Tax Perspective - Same Net Offer For My Property

4 Replies

Hey my beloved BP community, I just received two offers for my first flip property that I did in Washington DC. I need some of your inputs to determine which offer below would give me more profit or benefits from tax perspective. 1) First offer: $400K, which was what the listing price is for my property, with no closing help. 2) Second offer: $412K but with $12K seller credit for closing help. This nets out to $400K. Please keep in mind, the transfer and recordation rate is 2.2% (seller and buyer pays 1.1% each) for properties sold at $399,999 or less. The transfer and recordation tax rate increases to 2.9% (seller and buyer pays 1.45% each) for properties sold at $400K or higher. I am looking forward to getting your inputs Thanks, A

@Arthur C.

Sell it for 399,999.00 you save approx $2800 between buyer and seller. I don’t think the other facts will change your tax situation much. 

@Arthur C.

From a financial perspective you are prolly worse off with the $412,000 offer if you are using a real estate agent.
The real estate agent will take 6%(whatever % you agreed to) off $412,000 instead of $400,000.
6% of $12,000 is $720

There may also be other costs associated with selling it at a higher gross cost(each county is different).

I can understand why the seller would want to buy it for $412,000 with the $12,000 seller credit. He will likely require less down payment at closing. 

From a tax perspective - everything else should be the same.