How Do I Calculate My Net Proceeds to Sell My Home?

Want to know how much cash you’ll actually walk away with after selling your home? Let’s break it down step by step!

Selling your home is exciting, but understanding your net proceeds is crucial for planning your next move. This quick guide walks you through everything you need to calculate your take-home amount after closing, so you know exactly where you stand.

~Learn how to calculate your net proceeds by starting with the sale price and subtracting key costs like mortgage payoff and agent commissions.

~Get insight into Georgia-specific closing costs, including final water bills and HOA fees.

~Walk away with a clear picture of how much cash you’ll take home after selling your home.

Step-by-Step Guide

Step 1: Start with Your Sale Price

Begin by noting the agreed-upon sale price of your home. This is the amount the buyer has agreed to pay for your property.

Example: If your home sells for $300,000, this is your starting number.

Step 2: Subtract Your Remaining Mortgage Balance

Check with your lender to find out the remaining balance on your mortgage. This is typically the largest deduction from your sale price. In Georgia, the closing attorney gets this number directly from your mortgage holder. You can request this for yourself so that you have the final number. The balance shown on your most current statement will be very close to the number the attorney uses.

Example: If your remaining mortgage balance is $150,000, subtract it from the sale price.

Calculation: $300,000 (sale price) – $150,000 (mortgage balance) = $150,000

Step 3: Deduct Agent Commissions

Real estate agents typically earn a percentage of the sale price as their commission. This amount is determined by your Listing Agreement with your agent.?

Example: If the commission rate is 5%, calculate 5% of $300,000, which is $15,000.

Calculation: $150,000 (remaining proceeds) – $15,000 (commission) = $135,000

Step 4: Account for Seller’s Contributions

If you’ve agreed to contribute to the buyer’s closing costs or other expenses in the purchase contract, subtract this amount.

Example: If you agreed to pay $5,000 in closing costs:

Calculation: $135,000 (remaining proceeds) – $5,000 (seller’s contribution) = $130,000

Step 5: Deduct Prorated Property Taxes

Property taxes are typically prorated, meaning you’ll pay your share up until the day of closing. Check with your local tax office to calculate the amount owed.

Example: If prorated property taxes amount to $2,000:

Calculation: $130,000 (remaining proceeds) – $2,000 (property taxes) = $128,000

Step 6: Subtract HOA Fees and Costs

If your property is part of a homeowners’ association (HOA), you may need to pay prorated dues, an HOA letter fee, or other related costs.

Example: If these fees total $1,000:

Calculation: $128,000 (remaining proceeds) – $1,000 (HOA fees) = $127,000

Step 8: Final Utility Payments and Liens

In some areas of Georgia, sellers must pay their final water bill at closing. Additionally, if you have liens or unpaid property taxes from previous years, these will also be deducted.

Example: If the final water bill and unpaid taxes total $1,000:

Calculation: $124,000 (remaining proceeds) – $1,000 (utility payments and liens) = $123,000

Final Net Proceeds

After all deductions, the remaining amount is your net proceeds. This is the money you take home after closing.

Example: Your final net proceeds are $123,000.

Key Takeaways

• Always start with your sale price and subtract each expense step by step.
• Review your contract and discuss potential costs with your agent to avoid surprises.
• Keep track of all deductions and ensure your calculations are accurate.

Selling a home is a big financial decision, and understanding your net proceeds will help you plan your next steps with confidence. If you have any questions about the selling process, reach out to me for personalized guidance!