No matter if you are selling your personal home or an investment property, knowing the net proceeds you will walk away with is of vital importance. Our home sale calculator will assist in estimating all associated fees and expenses associated with selling.
This estimate takes into account your mortgage payoff balance, real estate agent commission and seller-side closing costs. However, this does not account for additional expenses such as home staging or moving costs.
1. Real estate agent fees
Real estate agent fees are one of the primary expenses involved with selling your home. Real estate commission rates in the US range between 5-6%. These costs are split evenly between seller’s agent and buyer’s agent fees and taken from proceeds upon closing of your sale.
Real estate agent fees vary based on state and region, making it hard to determine how much commissions will cost you in advance. One way of estimating this expense is with a realtor fee calculator which estimates your total fees according to the estimated selling price of your home.
To calculate the commission you will owe when selling your home, multiply your desired commission rate (expressed as a percentage, such as 6%) with its estimated final sales price and subtract the other costs such as remaining loan payoff amounts, taxes and closing fees in order to arrive at its net sales price.
Some real estate agents offer discounted commissions as an attractive draw for prospective buyers and to sell your home quickly, but beware that a lower commission means less money in your wallet at closing.
Some real estate agents opt to structure their commissions as a percentage of the final home sale price, meaning that as home prices increase so does their fee.
2. Mortgage payoff balance
Mortgage payments are one of the major expenses associated with selling your home, so plan for payment to the mortgage company when selling. At closing time you must also give them money; it is part of the standard sale process and should be anticipated beforehand.
Idealistically, selling your home for more than you owe on its mortgage will enable you to walk away with a profit; unfortunately, however, that’s not always possible.
At an early stage in the sales process, it is wise to contact your lender to inquire about your remaining mortgage balance or “payoff amount.” This will give you an accurate idea of what amount must be paid when closing on your home purchase.
Subtract ALL selling costs from gross proceeds in order to arrive at net proceeds, which will then be distributed directly to you as the seller at closing. Buyer funds will first go toward repaying mortgage lenders before covering transaction costs and closing fees and yielding profit. If your home’s current market value falls below its mortgage balance (negative equity), additional funds must be brought with you or short sale may be considered as alternatives.
3. Home repairs
When selling a home, its condition can have a direct impact on how much of its proceeds you will retain. If it requires extensive renovation work to become market ready, additional spending on repairs may eat into your net proceeds and compromise their return.
Seller concessions can also add to your real estate purchase costs, when sellers agree to cover some or all of a buyer’s closing costs as an incentive for closing quickly. Closing costs usually consist of loan processing fees, attorney fees, transfer taxes, title insurance costs and inspection fees.
Prep costs to prepare a home for market can narrow your buyer pool significantly, which makes pricing your home correctly essential. A great place to begin would be by researching comparable sales within your neighborhood.
If your home requires extensive repairs, you may have difficulty finding a traditional buyer willing to assume all of the burden. As an alternative, off-market cash buyers and property investors may be more accommodating when it comes to negotiations over repairs; plus they could potentially complete the sale in less time; though these buyers will most likely offer you less in return.
4. Seller concessions
Seller concessions provide homebuyers with an avenue to reduce closing costs and other pre-paid expenses, such as utility deposits. As these expenses can often require significant upfront payments, seller concessions can help lessen this financial strain on new home buyers. But before accepting such concessions from sellers, prospective home buyers should carefully consider any advantages or disadvantages before agreeing.
Some buyers may need seller concessions in a competitive market to make a deal work; additionally, mortgage loan programs like FHA and VA limit how many concessions may be provided by sellers.
Seller concessions can also increase your mortgage payment as they’re added onto the total cost, making it harder for some buyers to afford over time.
Homebuyers may negotiate with sellers to include some seller concession amounts in the purchase price of a property, making the overall purchase more affordable and expediting the home buying process. Before engaging in such negotiations however, always consult your lender first in order to ensure that any seller concession requests fall within your loan’s limitations. A good real estate agent and mortgage broker should be able to assist here.
5. Escrow fees
After selling your home, the net proceeds you receive are known as “net proceeds.” This number represents what remains after subtracting all fees and expenses from the selling price, such as outstanding mortgage balance payments, real estate agent commission fees, closing costs and seller concessions. Our home sale net proceeds calculator makes calculating these numbers quick and simple with just a few clicks!
Your net proceeds may differ when selling your home depending on how you decide to do it – working with an established real estate agent, selling independently via FSBO transaction or working with a company like an iBuyer who buys homes directly.
An agent will use a comparative market analysis (CMA) report to ascertain your home’s estimated market value, then deduct expenses like pre-listing repairs and improvements such as painting and home staging from your sale price, agent commission and closing costs to arrive at an estimate net sale amount that can help inform future decisions, such as what to do with excess funds after selling your home.
6. Home warranty
Home warranties are an attractive incentive that can both attract buyers and protect sellers. According to New York state law, sellers must disclose any known property defects to potential buyers before marketing the house for sale. Sundae’s Marketplace cash offers eliminate some of the hassle and costs associated with traditional real estate sales that require financing – use our net proceeds calculator to see how much your house could sell for!