With home prices soaring, buyers may be wondering if they can turn a quick profit by selling a home they bought recently. Although you can turn around and list a home for sale the day after your closing, this isn’t always a smart move. There is no length of time you have to wait, but there are reasons you may want to wait.

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Why Do You Want to Sell Your Home Now?

Unless you are a home flipper, you probably didn’t buy a new home just to turn around and sell it within a year or two. However, there are reasons that some homeowners need to sell quickly. You may need to sell your home fast for a job relocation, a family change, a health emergency, or even simply buyer’s remorse when you realize the house simply just isn’t right for you. If the housing market has changed dramatically, you may have gained equity in your home very quickly and have the opportunity to sell high, which can be a smart financial move. If you have a solid reason to sell quickly, you can certainly do it.

Will You Lose Money if You Sell a Home You Just Bought?

There is the potential for some financial loss if you sell your home fast. Selling your home in less than a year isn’t just about the purchase price. You need to factor in the costs associated with buying the home, the costs associated with selling, the equity you may lose, moving costs, and capital gains taxes. If you’ve lived in your home for more than two years, you will be exempt from paying these taxes on your home sale, but if you have lived there for under two years, capital gains taxes may apply. You need to speak with a financial professional to help you calculate the cost of selling a home you just bought.

Are There Other Consequences to Selling Your Home After Buying?

Other than the financial concerns, there may be other consequences when you sell your home fast. Listing histories are easily available to be viewed online, and buyers and agents will see what you paid and when. If you are selling quickly, potential buyers may worry that there is something wrong with the house and be wary of making an offer. If you are planning to sell quickly, you need to make sure that your listing reflects the reasons for the quick sale.

How to Calculate the Best Time to Sell

Waiting over two years is the smartest choice. This gives you the best chance of gaining some equity in your home and allows you to avoid the capital gains tax. However, if you can’t wait two years, there is a way to calculate the best time to sell to put yourself in the best position. You want to make sure you do the math first so you can anticipate and potentially offset any losses. Start by speaking to a real estate agent about the fair market value of your home and the listing price suggested. Subtract the closing costs from the sale price (usually 8-10% of the sale price), the seller prep costs from the sale price, and the mortgage payoff amount from the sale price. If you are losing a significant amount of money, it may be smart to talk to your agent or a financial advisor. Finding the “breakeven horizon”, which usually occurs after two years, is the smartest time to sell.

Selling a home quickly may not always be ideal, but if you have a need to relocate, it is certainly possible to sell your home fast. A real estate agent and financial advisor you trust is the best way to begin the conversation and find the best solution for your situation. We’re here to help. Contact Amberwood Real Estate today.