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Should a seller count on all the equity from a sale to cover the next down payment?

Probably not, because you will not receive the entire amount of your equity as cash when you sell your home. Most sellers use part of their equity to pay selling costs, such as brokerage commissions and transfer taxes. If you are delinquent on your property taxes or have other liens secured against the property, such as a tax lien, some of your equity will go to paying them off at closing.