2022 Boise Idaho Real Estate Blog

Read This if You Are Planning on Selling Your Home Within 2 Years of Buying

Main Treasure Valley Life

If 2020 taught us anything, it’s that things can turn on a dime and plans can change. Many people flooded housing markets across the country (especially Boise) to buy a new home with a home office, a bigger lot, or to get out of the big city. However, a life or job change can necessitate a quick move right after you get settled into your new home. If this happens, there are a few things to consider.

According to the United States Postal service, nearly 16 million Americans requested change of address forms in just the first 6 months of 2020. Many Americans used the COVID-19 pandemic as the catalyst to make a move to somewhere they wanted to live, given the chance to work remotely.

However, many companies are moving back into office spaces, and some people may be coming out of the honeymoon phase of their new house. Maybe it’s TOO big, not as affordable as once pictured, maybe they liked their previous town/state better. What are your options here?

First off, we should note that these are suggestions based on publicly available data. For your specific circumstances, talk to your real estate agent and tax professional for in-depth and personalized recommendations.

Call your real estate agent
The first thing you should do if you need to sell your home is call the real estate agent who helped you buy your home. You already have a good relationship with them and he or she may have people who are ready to buy your house ASAP. You may be able to get a good offer quickly, sign the docs and move out.

Crunch the numbers
This is the main point to address when selling your house shortly after you move. Even in the insane real estate market, we have worked through over the last year and a half, it is very difficult to even break even on the sale within two years. The biggest reason is capital gains taxes. Selling your home within 2 years of purchasing is subjected to capital gains taxes because it is treated as short-term gains. In Idaho, real estate must be held for 1 year (12 months) from the closing date. Information for Idaho can be found on the State of Idaho website. With the capital gains tax plus closing costs, it is unlikely that you will break even on the sale, even with annual appreciation. If you have the funds, you could rent out the house until the 2-year mark, and buy a new house where you need to move to. After the 2-year mark, you can sell the property, or you could enjoy the passive income from the rental and start your investment portfolio.

Buying elsewhere
Keep in mind that two quick moves will be taxing, both personally and financially. If, for example, you want to move back to where you initially moved from, keep an eye on prices. Home values may have one up in the city or neighborhood you used to live in. To that end, it may be worth looking at other places in the area you would like to live in: somewhere with more parks, better schools, better suits your lifestyle, or somewhere with a shorter commute. It may even be more feasible to rent for a year in your new city before you buy your next home.

No matter what you choose, start by talking to your real estate agent. They will be your best asset moving forward.

Posted by AndrewS at 6/26/2021 2:26:00 AM

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