It has become increasingly common for people to sell property under mortgage in the past few decades. This is because repayment of loan lasts on an average of up to 25 years whereas the average duration of residents in one particular house before shifting is around 8 years. Selling a home under a mortgage is slightly different from usual sale transactions since there are some vital prerequisites. Here are some useful tips that will facilitate the sale of your home with a mortgage.
Obtain a Loan-outstanding Certificate
As a seller, the first thing you have to know when considering a mortgaged property is the outstanding loan amount. Ask your lending institution to provide a loan-outstanding letter that states the exact due amount as on date. You must also obtain a list of all the documents that are in the custody of your lending institution and keep them handy before the sale.
Estimate Your Net Proceeds Before Fixing the Selling Price of Your Home
Calculate your estimated net proceeds by subtracting your outstanding loan amount and other estimated deal closure costs from the market value of your home. This will give you an idea of the amount of gain or loss you can actually realize from the sale transaction. You can conduct a comparative market analysis to get a holistic idea of your property’s market value.
Watch Out for Foreclosure Penalties
Interest is the major source of income for banks and other financial institutions that advance loans. Foreclosure of loans implies a reduction in their income which is why many lending institutions have penalties for foreclosure of loans. Check if any such penalties apply to you and if applicable, know the exact penalty to be paid from your lending institution.
Decide on the Sale Value
Once you are aware of estimated net proceeds, fix the sale value in a manner that will maximize your profits. In the rare case of a loss, you can at least minimize the loss to the greatest extent possible. Remember that your price should be in line with a realistic amount that a real buyer will be willing to pay for your home.
Look for Cash Home Buyers
Many prefer real estate agents for facilitating sale transactions only because they are unaware of the many benefits that cash home buyers can provide. Your sale is effected very quickly without hassles and cash is made available to you at the earliest. There are massive cost savings since there is no necessity for payment of any commission, listing fees, holding open houses, spending on repairs, or marketing. They not only facilitate the sale of your homes without any hiccups but also relieve you from excessive paperwork that can be difficult and time-consuming to handle, especially in cases of mortgages. Cash buyers also save a lot of time and energy since there are no showings or appraisals.
If you are looking for a one-stop solution where you can sell your home, hassle-free, at the earliest and for the best price, contact us today!