I’m sure you have heard the term “Net Proceeds” thrown around quite a bit. It is the same thing as a “sellers net” or “sellers cash at close” The definition of net proceeds is:
The amount of money received from a sale, after subtracting transaction costs.
The obvious reason why this is important to a seller is that it helps them understand what they will receive at the closing table, or after the sale. This number is crucial to understand both in up and down markets. This may seem like simple math, but the best way I explain the way to calculate your proceeds is by taking 8% off the final sale price of your home. I prepared an example below so that you can understand how it works.
As always, if you ever have any questions, feel free to contact us. If you ever want us to walk you through your “net proceeds” for your home or don’t be afraid to ask.
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| Estimated Seller’s Net Proceeds | ||||
| Prepared: October 8, 2010 | ||||
| Prepared for: | Net Proceeds
123 Anywhere Ave , |
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| The Information on this estimated net sheet is deemed reliable, but is not guaranteed. The actual costs with respect to each transaction will vary depending on the circumstances. | ||||
| Selling Price | $400,000.00 | |||
| Closing Date: | 11/7/2010 | |||
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Real Estate Fees
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| Listing Office (3.0) | $12,000.00 | |||
| Selling Office (3.0) | $12,000.00 | |||
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Settlement Costs
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| Escrow/Closing Fee (incl. tax) | $629.63 | |||
| Title Policy (incl. tax) | $1,084.05 | |||
| Prorated Property Tax | $0.00 | |||
| Excise Tax | $7,120.00 | |||
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Mortgage Costs
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| 1st Mortgage Balance | $280,000.00 | |||
| 1st Mortgage Prorated Interest
(0.0%) |
$0.00 | |||
| 1st Mortgage Prepayment Penalty | $0.00 | |||
| 2nd Mortgage Balance | $0.00 | |||
| 2nd Mortgage Prorated Interest | $0.00 | |||
| 2nd Mortgage Prepayment Penalty | $0.00 | |||
| Additional Payoff | $0.00 | |||
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Buyer’s Cost Paid
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| Seller Paid Buyer Cost | $0.00 | |||
| Lender Requirement (FHA/VA) | $0.00 | |||
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Other Costs
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| Special Assessment | $0.00 | |||
| Document Preparation Fee | $100.00 | |||
| Recording Fee | $62.00 | |||
| Homeowners Association Fee | $0.00 | |||
| Home Warranty Policy | $0.00 | |||
| Pest Inspection | $0.00 | |||
| Estimated Seller Costs | $312,995.68 | |||
| ESTIMATED NET PROCEEDS | $87,004.32 | |||
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