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Selling Your Home After 2 Years – Bankrate.com

How soon after buying a house can you turn around and sell it? Technically, you can put it back on the market the same day you get the keys — but just because you can doesn’t mean you should. Typically, the longer you hang on to…….

How soon after buying a house can you turn around and sell it? Technically, you can put it back on the market the same day you get the keys — but just because you can doesn’t mean you should. Typically, the longer you hang on to a home, the better. You’ll earn more equity and it will have time to appreciate in value. But life can be unpredictable, and sometimes you just need to sell and move on. Selling your house after owning it less than a year is probably not a great idea financially. Does waiting at least two years make more financial sense? Let’s find out.

Can I sell a home 2 years after buying it?

Of course you can. But, in an ideal world, you’d want to stay in your home long enough not to lose money on the transaction.

In the seller’s market we’ve seen recently, it’s been fairly easy to turn a profit in two years of homeownership in most parts of the country due to high home appreciation rates. But as interest rates rise and the market cools down, that may not be the case for much longer. And you could potentially find yourself underwater on your mortgage if the home’s value has stagnated — or worse, dropped — since you bought it.

In addition, keep in mind that selling a house isn’t free — it comes with significant closing costs. According to data from ClosingCorp, for a single-family home in the U.S. in 2021, closing costs averaged nearly $7,000. While that full amount would not be shouldered by the seller alone, it still takes a big bite out of your profits. And you’ll need to factor in real estate commissions (typically 5 to 6 percent of the sale price) and moving costs as well.

All of which is to say, it’s best to stay put in your home for long enough to recoup these costs. If that happens in two years, great! If not, it may be more prudent to wait.

Tax implications

When deciding whether to sell, you’ll want to consider the potential tax implications as well. Selling before the two-year mark can be costly.

“Staying long enough to hit 24 months can save you a significant amount of money on taxes,” says Jeremy Babener, a tax attorney and founder of Structured Consulting in Portland, Oregon.

It’s all about capital gains taxes. Owning and living in a home for two full years can qualify you for the IRS’s Principal Residence Exclusion. This allows you to deduct up to $250,000 in sale proceeds if you’re a single filer, and up to $500,000 if you are married and …….

Source: https://www.bankrate.com/real-estate/selling-your-house-after-2-years/

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