![Can You Sell A House With A Mortgage In Massachusetts [market_city]](https://image-cdn.carrot.com/uploads/sites/61222/2025/04/Can-You-Sell-A-House-With-A-Mortgage-In-Massachusett.png)
Still paying off your mortgage on that property in Massachusetts? Don’t worry. You’re not stuck there until 2045. Massachusetts homeowners sell their mortgaged properties all the time.
The truth is, most people sell their homes long before paying off their 30-year mortgage. In fact, the average Massachusetts homeowner stays in their property for just 13 years before selling. You absolutely can sell it with 25 years left on the loan.
Massachusetts has its own quirks when it comes to real estate transactions. But there is a clear path to selling your mortgaged home and with the right guidance, you’ll be able to sell smoothly.
Massachusetts Mortgage Laws: How They Differ From Other States
Here’s what makes Massachusetts mortgage laws unique compared to other states.
Title Theory vs. Lien Theory
In Massachusetts, we follow “title theory” rather than “lien theory.” What does this mean for you?
Your lender actually holds legal title to your property until you’ve paid off your mortgage completely. This differs from many other states where you maintain legal title even with a mortgage.
Attorney Requirement
Unlike many states that use escrow companies, Massachusetts requires attorney involvement in real estate transactions.
Your closing attorney reviews the final bill and handles any court requirements. This plays a significant role in making sure your mortgage is properly satisfied when you sell.
Foreclosure Protections
Massachusetts has some of the best homeowner protections:
- A “right to cure” period gives you 150 days to resolve mortgage delinquencies (compared to just 45 days in Rhode Island.)
- Stricter foreclosure procedures which requires judicial oversight (unlike Connecticut)
- These protections help homeowners but can complicate selling a house approaching foreclosure
Registry System
The commonwealth organizes property records by county rather than municipality, which differs from many other states. When selling, your mortgage discharge must be filed with the correct county registry.
Massachusetts Homestead Act
The Massachusetts Homestead Act gives protection for homeowners through the following:
- It automatically grants $125,000 in equity protection
- It provides an option to file for up to $500,000 in protection
- It doesn’t prevent selling but it provides important safeguards
When you sell your home in Massachusetts, despite our complex property laws, the payoff process works quite smoothly. The sale proceeds first satisfy your existing loan. Then, the remaining money comes to you as profit. This is all handled at closing under your attorney’s supervision.
The Legal Process of Real Estate Transfers in Massachusetts
Massachusetts takes real estate transfers seriously. We’re talking about a state where some property boundaries were established before the American Revolution. The commonwealth’s approach combines historical respect for property rights with modern consumer protections.
The legal transfer process begins once you accept an offer on your home. Your buyer will typically have a home inspection period, followed by mortgage application and approval.
Throughout this process, your existing loan remains active. You’ll need to continue making payments until closing day.
Massachusetts law requires a licensed attorney to oversee real estate closings. This differs from many states where title companies handle everything.
Your closing attorney will order a title examination going back 50 years. They’ll also help you prepare and review all legal documents, coordinate the mortgage payoff with your lender, and ensure proper funds distribution at closing.
The actual property transfer happens at closing through the signing of a deed. Massachusetts primarily uses quitclaim deeds rather than warranty deeds common in other states.
Can You Sell a House with a Mortgage in Massachusetts?
So, can you sell a house with a mortgage in Massachusetts? Yes! Massachusetts law fully allows the sale of properties with existing mortgages.
The process works smoothly because the loan gets paid off during the closing transaction. Even with a reverse mortgage or VA loan, you can still sell your home through a similar process.
Note that you need to understand where you stand financially regarding home equity and ownership. Massachusetts home values have increased 45% over the past five years in many areas. This created substantial equity for homeowners.
When you sell, your closing attorney coordinates with your lender to obtain the final payoff amount. This figure includes your remaining principal loan balance, which you can verify using an online calculator. The attorney ensures this amount gets paid directly to your lender from the sale proceeds.
