Let’s say you sold your home for $453,111, but at the end of the day, you’re projected to take home just $344,824.74.
Curious about that calculation? Itching to check every dollar and cent and get the full financial picture? Hello, what happened to that extra $108k?
“Sellers like to understand how much money they’ll be putting in their pocket,” says Mel Black, a real estate attorney and appraiser who teaches dozens of classes every year to real estate brokers across North Carolina. And rightfully so—this whole selling your house thing is kind of a big deal for your bank account.
Enter the seller’s net sheet, a document that estimates how much cash you can expect to stash after subtracting fees and expenses from the sale price of your home. Even if you’re no math whiz, we’ll make it easy to understand all the terms and figures with this simple guide. If you learn nothing else, remember that the seller’s net sheet has one big job:
To show you the money!
What types of numbers typically appear on the seller’s net sheet?
As defined by Independence Title Co., which operates 70 branch offices in Texas, a seller’s net sheet supplies a “reasonable” estimate of the closing costs attached to your home sale, as well as an idea of the net proceeds you can reap.
In other words, a seller’s net sheet removes much of the mystery surrounding how much money you can count on gaining from the sale of your home. Sellers can expect to pay between 6-10% of the final sale price in commissions and closing costs, so it’s nice to see exactly where that money is going.
What shows up on a seller’s net sheet varies from state to state, but not radically.
On this sheet, Grove tallied figures for four purchase scenarios: VA loan, FHA loan, conventional loan and all-cash. Most of the figures published here come from the “conventional loan” column, with some slight variations in descriptions for certain items in order to clarify what they are.
- Sale price: $453,111
- Share of commission for seller’s agent: 3%
- Share of commission for buyer’s agent: 3%
- Title document preparation fees: $175
- Escrow fee: $450
- First mortgage payoff: $77,000
- Home warranty (buyer): $495
- Home warranty (seller): $75
- Owner’s title policy: $2,814
- Seller’s agent professional fee: $13,602.33
- Buyer’s agent professional fee: $13,602.33
- Recording fee: $20
- Guaranty assessment recoup fee: $3.30
- Current-year prorated property tax: $7,341
- Tax certificate: $43.30
- Estimated variable: $300
- Title company e-file fee: $6
- Estimated costs to close: $115,927.26
- Projected net at closing: $337,483.74
- Project net after escrow refund from lender: $344,824.74
The bottom line: Grove expected the seller in this situation to pocket $344,824.74.
Grove asks each seller to initial and date the seller’s net sheet so that they grasp how much money they stand to pocket from the deal.
“If they don’t understand it, I don’t want them to initial it,” Grove says.
Black points out that you should not 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.”
As their names suggest, a real estate professional compiles a seller’s net sheet for the seller, and a buyer’s cost sheet for the buyer.
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 cost
- 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, Black says.
“In some cases, a sophisticated seller might prepare their own,” he adds, “or it could be done by another professional such as an accountant, attorney, or lender.”
The title company involved in a home sale also might create a seller’s net sheet.
In the case of a listing agent, they usually 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. And the listing agent might present the sheet to you as a printed-out document, in a computerized 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.
When will you receive the seller’s net sheet in the home sale process?
Customarily, a real estate agent who uses seller’s net sheets will supply one to you at different points during the transaction. These stages include:
- When you set the list price
- When prospective buyers put offers on the table
- Right before the sale closes as figures may have shifted in negotiations
If your agent supplies a net sheet when they set the list price and sift through offers, all of those figures can help you figure out whether you’ll be banking enough bucks to make the deal worthwhile. The projections in the seller’s net sheet can guide you, in collaboration with your agent, toward one key decision about your home—whether to raise or lower the sale price.
Furthermore, since the seller’s net sheet lays out all the estimated expenses, you’ll be armed with information that might give you some wiggle room on the litany of fees and expenses.
“Everything is negotiable,” Grove says.
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?
Your real estate agent isn’t required to provide a seller’s net sheet. In other words, you might need to ask for one.
“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. This could allow you to get a good ballpark number of your net proceeds based off the sales price of your house.”
“However,” he adds, “if you are selling a home for the first time or if your sales price is somewhat close to the amount of money you still owe on the house, it might be in your best interest to insist on a net sheet. 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, Charles says.
Robert Taylor, a rehabber in the Sacramento, California, area who’s bought and sold homes for 20 years, says he’s often been told by real estate agents that the title company will produce a seller’s net sheet for a home sale. Indeed, some title companies do offer seller’s net sheets.
Taylor says some agents have confided in him that they’re uncomfortable preparing seller’s net sheets out of fear that their numbers will be incorrect.
“When I recently asked for a copy of a net sheet, one agent told me they no longer had access to a net sheet in their software and they would have to create one by hand,” Taylor says.
However, a top-notch real estate agent is competent and familiar with every aspect of a transaction, including the seller’s net sheet should you request one.
Grove says she’s offered seller’s net sheets to her clients since she launched her real estate business in 1995.
“It gives the seller confidence that you’re being completely transparent with them,” she says.
“It’s very, very, very important,” Grove adds. “It’s a really, really good tool, and I don’t know why agents don’t use it all the time.”
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. What we’ll do is match you with 3 top agents near you based on their actual performance history. From there, you get to pick the best one to meet your individual needs.
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