As housing prices skyrocket, many homeowners are considering ways to turn their growing home equity into cash. If you’re one of the 6 million Americans projected to sell a home this year, you may be trying to figure out exactly how much of that increasing equity will end up in your pocket after all is said and done.
If you’ve estimated your home value to be $500,000, and your mortgage has a balance of $250,000, then you can expect to cash out the remaining $250,000 once the home sells, right?
Well, it’s not quite that simple. Selling a home costs money, and you’ve got to factor in all the costs to get an accurate estimate of what your take-home amount will be once the sale is complete.
Enter the seller’s net sheet, a document that estimates how much cash you can expect to walk away with after subtracting fees and expenses from the sale price of your home.
In this guide, you’ll come to understand the ins and outs of the seller’s net sheet through our research and interviews with experts such as Mel Black, a real estate attorney and appraiser, and Alex Saad, an appraiser turned real estate agent who sells properties 63% quicker than the average agent in Dearborn, Michigan.
What is a seller’s net sheet?
A seller’s net sheet is a document that provides an itemized list of all of the factors that contribute to an accurate estimate of the amount of money a homeowner can expect to receive after selling a home.
“It breaks down all of your costs as a seller and gives you a good idea of what you’ll get for your home,” explains Saad.
A seller’s net sheet removes much of the mystery surrounding how much money you’ll actually receive from selling your home. As a high-level rule of thumb, sellers can expect to pay between 6-10% of the final sale price in commissions and closing costs. The net sheet helps you see exactly where that money is going.
What numbers typically appear on the seller’s net sheet?
What shows up on a seller’s net sheet varies by state and provider, but not radically. While there is no standard net sheet, most will contain the same information even though the format may differ.
Saad summarized the items on a seller’s net sheet: “We start with the sales price, subtract the mortgage balance, and then subtract the other costs associated with the sale, such as Realtor® commissions, taxes, title fees, and other miscellaneous fees.”
We’ve collected an example of a seller’s net sheet by Diane Grove, a top-selling agent in the Fort Worth, Texas area. Below are the details based on an actual net sheet created for a home seller (slightly adjusted to simplify and reflect current costs).
On this sheet, most of the figures are based on selling a home with a conventional loan. Be aware that the costs may differ based on the type of financing originally used to purchase the home. For example, a home purchased with cash wouldn’t have to subtract the mortgage payoff.
- Sale price: +$500,000
Mortgage balance payoff
- First mortgage payoff: -$250,000
- Share of commission for seller’s agent: -$15,000 (3% of the sale price)
- Share of commission for buyer’s agent: -$15,000 (3% of the sale price)
Seller’s portion of closing costs (title fees, taxes, and escrow)
- Owner’s title insurance: -$3,250 (usually between 0.5%-1.0% of the sale price)
- Title document preparation fees: -$175
- Recording fee: -$125
- Current-year prorated property tax: -$7,250
- Tax certificate: -$45
- Escrow fee: -$450
- Title company e-file fee: -$10
- Seller-provided home warranty for the buyer: -$450
- Closing costs credit to the buyer: -$500
- Estimated inspection repairs: -$500
- Estimated escrow refund from the lender: +$7,100
|Seller’s closing costs||($11,305)|
|Estimated costs to close||($292,755)|
|Estimated net at closing||$207,245|
|Escrow refund from lender||$7,100|
|Estimated net after refund||$214,345|
Seller’s net sheet vs. buyer’s cost sheet
A buyer’s cost sheet is the document that itemizes the factors that contribute to the costs incurred by the buyer when purchasing a home. Both the seller and the buyer incur costs during a home purchase. Be careful not to confuse a seller’s net sheet with a buyer’s cost sheet.
“They analyze the same transaction and may appear alike, but they analyze different data for different purposes,” Black says. “Make sure you know the difference.”
According to Allstate, one of the country’s largest home insurance companies, items that you could see on a buyer’s cost sheet include:
- Appraisal fee
- Credit report fee
- Inspection fee
- Legal fees
- Title insurance
- Title search fee
- Document-recording fees
- Escrow fees
Who prepares the seller’s net sheet?
Typically, the listing agent prepares the seller’s net sheet prior to listing the home in order to give sellers appropriate expectations for what they may profit from the transaction.
“I always have a net sheet and every time we get a new offer I do a new net sheet” explains Saad.
Your listing agent may craft a seller’s net sheet with an Excel spreadsheet, a software package designed for the real estate industry, or even an online form or calculator. The listing agent might present the sheet to you as a printed-out document, or in a digital format such as a PDF, spreadsheet, or as part of a PowerPoint presentation.
