How Soon Can You Sell a House After Buying It

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By Jessica Johansen Updated April 11, 2024

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How soon you can sell your house after buying? | Selling your house after 1 year | Ways to sell your house

You can sell your house any time after you buy it, even same-day, but it often makes better financial sense to wait two to five years.

This allows you to build equity, take advantage of tax incentives, and possibly avoid mortgage penalties. If you're buying a home as an investment, you'll pay less in capital gains taxes the longer you wait to sell.

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Connect with top local agents who can help you sell on time and for top dollar. You'll pay just a 1.5% listing fee (half the typical rate), helping you save thousands!

How soon can you sell your house after buying it?

📅 Most homeowners stay in their homes for at least 10 years (62%, according to Zillow). Only a small portion will sell in three years or less (11%). Unless you're buying deeply discounted houses (like foreclosures), it’s very difficult to recoup your costs after only one year of ownership.

After a mortgage penalty period

Lenders usually ask that you live in your home for a certain time before you sell, often at least five years. If you sell earlier than this, they might charge you a prepayment penalty, which could be a:

  • Flat fee
  • Percentage of your remaining balance
  • Portion of the interest you still owe

After 2 years to avoid capital gains taxes

Homeowners who have lived in a primary residence for at least 24 consecutive months are exempt from paying capital gains taxes on all or a portion of their home sale proceeds.

💵 Capital gains

If you sell within two years, your home proceeds will be taxed as long-term capital gains. Whatever you earn will be taxed at 0%, 15%, or 20%, depending on your tax bracket.

If you sell within a year, any profits are considered short-term capital gains — same as your ordinary tax rate: 10–37%.

By waiting to hit the one-year mark of ownership, you could save thousands on taxes. Certain unexpected events could even qualify you for a partial exclusion of capital gains taxes.

» SEE: Full list of IRS qualifying events

When you break even or market conditions are favorable

If you can recoup your costs or make a profit, it's a great time to sell. Keep track of how much you’ve spent owning your home: down payment, mortgage interest, property taxes, homeowner's insurance, and closing costs (both from when you bought the house and when you sell).

Homeowners who have gained home equity could cash in early. But unless you're buying deeply discounted houses (like foreclosures), it’s very difficult to recoup your costs quickly.

When staying isn’t an option

Sometimes, you just have to sell — regardless of the financial consequences. This might occur if you relocate because of work, have an emergency that requires liquidating your home, add a new member to your family, or can no longer afford the mortgage.

Selling your house after 1 year

Owning a home for one year is a small milestone. After one year, your proceeds are taxed not as long-term capital gains, which could save you thousands.

» MORE: Selling A House After 1 Year? These Are The Costs + Pitfalls

✅ Possible pros ❌ Possible cons
Surge of equity: a hot market or strategic updates could increase your home's value in as little as a year Lost profits or equity: even if you sell for more than what you paid, you could still be in the red
(Slightly) lower tax rate: up to 20% in long-term capital gains, vs. up to 37% in short term Prepayment penalties: lenders may compensate for the interest they won't be earning off your mortgage
Freedom and flexibility: an emergency or unforeseen event could force you to sell fast Extra stress! Selling so soon after buying could be detrimental to your mental health
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Ways to sell your house soon after buying it

Hire a real estate agent

It’s always wise to get in touch with a professional real estate agent when you’re selling a home, especially soon after buying it.

You don’t want to lose money simply because you priced it too low, and buyers may have a negative perception of your home if it was listed so quickly after being bought. An agent can help ease buyers’ concerns in this regard.

A low-commission listing agent still offers full service to sellers but at a prenegotiated discount. Clever can connect you with top-rated real estate experts who charge 1.5% commission, rather than the traditional 2.5–3%. Learn more.
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iBuyer

An iBuyer is a real estate company that will make an instant cash offer on your home. The offer will be less than what your home is worth, so you'd be exchanging profit for convenience. In addition, iBuyers are often strict about where and what they buy.

Cash buyer

A cash buyer is an individual or company that pays hard cash for your home, saving you time. Finding a good cash buyer — one that offers a fair price for your home — can be difficult to do on your own. Clever Offers will connect you with a local agent who will then help you find reputable cash buyers in your area.

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