3 Keys to Selling Your Home
Without Taking a Loss
home equity articles and tips
Many homeowners assume that they can sell their home for a reasonable or even sizable profit several years or more after buying it. After all, they assume that property values have increased, and they understand that mortgage payments result in debt reduction. However, some homeowners take a significant financial loss when selling their property. You understandably want to make the most intelligent financial decision regarding the sale of your home. These are some of the steps that you can take to reduce the chance of selling for a loss.
Research Market Value Versus Mortgage Debt
If you want to avoid selling for a loss, you need to do some research and crunch the numbers. As a first step, search online for sales prices of similar homes in your community. Pay attention to the size of the home and its overall condition. Remember that some homeowners will list their home for a low price because they need to sell quickly, and others will list their property for a higher price because they want to maximize their profit. You also need to research the current payoff amount on your mortgage. Include balances of both first and second liens. If you have another type of lien against the home, this should also be included in your calculations.
Understand Closing Costs
The closing costs on a home can be considerable, so you should not overlook them when crunching numbers. Sellers typically pay real estate agent fees for both the buyer’s and seller’s agents. The combined fee is usually close to six percent of the sales price. This is usually one of the most expensive closing costs, but there are other expenses that you should factor into the equation as well.
Consult with a Real Estate Agent
If your preliminary calculations have yielded a positive result, the next step is to consult with a real estate agent. A real estate agent can provide you with more accurate information regarding a potential sales price for your home as well as estimated closing costs. With this information, you can finalize your plans to proceed with the sale.
Selling a home can be a stressful experience, and facing the financial stress of a potential loss can add to the weight of the situation. If you take these steps and are dismayed to learn that you would experience a financial loss by selling your home, you can always continue living in the home for a few more years. Another idea is to lease the property to a tenant.
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