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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Catherine McQueen/Getty Images October 13, 2022 Rae Hartley Beck is a writer and editor with over eight years of experience in personal finance. Her work has most recently appeared in Bankrate, MoneyWise and Investopedia. Rae specializes in credit card rewards, investing, real estate, home improvement, lending and financial advice for millennials, Gen Z, Gen Alpha and their parents. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. 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. 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 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 rates. But as interest rates rise and the , that may not be the case for much longer. And you could potentially find yourself if the home’s value has stagnated — or worse, dropped — since you bought it. In addition, keep in mind that isn’t free — it comes with significant . 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 (typically 5 to 6 percent of the sale price) and 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 . 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 filing jointly. “If you can’t make it to 24 months, try to stay at least 12,” says Babener. “Short-term capital gains taxes would apply if you sell your home and make a profit less than a year after buying it.” How long should I ideally wait
To avoid losing money, it’s best not to sell your home until it has appreciated enough to cover your closing and transaction costs. The waiting time required for that can vary depending on a lot of factors — the price you paid, your closing costs, the rate of appreciation, the prevailing market conditions — but is typically about five years. If you can’t wait five years, try to make it to at least two to avoid long-term capital gains taxes. Depending on your situation, you may have options to help you stay in your home long enough to hit that two-year mark. If you’re selling because of a job offer in another city, for example, you could try to negotiate a temporary remote-work situation. And if you’re selling because the mortgage payments are too much of a burden, there are also . Look into forbearance, loan modification and national or local assistance funds that might help you get back on track with payments and stay in your home, at least for long enough to sell it more safely. Bottom line
Your home is more than just the roof over your head. It’s an investment, and you want to get the largest return on the investment that you can. Selling too soon can cost you money, rather than making you money. You can sell after two years without incurring capital gains taxes, but be aware of your home’s appreciation in relation to how much you paid for it, and how much you owe on the mortgage. And when you do decide to sell, to make sure you’re maximizing your profit potential. SHARE: Rae Hartley Beck is a writer and editor with over eight years of experience in personal finance. Her work has most recently appeared in Bankrate, MoneyWise and Investopedia. Rae specializes in credit card rewards, investing, real estate, home improvement, lending and financial advice for millennials, Gen Z, Gen Alpha and their parents. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Related Articles