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Wednesday, February 24, 2016

Tax Season Is Coming Up, Here’s What You Need to Know

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Today, we are delighted to be joined by Troy K. Vigil, who has been a tax professional for many years. We’re going to ask him some of the most common tax-related questions we’ve been getting from buyers, and see what he has to say. Without further ado, let’s get to it.

What are some of the tax advantages of owning a home?
There are really 3 big ones. The first is being able to deduct the property taxes you paid on the property, and that’s a deduction you will take at the end of the year. Secondly, it opens up a lot more itemized deductions on your taxes, like medical expenses, charitable contributions, and more. The third, and best advantage, in my opinion, is the exclusion of paying capital gains when selling a property. If you live in a house at least 2 years and sell the property at a gain, you can exclude $250,000 from capital gains taxes if you’re single, and $500,000 if you’re married. This is one of the best tax benefits in America.

What do homeowners need in order to file their taxes?
The most important form you need is the 1098 from your mortgage company, which will show how much you paid in interest throughout the year, as well as what you paid in property taxes.

Do homeowners who bought in 2015 need any other forms?
Yes, in addition to the 1098, you will also need your closing statement. If you don’t have yours, we can send it out to you no problem.

What are the tax consequences of someone pulling money out of an IRA or a 401K to use for a down payment?
As far as the IRA is concerned, since the money has never been taxed, when you pull it out you will have to pay taxes on it. Also, if you are not at least 59 ½ years old, you will be charged an additional 10% penalty on any withdrawal over $10,000. With a 401K, the same rules apply, except for the fact that you will be charged that 10% early withdrawal penalty on any amount.

What considerations should rental investors make?
It’s just like any other investment, where you should focus on buying at a good price and starting a nice stream of cash flow. There are a lot of deductions associated with rental properties, so the cash flow is nice. I own 4 rental properties myself, and I think it’s a great investment. 

If you have any questions for us, give us a call or send us an email. You can contact Troy K. Vigil by calling his office phone, 720-484-6683, or emailing him at We would love to hear from you!

Monday, February 8, 2016

What to Expect from the Denver Real Estate Market in 2016

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Looking to sell in the Denver Metro Area? Get a free Home Price Evaluation

Today we’re going to give you an overview of what happened in the Denver real estate market in 2015, and we’ll be giving some predictions about what might happen in 2016. Overall, we’re seeing a market that’s moving very quickly with inventory just being gobbled up.

Here are a few statistics from 2015:
  • The average price for single family detached homes was $411K, and attached homes are selling for $276K.
  • Average days on market for detached is 32, and for attached homes it is 26 days.
  • Over 35% of homes are under contract in 7 days or less, and 46% of attached SF homes are under contract in 7 days or less.
  • We saw a net migration of 101,000 people into the state of Colorado in 2015, and this is putting enormous stress on our inventory levels.
  • We have predicted that 65,000 people moved into the Denver/Front Range area, but we only had 17,000 available units.
  • Overall, supply is simply lacking and that is what is driving prices higher and higher.

The market is moving at a rapid pace right now. Homes usually sell in 90-110 days in Denver, but homes are flying off the market in 30 days right now. We have found that the higher the price point, the less activity you will see, but we’re still in a very robust and active real estate market. If your home takes longer than 14 days to sell, the stats show that your home will likely not sell for its maximum value.

So, what are the odds of selling your house in one month? In 2015, you would have had a 62% chance of selling.

Should you wait to buy or sell this year? We expect another 90,000 people to move into Denver, so we expect even more appreciation on our homes. However, rising interest rates will push a lot of buyers onto the market, so you could capture some of that pent-up demand, but we expect next year to be a good one for our market as well.