Don't Lose Money Price: A Home Seller's Guide

[Homeowners Corner]

Know Your Numbers: The Essential Guide to Pricing Your Home for Break-Even

*** Here's an example to guide Home Sellers through their calculations: ***

Imagine a homeowner with the following financial details:

• Mortgage balance: $395,300

• Accrued interest on mortgage (30 days at 4.25% rate):

• (395,300  0.0425  30) / 365 = $1,354.52

• Home equity loan payoff: $12,000

• Accrued interest on home equity loan (30 days at 6.75% rate):

• (12,000  0.0675  30) / 365 = $65.75

• Title fees/closing costs: $1,900

• Real estate taxes (3 months at $198 per month): $594

Here's how to calculate their minimum sale price to break even:

1. Add up all debts:

• Mortgage balance: $395,300

• Accrued mortgage interest: $1,354.52

• Home equity loan payoff: $12,000

• Accrued home equity interest: $65.75

• Title fees/closing costs: $1,900

• Real estate taxes: $594

• Total debts: $411,214.27

1. Subtract the total debts from zero:

• Minimum sale price: $0 - $411,214.27 = -$411,214.27

Therefore, in this example, the homeowner would need to sell their home for at least $411,214.27 to break even and avoid losing money at closing.

Remember:

• This is a simplified example. Actual calculations may involve additional factors and variations.

The total of your mortgage balance, interest, second mortgages, closing costs, and potential taxes is the don't lose money amount.

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