How Soon Can I Sell My House After Purchase? Useful Tips

The average homeowner stays in their home for eight years. That’s double the numbers we’ve seen before the housing crisis. With housing prices set to approach historic highs in the coming years, homeowners have more financial reason to stay put and build equity. However, the question still arises: How soon can I sell my house after purchase?

Life can be unpredictable, pushing you to arrive at tough choices. This article will look at some elements that influence how quickly you can sell your home. When done correctly, you’ll discover that selling your house even after two or five years can be a completely viable option.

How Soon Can I Sell My House After Purchase?

You can legally sell a house provided your name is on the title and that you are its legal owner. There are two fundamental scenarios when people decide to sell their homes fast:

• You want to sell your house for profit
• You need to sell quickly owing to market pressures, job transfer, or divorce

If you want to sell for profit, there are more options. 

Consequences of Selling a Home Early

It is possible to sell a house shortly after purchasing it and still make a profit. However, even though the value of a house has soared, some homeowners have discovered the valuable lesson that they may be liable for some unexpected losses.

Think about these possible consequences:

Taxes on Capital Gains

To emphasize the relevance of the Two-Year Ownership and Use Rule, the capital gains taxes individuals pay when selling a home are 15% of the profits earned on the property. Provided you’ve stayed in the home for 2 years and it serves as your primary residence, you won’t be required to pay capital gains taxes when you sell your property after the 2 years of ownership.

Remember to consult with a tax specialist first. There are a few other exclusions to capital gains taxes- for instance, if you must relocate because of a natural disaster.

Prepayment Penalty on a Mortgage

Lenders impose prepayment penalties on their mortgages if you sell your property before a particular time has elapsed since you purchased it. It is customary for them to charge you between 2 and 5% of the outstanding payments on your mortgage.

Ensure that you thoroughly check your mortgage contract before selling to ensure that you will not be required to pay any penalties.

Lowered Buyer Perception

If you sell your home soon after purchasing it, you should know there’s a psychological component involved. However, even if demand in your local market has increased significantly, the price of your home may remain stagnant.

Hiring a real estate agent instead of selling on your own is a good option. When it comes to marketing and easing the fears of potential buyers, a real estate agent assists you by addressing all of their questions and convincing them that you’re not selling because of an issue with the property.

Top Reasons for How Soon Can I Sell My House After Purchase?

According to the data, the average length of time people spend in their homes is 13 years. Although the average time to move is slightly over a decade, various personal and commercial factors could lead to people moving significantly sooner.

Investors

One of the most popular reasons for a homeowner to sell their property fast is to make a significant profit from the transaction. 

Personal Reasons

Most of the time, an owner’s choosing to sell their property shortly after purchasing it. It is motivated by major life changes. Things including financial difficulties, job relocation, divorce, the birth of a child, or medical issues can occasionally force homeowners to relocate swiftly but without warning.

The Market’s Driving Forces

New homeowners may also decide to sell when their neighborhood is witnessing significant price gains or, on the other hand, because the community appears to be declining. Purchasing a home is a substantial financial commitment, many homeowners would like to ensure that the property they are in is the best fit for them with their financial circumstances.

The Feeling of Having Made a Mistake

In some cases, homeowners may decide to sell their home simply because they had second thoughts about purchasing it. First-time home buyers, particularly in a highly competitive environment, are known to make concessions when choosing a house to purchase. If they rush into a decision, they may discover that their location isn’t a great fit, their property doesn’t meet their needs, or they misjudged the expenditures associated with homeownership.

How Soon I Can Sell My House After Purchase. Break-Even Point

It is a stage in a transaction when the transaction cost matches the amount gained from a sale that the seller arrives at a break-even point. The time required to reach this stage varies depending on the property and loan. However, if you would like to profit from a home sale, you need to be well past the break-even point before listing the property.

Essentially, that implies that when people sell their property, you’ll need to earn enough cash to cover the costs of paying off your mortgage and the expenses you’ll incur as the seller. If you do not receive enough money from the sale of your house, you may be required to pay some charges with your cash, which would result in you losing money on the transaction.

Ideally, it would be best to create equity in your property before selling it to avoid financial damage like this. However, it isn’t always an alternative for sellers who need to sell a home shortly after buying it owing to unanticipated circumstances.

2-year Rule

After 2 years of living in the property and reselling it for $500,000, you will get $274,985.

Due to your residence in the home for 2 of the previous 5 years, you could save about $80,000 in capital gains tax. You’ve also made progress toward repaying the loan you took, so you’ll save that.

5-year Rule

Several real estate professionals advocate following the 5-year rule when reselling your house. This unofficial guideline indicates that homeowners should live in their homes for 5 years before selling them to be financially viable. Not everybody can break even in 5 years, so the 5-year Rule does not always apply. 

It provides homeowners time to accumulate equity, allowing them to avoid paying thousands in closing costs and other expenses merely to sell their home and cover closing charges.

How to Get Your Home Ready for Sale

Make use of these suggestions to make the whole process go more effectively, and remember to check with a real estate specialist before making any decisions.

Recognize the Monetary Value of Your Home

The first step here is to figure out how much money your house is genuinely worth. You’ve probably spent a lot of time in your house creating sentimental memories.

As a result of the many memories associated with the property, it is tempting to assume that it is worth significantly more now than it genuinely is. One of the most common mistakes when selling a property is overvaluing the houses.

A real estate agent in your area can assist you in determining the right price for your home. 

Find the Most Suitable Listing Agent

Listing agents don’t only manage your formal contract, but they also assist you in developing a game strategy for marketing, showing, and ultimately selling your house. Furthermore, a realtor ensures that your property does not sit on the market for an excessive time.

Reduce Personalization And Clutter in Your Space

Certainly, you may adore that blue bedroom, but would your prospective buyer? Buyers can visualize themselves inside your property if you remove distinctive extra bits. That frequently results in a higher market value and shorter time invested in the market. Some further pointers are as follows:

• Keep your theme neutral in terms of color and texture.
• Remove any distinctive wallpaper colors or paint and put away any family photos you may have.
• Ask a buddy to flag out whatever decorations are to your liking to get rid of them.
• Choose neutral wall coloring and contemporary furnishings when redecorating to give it a generic appeal.

The Benefits of Selling Your House FAST

A quick sale helps homeowners achieve their objectives if they need to acquire their money to invest elsewhere. For instance, relocating for a new career, or having another reason for selling.

Moving Forward

Based on what a seller hopes to accomplish, a speedy sale may be the best way for him to do so. Suppose a homeowner has a family and wants to sell their property following the conclusion of the academic year. They can spend their summer resettling in a different school district. If this is the case, the seller’s real estate agent can help. A speedy sale is particularly advantageous whenever a seller is relocating out of the area. The reason is they don’t want to manage the home from a distance.

Deals Are Killed by Time

In business, there is an expression – time ruins deals. The further a property remains under the agreement, the higher the chances that it could be terminated. Extended escrow periods allow anything to occur to the home or for the potential buyer. The seller’s exposure is reduced as a result of a speedy sale.

Free Up Some Cash

When someone asks how soon I can sell my house after purchase, the majority of the time, sells under pressure. They are in a hurry to have the cash out of the home. A quick sale frees up money. Sellers can use this money to make payments, cover medical costs, or complete a legal divorce settlement. That could also assist a family with a limited income in escaping from a mortgage payment they cannot make on their own.