The short answer
As a rule of thumb, a homeowner wants at least 15% to 20% equity before selling. That usually covers selling costs and typical buyer concessions and still leaves money for a down payment and moving costs on the next home, without bringing cash to closing.
The Equity Threshold Zones
- 1
The Break-Even Zone (0 to 10%)
Selling costs can eat most or all of the equity. Some sellers here would have to bring money to closing.
- 2
The Neutral Zone (10 to 15%)
Usually covers selling costs, but leaves little for the next down payment.
- 3
The Trade-Up Zone (20%+)
The ideal listing candidate: enough proceeds for a meaningful down payment on the next home, often enough to avoid private mortgage insurance (PMI).
- 4
The Payment Gap check
When rates are higher than their current loan, compare monthly payments, not just prices. Could part of their equity buy down the rate or reduce the new loan enough to keep the payment comfortable?
How Touchpoint Valuation automates this
Touchpoint Valuation gives each homeowner a current estimated value range, which is the starting point you need to run a net proceeds sheet with them.
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