Do you want to sell your house ASAP? Are you in the process of selling a house after 2 years of residing in Lincoln, Nebraska?
If so, you’ll need to work with a real estate agent and your lender to find potential home buyers, sell your place, and pay off your mortgage.
If you’re selling your house after 2 years of living in the Lincoln home, you’ve come to the right place.
Here, you will learn how to successfully sell your place after 2 years of living in it, including information on property selling taxes, closing costs, and why you may benefit from selling it.
Now, let’s get started!
How to Sell Your House After 2 Years in Nebraska
If you do decide to sell your house after 2 years of living in the Nebraska home, you should understand that:
- You may lose money on the sale
- You may pay more significant capital gains taxes
- You will likely have to cover high closing costs
You will need to consider how much equity you gained after 2 years of living in the primary residence. Essentially, you’ll need to figure out the breakeven target of selling your property after a short time.
Any homeownership tips will include how to determine your breakeven target.
If you’re selling a house after the 2-year mark of residing in Lincoln, Nebraska, you’ll need to have enough money to cover:
- Real estate agent commissions
- Higher capital gains tax rates
- Potential costs of renovations before the home sale
If you’re looking to break even, Zillow states that two years and three months is the average length of time it takes to accrue enough equity on the house at median cost.
Costs of Selling Your House After 2 Years in Nebraska
When selling your house on the real estate market, you may need the help of a tax professional, as you may need to cover the costs of long-term capital gains taxes.
However, if you lived in the house for at least 2 years, you may not have to pay capital gains taxes on your home sale profits below $250,000 for an individual or $500,000 for a couple.
To gain enough equity on your home and break even, you may need to wait 2 years and a few months if you put down a 20 percent down payment with monthly mortgage payments on a 30-year fixed-rate loan.
Property Selling Taxes
Property taxes such as the capital gains tax on the final home sale price are due to your home’s appreciated market value since your purchase.
The Taxpayer Relief Act of 1997 has exempted many homeowners from covering the capital gains tax if they obtain a profit from the sale of their property.
You won’t pay any capital gains taxes under a $250,000 profit if you’re a single homeowner. Married couples selling a place won’t have to cover these property selling taxes above $500,000 in profit.
However, there are several exemptions related to the capital gains tax you’ll need to consider before selling your primary residence.
Capital Gains Tax
One possible exemption that will require you to cover a higher capital gains tax is whether you’ve resided in the house for at least 2 of the last five years. IRS rules require you to live your potential sale property for at least 2 years.
Married couples need to meet the rule in a way where both spouses have to live in the place for 2 years. However, you do not have to live there in a particular block of time.
As long as you have lived there for 24 months within the last five years and your profit is below the required amount, you won’t have to cover the capital gains tax, including a short-term capital gains tax.
The Breakeven Target
The sale of your home should reach a breakeven target, or else you risk losing money on the sale. A breakeven price is a price that you need to gain after selling an asset that covers the costs of owning said asset.
You can apply breakeven prices to nearly any transaction, including your home’s sale. To break even, you will need to sell your place at a price high enough to cover the costs of:
- Your initial purchase price
- The interest rate you paid on the mortgage
- Property taxes
- Natural disaster insurance or other property insurance
- Cost of home improvements
- Closing costs
- Realtor commissions
Closing Costs When Selling a House
The closing costs related to your real estate transactions can get rather steep, as you need to cover the realtor commission rates and transfer taxes.
Generally, closing costs are about 6 to 10 percent of your home sale price. The closing costs are often taken straight out of the house sale proceeds unless you did not build enough home equity.
One of the closing costs to consider includes the commission fee of the seller’s and buyer’s real estate agents, which often falls to the seller to finalize.
Three days before closing, the sellers and the home buyers receive a closing disclosure. The closing disclosure will provide all the prices and numbers you’ll need to know before the sale, allowing you a little time to get your cash together.
Is It Worthwhile to Sell a House After 2 Years in the First Place?
The only way it may be worthwhile to sell a house after 2 years is if the value of your home has grown large enough to help you offset the costs of the sale. Before considering the resale of your property, you will want to figure out your breakeven target price.
Then, you should set the home sale price to align with that breakeven target. Once you find a buyer to pay that much for your house, you’ll find that it was worthwhile to sell your residence after 2 years.
Meeting your breakeven target is especially important if a job relocation has required you to sell your place, as you’ll need some cash-in-hand to purchase a new property wherever you are moving.
Reasons Why You Might Sell A House After 2 Years
Along with job relocation, you may consider the short sale of your home if you are undergoing a divorce, growing your family, or moving to care for an ailing loved one.
In addition, you may need to sell your residence because of market appreciation, the inability to afford your place, or the forced appreciation of house flipping.
The house sale may have either forced market appreciation or automatic market appreciation. Forced appreciation has a limited amount of profit. Automatic appreciation, however, includes unlimited profit.
If you’re looking to gain forced market appreciation, you’ll need to become a motivated home seller. You’ll have to buy the original property at below market price. Then, you can ensure more significant profit upon your sale.
Usually, market appreciation needs a time frame of anywhere from 5 to 10 years to grow enough for a significant profit.
Economic fluctuations are responsible for a home gaining market appreciation over time. These fluctuations may include business-based legislation and technological innovations.
You Can’t Afford to Keep Your Home
You may also face difficulty affording the mortgage and paying monthly payments, including condo fees. Sometimes, you may need to sell your home to avoid a foreclosure. If you lose your job or your ordinary income decreases, you may find it impossible to afford your house.
In general, you may have made a mistake, and your interest rates on monthly mortgage payments are too high for you to handle. You may even owe a lender a large amount, but you can sell a house to pay off debt.
Furthermore, you may also have buyer’s remorse, and you’ve found significant problems with the property. If you can’t afford the renovations required to keep the property liveable, you’ll have no choice but to sell it.
House Flipping has Forced Appreciation
You may have even decided to pursue forced market appreciation and house flipping. This process entails buying an investment property in disrepair at a lower market price then pursuing renovations and significant home improvements before selling it at a greater profit when it’s a seller’s market.
Such forced appreciation strategies can help cover the costs of property selling taxes, closing costs, and real estate agent commissions.
Nonetheless, to succeed in house flipping, you will need to know the real estate market to determine whether you’ll successfully sell the place in the particular neighborhood where you’re planning to make the initial purchase.
If you’re looking to sell your home quickly after 2 years in Lincoln, Nebraska, you may need to consider selling to real estate investors, cash home buyers, or other companies that buy houses in Nebraska.
To avoid paying the costs of a capital gains tax, wait at least 2 years and a few months before selling your home. It would be best to determine your breakeven target price before putting your house on the real estate market.