Using Equity to Your Advantage: What to Know When Selling Your Home

Wednesday, May 25, 2016, 6:00 AM | Leave Comment

Selling real estate can represent an opportunity to make a profit, help you downsize or maybe do both. If you have sufficient equity in your home, it can put you in an advantageous financial situation.

This is because you can use that equity to buy your next home or pay a significant portion of it.

What do you need to know about selling your property?

  • Equity Gives You Flexibility

    If you have enough equity in your home, you may be able to sell it for less than what it is worth and still make a profit.

    For instance, if you own a home that is worth $500,000 and you only owe $250,000 on your mortgage, you could sell it for $480,000 and still come out ahead.

    In a buyers’ market, selling for below market value can help you complete your transaction in a timely manner.

  • Seller Concessions

    Sellers concessions are paid to help a buyer better afford closing costs or other costs related to purchasing a home.

    Therefore, it could help you sell your home faster even though they represent an additional cost that reduces your profit.

    By having equity in your home, you can offer those concessions without compromising your financial situation. If you do offer concessions, they are generally no more than 6 percent of the cost of the home.

    Don’t forget that you also have to pay closing costs such as paying your real estate agent’s commission.

  • Determine Your Price Range

    New home listings can be used to determine what your home should be listed for. Finding new home listings can help you start to generate some ideas of what you really like.

    It will also help you determine how much you might need to put down to get a new home that you want or need. This can help you determine how much you need to sell to know that selling your current home makes sense.

    Your real estate agent can help you with those calculations as well as your lender or mortgage broker.

Selling your home can be a fun experience but is also a complex experience. Therefore, it is important to know how much equity you have and how you may be able to use it to create a deal that is in your best interest.

No matter how much experience you have selling homes, a real estate agent can help you get that great deal.

Author BIO

Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on twitter and Facebook.

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