If you are facing the need to sell your home soon, you may want to know what perks are in it for you. One of those perks is equity. In short, if you have equity in your home, you can sell it to clear your mortgage debt and tap into cash for a new house or any other purpose.
“Selling with equity” is an option if you can’t afford to stay in your home any longer but have built up sufficient equity. You could sell your home and use the resulting proceeds to pay off your mortgage and catch up with any missed payments. Also called an equity sale, this is a key option when you want to avoid foreclosure.
A Look at Home Equity
Equity is the part of the house’s value that you own. Basically, it’s the difference between the amount you owe and the current market value of your house. When the market value exceeds how much you owe, you are able to access that cash and put it towards a new house, expenses, retirement, or savings accounts.
Selling with equity is a valid option for homeowners facing a financial hardship and who can no longer afford their home. Or, you do this even if you’re not experiencing financial hardships but still want to sell the home for other reasons, such as taking advantage of a strong sellers’ market or to relocate for work.
You may consider a sale with equity as an alternative to foreclosure, which can be a good option for you in the event:
- You can no longer afford your home
- You are not eligible to refinance or modify your mortgage
- You have a long-term hardship
Considerations Before Selling
There are some things you should think about before selling your home with equity.
Keep in mind that even with home equity, the proceeds from the sale must be used to cover all debts and closing costs first. This will detract from the amount of cash you will get when all is said and done. Don’t forget to factor in moving costs and costs associated with securing new housing.
When selling your home, any payments you had missed previously are included in the amount you will owe your mortgage company at closing. Included in the payoff will be any late fees, expenses, and advances.
Selling Your Home: The Steps
Keep these steps in mind when selling your home:
- Hire an experienced listing agent who has vast knowledge of the current market.
- Come up with a realistic timeline and sale price suitable with current market conditions.
- Heed your agent’s advice when he or she recommends cleaning, decluttering, staging, and making repairs to the home prior to selling.
- Allow your agent to market the property and show it to potential homebuyers, either through private showings, open houses or a combination of the two.
- Discuss offers with your agent, who will help you negotiate offers and close the deal.
Contact Berkshire Hathaway Premier Properties
Lean on our sellers’ agents to explain the selling process as well as how you can tap into equity to avoid foreclosure. We invite you to contact Berkshire Hathaway Premier Properties today at 713-862-0000.