Factors To Consider Before You Sell Your House
When trying to decide how long you should wait before selling your home, factors you should consider include:
Building Equity
Equity is the amount of your home that you own. When you take out a loan to buy your home, you pay it off over time, slowly gaining more ownership over it than the lender. The more equity you have in your home, the larger percentage of proceeds you’ll receive when it comes time to sell. Therefore, consider how much equity you have in your home before you decide to sell.
Capital Gains Tax
Another factor to consider is capital gains tax. Capital gains tax is a fee imposed by the IRS on assets that generate a profit when you sell them. Basically, if you sell a home at a higher price than you bought it, you must pay a tax on the profit amount. The exception is if the home is your primary residence. If you’ve owned or lived in your home for at least two years, you might avoid the capital gains tax altogether.
Closing Costs
When you buy a home, there are additional fees tacked onto the sale called closing costs. These closing costs are typically around 3% to 6% of the price of the home. If you were to sell your home before it appreciated by a similar amount, you’d be losing money. If you’re trying to make a profit on the sale of your home, make sure you can cover the closing costs.
Market Conditions
Finally, consider the real estate market before you sell. The real estate market is always in flux, with some periods that are better for sellers and others that are better for buyers. Many factors can determine the state of the real estate market, and you personally can’t do anything to influence the market. Often, your best option is to simply choose to list your home during favorable market conditions. Specifically, you’ll want higher housing demands in your area coupled with fewer housing options available. If you can wait until the right time, you can make a more significant profit.
Get Started With a Dallas Mortgage Lender
If you’re in the Dallas area and you’re looking to either sell or buy a home, you’ll want to work with one of the best mortgage lenders in Dallas, Texas. The Tuttle Group is a local Dallas mortgage lender that can help you find reasonable loan terms. We can also provide you with guidance on the best time to sell your home for the maximum profit. To get started or determine which loan type is right for you, contact us today.
