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Message
Selling a home 1 year after buying?
Posted on 8/7/15 at 3:59 pm
Posted on 8/7/15 at 3:59 pm
Wife and I bought a home back in April and realize that we will need to find something bigger within the next year. How will that look when lenders see we just bought and will already be entering the market again? Will this hurt us to a degree that we get raped on our rates?
We are in a prime spot where values continue to rise. Credit scores are high as well.
Anyone ever been in this position and sold with 12-16 months after buying?
We are in a prime spot where values continue to rise. Credit scores are high as well.
Anyone ever been in this position and sold with 12-16 months after buying?
This post was edited on 8/7/15 at 4:00 pm
8
Posted on 8/7/15 at 4:04 pm to Birdie225
Lenders won't give a shite.
The tax man will though.
The tax man will though.
Posted on 8/7/15 at 4:26 pm to TigerDeBaiter
Yeah, if you qualified before you will likely qualify again.
I think the harder part is dealing with the transaction costs. Closing costs aren't ridiculous, but if you only amortize them over one year they are a bit much to stomach.
eta: its unlikely that your home has appreciated enough in value to offset your realtor fees too. You are likely going to take 5-7% loss.
I think the harder part is dealing with the transaction costs. Closing costs aren't ridiculous, but if you only amortize them over one year they are a bit much to stomach.
eta: its unlikely that your home has appreciated enough in value to offset your realtor fees too. You are likely going to take 5-7% loss.
This post was edited on 8/7/15 at 4:27 pm
Posted on 8/7/15 at 5:17 pm to Hawkeye95
If you would be lucky enough to make a profit on your sale, that would be taxable.
Posted on 8/7/15 at 5:53 pm to LSU1018
Hold off until you've owned the house for 2 years. Then, do what you want
Posted on 8/7/15 at 6:10 pm to TigerDeBaiter
quote:
Lenders won't give a shite.
The tax man will though.
Lenders would *love* to be able charge you closing costs year after year after year. Why would they not like the extra money?
The tax man won't unless capital gains is over $500k for married couples ($250 for singles). Which seems pretty unlikely given the one year holding period.
Posted on 8/7/15 at 6:47 pm to foshizzle
The 250/500k exclusion only kicks in if you've owner occupied for 2 of the most recent 5 years.
Posted on 8/7/15 at 7:05 pm to AUjim
^This.
And foshizzle, I was referring to qualifying.
And foshizzle, I was referring to qualifying.
Posted on 8/7/15 at 7:24 pm to AUjim
quote:
The 250/500k exclusion only kicks in if you've owner occupied for 2 of the most recent 5 years.
Ah, that's correct.
Posted on 8/7/15 at 7:40 pm to LSU1018
quote:
If you would be lucky enough to make a profit on your sale, that would be taxable.
I know a guy who made a 100K profit after 10 months in the DC area, early 2000's.
Posted on 8/7/15 at 8:19 pm to Birdie225
Thanks for the info fella's. Knew about the exclusion but wasn't sure how it worked.
This post was edited on 8/8/15 at 11:07 am
Posted on 8/7/15 at 10:52 pm to Birdie225
I'd be sure to sell before buying another house.
Having 2 notes could get expensive and overwhelming fast. Theres no sure bet that the home will sell right away.
Having 2 notes could get expensive and overwhelming fast. Theres no sure bet that the home will sell right away.
Posted on 8/8/15 at 6:35 am to Birdie225
quote:
bought a home back in April and realize that we will need to find something bigger within the next year.
Take your time.
No need to rush into buying a house.
Posted on 8/8/15 at 6:50 am to Birdie225
Curious on why you'll need something bigger after a few months. What did you buy?
Posted on 8/8/15 at 6:54 am to hbuc88
Do you pay taxes if you roll all the equity into a new home even if there were gains? I don't know if this would qualify as a 1031 exchange but something along those lines.
Posted on 8/8/15 at 10:39 am to Birdie225
quote:
No need to rush into buying a house.
