A home worth $400,000 sounds like a $400,000 payday, right? Not quite. If the house sold today, the money from the sale would first have to cover the remaining mortgage, selling expenses, and other obligations before the seller could celebrate the amount that actually lands in the bank account.
That distinction matters because homeowners often confuse home value, equity, and cash proceeds as if they mean the same thing. They do not. A $400,000 house could leave one homeowner with a substantial check and another with far less, depending on what the homeowner still owes and what the sale costs.
