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If you sold your home in 2024 or early 2025, you could claim the maximum capital gains exclusions set in 1997. However, since these exclusions aren’t adjusted for inflation, many long-time homeowners still face capital gains taxes, notes Evan Liddiard, CPA and director of federal tax policy for the National Association of REALTORS®.

The maximum exclusion on homestead capital gains is $250,000 for single filers, and $500,000 for married couples. Sellers must have lived in and owned the home for at least two out of the past five years.

Subtracting the purchase price of the home from the sales price gives you the cost basis but you can minimize capital gains using an adjusted basis, like including the cost of any capital improvements you made. Capital improvements are permanent structural changes and restorations that enhance the property’s overall value, its useful life, or adaptation to new uses.

Charitable donations and putting cash into tax-deferred IRAs can also reduce your tax exposure. Ask your CPA for more tips.

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Housing market conditions change rapidly, with fluctuating interest rates, price and availability of homes. Your Berkshire Hathaway HomeServices network professional can help you with the following suggestions:

Step 1: Be financially prepared
Prequalification for a mortgage loan tells you what kind of loan is best, the interest rate you’ll pay, how much you can spend on the purchase price of a home, and whether you’ll pay private mortgage insurance.

Step 2: Be flexible
You may have to make compromises to your wish list, like moving further out to get the amenities you want, buying a fixer-upper instead of a new home, or getting a condo instead of a house. Be open to alternatives.

Step 3: Plan for the long-term
Building equity takes time, so plan to stay in your home long enough to “repay” your closing costs. Closing costs for homebuyers account for 2 to 6% of the purchase price so it could take five to seven years to sell at a profit or break even.

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Before you buy a home, ask Jane At The Lake with Berkshire Hathaway HomeServices to look into any potential deed restrictions that limit how you can build upon or use your property.

Deed restrictions are regulations imposed either by the local community or a homeowners association. These regulations can be found in the county clerk’s property records, the builder or planned community developer’s plans, and through homeowner associations’ Covenants, Conditions and Restrictions (CC&Rs).

Restrictions are required for cities to effectively operate services and to protect the rights and property values for all owners. This explains why adding a second story or operating a business out of your home requires a permit.

Homeowner association CC&Rs are designed to protect property values, foster public safety, and prevent disputes. HOAs typically want owner occupants only, and don’t allow rentals. Homes are built to conform to specific sizes, materials, colors and housing styles to make the community more attractive. Regular lawn care, exterior maintenance, and common area maintenance keep home values higher and make the community more desirable.

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As the costs of homebuying continue to rise, many homebuyers are willing to exchange urban amenities for the peace, quiet, and affordability of country life. If you’re a city slicker moving to the countryside, be prepared for big changes, like using well water and septic tanks instead of city plumbing and dealing with less reliable cell phone, satellite TV, and internet services. But—you’ll improve your chances of seeing more stars at night and breathing fresh air.

You may have to do most if not all property maintenance and animal care, as help may be hard to find. Consider how close you want to be to the city and how often you need to go there. What services does your rural community offer, such as police, fire departments, EMS, and hospitals? Conveniences such as grocery stores and auto repair shops should be within a reasonable commute. You can choose which schools your children attend, even if they’re in another school district.

Before making the move, ensure your rural home meets your household’s needs.

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Mortgage interest rates are slowly drifting lower, giving a much-needed boost to both homebuyers and home sellers. Yet, home prices continue to rise, even as more sellers put their homes on the market. Why? The U.S. is still several million homes short of a balanced market. So, do you want to wait for cheaper rates or go ahead a buy a home before home prices rise further?

To time the housing market perfectly, you need to:

1. Find the right home.
2. Buy at the right price.
3. Obtain the right mortgage interest rate.

You may get lucky and get one out of three or even two out of three, but it’s nearly impossible to get all three at the same time unless the market is in a recession or depression. Only then will there be plenty of homes to choose from, low prices, and low mortgage interest rates.