“Relying on a faded piece of paper to serve as a net sheet isn’t the most professional way to go,” Black stresses.
Additionally, most title escrow officers will also provide this information, and many title companies even have an online calculator.
While it’s not a seller’s net sheet, HomeLight provides a free net proceeds calculator you can try right now to see a ballpark estimate on how much it might cost to sell your home and the proceeds you could earn from the sale.
I always update the net sheet every time we get an offer. This helps the seller make better decisions so they can see the bottom line every time. Once they see the final estimate, they can better understand which offer to take, or whether to change the sale price.
- Alex Saad Real Estate AgentCloseAlex Saad Real Estate Agent at Remax Team 2000
- Years of Experience 14
- Transactions 355
- Average Price Point $151k
- Single Family Homes 328
As a home seller, when do I receive a seller’s net sheet?
Typically, a listing agent provides homeowners the seller’s net sheet before the home is listed in order to help determine the proper list price. But ideally, according to Saad, your agent will provide multiple net sheets at different points during the transaction.
These stages include:
- When you set the list price
- When prospective buyers make offers
- Throughout a transaction when figures shift due to negotiations
“I always update the net sheet every time we get an offer. This helps the seller make better decisions so they can see the bottom line every time. Once they see the final estimate, they can better understand which offer to take, or whether to change the sale price,” says Saad.
At the time of closing you’ll also receive a separate — and more official — document called the seller’s closing statement (aka seller’s settlement statement), which is an itemized list of fees and credits that shows your net profits as the seller.
Is an agent required to supply a seller’s net sheet?
The simple answer is no. Your real estate agent isn’t required to provide a seller’s net sheet. In other words, if your agent doesn’t provide one, you might need to ask for it.
“Whether you should insist on having one depends on your individual situation,” says Cornelius Charles, co-owner of Dream Home Property Solutions LLC, a Ventura, California-based residential real estate investment company with an A+ rating from the Better Business Bureau.
“If you have bought and sold multiple homes throughout your life, you probably have a pretty good feel for the expenses involved with doing so… [but] first-time home sellers are usually not aware of all of the expenses involved with selling a home and can make the mistake of thinking they are going to pocket close to the full amount of the sale price.”
Similarly, if the amount you owe on the mortgage comes close to the sale price, you’ll probably want to ask for a seller’s net sheet to ensure the proceeds will cover most or all of your expenses.
Q&A: More expert tips and insights about the seller’s net sheet
Can I trust the estimate on a seller’s net sheet?
The estimates provided on a seller’s net sheet are just that — estimates. The accuracy of the estimate depends highly on the experience and knowledge of the person preparing it.
“A lot of agents will give the sellers the net sheet at a higher price than what they think it will actually sell for in order to win their business,” warns Saad. It is vital to properly screen your listing agent to ensure they have the proper experience to provide realistic estimates.
Can there be additional costs that aren’t on the net sheet?
In most cases, the seller’s net sheet will capture all of the costs associated with the real estate transaction. However, in some exceptional cases, there may be additional costs discovered before closing.
Saad has experienced times where a seller had a forgotten lien on the home from an unpaid contracting job years prior. “We don’t find that out until we pull title and see the lien on the home,” explains Saad. These exceptional cases are exactly why title searches and title insurance are so important to real estate transactions.
Which costs are most often misunderstood?
For many sellers, especially those selling a home for the first time, many of the costs associated with selling a home are new and misunderstood.
According to Saad, tax proration and title insurance costs are the costs that produce the most questions from sellers after he has presented the seller’s net sheet. When sellers are surprised about title insurance, Saad explains, “You want to assure the new buyer that there aren’t any liens or judgments on the property, reassuring them that these won’t pop up later.”
Get the best bottom line by partnering with a top real estate agent
How your agent handles providing you a seller’s net sheet is often a great way to determine if they are the right agent for you. If you find your agent is struggling to answer your questions or produce the documentation and details you’re looking for, it may be time to consider listing with another real estate agent with a proven track record of success.
Be sure to check the details of your listing agreement before you make any moves. Then, start your search for a top-selling real estate agent in your area with HomeLight. We’ll match you with three top agents near you based on their actual performance history. From there, you get to pick the best one to meet your individual needs.
If you’re curious what your home might be worth right now, try HomeLight’s Home Value Estimator. This free online tool can provide a ballpark estimate of your home’s worth in less than two minutes.
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