Scottsdale Homes For Sale: It Is Possible To Sell After Five Years



After being in your current house for almost five years, you might want to consider starting to find Scottsdale homes for sale for a bigger place. As the owner of the house, you can always decide to sell your property, though there are some tax benefits if you wait until you hit five years. Taxes aside, the value of your house and your mortgage could make the home sale tough.


In the U.S., you will need to pay capital gains tax if you realize a financial gain following an asset sale. Such tax is applicable to homes that include main residence. But, it is possible for you to avoid paying all or some of the capital gains tax if the house is used as your main residence and you stayed there for a period of time that is equivalent to a couple of years over the five-year course. In case you file individual tax, a capital gain tax can be excluded from a house sale of as much as $250,000 from the taxes. If the tax is filed jointly, you can have $500,000 exclusion.


If your house was financed through a loan which started with an interest only term that lasts for 5 year or more, you have not yet paid off the principal money you owe to finance the property. Therefore, you need to sell the property for a price at least equivalent to what you borrow, though you actually have to sell it for more in order to cover the fees of your agent. In case you took out of a fixed interest loan, the principal was somewhat reduced. But, fixed interest loans amortize, thus payments are set for paying off the principal and interest over the term of the loan. In the early years, payments are heavy on interest so you are likely to still owe nearly what you borrowed on the property.

No matter what kind of loan you get, your home’s equity might have dropped or risen because of the fluctuations in price in the real estate market. If you are fortunate enough, the value of your Scottsdale homes for sale has risen which means that you can pay the loan off and have some cash left over for making a down payment on a new place. During a down market, the home’s value is likely to fall. In such scenario, the mortgage balance is likely to exceed the value of the property. In this takes place, you may need to use your savings so the residual balance is covered.

Short Sale

In case you owe more than what your house is worth; however, lack the desire or means to pay the residual balance off, your agent might be able to talk to you on a short sale. In such kind of transaction, the lender will allow you to sell your Scottsdale homes for sale for less than you own. This sound s a good solution; however, a short sale has the same type of effect on your credit scores as foreclosures. Overall, you took on a debt for a house and not able to pay it back in full. The worse is that laws in a number of states allow lenders to sue you later to recoup the debt’s remainder. Going down the short sale route will have you failing to qualify for a loan to purchase one of the available Scottsdale homes for sale for many years.

Contact Top 1% Scottsdale AZ Real Estate Broker-Jennifer Wehner 480-748-6925 or for more information about SCOTTSDALE HOMES FOR SALE.