In today's housing market, not everyone has the luxury of being above water. If you are a low-equity homeowner, you might want to sell but not know how - and that could seem like a pretty serious problem.
However, there is hope. Plenty of homeowners are lacking equity and still finding ways to make some money on their properties, with more even moving out altogether. While there are a number of viable options, each one should be prefaced with a home inspection. A licensed professional will help clarify any issues that may have arisen with your house, and that could be the difference between getting out under a tight mortgage or having to wait out the real estate market.
Either way, here are some tips and tricks to sell your home if you are a low-equity homeowner.
Find alternative ways to cut costs
Having a lot of equity on your property means that you can mitigate some amount of associated costs and other expenses with a big move. However, not having equity means many of those bills will come out of pocket. If waiting for home values to rise further isn't an option, call in a home inspection professional to look around before putting that home on the market.
In addition, HSH.com recommended that you rent your house for a short while before selling it. This can buy you time until values tick up, when you won't be so low-equity after all.
"Before you decide to rent your property you need to get an idea of your cash flow," Tammy Trenholm, a broker with an Atlanta-based Redfin real estate company, told the news source. "You'll need to estimate the rent and your other costs such as homeowner association dues and maintenance. You also have to pay your own rent or mortgage wherever you move."
Besides renting, you could also negotiate the commission with your Realtor. Many of these professionals are willing to be flexible in that regard, and that could save you cash in the long run. Short sales are also an option, and some lenders could be willing to grant one if you don't have the money to pay the mortgage and closing costs during your move.
Most importantly, you may want to consider home improvements. These can raise the value of your property, possibly taking you from low-equity to above water quickly. Before making any changes, however, consult a home inspection professional.
What projects help sell a house
When planning for a home improvement project, not all are created equal. And, this could make a big difference when it comes time to sell, especially if you are short on equity.
According to AOL Real Estate, think about converting unused space into a storage area. Many buyers in today's housing market are interested in this, and that can increase the value of your property. For example, an unfinished attic or basement can be transformed into extra storage room, a plus for anyone looking to sell. The same goes for switching a closet into an office. If the house has plenty of storage, perhaps one of these areas can be turned into another functional space. All it takes is an added wall outlet, shelves and a desk.
Above all else, consider cleaning up your home. A neat, de-cluttered space will often sell for more money. AOL Real Estate explained that you should replace all toilets that need help, and clean grout to make bathrooms look clean and new. No buyers want the last person's dirt and grime, and improving often-used rooms like the bathroom and kitchen can be a great way to increase your home's equity.