Home sellers have a lot of work to do. They need to have their houses listed, marketed, and advertised. Homeowners either try to sell their property themselves or enlist the services of an experienced real estate agent.
Certain owners choose to sell their house within a few weeks or months after the initial sale transaction was completed. There are many reasons why this happens. Some may need to move due to a change of employment or to live closer to relatives. There may have been a medical emergency or other major life events, such as the birth of a child, death of a family member or a child or parent may have started college. Sudden changes in finances, rising costs, and other financial concerns can also necessitate a home sale.
Selling a home in California isn’t always easy. You need to pay attention to current economic trends and market conditions. Even if you accept an offer from a highly motivated buyer, there could still be unforeseen delays or other complications that can prolong the process. Staying positive, patient, and open-minded can help you weather those storms. Here are a few things to know if you’re trying to sell a house that you just purchased.
There are distinct advantages to this plan of action. Some of the advantages to selling your home not long after purchasing it are:
1. Repairs, renovations, and other upgrades can increase a home’s value. If you’ve added new appliances, built a deck, or remodel your kitchen, these changes will improve the value of your house almost immediately. The exact amount will depend on the work that was done and the amount that you paid to buy the house.
2. Your residence may have been a short sale or foreclosure property. Some houses are put up for sale by the lender after the previous owner failed to make their mortgage payments as promised. When that happens, the home will go into foreclosure. Most of these houses are sold fairly quickly, as the financing company usually wants to recoup their losses.
A short sale is another type of real estate transaction where a lender may be agreeable with selling a particular home for a dollar amount that’s less than the amount that’s still owed on the original mortgage. This can happen if the previous owner cannot realistically catch up with their late mortgage payments and if the property value has decreased to the point where the home is valued at an amount that is less than the current mortgage balance.
3. You may be in a seller’s market. In a seller’s market, there are more buyers than available homes. When a higher demand for housing exists, sellers may be able to raise their asking prices accordingly. Buyers may even be involved in bidding wars with one another.
A few of the major disadvantages to selling your house quickly are as follows:
1. There could be a penalty for paying off your mortgage early. Take some time to read your mortgage contract carefully. Find out if there is a penalty for paying off the mortgage early. This is not uncommon for mortgage loans. These penalties are put in place because the lender may miss out on potential interest earnings. Prepayment penalties are usually anywhere from two to six percent of the loan’s remaining balance.
2. You may not have reached the break-even point yet. It can take a while for homeowners to reach the break-even point on their investment. They’ll need to factor in their closing costs and money that was spent on repairs or renovations. That and other related expenses will then need to be compared to the purchase price of the property to determine how much money and equity will need to be made before they can officially break even.
3. Capital gains taxes could apply. To avoid paying capital gains taxes on the sale of a home, the seller must have owned the property for at least two years. The house that was sold must have been their main residence, and they can’t have claimed this credit on any other properties. Homeowners filing as individuals can claim up to $250,000 and couples filing a joint tax return can claim as much as $500,000 in capital gains exclusions from such a transaction.
If you don’t meet these criteria, you may need to shell out more money to the IRS for those taxes. This is especially true if you sell the home in question less than two years after it was purchased. There are certain exceptions that may apply, such as selling or moving due to a family health crisis or natural disaster.
Interested buyers may be concerned if you’re attempting to sell your house shortly after it was bought. They may think that the home could have significant problems, even if this is not the case. The perception that you’ve got something to hide may be difficult to overcome. That’s why it’s essential to communicate with anyone who expresses interest or makes an offer to allay those suspicions.
If you’re concerned about your liabilities or financial or tax obligations, you can discuss them with your realtor, accountant, or mortgage lender. Most veteran real estate agents have experienced this same type of situation more than once, so you don’t need to feel like this is something out of the ordinary. Being open and honest with possible buyers can also make things much less stressful.
The price that you establish should be reasonable according to what the market will bear. You don’t have to slash the amount if the home isn’t underwater or if you aren’t planning on a short sale. You can remain competitive and should still be able to sell your home before you know it in most instances.
Once you’ve accepted an offer, it won’t be much longer until the transaction has been finalized. At closing, all remaining paperwork will be signed and filed. The buyer will get the keys to your former residence, and you’ll receive payment for the net proceeds from the sale. That money will be yours to do with as you wish. It could be used to buy another home, a vehicle, or other big-ticket items, or you could just set it aside for later. No matter what you decide, you can breathe easier knowing that the chapter has finally been completed. You can look forward to beginning the next phase of your active life in another location.
📞 Have Questions? Ask The Chris Eckert Real Estate Team
Give The Chris Eckert Real Estate Team a call today at 650.627.3799 to learn more about local areas, discuss selling a house, or tour available homes for sale.