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Selling Your House After 1 Year Or Less – Bankrate.com

Circumstances can change in periods of economic instability and uncertainty — sometimes very quickly. This may result in the need to make major life changes much faster than you otherwise would. While most people who purchase a ho…….

Circumstances can change in periods of economic instability and uncertainty — sometimes very quickly. This may result in the need to make major life changes much faster than you otherwise would. While most people who purchase a home stay in it for a median of 13 years, according to the National Association of Realtors, some people find it necessary to sell their home after as little as one year or less.

If you find yourself in this situation, either by choice or out of necessity, do not worry. While the situation is uncommon, it is far from unheard of. Here is everything you need to know about putting your home back on the market after just one year.

Can I sell my house after 1 year or less?

Yes. Under most circumstances, there are no legal restrictions preventing you from selling your home after owning it for less than a year. In fact, if you wanted to, you could put your home back on the market immediately after closing on it.

That said, you are likely to face some financial challenges in pursuing this route. For instance, if you sell your home for more than you bought it for, you may have to pay capital gains taxes. These taxes apply to properties that are sold within the first two years of ownership, and depending on how much you make on the sale, they can be steep.

In addition, if you have a mortgage on the property, you may be subject to a prepayment penalty. “When selling a home after a year or less, a mortgage prepayment penalty [may be] applied of approximately 2 to 5 percent of the loan amount,” says mortgage broker Chris Allard of the Chris Allard Mortgage Team in Ottawa, Canada. “The minimum penalty is 3 months of interest, to a maximum of approximately 5 percent of the total loan amount.”

Amy Cherry Taylor, a Realtor and associate broker at Amy Cherry Taylor & Associates in Fredericksburg, Virginia, notes that most loans don’t contain this penalty. But you’ll want to check your specific mortgage to make sure you aren’t subject to it. “If you used a first-time homebuyer program or a grant program, you may have some type of fee that will be owed upon the sale of the property,” she says.

Exceptions

There are some exceptions that may allow you to avoid paying additional fees for selling your home within the first year of ownership. These include hardships like job loss, divorce or a death in the household. You may also be able to receive an exception for military service. Be sure to consult with an attorney if you believe you …….

Source: https://www.bankrate.com/real-estate/selling-your-house-1-year/

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