There are many factors that may make you want to move. Your desire to move may be motivated by financial reasons, or it may be due to life changes. Maybe you are motivated by both. Whatever the reason, it's only natural to want to make a profit on the sale, and it's safe to say that no one wants to lose money.
Assuming that there is no pressing reason to move immediately, many homeowners wonder: How long should I live in a house before selling it? As Realtors, we get this question a lot, and it does warrant serious consideration, since the length of time that you live in your home can significantly impact your ability to turn a profit when you sell it.
There is no perfect number that will magically apply to every homeowner's situation, but there are several factors to consider. Each time you buy or sell a home, there are selling fees and closing costs involved. The costs involved in selling and moving, the state of the current local market, and the amount of equity you have built up are all important factors to consider before selling your house.
In the last 2 years or so (2020-2022 seller's market), some homeowners have been able to resell their home in as little as 6 months after purchasing it and still turn a profit. This scenario is not the norm! The normal pace for appreciation is typically a bit slower. As the real estate market shifts and normalizes, we need to focus on what the normal standard has always been for homeowners, which is to stay put for 3-5 years before selling.
The less money you put down up front (such as with 100% financing loans like the VA, USDA, or CHIP programs, and FHA loans with only 3.5% down), the longer you will need to build up equity and the longer you will need to stay put. Plan on staying for at least 5 years in order to recoup your investment. For purchasers who bought with conventional financing who put as much as 20% down, you will build equity more quickly, and you will have more flexibility when selling.
Another reason to stay in your home for at least 2 years is for tax purposes - to avoid capital gains tax. You must live in your home as your primary residence for at least 2 out of the 5 most recent years when selling in order to avoid capital gains tax. (Ask your accountant for more information on this topic.)
But, what if you have been in your home for less than 3-5 years, and life happens? What if you receive a job transfer? Or, what if an unforeseen life change requires you to move? If this is the case, don't panic. However, your choice of listing agent will matter more than ever. Please hire a trusted professional who will guide you through the process and educate you regarding your options.
If you have questions about what your home is worth in today's market or if you have questions in general about the market, please do not hesitate to reach out! We love talking real estate! You may reach our team of trusted agents by calling 256-310-2294.
When you hire The Joey Crews Team, you place your real estate needs in Crews Control!
Leading the East-Central Alabama market since 2010! Serving Calhoun, Talladega & Cleburne Counties, as well as neighboring communities!