What Sellers Need to Know About Equitable Interest

If you’ve never heard the term “equitable interest,” you’re not alone. It’s a piece of real estate jargon that gets used a lot, especially by buyers in off-market or cash sale deals. But understanding what it means and how it affects your sale can protect you from serious headaches down the road.

What Is Equitable Interest?

Equitable interest is created when a buyer signs a purchase contract and that contract gets recorded with the title company. It shows their intent to buy the home and gives them certain rights in the deal. While this can be part of a normal transaction, it can also cause problems if the buyer doesn’t follow through.

The Problem for Sellers

In some cases, a buyer will file for equitable interest but never actually close on the home. That recorded interest can cloud the title, making it harder or even impossible for you to sell to someone else. It’s a tactic that dishonest buyers or scammers use to gain control over your property without ever completing the deal.

They may even try to renegotiate the price at the last minute or prevent you from accepting a better offer. In the meantime, you’re stuck, unable to move forward and left feeling like you’ve been taken advantage of.

How to Protect Yourself

• Work with reputable buyers only
  Ask for proof of funds and check their track record.
• Understand what you’re signing
  Don’t rush through contracts without reviewing them carefully.
• Talk to a title company or real estate attorney
  They can help you understand what’s being recorded and why.
• Ask questions
  If something feels off, pause and get clarity before moving forward.

The Bottom Line

Equitable interest isn’t always a red flag, but it can be if it’s misused. Make sure the buyer you’re working with is trustworthy, especially in cash deals or off-market sales. At Best Offer KC, we believe in being transparent and walking sellers through every step so you can avoid surprises and feel confident in your decision.