Of primary consideration for sellers is how much it costs to sell a home. If you’re like most people, you will probably invest several thousand dollars in getting your home ready for sale. The bulk of your costs, however, will be incurred upon the closing the sale of your home, and not before. You may be spending some money while your home is on the market, for example a house cleaner and landscaper to keep your home looking its best, but these too will be comparatively small.
The good news is that the largest of these expenses are not out of pocket, but rather are usually paid from the proceeds of the sale. They include paying off your loan for any existing mortgage(s) or liens, and your real estate agent’s commission. Additional costs include the seller’s share of title and escrow fees, and, in some cases, any concessions granted to the buyer.
Unlike the cost of preparing your home for sale, these final expenses are very easy to calculate. Your escrow company can order a loan payoff amount from your lender. Your real estate agent fee will probably be a percentage of the sales price. You can work with an accountant to figure out if you’ll have any taxes to pay. Your buyer may ask for concessions, but if you’ve prepared your home well and negotiated the sale skillfully, you won’t have to make any significant, costly concessions.
This means that before you sign a purchase agreement, you should know with relative precision how much money you’ll walk away with at closing. Your escrow officer can for example show you an estimated settlement statement based on a proposed sale price, terms, and closing date. If you want to evaluate scenarios ahead of time, you may find it helpful to run the numbers through a spreadsheet. We have prepared an Excel spreadsheet called the Seller’s Estimated Net, which can be downloaded from the Resources section of this web site.