For most sellers, this is the big question when it comes to selling their house. How much money are they actually going to walk away with once the house is sold and the deal is closed? The money you get after the sale is called your net proceeds. That’s the profit from the home once you take out all the closing costs and other associated fees.
Luckily, it’s pretty easy for sellers to estimate what their net proceeds will be using a simple calculation! First, you’ll need to get your numbers ready. Your real estate agent can help with this if you need it!
- Selling Price: This number is what you think the house will sell for, AKA the purchase price. For example, let’s say the house sells for $350,000.
- Current Mortgage: This is how much you owe on your current mortgage. Let’s say that the amount you owe is $150,000.
- Prep Costs: This is the amount it will take to get your home ready for market including repairs. For example, let’s say this amount is
- Closing Costs: These usually run around 9 – 13% of the sale price and include real estate agent commissions (for buyer and seller’s side). We’ll go with the higher end for our example and say this cost is $45,500.
Then, you simply plug those numbers into this equation: [selling price] – [remaining mortgage] – [prep costs] – [closing costs] = your net proceeds!
If you don’t want to do the math, there are several free calculators online that will do the math for you. Just Google “home sale calculator” for a shortcut.
Here’s an example using the numbers above:
$350,000 – $150,000 – $10,000 – $45,500 = $144,500. That means that after the sale is closed and you’re free and clear, you’ll walk away with $144,500. That’s a pretty sweet down payment!
Using this equation, you can find what your net proceeds will be, which makes knowing how much you can spend on your next home so much easier! For more help on selling your home and getting the most
money from your home, just reply to this email!