This. You already made the wrong decision once and it's probably going to cost you money. Take your time and slow down a little.
Posted on 8/8/15 at 11:12 am to VABuckeye
We didn't buy anything new since moving in...... We bought with the plan to settle for 2/3 years, have a child and upgrade. After moving in and realizing how little room we realistically have we have second guessed the decision.
Thinking we will add on another bathroom, expand some living space and sit on it for 2 to 3 years then start looking around.
My OP was more of along the lines of inquiring in the event we don't add on.
Love the house it's just when we start our family we will absolutely bust through the walls as we are close to it now. We bought knowing it was a little small but it was a smart decision considering the lot itself was worth what the house was/ is or damn near it would be more accurate. We also didn't want to live above our means when we are just starting out.
The house now allows us to save and plan.
Thinking we will add on another bathroom, expand some living space and sit on it for 2 to 3 years then start looking around.
My OP was more of along the lines of inquiring in the event we don't add on.
Love the house it's just when we start our family we will absolutely bust through the walls as we are close to it now. We bought knowing it was a little small but it was a smart decision considering the lot itself was worth what the house was/ is or damn near it would be more accurate. We also didn't want to live above our means when we are just starting out.
The house now allows us to save and plan.
This post was edited on 8/8/15 at 11:15 am
Posted on 8/8/15 at 1:41 pm to Birdie225
quote:
we will absolutely bust through the walls as we are close to it now. We bought knowing it was a little small
It seems like when someone buys a house, they fill it up no matter how big.
The key to life is to not accumulate stuff. Accumulate friends and experiences. Having more space for more stuff is not going to help if you cannot stop the cycle of "more space, more stuff."
I know because I've lived there unfortunately. It took me a while to learn that.
Posted on 8/8/15 at 6:45 pm to makersmark1
Definitely agree on the less is more......up to a point. You've got to live in it every day, so it needs to fit your life. It's nice to have room for hobbies, guests, all yo damn kids. But if it's housing a useless collection of stuff you never use, or 1001 display gewgaws, or a crapload of junk (like Vhs tapes, trophies, plastic kids toys long outgrown or never used), then you don't need a bigger house, you need less stuff.
Makes me think of a couple I know who have six kids between em. Neither was the primary custodial parent, yet they "needed" a four bedroom house to fit everyone in a couple times a month, plus a bonus room to store the collectibles. Plus a cabana for parties....fast forward two or three years: One got job hrs cut, the other was in a car accident and couldn't work for a while....foreclosure was the only option. Too little house is always better than too much.
The kids will be at home (in most cases) for fewer years than it takes to pay off the mortgage.
Makes me think of a couple I know who have six kids between em. Neither was the primary custodial parent, yet they "needed" a four bedroom house to fit everyone in a couple times a month, plus a bonus room to store the collectibles. Plus a cabana for parties....fast forward two or three years: One got job hrs cut, the other was in a car accident and couldn't work for a while....foreclosure was the only option. Too little house is always better than too much.
The kids will be at home (in most cases) for fewer years than it takes to pay off the mortgage.
Posted on 8/9/15 at 6:52 pm to Birdie225
quote:
My OP was more of along the lines of inquiring in the event we don't add on.
Love the house it's just when we start our family we will absolutely bust through the walls as we are close to it now. We bought knowing it was a little small but it was a smart decision considering the lot itself was worth what the house was/ is or damn near it would be more accurate. We also didn't want to live above our means when we are just starting out.
The house now allows us to save and plan.
Then don't sell for 1 more year. It will likely appreciate some more and the capital gains won't be taxed (up to $500k). All the fees you paid in closing and what you'll pay a realtor would make this a losing proposition or do you plan to FSBO? Either way, wait 12 months it will go by quick. Maybe you can do some cheap and easy things to improve upon the value of the house for when you go to sell it, just don't go getting too crazy with that stuff as you won't recoup all of it.
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