The first question in every potential seller’s mind is “How much is my home worth?”
Right behind that comes “What’s it going to cost?”…which is just another way of saying “How much will I end up with in my pocket!”
I just wonder if you knew…
When you hire a Realtor to represent you in the sale of your home, they owe you some very specific duties.
They are the duties of:
Yet you might not realize the Duty of Accounting includes an estimate of the expenses a seller may owe out of the proceeds of their sale.
You have the right to know BEFORE you sign the listing agreement.
And it’s all revealed in this little understood part of the listing contract called the Seller’s Estimated Net Proceeds.
The Seller’s Estimated Net Proceeds should be explained thoroughly and understood completely
…not only when you sign the listing agreement, but when ever you are evaluating the strength of an offer.
Understand the Seller’s Estimate Net Proceeds and you will know exactly
- if it’s the right time for you to sell
- how to respond to an offer
- how much you’ll receive at closing
Selling your home is a huge financial decision and you should be aware of all the possible expenses. It my job to make sure you do.
So lets take a look precisely what this document explains…
The Sale Price (minus)
The gross price the buyer has agreed to pay and the seller has accepted.
The Estimated Expenses
Title Insurance: The amount associated with the cost of obtaining title insurance. These fees are set by the title company chosen by either the buyer or seller as negotiated in the purchase agreement. It will include such costs as the Title Policy and Search and Exam Fee. Title Insurance assures the buyer that there is no other party holding an interest in the property being purchased.
Mortgage Payoff: How much do you currently owe on your mortgage? It must be paid off at closing
Pro-Ration of Taxes: In Indiana, we pay taxes in arrears. This means that the tax payments made in the current year are actually for last year’s taxes. The net sheet defines what periods property taxes are still outstanding but not yet due.
At closing, the seller gives credit for the taxes the buyer(s) will be responsible for paying when they didn’t own the property. This is commonly called “pro-ration of taxes” and is calculated for the time period and entered at #6.
If you have a mortgage payment that includes an escrow amount for taxes and insurance, the lender will return any unused portion of your escrow account when the mortgage balance is paid.
Broker’s Commission: The Broker’s Commission is most commonly calculated as a percentage of the gross sales price. In some cases, it may be a flat fee.
The type and amount of the commission is spelled out in the listing agreement.
Other Common Costs and Fees: Other costs and fees common to most transactions include a closing service fee, TIEFF fee, Closing Services Letter and Attorney Fee.
Other Negotiated Costs: Because there is almost 70 points to negotiate on a purchase agreement, it would be almost impossible to list them all. These are some that we see most often:
- Seller Assistance with Buyer Closing Costs – $3000-$3500
- Home Warranty – $500 approx.
- Survey – Variable depending on the type
- Negotiated Repair Costs – Determined after inspections
= The Bottom Line
From here on out, it’s a simple math calculation. Total up all your expenses, then simply subtract them from your sale price…the difference is the amount you will take away at closing.
This should be in every home-owner’s tool-kit.
Finding out what your home is worth is only part of the answer.
Complete the picture by knowing your expenses as well. Download your own full-sized study copy below