Basic Honolulu Mortgage Math

The dream of every Honolulu homeowner is to sell their home and come away with a massive profit.  Many Honolulu homeowners achieve this dream when they invest when prices are low and sell when they are high.  However, more often than not, a homeowner does not see a profit on the sale of their home.  

When selling a Honolulu house with a mortgage many homeowners can only hope to break even and move on to their next property.

Excess Funds

Sellers start to think of extra money that they see from a sale as profit.  However, during closing, they quickly see that this profit will go towards other fees that are associated with completing a sale.  

There are many third parties that handle various portions of the Honolulu sale process.  These third-party companies need to be paid for their work.

Real Estate Agent

A cost that many Honolulu sellers do not factor in is the amount being paid to their real estate agent.  Real estate agents need commission for the work that they have completed during the sale. Additionally, some areas require an attorney which will have a fee to pay, as well.

Most real estate agents will take up to five percent of the sale price for their commission.  But the amount that the agent receives is not a number randomly pulled out of the air. Instead, there is a listing agreement that was first signed as the agent was hired to sell the Honolulu home.  The payment is outlined in this agreement at the start of the sale process.

There are some instances where there is no money left over from a sale.  In that instance, a Honolulu homeowner will need to pay the real estate agent out of their pocket.  For most homeowners, there is money left over to pay the third parties involved in the process without the homeowner taking out their checkbook.

Costs of Closing

Most real estate deals have the buyer paying a bulk of the closing costs.  However, during negotiations, the seller may agree to take some of these costs on.  

The closing costs can be up to three percent of the price of the home.  If the homeowner agreed to pay a portion of this they will need to pay it with any money left after the mortgage is paid off.

Taxes

The property taxes that are owed on the home do not transfer to the new homeowner.  Any taxes that were owed while the seller lived in the home will need to be paid before the new homeowner can take possession of the home.  This can be a small amount up to the full amount depending on when a homeowner pays their taxes and if they were behind in payments.

After plenty of fees and third-party payments, Honolulu sellers may see that they have money left over from a sale.  This money that is left over is truly the profit made from the house. Paying off a mortgage with the profits from a sale is a good way to get out of a mortgage, but the Honolulu seller has to factor in these added fees to know if they will walk away with a profit.