I’m embarrassed that I am a full grown adult, and don’t know how this works. I am so ignorant to it, I didn’t even know how to search Google for the question.
Basically, suppose you buy a home for $200,000 on a 30 year mortgage, and 5 years into your purchase, you manage to find a buyer who will pay $280,000. Of course, you did not pay $200,000 yet after only five years, if someone wants to buy your home.
These are optional guiding questions just so you can see how ignorant I am.
1) Do you get a check for the full 280,000 if they are able to pay in cash?
2) If they’re financing for 30 years instead (since they don’t have cash), do you have to wait 30 years to get your full amount of money? Like, does their monthly mortgage payment go to you?
3) Where does the bank come into this? Or can you bypass that?
4) What happens to the money you paid into the home during that 5 years?
In: 5
States vary slightly. But there will be a real estate closing when the home sells.
The buyer will have 280k, either in cash from his funds or in the form of money from his bank if there’s a mortgage. Maybe some combo of the two. That doesn’t really impact you as seller.
The money goes into escrow at closing. That account is then used to pay off any liens on the property, like your remaining mortgage balance. Once all liens are cleared, the rest will go to you in a check or wire transfer.
Depending on where you live, you probably get the funds the day of closing.
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