Not only do home sellers want to know what their home is worth, but they want to know how much money they will net after the sale. For homeowners, equity is like an extra bank account. Every dollar you put toward your property gives you a bigger stake in your home, as well as more money to pull from should you need it down the line.
A major goal when selling your house is to profit from its equity. In real estate, “home equity” refers to a home’s value relative to what’s owed on it. If you sell your home for more than you owe, you’ll benefit from its positive equity. However, when you sell your home for less than what you owe you’re in a negative equity situation. The ideal time to sell your house, of course, is when you can make a profit.
But how do you get more equity? Here are some things you can do:
Make a bigger down payment. If you haven’t bought a home yet, the easiest way to get more equity is to put more money down. And depending on the type of mortgage loan you choose, this could also lower your monthly payment or eliminate the need for private mortgage insurance, making your home more affordable.
Upgrade or renovate your home. Anything that increases the value of your home also increases your equity – and the amount you stand to gain when you sell. Just be sure to choose your renovations carefully, as some offer higher returns than others.
Pay down your mortgage. The lower your mortgage balance, the more equity you have, so work on paying that loan off sooner rather than later. Try making an additional payment every quarter or dedicating your tax returns and holiday bonuses to the account. It’ll make a significant difference in the long run.
The Bruske Team works with buyers and sellers in Arcadia, Paradise Valley, the Biltmore and the surrounding neighborhoods. Give us a call if you’re looking for ways to maximize your home equity and get your home ready to put on the market.