Learn: How to Figure Out Net Sale Profits When You Sell Your Home?

Susan Kelly

Oct 13, 2022


When deciding to sell their home, most homeowners are initially focused on how much money they can make. The equation, if not the details, is simple. To estimate your prospective earnings, you should figure out the expenditures related to the sale and have your agent supply you with two net sheets. Both sheets should assume different sales prices: the asking price if the house sells quickly and the median sales price of similar homes in the neighborhood if the house sits on the market for a while. If you do both, it's more realistic to expect a range of net profit numbers rather than hoping for top dollar no matter what.

What Are Net Proceeds on a Home Sale?

The money you make after selling your house is known as the "net profits." This sum is typically less than the difference between the current market worth of your home and the price you're seeking to sell it for. After paying off the mortgage, the selling agent's commission, the property tax, and any other fees related to the sale, the remaining money are the gross proceeds. Second mortgages and home equity loans must be repaid before selling the property. The goal of any property seller is to make a profit. That's why you should figure out how much money you'll make before selling your house. In addition, it will help you calculate how much you can afford to spend on a home. Whether you want to use the proceeds for a down payment, home improvements, or something else, knowing how much money you can anticipate to net from the sale is essential.

How To Calculate Net Proceeds from Home Sale

Discover the easy way to calculate your profit from the sale of your house.

Start with An Estimate

Setting the right price for your home is the first and most crucial step in selling it. Don't over- or under-price your home; finding the sweet spot is essential. It would help if you began by looking at recently listed properties in your region comparable to yours. Finally, the home prices should be compared to their original listing prices to evaluate modifications. The ultimate sales price of a recently sold house with comparable comp listings as yours is an excellent place to begin your estimate.

The Sellers' Closing Statement

The sum of all credits and debits will be itemized on the closing statement provided to the seller. The whole deal may count as a credit. The seller may be entitled to a prorated refund or credit toward future taxes if they have already paid property taxes for a period after they no longer own the residence. If the seller has no equity, their check will be used as a credit on the closing statement.

The Buyers' Closing Statement

Since the sales price constitutes a liability for the purchaser, it will appear as a debit on the closing statement. The buyer will receive a credit, and the seller will incur a debit if the buyer is responsible for paying real estate taxes for a period in which the seller also resided in residence.

Out-of-Pocket Costs

If you want an accurate picture of your net earnings, you must, at the absolute least, account for any expenses you paid yourself. The costs of selling a home include buying snacks for open houses and hiring a professional home stager.

Net Profit Calculations

To get an idea of how much money has been taken out thus far, start by adding up all individual costs. The sales price is factored into the total credits as a final step. Subtracting the debit column from the credit column is the last step. This disparity is the seller's profit after all costs have been deducted. If the vendor has sufficient equity, the net profit should equal the difference between the credit at the bottom of the ledger and the total debits.


Your remaining mortgage balance and the real estate agent's commission will reduce your net proceeds from selling your home. When selling a home, you must first pay off any second mortgages or home equity loans. Until the sale closes, interest must be paid on the mortgage balance. Until you sell the house, the tax bill will be your responsibility. The vendor may occasionally have to pay for some unexpected extras. Other than the down payment and closing costs, you may have to pay various fees associated with the sale of your home. You can use this calculator for your mathematical needs.

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