How long should you own a home before selling and moving up?
There’s no fixed rule, but you need enough equity growth and loan paydown to cover the cost of selling and buying. In Washington, selling costs, including commission, the graduated state REET (1.10% up to $525,000 and 1.28% from there to $1,525,000 in 2026), local REET, title, and escrow, often add up to roughly 7% to 9% of the price, plus buying and moving costs on the next home. Many homeowners need several years of appreciation and paydown to break even. Also check the federal two-out-of-five-year rule for the capital gains exclusion.
“We’ve only been here three years. Is it too soon to move up?”
I hear that question all the time. The honest answer: it depends on your numbers, not the calendar. Here’s how to run your own break-even math. For the full move-up planning picture, see our Pierce County move-up strategy hub.
The costs you need to cover
Selling costs
- Commissions — negotiated, and they vary
- State REET — graduated rates; for 2026, 1.10% on the first $525,000 and 1.28% from $525,000.01 to $1,525,000
- Local REET — commonly 0.25% to 0.50%, depending on location
- Title, escrow, and recording fees
- Prep, repairs, and any concessions
Here’s how REET works in Washington.
Buying and moving costs
- Lender, title, and escrow fees on the new loan
- Moving costs, temporary housing, and setup for the new home
Here’s what moving up really costs, with a full worked example.
A worked example (illustrative)
Assumptions: bought for $600,000 with 10% down; selling three years later for $660,000; loan paydown of about $20,000; local REET 0.50%; commission and other costs are placeholders, not quotes.
| Item | Amount |
|---|---|
| Sale price | $660,000 |
| State REET ($525,000 × 1.10% + $135,000 × 1.28%) | $7,503 |
| Local REET (0.50%) | $3,300 |
| Commissions (assumed 5%) | $33,000 |
| Title, escrow, and other selling costs (assumed) | $4,000 |
| Total selling costs | $47,803 |
Equity gained since purchase: $60,000 appreciation + $20,000 paydown = $80,000
After selling costs: about $32,000 of new equity remains, before buying and moving costs on the next home.
At lower appreciation, the same costs could erase most of the gain. That’s why timing and price matter.
A simple break-even test
- Estimate today’s value with a local market analysis, not an online estimate
- Subtract your loan payoff to find current equity
- Subtract selling costs (use 7% to 9% as a starting range, then refine)
- Subtract buying and moving costs for the next home
- Compare what’s left to what you need for your next down payment and reserves
Don’t forget the capital gains rule
Under federal tax rules, homeowners who have owned and lived in the home for at least two of the last five years can generally exclude up to $250,000 of gain, or $500,000 for married couples filing jointly. Selling before two years may limit that exclusion, though partial exclusions can apply in some situations. Talk with a tax adviser. Here’s an overview of capital gains when selling.
When moving sooner can still make sense
- Your family has outgrown the home and the cost of staying is real
- A job change or commute makes the move necessary
- You’d pay more to remodel than to move. Here’s how to compare remodeling, adding space, or moving.
Frequently Asked Questions
How long should you live in a house before selling?
There’s no set rule. You need enough appreciation and loan paydown to cover selling, buying, and moving costs. Many homeowners need several years, but your local market and price matter most.
What does it cost to sell a house in Washington?
Costs typically include commission, state and local real estate excise tax, title, escrow, and any repairs or concessions. Together they often total roughly 7% to 9% of the sale price, but every sale is different.
What are Washington’s REET rates for 2026?
For 2026, the state rate is 1.10% on the portion of the price up to $525,000, 1.28% from $525,000.01 to $1,525,000, 2.75% from $1,525,000.01 to $3,025,000, and 3% above that. Local REET is added on top.
Do I pay capital gains if I sell my home after two years?
If you owned and lived in the home for at least two of the last five years, you can generally exclude up to $250,000 of gain, or $500,000 if married filing jointly. A tax adviser can confirm your situation.
Is it worth moving up after three years?
It can be, if your equity growth covers the costs and your needs have changed. Run a net proceeds estimate and compare it to what you need for the next home.
Know your number before you decide
Moving up early isn’t always a mistake, and waiting isn’t always safer. A clear break-even estimate tells you which makes sense for your family.
If you’d like help running the numbers on your home, schedule a move-up strategy conversation with The Barnard Group.
About Josh Barnard Josh Barnard is the founder of The Barnard Group and has spent over 20 years helping families navigate some of life’s biggest moments through real estate. Known for his “Work Hard. Be Kind.” approach, Josh combines expert market knowledge, innovative marketing, and genuine care to help homeowners make confident decisions about their next chapter. Whether someone is buying their first home, moving up, downsizing, or relocating to Pierce County, his mission is simple: serve people well, create unforgettable experiences, and help families build a life they love.
Researched October 14, 2026. Examples are illustrative. Commissions are negotiable. REET thresholds change January 1, 2027. This is not tax or financial advice.
