When I think of selling my house the first thing I think about is equity. Equity is defined by one of the many dictionaries out there as “The value of mortgaged property after deductions of charges against it”. In other words, how much money you walk away with when selling your house after it is paid off.
Equity can be built in a couple of ways. One way you build equity is by paying down your mortgage. That’s like a savings account.
Another way one can build equity is time based. Most real estate appreciates over time. So if you buy a house and live there for 15 years all the payments you have made paying down your mortgage is equity and if your homes value has increased, which it likely has, that’s even better.
For example if you have lived in your house forever, unlikely, and have paid off the mortgage you get to keep it all. Yay for you.
If you bought your house last year and are selling because you decide you bought the wrong house, or whatever reason, you might not get anything. In fact you might have to pay to sell your house if you hired a real estate agent because you have to pay the agent. There is not likely to be a lot of equity in your house depending on how much you put down when you bought it.
How Much Money Do I Get
I have lived in my house for 11 years now. I negotiated a good price when I bought it, put down 16% and paid all of my own closing costs. Only putting down 16% means I had to pay PMI, or private mortgage insurance, for a few years so that cut into my equity somewhat.
My wife and I plan on leaving the area when we retire in…not sure yet how many years but hopefully not long. So the other day I was pondering what it will be like when I sell my own home. My own, I’ve sold lots of homes for lots of people over the years, but what about when I sell my own home.
So I have been paying the mortgage down for 11 years. Add that to the 16 % I put down and the rise in market values. That’s a nice chunk of equity. That would be added to our retirement account so it’s also a very important chunk of equity.
That chunk is as of today, if I sold my house, $47,000. We’re not selling today but if we were that would be our profit minus any expenses. The selling expenses are cheap, about $620 for the closing fee and title insurance. Unless I have to pay a Real estate agent. If I was going to pay a real estate agent to list it on the internet at today’s value it would cost me another, ready for it, $8400. That is a nice payday for someone to do something I can easily do myself.
It’s also something you can easily do yourself.
Yes, I Am A Real Estate Agent
Yes, I am a real estate agent and I know how to do everything that needs to be done. But, there are many brand new agents that are winging it just as I did when I was a new agent.
Two points to the fact that I am a real estate agent.
The first point is I know how easy it is to sell a house, in any kind of market, be it a buyers market or a sellers market. For anyone. That’s the big “secret” in the real estate industry we don’t want you to know.
The second point is I will not list my house on the mls. Most agents don’t. I’ll go straight to the online real estate portals such as Zillow, Trulia, Homes.com ect. That is where I’ll try and pick up a buyer without an agent. That will keep my profits at $8400
If a buyer comes to me with an agent that they have a contract with I may consider but I am for sure going to negotiate with that agent. I may offer them 2%, or 1.5%. The buyer will always know what I am doing so everything is in the open and disclosed. If the agent does not accept my deal then the buyer may lose a great house, due to his agent.
Yes, when I think of selling my house I think of profits. I don’t mind paying someone to help but I’ll pay them something within reason.
You can sell your house yourself too, and keep more of your profits.