell it but am concerned about the capital gains tax. My
profit will be around $400,000. I am 61, out of work, with no pension. How much
capital gains tax will I owe? – Charles S.
DEAR CHARLES: The current federal capital gains tax rate is
15 percent, plus your state income tax. Presumably, part of your capital gain
will be "recaptured" depreciation, which is taxed at a special 25
percent federal tax rate. For full details, please consult your tax adviser.
NO LIMIT TO USE OF $250,000 HOME-SALE TAX EXEMPTION
DEAR BOB: Can a husband and wife earn up to $250,000 each
every two years on the sale of their principal residence? My brother thinks it
is available only once in a lifetime – Colleen W.
DEAR COLLEEN: Your brother is wrong! Internal Revenue Code
121 can be used over and over again every 24 months without limit. If you use
this tax benefit frequently, you will become known among your friends as a
"serial home seller."
A husband and wife who own and occupy their principal
residence at least 24 of the 60 months before its sale can claim the $250,000
per owner IRC 121 tax exemption (up to $500,000 for a married couple filing
jointly) over and over again. Details are in my special report,
"Everything Homeowners Need to Know About the New $250,000-$500,000 Home
Sale Tax Exemption Rules," available for $4 from Robert Bruss, 251 Park
Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant
Internet download at www.bobbruss.com.
Questions for this column are welcome at either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
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