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“Equity” is also theoretical until you try to cash in on it: they say your house could sell for $1MM, but you have to find a buyer before you can get that equit
by commandlinefan 5y ago
“Equity” is also theoretical until you try to cash in on it: they say your house could sell for $1MM, but you have to find a buyer before you can get that equity out and spend it. You may very well have to sell it for (a lot) less. It’s also a liability every year when the tax man comes, because he charges based on the “imaginary” number, not what an actual person will actually pay for it.
- biggc 5y agoThe second part isn't exactly true in California. Thanks to Prop 13 homeowners' property taxes usually don't increase in proportion to their value.
- m-ee 5y agoAs mentioned by the other poster, prop 13 makes the surprise tax bill situation moot. And in this current market you will not have to sell for less. My sister in law recently accepted an all cash offer for more than asking price. Made about $500k in 4 years.
- xsmasher 5y agoYou can access the equity with a second mortgage, a home equity line of credit, or a cash-out refinance.