What happens if your sale price doesn’t cover what you owe? Massachusetts follows a deficiency judgment process that allows lenders to pursue shortfalls.
However, most lenders prefer working out alternatives like short sales rather than pursuing legal action. The good news is that with our strong real estate market, negative equity situations have become increasingly rare.
Your Current Loan Balance
Before listing your Massachusetts home, you need a clear picture of what you owe. You need to contact your mortgage servicer and request a payoff quote, not just a statement showing your principal balance.
The payoff amount includes additional interest calculated to a specific date and sometimes, processing fees.
Massachusetts lenders typically provide payoff quotes valid for 30 days. This gives you a precise amount for what you’ll need to clear your mortgage.
Remember that your regular monthly mortgage statement doesn’t show the complete payoff figure.
Most Massachusetts lenders now offer online access to payoff statements through their servicing portals. This makes it easier than ever to monitor your exact balance throughout the selling process.
Options When Selling Your Mortgaged Massachusetts Home
Massachusetts homeowners with mortgages have several options when selling their property. Each approach has its advantages depending on your specific situation.
Working with a Real Estate Agent
Most Massachusetts sellers choose to work with a licensed real estate agent who knows the local market.
Your agent will help you set an appropriate price based on your mortgage balance and equity position. They’ll also market your property professionally and negotiate with potential buyers. Plus, they’ll also coordinate with your attorney throughout the closing process.
For mortgaged properties, a skilled agent’s expertise is really important. They can help you time your sale to minimize the period you’ll be making payments while waiting for closing.
Massachusetts agents typically charge 5-6% commission, but their guidance often results in higher sale prices that offset this cost.
For Sale By Owner (FSBO)
Some Massachusetts homeowners attempt to sell without an agent to save on commission costs. This approach can work in hot markets like Cambridge or Somerville where demand outpaces supply.
However, when dealing with a mortgaged property, the process of ensuring proper loan payoff makes professional guidance particularly valuable.
If you choose the FSBO route, you’ll still need a Massachusetts real estate attorney to handle the closing and ensure your mortgage is properly discharged.
You’ll also need to accurately calculate your payoff amount when setting your price.
Direct to Cash Buyers
Cash buyers provide another option for Massachusetts mortgage holders. These buyers (often investors or specialized companies) purchase properties without traditional financing.
This approach bypasses many of the complications and delays associated with buyer mortgage approvals.
For sellers with tight timelines, cash buyers can offer a fast solution. While these offers may come in below market value, the quick closing and certainty can sometimes outweigh the price difference. This especially true when mortgage carrying costs are significant.
Auction Sales
Selling through auctions is less common but still viable in Massachusetts. This can accelerate the selling timeline significantly. It works well for unique properties that might be difficult to price through traditional methods.
For mortgage holders, the outlined timeline of an auction can help with planning your loan payoff.
Massachusetts auction sales still require proper legal monitoring to ensure your mortgage is satisfied from the proceeds. The auction company typically coordinates with your attorney to manage this process.
Closing Costs When Selling a Mortgaged Home
Selling costs in Massachusetts typically range from 8-10% of your sale price. This is an important consideration when calculating your proceeds from a mortgaged property.
These expenses directly impact how much money you’ll walk away with after paying off your loan.
The largest expense is usually the real estate commission, which is typically 5-6% of the sale price. Massachusetts sellers traditionally pay this commission, which is split between your listing agent and the buyer’s agent.
Your mortgage payoff adds another layer to closing costs. Beyond your principal balance, you’ll also pay the following:
- interest accrued through the closing date
- processing or release fees ($150-300 in Massachusetts)
- any prepayment penalties (rare in modern Massachusetts mortgages)
Massachusetts-Specific Fees and Taxes
Massachusetts imposes certain costs that sellers should anticipate when they sell their home with a mortgage. Massachusetts deed excise tax runs $4.56 per $1,000 of sale price. On a $500,000 home, this tax amounts to $2,280. Your closing attorney collects and pays this tax when recording the deed.
