can you sell a house within 6 months of buying it

Can You Sell A House Within 6 Months Of Buying It?

In Real Estate by Jamie

Did you know that the average homeowner lives in a house for 15 years before selling? But for every homeowner who lives in a house long-term, there is another homeowner who stays only for a short amount of time. There is no recommended time after purchasing a house that you should sell it, it all depends on the market and whether or not you want to move.

But if you did just recently purchase a property, can you sell a house within 6 months of buying it?

Yes, you can sell your house within 6 months of purchasing it, you can sell your property whenever you want, but keep in mind that selling your house quickly after buying it may result in you losing money because of the selling expenses and potential lender penalties. 

Let’s consider this question a little more closely—

The Cons of Selling a House Within 6 Months

There may be several good reasons to sell a house shortly after buying it, but there are also several good reasons not to sell quickly if you can help it. Here are 5 questions you should ask before making your decision—

Is there a penalty when selling your house early?

Before deciding whether to put your house on the market, it’s a good idea to check with your lender. This is a good place to start.

Some lenders impose what is called a prepayment penalty if you sell your house too soon after buying. The reason?—Your lender gave you your home loan with the anticipation of making money on interest. So if you pay off your loan too quickly, your lender loses any money they anticipated earning from your loan.

The good news?—Most lenders today—including all FHA loans—do not impose a prepayment penalty. But check just to be sure. If there is a prepayment penalty, generally it’s either a flat fee or a percentage of the owed interest.

What about taxes?

Taxes are another important consideration when choosing the right time to sell. Taxes are different in different countries, so it is best to check with a local realtor, tax professional, or a lawyer.

Once you’ve lived in your house for two years—and as long as the house is still your primary residence—you become exempt from paying out capital gains taxes—up to $250,000 for a single seller or $500,000 for a married couple—when you sell.

Capital gains taxes depend on your income tax bracket and how long you’ve owned your house.

Selling sooner than two years could mean you may have to pay capital gains taxes if the house makes a profit. If you have to move sooner than two years because of a personal emergency—including death or unemployment—you may be eligible for an exemption.

Check with a tax professional in your area for help navigating your tricky home taxes.

What about selling expenses?

One easily overlooked detail: Even if you make money from the sale of a house, it costs a significant amount of pocket change to sell a home.

Keeping in mind that closing costs can be 8–10% of the final sale price, selling expenses can already set a homeowner back if they sell the home for equal or less than what they paid six months earlier. Here are some additional selling expenses to keep in mind:

  • Agent or agency commission
  • Escrow fees
  • Excise tax
  • Prorated property tax and/or prorated HOA fees
  • Title insurance
  • Transfer fee

One other consideration. The term breakeven horizon refers to the length of time necessary to make buying a home a better financial option than renting a home. But as much as renting a home can feel like flushing money down the drain, buying a home isn’t always the financially savvy decision either.

Based on average home values and monthly mortgages, it takes approximately wo years and three months to make buying a home a more cost-effective decision than renting. So if you know from the beginning that you aren’t planning to stay in your home for two years, it may not be the best use of your funds to buy a house.

This isn’t to say that there is never a good reason to sell your home quickly. But the fees should be a reason to carefully consider whether the investment and sale are worth it.

Are there any pros to selling a house shortly after buying?

Even with all the potential penalties, taxes, and selling expenses, there are still several good reasons to consider selling after a few months. Here are 5 quick reasons to sell quickly—

  • Family changes
  • Health needs
  • Hot sellers market
  • House flipping
  • Job relocation

Especially if you’re in the market for flipping houses by making significant updates or renovations that greatly increase the home’s resale value, it’s possible to gain equity and make a quick profit on a house.

Also, if you got an amazing deal on a home—say you bought it on a short sale or after it went into foreclosure—you may be able to turn a profit in the right market.

If you know what you’re doing—or if you work with someone who understands the market—it is certainly possible to sell quickly without losing money. The key is understanding the market.

Final Thoughts

So what’s the final verdict? Can you sell a house within 6 months of buying it?

Yes, it is absolutely possible to sell your house any time after you close on it. That said, there will always be a certain level of risk involved. Generally speaking, selling your house less than a year after buying it will result in losing the financial benefits of owning a home.

When selling a home—as with any major decision in life—you should simply take the time to carefully weigh your pros and cons and consider your costs and what penalties you might accrue for selling too soon.

That said, sometimes selling is a better decision for personal reasons that cannot be calculated financially. Sometimes the final equity that is gained or lost is nothing compared to the personal or emotional equity associated with the house.

Our recommendation—talk to a professional who understands the ins and outs of the housing market who can walk you through the details of your personal situation to come to the right decision.

About the Author

Jamie

Jamie is the Founder of My Home Dwelling. He is a homeowner and enjoys sharing his homeowner tips with others. He has real estate experience working as a new home construction Realtor. Jamie has worked on numerous residential construction sites helping with interior and exterior renovations. He loves refinishing furniture, DIY home projects, and sharing his knowledge online.