Before making any long-range plans of selling a home, it’s important to find out whether your home has any equity. Reality can pack some rude surprises.
If you’re envisioning a comfortable future based on imagined proceeds that will never actually materialize, it’s better to find this out and make the adjustment now, rather than after the agreements have been signed and reality is knocking on your door.
It is an important step to obtain a realistic sale price for your property. Another important step before putting your house on the market is to run a title search, which your real estate agent can do for you. This will reveal any liens attached to the property and help you determine how much money you might receive after a sale. If the numbers point toward a short sale, your agent can then reach out to the respective creditors and begin negotiating the most favorable terms.
Here are some of the items that could be subtracted from your sale proceeds:
- Unpaid balance on second mortgages
- Home equity lines of credit (HELOCs)
- Unpaid property taxes
- IRS liens
- Mechanic’s liens (for unpaid construction or remodeling work)
- Child support liens
- Family law attorney’s real property liens (FLARPLs)
- Prepayment penalty riders
- Unpaid homeowners association dues
- Real estate sales commissions
- Title and escrow fees
- Termite damage repair costs
- Other lender-mandated repairs
By estimating these costs, adding them up, and subtracting the total from your expected sale price, you’ll get an idea whether you’re looking at a short sale—or if you can expect some money at the end of it all.
Excerpt from The House Matters in Divorce by Laurel Starks, Unhooked Books.
About Laurel Starks
