Congratulations! You’ve officially closed on your new forever home and can’t imagine ever wanting to move. Then, life happens and two years in, you’re playing with the idea of selling. We understand that changes or obstacles might mean putting your home on the market sooner than planned! Whatever the situation, the question that may come to mind is, “How soon can I sell this house?”
A general rule of thumb that we relay to our clients is to wait at least five years before playing with the idea of selling. Five years is the typical amount of time it takes to break even on your initial investment. However, if your situation requires an early sell, it’s not the end of the world. An article written this past week on Realtor.com has come up with three quality exceptions to the five year rule:
- Your property value goes way up! Occasionally, the market gets hot and property values jump quickly. The current market is a good example of this as home values in Whatcom County have been on a steep and steady incline for a few years now! If you bought a couple years ago and notice your property value rising drastically, we would suggest first figuring out where it is you plan to go next. Moving to a lower-cost community would be beneficial, but you may not be able to get a nicer place in the same area without also paying a higher mortgage. Also, keep in mind that selling a property that you’ve owned for less than two years generates a capital gains tax. Take a look around and run the numbers before taking the plunge!
- The neighborhood is going downhill. If you notice a clear downward trend in the quality of the area and homes surrounding you, it might be wise to get ahead of it. Neighborhood characteristics are usually a major attraction or potential deterrent for a buyer, so a declining one could greatly reduce the value of your home. Factors to consider about your neighborhood include it’s distance from noise, factories, malls, new construction projects, or anything that disrupts the quality of life. Ask yourself if any changes are devaluing your home and if yes, get out of there.
- You just really hate living there! Although making a profit on the sale is important, that is not the only factor to consider. Your happiness is just as significant if not MORE important than the former. Before pulling the plug, you might consider turning the house into an investment property so that you can stop living there, allow someone else to pay your mortgage and continue to grow your net worth. Sounds like a win, win!
We encourage you to ask the hard questions and explore your options. If you’re unsure what the best decision to make is, we are here to listen and offer professional advice on the matter!