How Much Do I Need to Sell My House for to Break Even?

The simplest way to calculate how much you need to sell your home for in order to break even (or make profit) is to subtract the market value of your home from the amount you owe.

You should also take into account the costs involved in commission fees for the real estate agents, taxes from the sale, title insurance, escrow fees and other miscellaneous closing costs. Here’s a simple two-step process to calculate your break even point:

1. Get an estimate of the current value of your home.

The Redfin Estimate determines your home’s estimated value based on recent home sales in your area. When you’re ready for professional home-value assessment, a Redfin real estate agent can evaluate your home in person and give you pricing recommendations. Talk to a Redfin Agent that specializes in your area for a free consultation.

2. Enter in the estimated value of your home as the price on the Redfin Home Sale Proceeds Calculator.

The Redfin Home Sale Proceeds Calculator will estimate how much you will make from selling your home based on what is left on your mortgage and all of the related taxes and fees that you will have to pay. Simply enter in your location, the price (Redfin Estimate), and how much you have outstanding on your mortgage. If the estimated proceeds are negative, you are not yet at the break even point.

How Long Does It Take to Break Even?

Usually it takes between five and seven years of home ownership to reach a point at which you could break even should you sell the property, considering the costs of purchasing, owning, and selling your home. However, if your property is in an area with declining market values or you’ve taken out a second mortgage or home equity loan, you could owe more than your home is currently worth, even if you’ve owned the property for more than seven years.

How to Get Out of a House That is Underwater

When the value of your home has declined due to market conditions, you might find yourself in a situation in which you owe more on your property than the current property value, which is referred to as being underwater on your mortgage. The best course of action, if you find yourself in this position, is to wait until home values level out or begin to rise again.

This isn’t feasible for every homeowner; in fact, you might need to sell your property as soon as possible to relocate for a new job or due to financial circumstances. There are some options to consider in this case, such as renting the property until real estate values increase, or selling your home as a short sale.

If you are just shy of making the break even point, you should consider ways to save when selling your home. Redfin has a different business model than other real estate brokerages. When we help you sell your home, we charge a fee of only 1.5 percent of the price of the home, instead of the typical 3 percent. This can add up to thousands of dollars that you can use to pay taxes and other closing costs.