If you recently bought a house and now realize that you need to sell it, don’t panic. While there are financial implications of selling a house soon after buying it, certain circumstances and life changes may make selling quickly a necessity and leave you wondering, “How soon can I sell my home after purchasing it?”

In addition, selling a home shortly after buying it can cause significant stress and concerns about how much money you could lose and if you’ll scare off potential buyers by selling so soon.

To help you navigate an earlier-than-expected home sale, we talked with a top real estate agent and some seasoned property investors to create this homeowner guide. It covers everything you need to know to decide whether to sell now or wait, including the costs of selling, tax considerations, and how to calculate whether you might lose money on the sale.

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What are some common reasons homeowners sell early?

A homeowner’s decision to sell abruptly often stems from an unplanned life change, such as a job relocation, a death in the family, a divorce, or an injury or medical condition, notes Pennie Carroll, a top-rated Des Moines, Iowa, real estate agent with more than 21 years of experience. Let’s take a closer look at a few scenarios.

Unexpected family change

Whether you find out you’re having another child, a parent is moving in, you decide to do foster care, or you get a divorce, an unexpected change in your family can prompt an unexpected move.

Job changes

A new job, job relocation, or move to remote work may mean that selling quickly is your best option to take advantage of a job opportunity. If you’re experiencing a loss of employment, you may need to sell to reduce costs until you find another job.

Family health emergency

A family health emergency can create the need to move to a new location or downsize to cut back on expenses. In the event that a family member needs certain accommodations in the home, you may need to sell and purchase a home that is more accessible.

Buyer’s remorse about your current home or location

If you bought a house that you regret, selling quickly might help remedy the situation. Or if you bought a house and then determined that the location wasn’t what you expected, you may need to sell so you can move to a better location.

Financial need

If a life change occurs — job change, increased or unexpected expenses, etc. — you may need to sell to get your finances back on track.

Take advantage of equity growth

If you bought your house in the past few years, you might have already built substantial equity as home values increased at record rates throughout 2021 and 2022, and into 2023. Depending on your financial needs, it may make sense to sell and take advantage of those gains — though beware of the tax implications (we’ll get into this soon).

What is the 5-year rule for selling a house?

The so-called “5-year rule” is basically a rule of thumb that says you can be at a greater risk of losing money if you sell before you’ve owned a house for five years. There is also a tax rule in place that allows a seller to exclude up to $250,000 of the capital gains ($500,000 if married and filing jointly) from the sale of their home if they’ve lived in the home for two of the previous five years.

Owning a house for five years typically allows it to appreciate while you pay down the principal (the amount you borrowed), building equity that you’ll earn back when you sell. Selling before the five-year mark could result in a financial loss — but that isn’t always the case.

Has your home appreciated enough to sell?

According to consumer data company CoreLogic, “The average U.S. homeowner now has more than $274,000 in equity — up significantly from $182,000 before the pandemic. Economists and analysts at CEIC Data and the National Association of Realtors report that home values grew at a rate of 3.5%–4% in 2023.