How to Sell a Home for What Is Owed
Most home sellers expect to pay off their home when they sell. Difficult real estate markets, those markets where supply outweighs demand, could cause you to sell your home at a loss, especially if you do not have any equity in the home. Because the real estate market generally dictates a home's sale price, you must consult a comparative market analysis -- the list of homes sold recently in your area -- to determine if you will be able to sell your home for what you owe or if you should wait until real estate prices go up.
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Instructions
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Contact your lender to find out your mortgage pay off amount. Knowing your pay off amount helps you estimate an accurate listing price to yield the amount you need to pay off the loan. You must keep paying your mortgage until you close the sale, but you could end up owing less depending on how long your home stays on the market.
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Calculate your home's listing price. Download a closing cost worksheet online or ask your real estate agent to work up an estimate for you. Estimate your break-even price by adding to your mortgage payoff your expected real estate commission if you plan to hire an agent -- between 6 and 10 percent of the sales price in most real estate markets. You should also add attorney fees, termite inspection and any closing cost incentives you plan to offer the buyer such as loan discount points and a home warranty.
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Sign the listing agreement. The listing agreement contains your home's list price, the items included in the home and the terms and conditions under which you will accept a sales contract. You must sign the agreement for your real estate agent to enter the home into the Multiple Listing Service system, or MLS. If you are selling your home without an agent, you can begin advertising your home once you calculate the asking price.
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Accept a contract that meets your asking price and terms only. Increase buyer interest in your home by keeping it neat and well-manicured inside and out. You have a right to counter or reject low-ball offers. Although it may take some time to find a buyer willing to meet your exact price and terms, waiting for the right buyer will allow you to pay off your mortgage.
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Tips & Warnings
Home sellers sometimes pay unplanned expenses when home inspections reveal repairs that must be made before closing. You can avoid such surprises by having your home inspected and taking care of repairs before it goes on the market.
