How to calculate net proceeds from a home sale
A worked example of the seller net proceeds formula, and how it compares with the net sheet and settlement statement you get from a title company.
Net proceeds are what you actually receive when your home sale closes. The sum itself is simple:
Net proceeds = sale price − agent commission − transfer tax − other closing costs − mortgage payoff
A worked example
Say you sell a house in Ohio for $400,000 and still owe $180,000 on the mortgage.
| Sale price | $400,000 |
| Agent commission at 5.5% | −$22,000 |
| Transfer tax at $4 per $1,000 | −$1,600 |
| Other closing costs at 1% | −$4,000 |
| Mortgage payoff | −$180,000 |
| Net proceeds | $192,400 |
The same house in Texas, which has no transfer tax, would leave you $194,000. In Philadelphia, where the seller's usual half of the transfer tax is about 2.3% of the price, it would leave about $184,800.
Where each number comes from
- The sale price is the contract price, less any credit you agreed to give the buyer.
- The commission rate is in your listing agreement.
- The transfer tax follows your state's rule. Our calculator applies it for you.
- Other closing costs are title, escrow or attorney fees and recording charges. One percent is a reasonable planning figure until you have real quotes.
- The mortgage payoff comes from your lender and includes interest up to the closing date.
Net sheets and settlement statements
A seller net sheet is the same calculation done by your agent or title company, with their actual fees in it. Ask for one before you accept an offer. The final version is the settlement statement or Closing Disclosure you sign at closing, and the figure on it is what gets wired to you.
An estimate made early is still useful. It tells you whether a price you are considering leaves enough for your next down payment, and it shows how much a change in commission or price moves the result.
What the estimate leaves out
Property tax prorations, association dues, repairs and capital gains tax are not in the formula. Prorations can go either way. Capital gains tax applies only to profit above the home sale exclusion, which is $250,000 for a single filer and $500,000 for a married couple filing jointly who meet the ownership and residence tests.
Run your own numbers in the calculator, or look up transfer tax by state.
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