For Homeowners Curious About Their Equity

How Much Equity Do I Have in My Seattle Home, and What Can I Do With It?

By Emily Cressey, Broker, HomePro Associates at Keller Williams Greater Seattle. Updated October 2026.

Dear Neighbor, you do not have to be planning to sell to wonder what your house is worth. Prices in the Seattle area have changed a lot, and many owners have a hunch that they are sitting on more equity than they realize. You may also be wondering whether you should do something with it.

I help owners answer that question with real numbers, not just an online estimate. Here is how to figure out your equity, what the number can and cannot tell you, and the choices that come with it.

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How to Calculate the Equity in Your Home

Equity is the part of your home that you own. The formula is simple: your home’s value minus everything you owe against it. The tricky part is the value.

• Estimated value. What a buyer would likely pay today.
• Mortgage balance. Your current principal balance, not the original loan.
• Other liens. A home equity line, a second mortgage or any unpaid taxes or liens.
• Your equity is the value minus all of the above.

Say a home is worth about $900,000 and you owe $350,000 across a mortgage and a line of credit. Your equity is about $550,000. That is on paper. You would not get all of it if you sold, because selling costs come out first.

Why an Online Home Value Estimate Is Only a Starting Point

Free online estimates are a fun place to start, and they are not appraisals. They use public records and formulas and cannot see your kitchen, your view, your foundation or your street. They tend to miss on unusual homes, and they can miss in either direction. Two examples from my own work show how.

A Lakeview House That Sold Far Above Its Online Estimate

A 1960 lakeview house in the Seattle area had an online estimate of about $498,000. The home was dated, so we used professional staging to help buyers see it. It had no bidding war, but an investor who planned to remodel paid $613,000.

The estimate was off by over $100,000, because it could not see the view, the lot or what a buyer with a plan would pay. A local price opinion looks at the same homes buyers compare yours to.

A Condo Seller Who Hoped for $950,000

A downtown condo owner wanted to list at $950,000. The home ended up selling closer to $850,000. The gap between the owner’s number and what buyers would pay is common, and it is why I start with real sales.

Equity is only real when buyers agree on the value, so I check recent closed sales and pending sales before I tell an owner what they have.

What Can You Do With the Equity in Your Home?

Having equity gives you choices. None of them is automatically right. Here are the main ones, along with the trade-offs.

What Makes Your Home Equity Go Up or Down

Your equity changes for a few simple reasons, and only some of them are in your control.

• Paying down your loan. Every payment on a standard mortgage reduces your balance a little, and the amount grows over the years.
• The local market. When prices in your area rise, your value rises. When they fall, your equity shrinks. Neighborhoods move differently, so your street may not match the headlines.
• The condition of your home. Deferred maintenance lowers what buyers will pay. Well-kept homes hold value better.
• Improvements that buyers value. A new roof or a refreshed kitchen can help, but you rarely get back everything you spend.
• New debt. A home equity line or second loan lowers your equity dollar for dollar.

When It Makes Sense to Check Your Equity

You do not need a reason, but certain moments make it especially useful.

• You are thinking about a move, a smaller home or a different part of the country.
• You want to refinance or borrow against the house.
• A job, school or family change is coming.
• You are planning retirement and want to know what the house can do for you.
• You are thinking about buying a rental or helping a family member.
• The market has changed and you want to know where you stand.

Mistakes Owners Make When They Use Their Equity

What Equity Is Not

Equity is not cash in your pocket. It is tied up in the house until you sell or borrow against it. It can also go down if prices fall. Selling takes costs out of your equity, including real estate excise tax, title and escrow fees, commission and the work to get the house ready. I explain each in the costs of selling a home. Taxes on a gain may apply, but many owners can exclude a large part of it. The IRS explains the rules in Topic 701. Ask your CPA about your own situation.

How I Estimate Your Home’s Value and Your Net Proceeds

1. Look at recent closed sales. Homes like yours, nearby, sold in the last few months.
2. Check pending and active listings. These show what you are competing against and where the market is moving.
3. Adjust for your home. Condition, updates, lot, view and floor plan.
4. Give you a range, not a single magic number. The market decides the final price.
5. Subtract the costs. You get an estimate of what you would net after paying everything.

This costs you nothing and does not commit you to anything. If the answer is to stay, I will tell you.

Questions Homeowners Ask About Equity and Home Value