Yes, Many Homes Are Sold with Mortgages. Here’s How It All Works.
You don’t have to pay off a mortgage for your house before selling it. In fact, most homeowners end up selling their houses well before they own them free and clear.
Here’s how they do it — and what you need to know to navigate these sales and set yourself up for a profit, instead of a loss.
7 Steps to Selling a Home with a Mortgage
If you own a home with a mortgage and you want to sell it, take these steps to get everything in order, figure out if you’ll come out ahead on the deal, and get the house ready to sell if so:
- Figure out how much you still owe: What’s the balance on the mortgage loan? What would you need to fork over to pay it off in full? Once you know the balance, you can determine how much equity you already have in the house. And you can start ballparking your potential asking price for the house.
- Revisit your reasons for wanting to sell: Do you have some flexibility in terms of when you list your house? Or do you absolutely have to sell immediately? If you don’t have to sell now and you don’t have sufficient equity in your home to profit from a sale at the moment, it may not be the best time to list your house — and you may want to put things on hold until you’ve built more equity and/or market conditions shift.
- Think about your next home: After you sell, where are you going to live? Will you be looking to buy another home or will you be a renter? If selling means you’re going to be buying another house simultaneously or right after, it’s crucial to consider the market conditions you’ll enter as a buyer. Also, remember, just because you have equity and you may be able to list your house for a fair sale price does NOT mean it’s a great time for you to become a homebuyer. So, be sure to look ahead before you get the wheels in motion to unload your house.
- Choose a fair asking price: How much is your home worth? What have comparable properties sold for? And what can you reasonably ask for your house, given the current market conditions? Of course, you’re going to want as much as you can get for your house; still, it’s important to price it reasonably, so you attract as many potential buyers as possible — and so you don’t price yourself out of buyers’ online searches and price filters.
- Stage and list your house: If you stand to profit from the sale of your house and now’s a good time to list it, you’ll want to get the house in listing-ready condition. That means thoroughly cleaning it, removing the clutter, depersonalizing the space, and staging the home. All of that helps buyers envision themselves in the space. Then, put your house on the market and try to make it available for open houses.
- Get a payoff quote from your lender: When you list your house or as you’re fielding buyers’ offers, contact your lender to get a payoff quote for your mortgage. This will give you an accurate number of how much you need to pay the lender in order to satisfy the mortgage. Keep in mind that these quotes expire (because interest will accumulate with time). So, you may need to ask for a new payoff quote if the deal falls through, the closing process takes longer than expected, or your quote expires before you’re able to complete the sale and repay the lender.
- Satisfy the mortgage once you finalize the sale: Once the sale is done, use the proceeds to repay the remainder of the mortgage, according to the payoff quote you have. If you’re able to pay the remainder before the quote expires, you could see a refund for any overages in interest payments. Also, if you owe back taxes or if there are other liens on the property, it may be necessary to satisfy those from the proceeds of the sale. Once those debts are paid, the remainder is generally the profit that you get to walk away with.
This simplified guide can give you the framework you need to sell a house with a mortgage. With an experienced Realtor® on your side during the sale and closing process, however, you can help setting the transaction for success. You may even get a better price for your house and close the deal faster.
Selling a Home in Texas? Work with 5-Star Realtors® & Get CASH BACK at Closing
No matter when or where you’re selling a home in Texas, you can get experienced help and cash back at closing when you work with the 5-star Realtors® at New Home Gurus.
We can guide you through the process, helping you with offers, negotiations, and closing. Plus, we’ll split our commission with you at closing!
Home sellers (and buyers) who work with New Home Gurus can get back an average of $4,500 to $12,000 at closing.
How Much Cash Can You Get after Closing?
Call (281) 668-8124 or Contact Us to Find Out Now
We are standing by, ready to answer your questions and explain the details of our commission-sharing program.