Negotiating with the seller is always worth trying, even in a hot housing market. Don’t be afraid to offer lower than the asking price and negotiate up! As mentioned earlier, plan for your
5 Factors To Consider When Deciding How Long You Should Live in Your Home Before You Sell
Dated: October 23 2020
Whether you just got your house keys last week or you've lived in your home for almost 20 years, you could always sell your home whenever you want. However, experts strongly advise homeowners to follow the “five-year rule” — stay in the same home for at least five years before selling. According to the 2019 Zillow Group Consumer Housing Trends Report, at least 62% of homeowners stay for more than 10 years, while the median number of years a seller stays in a home is 14. These figures may seem like such a long time, especially if you're itching to sell ASAP or you think you’re more than ready to sell anytime soon. Here we’ll discuss some of the most important factors you should be aware of before making any rash decisions and putting up a “For Sale” sign.
1. Your Mortgage
Who doesn't want to make money on the sale of their home? But if you want to maximize your profit, then your sale price must be greater than what’s left of your mortgage. During the first few years of your mortgage, a huge part of your payment goes towards interest rather than the principal. This makes it more difficult to make money off your sale if you’ve lived in the home for less than five years. The only exception would be if you purchased your home with a larger down payment, then your interest rate and mortgage amount will probably be smaller so it’s possible to make money in a shorter amount of time.
Your equity also grows when your home appreciates in value due to a strong local real estate market and improvement projects you make, such as remodelling the kitchen or bathroom, redoing the flooring, and other renovations that have higher return on investment. It’s best to take on these projects slowly as you live in the home so you can maximize your profit when it’s time to sell.
3. Capital Gains Tax
How long should you live in your home before you sell? It may be best to stay put for at least a couple of years if you want to avoid paying hefty taxes. The home must be your primary residence for a minimum of two of the five years prior to the sale to be exempt from paying capital gains taxes on the profits of your sale — which could cost up to $250,000 for an individual or $500,000 for married couples.
4. The Local Market Conditions
"Your Legacy Begins At Home" Janette and Doug and their Friend Team have more than a real estate practice; they have a mission called "Your Legacy Begins At Home". The mission combines years of real ....