If you own a home, you can sell it whenever you want, even if you just bought it. Selling a house right away might cause you to incur financial penalties, but sometimes it’s the right move. Under some circumstances, you might have no choice but to sell early.
Why Might You Sell a House That You Just Bought?
People generally buy a home intending to live there for at least several years, but life doesn’t always go according to plan. A job loss, pay cut, relocation, divorce, death in the family, or medical bills can force you to leave the house that you recently purchased.
You might realize that the house just isn’t for you. Maybe there is something about its layout that’s problematic for your family, maybe you discovered that it’s too big or too small, or maybe your commute to work is longer and more stressful than you anticipated.
Sometimes it’s possible to make a profit by selling a house soon after buying. For example, you can make renovations that significantly raise the property’s value, or you can buy an inexpensive house in foreclosure, then sell it when the local housing market improves. Under those circumstances, you might be able to walk away with a substantial profit, even if you have only lived in the house for a short time.
What Problems Might You Encounter If You Sell Soon after Buying?
When you sell your house, you’ll have to pay closing costs. You might also have to pay professionals for cleaning, staging, and other services before you list the property. Those fees can reduce any potential profit from a sale, and you might not break even. If you can wait, you might be better off staying in the house a bit longer. If you’re facing tough financial circumstances, however, you might be forced to sell your home at a loss.
Mortgage lenders sometimes charge prepayment penalties if borrowers pay off their loans ahead of schedule. If your mortgage has a prepayment penalty and you sell your home soon after purchase, that penalty can cut into your profit.
You might have to pay capital gains taxes if you sell your home shortly after moving in. Whether you will have to pay taxes, and how much, will depend on how long you have lived in the house, why you’re moving, your annual income, and whether you make a profit from the sale.
You might have trouble attracting a buyer if you list your house soon after you purchased it. Potential buyers might assume that the house has significant problems and might immediately eliminate it from consideration. In the listing, your real estate agent can briefly explain why you’re selling to address buyers’ concerns.
Consider the Pros and Cons
Everyone’s situation is different. Selling your home soon after purchase may or may not be a wise move. Consider your home’s value, your potential profit, and costs associated with selling early to figure out if it’s the best option for you.
