How Soon Can I Sell My Home?

Is flipping your house a good idea? Here's what you need to know.

There’s nothing stopping you from selling your home immediately after you walk away from the closing table. However, if you don’t stay in your home for at least a couple of years, you’ll likely have to take a loss when you sell.
 

Remember all that cash you shelled out to buy the home? Unless you sell for more than you owe on the mortgage, you lose that initial investment. In case you're curious, average closing costs on a $200,000 mortgage in 2009 totaled $2,732, according to Bankrate. This assumes a 20 percent down payment and good credit, and excludes taxes, insurance or prepaid items such as prorated interest or homeowners association dues.

Second, there are huge transaction costs associated with selling a home. If you hire a real estate agent, for example, you’ll likely pay 6 percent of the sales price of your home in commission -- $12,000 on a $200,000 home. If you sell mere months after buying your home, you probably won’t have enough equity built up to offset these costs.

Third, if you sell for a profit, you may have to pay capital gains taxes if you’ve owned your home for less than two years. Under current tax law, individuals are excluded from capital gains taxes for up to $250,000 of profit on the sale of a primary residence (or $500,000 for married couples). If you sell your home before you’ve owned it for two years, you may have to fork up the cash.

However, if you’re selling your home due to a job relocation, a change in health or another unforeseen circumstance, you may be eligible for a partial exclusion. Consult a tax expert for more information.

Advertisement

Zillow Real Estate Search


What do you think?

Related Keywords:
Sell
Finance
Tips

See Also