Start with finding the right home—one that best meets your household’s needs for space and features, your finances, and a reasonable interest rate.

Filed under: Blog by Jane Sullivan Horne
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Once the outcome of the presidential election was known, 30-year mortgage interest rates slowly decreased through the end of 2024 from the high 6% range, into the mid-to-low 6% range. Forecasters predicted that they’ll continue to soften, sinking below 5%, just in time for the spring 2025 homebuying season.

• Wells Fargo agrees that rates will dip below 6% in Q2 2025.
• Fannie Mae predicts that mortgage rates will average 5.7% in 2025.
• The Mortgage Bankers Association says rates between 2024 and 2025 will drift between 6.3% by Q4 2024 and 5.9% by Q3 2025.
• The National Association of Home Builders predicts that rates will average 5.94% in 2025, with “sustained, sub-6% mortgage interest rates” beginning in Q2 2025.

Federal Reserve chair Jerome Powell says that forecasting interest rates is highly uncertain. While there are trends that suggest that the interest rate forecast for spring 2025 will be lower, it all depends on developing economic conditions. For that reason, don’t try to time the market. You can always refinance if interest rates drop.

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An older home can be a bargain, depending on how much work and money you put into it. Understanding functional obsolescence can help you get the most value for your money.

Professional real estate appraisers value properties in two parts—land value and structural enhancements, such as a house. When the home’s design and technologies are too outdated, the house is functionally obsolete and requires renovations. In worse cases, the structure’s condition has deteriorated to the point where the property’s value is only in the land, also known as “lot value.” This generally means the house is a tear-down, and a new structure can be built in its place. However, you can inadvertently create functional obsolescence when you over-improve a home for the surrounding neighborhood or install features that homebuyers don’t like or want, also known as superadequacy.

Before you buy an older home that needs either work or demolition, ask your Berkshire Hathaway HomeServices network professional for advice. They’ll show you market trends, neighborhoods and homes that will support the improvements you want to make.

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Thanks to social media, some homebuyers can be ruthless in describing your home to others. If they call your home cheugy (choo-gee), they believe you’re pursuing trends a little too hard, or your home is outdated. What makes a home cheugy is hard to pin down, but these are a few things that writers, redditors, and designers have called out:

Swap inspirational signs like “Live, Love, Laugh” with vintage or abstract art. Ditto for obvious statement signs like “Eat.”

Giant TVs taking over the living room. The trend of discreet tech: “hidden speakers, wireless charging furniture, and voice-controlled lighting” along with hidden TVs are now preferable.

Shower curtains, bath rugs, and old towels seldom look fresh and clean. Better to install a glass enclosure or buy new bath accessories.

Gray paint, the new neutral following the Great Recession, is now old and well…gray.  Try a bolder grayed blue, sage green, or mushroom instead.

It’s ironic, but the word cheugy will soon be cringy, too.

Filed under: Blog by Jane Sullivan Horne
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To sell your home this spring, you should repaint, declutter and deep clean, but details will make the most difference.

• Before you paint, scuff up the surface with a light sanding or a fine abrasive pad. Clean walls and floors of dust and dirt so painter’s tape will adhere tightly and your paint job looks more professional.
• Be ruthless when you declutter. Donate items you don’t use or like very much. Closets look bigger with fewer clothes. Organize kitchen and bath cabinets and drawers for more appeal.
• Deep cleaning should include windows. Vacuum dust and dirt from sills, then apply a generous spray of window cleaner. Use a squeegee to remove wet streaks, which works better than a cloth. Fluff curtains in the dryer and wipe off curtain rods in the meanwhile. Open all window coverings for showings to homebuyers.
• Pay attention to smells. Wash all bedding, and apply baking soda to the mattresses, then vacuum. Wash or replace pet beds. Put orange peels down stinky disposals to help clean smelly blades.

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