The equity in your home is the cash in your pocket when you sell. Again, the equity in your home is the cash in your pocket when you sell!
Equity in residential real estate by its very nature is ambiguous. No two homes are the same and all homes come with different specifications and in various conditions. In an ever-changing marketplace, this results in a true guessing game.
Until a home is under contract with a buyer for an agreed-upon price there is no way to truly know what the equity in your home is.
Not so fast though… The sales price of a home is hardly ever the amount the seller of the home walks away with. Most of the time a real estate agent is involved and typically the seller pays the realtor commission, which is 5%-6% of the sale price on average. Then there are attorney fees, conveyance tax, amongst other closing costs. Total closing costs for sellers in Connecticut run at an average of 8%-10%.
It is important to be knowledgeable of these costs when planning to sell your home or take a loan against the equity you have in it. As they can seriously affect the net gain or loss you will yield from the sale when the time comes to do so.
Hence why we say, the equity in your home is what’s in your pocket when you sell!
