So, you have chosen to sell your home soon after you have purchased it but didn’t anticipate how hard it would be and how much time it would take. Now, you have a stream of strangers trickling in and out of your newly purchased home as you try to bequeath it to its new owner, whilst they criticize it and offer much less money than it is worth. A little knowledge can go a long way, so you can come out on top in these complex transactions.

Here are the answers to some questions you might have.

Should I Sell My House After Purchase?

Selling a newly purchased home can mean losing money. It may be a career emergency making you move. You might have a health emergency that requires you to. Paying for the house may prove to be too expensive. You might even buy a house just to find that you hate living in it.

There might be many reasons why you may want to sell a house soon after purchasing it, but whether it will be a smart financial move depends on you.

Once you have purchased a home, you should consider living in it for at least a year so that the benefits of homeownership weigh out the costs associated with buying and then selling the house. 

Can I Sell My House After Purchase Without a Loss?

When does buying begin to make more financial sense than renting a house? This is known as the breakeven horizon. In America, for example, it is more than 1.8 years. You can calculate this online if you know your location (and the property taxes and home prices there), the price you can pay for a home right now, your marital status, and annual pre-tax income.

If you live in America, you should buy a house instead of renting it only if you plan to live in it for more than 1.8 years. This differs from city to city. In NYC (New York), the break-even point is 2 years 10 months because of tight access to land. In Dallas, Houston, or Austin (Texas), you have to wait only 1 year and a few months because there is a lot of lands. In Los Angeles (California), it is 3 years 6 months because of high demand. In Chicago (Illinois), it is 2 years because of some accessible properties. In Hartford (Connecticut), it is a whopping 3.23 years!

You get the idea. There are many tools available to help you calculate it. Use a Rent vs. Buy calculator to determine how long you should own a home once you have bought one. It gets a little trickier if you are using an FHA loan, VA loan, or conventional loan.

Selling House with an FHA loan

A mortgage loan is given by the Federal Housing Administration (FHA) to individuals who don’t have the best credit score and financial situation to afford a home otherwise. The minimum credit score required is 500 only, and the down payment required for that is 10 percent only. (3 percent if your credit score is 580 or more). This makes it much easier to qualify for an FHA loan.

If an FHA borrower is selling their home to another FHA borrower, they must wait 90 days after acquisition to sell the property. As a home seller, you should consider buyers who wish to purchase using an FHA mortgage because it will increase the buyer pool.

If you are a home seller with an FHA-backed mortgage yourself, you could also let a prospective buyer assume your loan. As you can see, an FHA loan lets you buy and sell a house much faster than you could otherwise.

Selling House with a Conventional loan

If you do have the credit score and financial situation to afford a home without an FHA loan, then you may consider going for a conventional loan, which is much more common. A conventional loan comes with many benefits, such as fast loan processing, diverse down payment options, and term lengths on a fixed-rate mortgage, but it comes with ground rules like a loan limit.

You should consider a conventional loan if you have a credit score of at least 620-640 and can give a down payment of at least 20 percent to avoid paying for private mortgage insurance.

If you have been wondering how soon you can sell your house after the purchase with an FHA loan or Conventional loan, there is no rule or requirement (other than any stated above) that says you cannot sell a house while you still have an FHA or Conventional loan associated with the property. So, go ahead!

Selling House with a VA loan

There’s one other government-backed loan we must talk about. VA loans are available to United States Veterans. They are given by the Veterans Administration to previous or current members of the U.S. Armed Forces or National Guard and their eligible spouses. It requires no down payment. Veterans must pay a one-time funding fee only, which is 1 to 3 percent of the entire loan.

How to Turn a Profit from Selling a House After Purchase

It is possible to turn a profit even if you sell earlier than your area’s breakeven horizon. If you have increased the house’s resale value through significant renovations, you should sell it! If demand for homes has shot up in your area, raising prices, this may also be a fortuitous time to sell.

Now you can either try to sell your newly purchased home on your own or hire an agent to do it for you. Having help will, of course, make it easier for you to sell your home, but selling it on your own may save you money. But be warned, if you want to get a reasonable price for the home you are selling, you have to stop thinking of yourself as a home-owner and start thinking of yourself as a property owner.

In order to sell your newly purchased house at a profit, you will have to make it attractive to your newly purchased home to potential buyers.

First, imagine your target audience. They will likely be aged 25 to 35 (the median age for home buyers is 31) because they likely won’t be able to save up enough before then. A home buyer is likely to be in a relationship and may be buying it with future/present children in mind. They are likely to be in an emotional state of mind, so it is best not to rush and overwhelm the buyer.

You’ll likely be feeling confusing emotions yourself as you sell your first home, but unlike the buyer, you will have to keep yours in check if you are selling it on your own.

After you have imagined your target audience, find out what they like in a house. Here, you may have to consider remodeling to fit their needs and wants. Next, you must find out how much you will be able to sell for based on what the fair market value of your home would be, for which you could get a pre-appraisal done if you are out of your depth. Factor in closing costs and subtract your mortgage payoff amount.

Bottom Line

Now you know how soon you can sell and how much profit you can make! As you can tell, a lot of factors come into play, which can determine how soon you can sell a house after purchasing it. Hopefully, this article has made it easier to estimate!

Have more questions? We help folks all over the Southern Maryland real estate market. Give us a call or contact us below.