How To Calculate Your Net Proceeds From Selling Your Home
Selling your house is a major financial transaction, so you’ll want to be sure you’re coming out ahead. You’ll need to keep track of all the costs associated with the sale of your home as you decide upon an asking price and evaluate any offers. With these figures in hand, you can use the Zillow Home Sale Proceeds Calculator to estimate your net proceeds, but when you’re at the settlement table, it’s good to know how to calculate your net proceeds from selling your home.
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Gather the Info
The figure that starts it all rolling is the sale price of your home. When you deduct all of the expenses, you’ll have your net proceeds. According to Forbes, the five biggest costs associated with selling your home are the loan payoff (what’s left of your mortgage or any other loans against your home), agent commissions (what you’ll owe your realtor), home repairs, closing costs and everything else. Let’s take a closer look:
Sale Price: The amount you and the buyer agree upon. It can be higher or lower than the asking price.
Loan Payoff: Most people have a mortgage on their home. When you sell your home, you must pay the remaining balance on your mortgage in full. Ask your lender for the payoff amount to get the exact amount due.
Agent Commission: It’s customary for the agent who sold your home to get a commission. The amount and terms vary from state to state, so be sure you understand up front what the amount will be (usually a percentage of the sales price).
Home Repairs: These fixes can come about in one of several ways. The most likely are the repairs you make to get the house ready to show, like replacing the broken screen door. Repairs can also come about at the buyer’s request as a condition of sale.
Closing Costs aka Settlement Costs: These costs cover whatever is needed to complete the sale of the property, according to Better. They depend upon the lender and may include origination fees, credit report fees, appraisal fees, property taxes and recording fees. Some of these will be paid by the buyer, but they can wind up on your side of the settlement sheet as part of the deal.
Everything Else: If you stage your home to make it look more inviting, store some of your furniture to make it look less cluttered, do a quick paint job or some curb-appeal landscaping to make your home more attractive, these are all costs associated with the sale of your home. If you’re paying for the move yourself, you may want to include those costs as well.
Do the Math
Once you have all of the information in hand and know who is paying for which of these things, you can calculate your net proceeds:
Gross Proceeds – Loan Payoff – Agent Commission – Home Repairs – Closing Costs – Everything Else = Net Proceeds
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