Most buyers and sellers expect to pay some or all of the closing costs. As you prepare for the closing, you will be presented with an item-by-item list of closing costs so that you can have the cash on hand that day. Unfortunately, there is another reason why a seller might need some money with them that day and it has little to do with common closing costs. Read on to learn more.

When Does the Seller Need Cash to Close the Deal?

If you've paid off your current mortgage, or the selling price more than covers the balance, bringing extra cash to the closing is not an issue for you. On the other hand, perhaps your home has dropped a lot in value since you bought it. Most homeowners assume that their property will increase in value as time goes on, but sometimes that doesn't happen. No matter what the selling price of the home might be, if you cannot satisfy the mortgage or other loans, the deal won't happen. Here are a few issues that might negatively impact the value of your home when you get ready to sell:

1. The neighborhood used to be popular and homes were eagerly snatched up as soon they became available. That might have led to buyers paying far too much for the homes in the first place. This is problematic when the neighborhood declines in popularity in general.

2. The number of single family homes for sale on your street (all at the same time) is excessive. When buyers see a street full of "for sale" signs, it makes them nervous.

3. Noise, pollution, the view, or traffic problems have cropped up due to newly added commercial and industrial development.

4. New neighborhoods with competitive pricing and better amenities have been built nearby.

5. A previously excellent nearby school has declined and parents are opting to send their children elsewhere.

6. While you originally planned to reside in your home for several years, a job opportunity has caused you to put your home on the market after living in it only a year or so. You haven't had time to build up adequate equity in your home and must bring cash to the closing.

7. Your home needs major repairs and you must provide cash to the buyers to seal the deal.

Speak to a real estate agent to learn more about how home values are determined and how to deal with a low valuation.