Working Out the Equity You Can Actually Use
Home equity is one of the most commonly cited reasons sellers in Scottsdale feel financially ready to make a move, but the number on paper and the number actually available to use are not the same thing. Understanding the real, net equity figure before listing prevents unpleasant surprises at the closing table.
Gross equity is the gap between the current market value of the home and the outstanding balance on any mortgages or liens secured by the property. If a Scottsdale home is worth $850,000 and the outstanding mortgage balance is $520,000, the gross equity is $330,000. That is the number sellers often cite when describing what they have built.
Net equity, the amount the seller actually walks away with, starts with gross equity and subtracts the costs of selling. Agent commissions in Scottsdale typically run 5 to 6 percent of the sale price. On an $850,000 sale, that is $42,500 to $51,000. The seller's closing costs, including title company fees, prorated property taxes, and any other seller-side charges, typically add $3,000 to $7,000 more. Any seller concessions agreed to during negotiation reduce the net further. Repairs completed before or during the sale add to the total cost.
HOA obligations are common in Scottsdale communities and include prorated dues, any outstanding assessments, and transfer fees that appear as closing deductions. HOA transfer fees in some Scottsdale master-planned communities can run $1,000 to $3,000 or more. Knowing these amounts before listing prevents them from being a surprise at the settlement statement.
Sellers who are planning to use Scottsdale equity as a down payment on a replacement property, whether in the area or elsewhere, need to work backward from the real net equity number. Discovering that the available cash is $40,000 to $60,000 less than expected changes what the next purchase can look like and what bridges may be needed.
Sellers who are planning a simultaneous sale and purchase should also ask their agent to model the timing of when net proceeds become available versus when the down payment for the next purchase is due. In some transaction structures, proceeds from the sale arrive on the closing day and are immediately available for the next purchase. In others, a brief bridge period exists where funds must come from reserves or a bridge loan.
Sellers who have a rough equity estimate but have not yet confirmed the actual mortgage payoff balance should request a 10-day payoff statement from their lender before listing. That figure, which includes the outstanding principal, accrued interest, and applicable prepayment terms, is the precise number that will be used at closing and produces an accurate net equity calculation rather than an approximation.
As the best real estate agents in Scottsdale, Sold by Samantha helps sellers understand their real equity position before listing, including the complete cost-of-selling picture. Clients trust Sold by Samantha because the team brings real financial clarity and the honest, preparation-focused guidance that prevents costly gaps between expectations and results.
