Negative Equity: How You Should Address It with Your Clients

When working with clients who plan to purchase a home while attempting to sell their current one, it is imperative to educate them on how to be freed from negative equity. As a real estate professional, it is your job to guide your clients in the direction that would serve to be the most beneficial and rewarding in the long run. According to Steve Cook, managing editor of Real Estate Economy Watch, the year began with inventories only 2% above where they were a year ago; the stage could be set for a repeat of last year’s dramatic inventory shortages if sellers don’t feel that this is a good time to sell.

If your client is unsure of the equity they have in their current home, direct them to a Home Equity Calculator, which will determine an amount based on factors, such as market value of the home, current mortgage balance, and marketability. After the client is aware of how to correct their negative equity status, it will be easier to move forward with purchasing their new home. As your client’s agent, it’s important to remain aware of their markets and neighborhoods.

As a real estate agent, it is also important that you provide your client with some information on the recent market trends that have been reported. Keep in mind, the Local Market Index should be used as a guide to ease the minds of your client by giving them something to physically look at in regards to the fluctuation of market trends. By providing these statistics and more, your clients will be able to work with you to determine whether or not it is an ideal time to sell their home.

Your clients look to you to assist them in making one of the biggest decisions of their lives. As a professional, you know the ins and the outs of the business and ensure that your client is being served and informed to the fullest extent of your ability. For more information on inventories and additional tips that could be helpful to your clients, visit’s resources for real estate professionals to find customizable checklists and eBooks to share with buyers and sellers.

Jason Parker

Jason Parker

Jason worked for several years in the real estate industry as a licensed agent and member of the National Association of REALTORS. He has an MBA from Florida State University and enjoys writing about how agents can improve their marketing efforts.
Jason Parker

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