Yes, you can absolutely sell a house in Memphis even if you still owe money on it. Most homes sold in the U.S. still have a mortgage attached when they go on the market. According to the Federal Reserve, over 60% of homeowners carry a mortgage on their property when they decide to sell.
So, if you’re wondering whether it’s possible to sell your house before the mortgage is paid off, it is. But the process depends on a few key things: how much you still owe, what your house is worth, and how you choose to sell it.
Let’s break it all down step by step.
Understanding How Mortgages Work in a Sale
When you bought your home, you likely took out a mortgage loan and agreed to repay the bank over time. Until that loan is fully paid off, the lender has a lien on your property, meaning they have legal rights to the house until you repay them.
When you sell your house, your mortgage doesn’t disappear automatically — it gets paid off at closing. Here’s how that typically works:
- You find a buyer and agree on a sale price.
- On closing day, the buyer’s funds go to:
- Pay off your existing mortgage balance.
- Cover any remaining fees (like taxes or liens).
- The rest becomes your profit (also called equity).
If your home is worth more than your mortgage balance, you’ll walk away with money. If it’s worth less, it gets trickier — more on that later.
Step-by-Step: Selling Your House With a Mortgage in Memphis
1. Get Your Mortgage Payoff Amount
Call your lender or log into your mortgage portal and ask for your payoff amount. This is the exact number you’ll need to pay in order to clear the loan.
Tip: This amount includes daily interest, so the total changes slightly every day. Your lender can give you a “good through” date for accuracy.
2. Figure Out Your Home’s Market Value
The next step is to determine what your home could sell for in today’s Memphis market. You can:
- Ask a local real estate agent for a Comparative Market Analysis (CMA).
- Look at recent sales in your neighborhood (Zillow or Redfin can help).
- Or, request a free cash offer from a local home buying company like iBuyYourHouse.com.
The difference between your home’s value and your mortgage balance is your equity.
Let’s say:
- Your home could sell for $200,000.
- Your mortgage payoff is $145,000.
- You have about $55,000 in equity before closing costs.
That’s a great place to be — and you’ll probably have some money in your pocket after the sale.
What If You’re Underwater On Your Mortgage?
If your mortgage balance is higher than your home’s value, it’s called being underwater or upside down.
In Memphis, this isn’t super common right now, since home values have risen in recent years. But it can happen if:
- You bought the home at a high price.
- You took out a second mortgage or home equity loan.
- The house needs major repairs or updates.
Your Options If You’re Underwater:
- Bring money to closing to cover the shortfall (not ideal for most sellers).
- Ask your lender about a short sale (they agree to take less than the full amount owed).
- Sell to a local home buyer like iBuyYourHouse.com who can work with you on creative solutions like subject-to or delayed closing strategies, without using traditional bank financing.
3 Ways to Sell a House with a Mortgage in Memphis
1. Traditional Listing with a Real Estate Agent
This is the most common method. A real estate agent lists your home, markets it, hosts showings, and tries to find a buyer. Once you get an offer and go under contract, the sale proceeds are used to pay off your mortgage.
Pros:
- Could get top market value
- Professional representation
Cons:
- It may take 30 to 90+ days to close
- You’ll need to make repairs and prep the home
- You’ll pay about 6% in commissions, plus other closing costs
This works well if your house is in good shape, your equity is strong, and you don’t need to sell fast.
2. Sell For Sale by Owner (FSBO)
Some homeowners try to sell on their own to save on agent fees. You’ll handle everything: pricing, marketing, showings, paperwork, and negotiations.
Pros:
- No listing commission
Cons:
- Lots of work
- You might not get as much exposure or traffic
- Sales can fall through due to financing or inspection issues
Selling FSBO can be risky if you’re on a deadline or have no experience in real estate.
3. Sell to a Cash Home Buyer in Memphis
This is the fastest and easiest option, especially if your home needs repairs or you’re on a tight timeline. Companies like iBuyYourHouse.com buy homes directly from sellers, with no agents, no fees, and no repairs required.
Pros:
- Sell your home as-is
- No commissions or closing costs
- Close in as little as 7 days
- Get help even if you have little or no equity
Cons:
- Offer may be slightly below full retail price (but no fees or holding costs)
This route is ideal for homeowners dealing with situations like divorce, foreclosure, probate, bad tenants, or job relocation.
What Happens to the Mortgage at Closing?
At closing, the title company will:
- Request a payoff statement from your lender
- Use the sale proceeds to pay off the loan
- Release the lien on the property
- Distribute the remaining funds to you
If you’re working with a cash buyer like iBuyYourHouse.com, they’ll handle all of this paperwork for you, so you don’t need to worry about a thing.
Documents You’ll Need to Sell With a Mortgage
- Mortgage payoff statement (from your lender)
- Your most recent mortgage statement
- A copy of your mortgage note
- Government-issued ID
- Your homeowner’s insurance info
- Any HOA documents (if applicable)
If you’re selling to iBuyYourHouse.com, we can help gather these for you and walk you through every step.
Real Talk: When Should You Call a Cash Buyer?
If you need to:
- Sell fast
- Avoid expensive repairs
- Stop foreclosure
- Sell an inherited property
- Move without hassle
- Get cash without paying commissions
Then, a direct cash offer from a local company like iBuyYourHouse.com might be your best bet. You can skip the stress and still sell your house even if you have a mortgage.
Selling a house with a mortgage in Memphis is possible. You just need the right plan — and the right buyer. Whether you have equity or not, whether your house is in great shape or needs work, you’ve got options.
And if you’re looking for a no-hassle, fair, and fast way to sell your house and pay off your mortgage, we’re here to help.
Let’s Talk About Your House
At iBuyYourHouse.com, we’ve helped hundreds of homeowners in Memphis sell their houses — even with mortgages, liens, or tough situations. We’ll give you a fair cash offer, pay off your mortgage, and handle everything so you can move forward.
Call us today at 901-808-6991 to get your no-obligation offer or fill out our quick form online. Sell your house on your terms — fast, easy, and stress-free.