As we approach year-end a number of things come in to play in real estate. One of the biggest is the fact that most people and entities will reach the end of their tax year on Dec. 31. There isn’t too much you can do in the few weeks remaining in that time, but there are some things you can do to get save yourself some taxation and to prepare properly for the upcoming year.
The first thing to consider is when you will have the larger income, this year or next. If you are going to retire next year and your income be reduced then you should consider pushing your upcoming closing to next year, i.e.- Jan. 4 so you can take the anticipated income from the sale in that tax year. Conversely, if you anticipate a windfall next year then work to close it this year.
If you have are able to deduct the expenses of your income properties then you might consider spending some money if you need to offset income. This can include buying a new vehicle and stocking up on office and other business-related supplies. By spending you will save in your tax obligation. Talk to your tax adviser immediately on this and other tax positioning matters.
The end of the year brings Christmas, New Year, and the holiday spirit so prevalent this time of year. While things are festive and spirits are bright it is the best of times and some of the more troubling. Everyone is distracted this time of year by the holidays with their preparation, execution and, for some, their emotional burden. You never know how the people you are relying on are going to react, but with the many people involved in a real estate transaction the likelihood that somebody is performing at less than optimum is real.
Many understandably prioritize their family time and experience this time of year. Expect that and be easy to work with. If you are looking at property understand that some homes will be in a state of confusion while others will look their best with all the decorations and festive atmosphere. It’s a good time of year to do business. One year we put our last transaction together at 5 p.m. on New Year’s Eve. What a way to start the year for buyer, seller and us! Not everyone will be shut down so don’t shut yourself down if you are still looking to buy or sell.
Some folks may be trying to pad their sales performance numbers for the end of the year. Don’t succumb to extra pressure from agents, lenders or anybody else in the real estate process. The end of the year looms large, but the transition from Dec. 31 to Jan. 1 is the same as always – the sun goes down, the moon comes up, the moon goes down and the sun comes up, and it’s a new dawn. Life goes on (“ob la di, ob la da” anybody?) so don’t get pressured into a bad decision by a bad actor. Your agent should be able to give you perspective on the overall consequences of your decisions and actions.
This is an exciting time of year – enjoy it! To get something done be very cooperative. Be courteous with your showing timing, show up on time, have the home ready. If you are in escrow, get your documentation to your Lender in a timely manner, be available to the escrow officer, respond to your agent’s inquiries, i.e.- decisions on inspection reports, etc. You will find it easier for you, too, if you be the model buyer or seller – all the professionals will appreciate and respond to your behavior appropriately. You will find life much more enjoyable, experience less transaction stress, and will have more time to spend with friends, family and business associates as you may choose.
Enjoy this time of year – it only happens once a year!
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. firstname.lastname@example.org