Real Estate Information Archive


Displaying blog entries 1-4 of 4

What Not to Overlook on a Final Walk-through

by Carol or Jim Chamberlain
Be sure that: Repairs you’ve requested have been made. Obtain copies of paid bills and any related warranties. All items that were included in the sale price—draperies, lighting fixtures—are still there. Screens and storm windows are in place or stored. All appliances are operating. Intercom, doorbell, and alarm are operational. Hot water heater is working. HVAC is working. No plants or shrubs have been removed from the yard. Garage door opener and other remotes are available. Instruction books and warranties on appliances and fixtures are there. All personal items of the sellers and all debris have been removed.

What to Keep From Your Closing

by Carol or Jim Chamberlain

The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need this for income tax purposes and when you sell the home.


The Truth in Lending Statement summarizes the terms of your mortgage loan.


The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.


The deed transfers ownership of the property to you.


Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association’s rules and restrictions.


Insurance policies provide a record and proof of your coverage.

Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.

Understanding Capital Gains in Real Estate

by Carol or Jim Chamberlain
When you sell a stock, you owe taxes on your gain—the difference between what you paid for the stock and what you sold it for. The same is true with selling a home (or a second home), but there are some special considerations.
How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:
1. Take the purchase price of the home: This is the sale price, not the amount of money you actually contributed at closing.
2. Add adjustments:
 Cost of the purchase—including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.
 Cost of sale—including inspections, attorney’s fee, real estate commission, and money you spent to fix up your home just prior to sale.
 Cost of improvements—including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.
3. The total of this is the adjusted cost basis of your home.
4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.
A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:
 You have lived in the home as your principal residence for two out of the last five years.
 You have not sold or exchanged another home during the two years preceding the sale.
Also note that as of 2003, you also may qualify for this exemption if you meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.

Answer these questions to help you decide whether moving up makes sense.

by Carol or Jim Chamberlain
Answer these questions to help you decide whether moving up makes sense.
1.How much equity do you have in your home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of paying a mortgage, but if you’ve owned your home for a number of years, you may have significant unrealized gains.
2.Has your income increased enough to cover the extra mortgage costs and the costs of moving?
3.Does your neighborhood still meet your needs? For example, if you’ve had children, the quality of the schools may be more of a concern now than when you first purchased.
4.Can you add on or remodel? If you have a large yard, there might be room to expand your home. If not, your options may be limited. Also, do you want to undertake the headaches of remodeling?
5.How is the home market? If it’s good, you may get top dollar for your home.
6.How are interest rates? A low rate not only helps you buy more home, but also makes it easier to find a buyer.

Displaying blog entries 1-4 of 4

Contact Information

Photo of Carol and Jim   Real Estate
Carol and Jim
Preferred Home Brokers
3230 E Imperial Hwy, Ste 125
Brea CA 92821

Carol & Jim Chamberlain 714-726-3166 or 714-726-3144                  "Yes, We Can Be In Two Places At Once!"                                              BRE Lic Numbers: 00912962, 01015143