Attorney fees in Massachusetts typically range from $800-1,500 for the seller’s side of a residential transaction. This covers document preparation, coordination with your lender, and representation at closing.
Massachusetts also follows certain customs regarding closing cost allocation. Sellers typically pay real estate commissions, deed preparation, deed excise tax, outstanding property taxes (prorated), attorney fees for document preparation, and mortgage discharge processing fees.
Meanwhile, buyers typically cover mortgage origination fees, title search costs, recording fees for new mortgages, home inspection fees, and owner’s title insurance (optional).
What Happens to Your Mortgage at Closing
The culmination of your home sale happens at the closing table. This is where your Massachusetts mortgage officially gets paid off and your property legally transfers to the new owner. The process follows a specific sequence designed to protect all parties.
Your closing attorney coordinates directly with your mortgage lender to obtain the final payoff figure, which is typically calculated through the day of closing. This amount will be paid first from the sale proceeds, before any other disbursements.
Massachusetts uses a “table funding” approach, where all money passes through your attorney’s IOLTA (Interest on Lawyers’ Trust Account). This secure account provides additional protection under Massachusetts law.
After closing, your attorney sends the payoff to your lender, who then prepares and records a mortgage discharge document.
Massachusetts law requires lenders to record this discharge within 45 days of receiving full payment, which then officially removes their claim on your property.
Massachusetts Real Estate Market Considerations
The Bay State’s real estate market varies dramatically from region to region. A mortgaged property in Boston faces different market dynamics than one in the Berkshires or Cape Cod. That is why understanding your local market will help you set realistic expectations for your sales.
Eastern Massachusetts, particularly inside Route 128, continues to experience strong seller’s markets with limited inventory and competitive bidding. This means sellers can command premium prices and make mortgage payoffs easier to manage even with substantial loan balances.
By contrast, some areas in Central and Western Massachusetts move at a more measured pace.
Properties in Springfield, Worcester, or Pittsfield may take longer to sell. This will increase the carrying costs while you continue making payments during the listing period.
When a Cash Buyer Makes Sense for Your Massachusetts Mortgage
Sometimes, accepting a cash offer for your Massachusetts home makes more financial sense than holding out for a higher financed offer. This is particularly true in certain mortgage situations.
If you’re facing an adjustable-rate mortgage reset that will dramatically increase your payments, the speed of a cash closing might outweigh waiting for a potentially higher offer.
Massachusetts homeowners in this situation often find that avoiding even a month or two of increased payments is okay for a slightly lower sale price.
Cash buyers also make sense when your mortgage is approaching foreclosure. The 150-day right-to-cure period in Massachusetts provides some breathing room. But once you’re seriously delinquent, a fast, certain close with a cash buyer can prevent damaging your credit through foreclosure.
For properties with significant deferred maintenance that wouldn’t qualify for conventional financing, cash buyers may be the only option for selling.
Rather than investing thousands to make your property mortgage-ready, accepting a cash offer might yield better net proceeds.
Massachusetts homeowners relocating for employment opportunities often benefit from cash offers as well. The speed allows you to coordinate your move more precisely. You’ll be able to avoid temporary housing costs or the need to carry two mortgages simultaneously.
Key Takeaways: Can You Sell a House with a Mortgage in Massachusetts?
As stated in this guide, you can definitely sell your Massachusetts home while still paying off your mortgage!
Most homeowners sell long before their 30-year loans are paid off and the process works smoothly. Your loan gets paid off during closing, with the remaining money coming to you as profit.
Looking for a quick and hassle-free sale? Nunley Home Buyers provides the perfect solution. We can close on your timeline without financing delays so you can avoid continued mortgage payments. Contact Nunley Home Buyers today to experience a stress-free closing process!