If you own a home in the Baltimore area and you've outgrown it, your equity is probably the first number you think about. But as we say in our latest video, $200,000 in equity is not automatically $200,000 for your next down payment. Before you shop for a much bigger house, that money needs a realistic job.
Why Homeowners Start Thinking About Selling
It usually looks like this. You bought a townhome before your second child arrived. Now someone works from home in the dining room, someone else practices soccer in the living room, and nobody has space to be themselves anymore.
So you open a home value website. You aren't sure those numbers are right. You subtract what you think you owe, check whether it's enough for a down payment, and the math doesn't add up. That gets confusing fast.
Step 1: Figure Out What Your Home Would Actually Net
The real starting point isn't your equity. It's your net walk-away: what you keep after the sale. We work through three things in order:
- What your home would realistically sell for
- What you'd net after costs and adjustments
- What that lets you put down, and what purchase price you should be shopping in
Doing this up front means you'll know you're comfortable with your cash to close, your available equity, and your new monthly payment.
A Hypothetical Example (Made-Up Numbers)
These are illustration numbers from the video, not a client story or Baltimore averages.
- Home sells for $450,000
- Mortgage owed: $250,000
- That leaves a $200,000 spread before closing costs and adjustments
- Placeholder of $30,000 for combined selling costs and adjustments (a placeholder, not a standard commission or fee)
- Estimated remaining: $170,000
The number you can actually work with is already different from the first one you saw. A real estimate itemizes those costs instead of hiding them in one convenient figure. Go over the negotiated charges, credits and adjustments with the people handling your sale.
Use Your Payoff Amount, Not Your App Balance
If you have another loan secured by the house, you need to account for it. Request an actual payoff amount instead of trusting the balance in your bank app. A payoff can include interest through the payoff date and other unpaid charges. If you've been using your online balance as your payoff, your final math may be off.
Step 2: Give Every Dollar a Job
Back to the hypothetical $170,000. Say this household:
- Keeps $25,000 in reserves
- Sets aside $5,000 for moving and transition expenses
- Puts $15,000 toward closing costs on the next purchase
That leaves $125,000 for the down payment. Every household needs different amounts. The reserve money didn't disappear, either. It's still theirs. It just isn't going into the next house on closing day.
That matters most when a move only works if every last dollar is committed and nothing is left for an unexpected problem.
Checking the Next Purchase Price
For a hypothetical $650,000 purchase, you run the numbers again. That leaves $525,000 to finance after the $125,000 down payment. This isn't a loan approval or a payment quote. Your lender has to account for your actual financing, and you have to decide whether the full cost of owning the home feels comfortable.
Step 3: Understand the Full Cost of Ownership and Cash to Close
Your full ownership cost isn't just principal and interest. It also includes:
- Property taxes
- Insurance
- Association costs
- Anything else the property needs outside your typical payment
On your closing documents, cash to close and closing costs are two different figures. Make sure money you've already paid is counted once, not twice. If you've already paid a deposit, make sure it shows up as a credit. Ask your lender at every step what cash you'll need, not just the final total. You want one clear money timeline, not several numbers from several documents that confuse you, your lender and your agent.
Bridging the Gap: Options for Buying Before You Sell
Home Equity Line of Credit (HELOC)
Borrowing against your equity is a real option. A home equity line uses your home as collateral. It can carry fees and a variable interest rate, and it generally has to be paid off when you sell. It isn't a second pile of free money on top of the equity you already counted. It is your equity, and you're borrowing against yourself.
Used as a short-term bridge, it can help you buy your next home without making a contingent offer, which the video says is unlikely to be accepted in this market. Because a new mortgage is paid in arrears (your first payment usually comes a month or two after you move in), these payments can often be spaced so you're not paying on two houses at once. That's the goal of a bridge-type equity loan.
Guaranteed-Purchase Bridge Programs
Some companies offer their own bridge program and guarantee to buy your house if it doesn't sell on the open market at the agreed price. In most cases they don't actually buy it, but they charge a large fee at closing. According to the video, that's about 8% of your total proceeds.
That's a hefty cost. Still, if you weren't approved for an equity line and you need to make a non-contingent offer, it can be a useful backup and another tool your agent can talk through with you. It doesn't make sense for everyone, but it's worth knowing about.
A Real-World Example: Selling Here, Buying Out of State
We recently helped local homeowners, friends of ours, who were selling here and buying in another state. We laid out all of their equity, why they were moving and what they wanted. They headed to their new area with a concrete plan for what they'd have available, including what it meant to buy in a new market after owning their current home at a much lower rate than they'd get now.
That plan let them list, make the necessary repairs, sell for top dollar, coordinate both closings and move to their new state with ease.
The Bottom Line for Sellers
"We've got a ton of equity. This should be so easy." It can be, but you need a plan. Every home and every situation is different. Mapping your numbers before you start, instead of assuming your equity will carry you to your next home, goes a long way. The next step is building a marketing plan for your home in a market that's changing faster than it has in the last three to four years.
Thinking About Selling Your Baltimore-Area Home?
Book a 15-minute phone call with Mike and we'll walk through what these numbers look like for you. To make it count, bring:
- Your current payoff amount
- Your reason for moving
- Your time frame
Once we know your goals, we can map out the financial plan and timeline that make the most sense for you.
👉 **Get your home's selling plan at Exploring Charm City**, or call (410) 952-0286.
Mike Myslinski, REALTOR, Kelly + Co Realty. Serving Baltimore Metro, the Hereford Zone and Southern Pennsylvania. All figures in this article are hypothetical illustrations, not financial or lending advice. Talk to a licensed lender about your situation.