Why agents care
Net proceeds are what sellers care about most, more than the sale price. Framing pricing and offer conversations in net terms keeps the discussion on the seller's goals, such as the down payment on their next home.
Glossary term
Net proceeds
Net proceeds are the funds a seller receives from a sale after all deductions: the mortgage payoff, any other liens, commission, seller closing costs, transfer taxes, prorations, repair credits and other charges. A seller net sheet estimates them before listing, and the settlement statement shows the final figure.
Example
Example: sale price $425,000, minus a $238,000 payoff, $23,375 commission at a negotiated 5.5%, $6,375 closing costs and $3,000 repairs, gives estimated net proceeds of about $154,250.
Pairs well with
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Questions by topic
Net proceeds: common questions
Are net proceeds taxable?
That depends on the seller's gain and situation, not the proceeds. Primary-residence exclusions may apply. Sellers should ask a tax adviser.
Why do estimated and final net proceeds differ?
Prorations, payoff interest to the actual closing date, and final fees all shift the number slightly.
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