So you’re thinking about selling your home and wondering how much equity you should have first? In Richmond and throughout Virginia, there’s no one-size-fits-all answer—it really depends on what you’re trying to accomplish. That said, having more equity typically means you’ll walk away with more cash and have better options. This guide from Eagle Cash Buyers breaks down what home equity actually is, why you should care about it, and how to figure out (and maybe boost) yours before putting up that “For Sale” sign. We’ll also look at the real costs involved, timing considerations, and some local market insights to help you make a smart move.
TL;DR:
- You’ll probably want at least 15–20% equity before selling—gives you breathing room and actual profit.
- To find your equity, just subtract what you owe from what your home’s worth today.
- Strong equity helps cover those pesky selling costs and sets you up for your next purchase.
- Smart renovations and paying down principal faster can build equity.
- Don’t forget to account for agent commissions, repairs, and closing costs—they add up fast.
What is Home Equity and Why Does It Matter?
Home equity is basically what you actually own of your house—the current market value minus what you still owe the bank. Let’s say your Richmond home could sell for $300,000 today, and you’ve got $220,000 left on your mortgage. That $80,000 difference? That’s your equity, and it’s pretty much what you’d pocket after paying off the loan (before other costs, anyway).
Why should you care? Well, strong equity opens doors. You might be able to make a competitive offer on your dream home without sweating the financing, or finally pay off that credit card debt that’s been nagging at you. On the flip side, if your equity is thin, you could find yourself stuck—or worse, having to bring money to the closing table just to sell. I’ve seen homeowners check their equity quarterly, which seems to help them spot the sweet spot for when to sell my house fast in Richmond or hold off for better market conditions.
How Can You Calculate Your Home’s Equity?
The math is straightforward, though getting accurate numbers takes some homework. Start by figuring out what your home would likely sell for—you can check recent sales in your neighborhood or spring for a professional appraisal. Then subtract what you owe on your mortgage. Done.
Here’s a real-world example:
- AS IS value: $250,000
- Minus mortgage balance: $180,000
- Estimated repair costs: $15,000
- Agent fees & closing costs: $15,000
- Target profit: $40,000
Looking at these numbers, you’d need around $70,000 in equity to hit that $40,000 profit target after handling repairs and fees. Not exactly pocket change. If you want a quick estimate without the guesswork, NerdWallet’s home equity calculator can give you a ballpark figure.
What Amount of Equity is Advisable Before Selling Your Home?
The conventional wisdom suggests having at least 15–20% equity before you sell, though I’d argue this is more of a guideline than a hard rule. This cushion usually means you can pay off your mortgage, handle the various selling costs, and still have enough for a decent down payment on your next place (potentially dodging PMI in the process). Virginia’s market can be quirky—what works in Arlington might not fly in Roanoke—so it pays to do your homework or chat with someone who knows the ins and outs of selling a house in Virginia.
- Cover your mortgage payoff (obviously).
- Handle those 5-6% agent commissions that somehow always feel higher than expected.
- Fix that leaky roof or outdated bathroom buyers will definitely notice.
- Secure a solid down payment for your next home.
- Keep some cash on hand—moving trucks and unexpected expenses have a way of appearing.
Strategies to Increase Your Home Equity Before Selling
Want to pump up your equity? You’ve got two main paths: make your home worth more or owe less on it. Sounds simple enough, right?
For the home improvement route, focus on projects that actually pay off. A friend of mine spent $25,000 on a kitchen remodel and saw her home value jump by nearly $40,000—but another neighbor’s elaborate landscaping project barely moved the needle. Bathroom updates and curb appeal improvements tend to give decent returns too. As for the debt side, throwing an extra $200 at your principal each month might not feel exciting, but it chips away at that balance faster than you’d think. Some folks refinance when rates drop, though that’s less appealing in today’s market.
The trick is knowing your local buyers. In Norfolk, for instance, people seem to go crazy for open floor plans and modern kitchens—nail those, and you’ll likely be able to sell your home quickly in Norfolk at a premium.
The Costs Associated With Selling Your Home and Equity’s Role
Here’s where things get sobering. Between agent commissions (usually 5–6% of your sale price), repairs, maybe some staging, and closing costs, you’re looking at expenses that can easily hit 8–10% of your home’s value. Your equity needs to absorb all this, or you’ll be writing checks at closing—never fun.
Some sellers sidestep certain costs by working with cash home buyers in Virginia Beach or similar investors. These buyers typically purchase homes as-is and can close in a week or two. The trade-off? You’ll probably accept 70-80% of market value. Whether that math works depends on your situation.
When is the Best Time to Sell Based on Your Home’s Equity?
Timing is part math, part gut feeling. Ideally, you sell when your equity easily covers your mortgage payoff and selling costs, with profit left over. But it’s not just about the numbers. Market conditions matter—if inventory is tight and buyers are desperate, your equity could grow surprisingly fast. Then again, if you’re facing a job transfer or family situation, perfect timing might be a luxury you can’t afford.
Seller Checklist Before Listing
- Run the numbers on your current equity (be honest about your home’s value).
- Check what similar homes are selling for in your area.
- Get realistic estimates for selling costs and what you’ll net.
- Tackle those repairs that’ll give you the best bang for your buck.
- Talk to a real estate agent who knows your neighborhood.
- Weigh traditional selling versus going the investor route.
FAQs About Home Equity and Selling
1. Can I sell with less than 20% equity?
You can, but it might get messy. If the sale proceeds don’t cover your mortgage and closing costs, you’ll need to bring cash to closing—essentially paying to sell your own home. In softer markets like certain parts of Chesapeake, it might make sense to wait and build more equity. Though if you’re in a bind and need to move quickly, a fast house sale in Chesapeake to an investor could still be your best bet, even if the price isn’t ideal.
2. How do market conditions impact equity?
When home prices climb, your equity grows without you lifting a finger—it’s like free money. But the reverse is also true; a cooling market can erode equity surprisingly fast. I’d suggest keeping tabs on recent sales in your neighborhood and maybe checking in with a local agent every six months or so.
3. Should I pay off my mortgage before selling?
Probably not worth it. Most sellers still have a mortgage when they list, and that’s totally normal. What matters is having enough equity to cover the payoff plus selling costs, with some left over for your next chapter. Unless you’re sitting on a pile of cash with nowhere better to put it, there’s usually no advantage to paying off the mortgage early just to sell.
