Overcoming Financial Hurdles
When you’re selling your house, it’s important to remember that you need to have enough equity to make the sale successful. Equity is the amount of money you own in your home, usually calculated as the market value of the home minus what you owe on the mortgage. Without enough equity, you could end up in a situation where you’re unable to pay off the mortgage and owe the bank more money than you receive from the sale.
In the realm of real estate sales, it has been customary for the seller to bear the majority of transaction costs. Typically, these costs amount to around 10% or more of the agreed-upon selling price. In today’s challenging economic climate, financial constraints affect everyone. Particularly when dealing with FHA buyers, an additional 3% may be negotiated, further reducing your sales proceeds. This means that for every $100,000 of the selling price, between $10,000 and $13,000 could be deducted from your final payout at closing. For any homeowner, this can be a difficult reality to accept.
Here are some of the most common problems that arise when selling your house without enough equity:
1. You Could Owe the Bank Money: If you don’t have enough equity in your home, the bank may require you to pay the difference between what you owe and what you’re getting for the sale. This can be a significant amount of money, especially if you’re selling your home for less than what you owe.
2. You May Not Be Able to Sell: If you don’t have enough equity, you may not be able to sell your home. This is because buyers are typically not interested in buying a home when the seller has negative equity.
3. You Could Be Responsible for Unpaid Taxes: If you don’t have enough equity, you could be responsible for any unpaid taxes on the home, such as property taxes. This could be a significant amount of money that you would be responsible for.
4. You Could Lose Money on the Sale: If you don’t have enough equity, you may end up taking a loss on the sale of your home. This means that you’ll be responsible for the difference between what you owe and what you get for the sale, meaning you could end up losing money.
Selling your home without enough equity can be a difficult process, and it’s important to understand the risks involved. If your property meets our buying criteria, we can purchase your home even if you’re unable to cover the costs of selling. If your property meets our buying criteria, we can buy your home even if you cannot afford to pay for the cost of selling, and we will even cover any closing costs for you. Contact us and we’ll provide advice on the best course of action for your situation.