Calculate Your Property Return After Fees

Are you selling a home? If so, use this calculator to figure your ultimate net proceeds from a sale after factoring in your closing costs. Enter your current mortgage balance, any loan pre-payment penalties, property taxes, transfer fees & Realtor commissions to quickly figure how much you'll have set aside after the transaction.

If you are using your proceeds to buy another house, we publish current mortgage rates under the calculator.

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Current 30-YR Fixed Mortgage Rates

The following table highlights current mortgage rates. By default 30-year purchase loans are displayed. Clicking on the refinance button switches loans to refinance. Other loan adjustment options including price, down payment, home location, credit score, term & ARM options are available for selection in the filters area at the top of the table.

Seller Closing Costs: Things to Consider

Selling your home can be both exciting and worrisome for the first-time homeowner. You are, at last, liquidating your biggest asset. With the proceeds, you may hope to move on to bigger things. There are many major cost considerations to make before parting ways with your home.

These costs can eat into your proceeds, which could be a problem. To get the most of your investment, you must manage the costs of the selling process with care. With the right moves, you can maximize your selling price while reducing your major costs.

The Clock is Ticking

How long does it take to sell a home? There’s no simple answer. Many factors come into play when you attempt to sell a home. Market conditions, location, season, price, and even the home’s present state influence the time it takes to sell. In the worst of times, your house can stay in the market for years before it’s finally sold.

On average, it can take at least three weeks to sell your home once you post it for sale. Now, this time frame already makes several assumptions. First, there must be adequate demand. During a seller’s market, you can sell your house in even less time. Cooler, buyer’s markets have lower demand and thus lower prices. Fewer people are buying, and they’d sooner buy a home that’s cheaper.

Housing supply may also contribute to sale times. If your property was one of twenty for sale, it may take longer to find a buyer than if it were one of six. A lower home supply also means you command better prices. Potential buyers may gear up for a bidding war, especially during a seller’s market. During a buyer’s market, sellers must compete with one another to secure buyers.

In 2017, CNN listed down the conditions to sell your home within three weeks of entering the market:

• It must be competitively priced
• It must be attractive to buyers (in both location and condition)
• It must be listed in either Spring or Fall (or during a hot sales pattern)
• You must make an active effort to market it.

The more your property deviates from this checklist, the harder it is to sell.

As the adage goes, time equals money. Investors must sell properties fast to realize profit. Meanwhile, homeowners may have other things they need to sell their home for. The longer your house stays on the market, the more money you end up spending. Before you measure your profits, you must first understand how long it could take you to sell.

Examine Your Market

But where to start? First off, examine the state of your local real estate market. How long did it take to sell homes much like your own in your neighborhood? How much did they sell for? This will give you a good idea of how to price your home. You can also conduct a professional appraisal of your property. Doing this early on can help you set the appropriate competitive price.

Comparative market analysis (CMA) is a useful tool to have in your home selling arsenal. It will help you understand how much properties are in demand. A CMA notes down listings of similar properties in your area and the price they sold for. It also mentions how long these homes stay on the market. You can often buy a CMA from a local agent. Likewise, you can also do your own market research. Listings on websites like Zillow can give you a good place to start comparing prices.

A good agent brings a lot to the table. They might add to your costs, but the knowledge and skills they offer can help you sell your home fast.

Remember that it is common for prices to change. You may make concessions to close the deal or change the offer to attract a buyer. In a 2017 report, Zillow lists down a few things you must adjust to seal the deal. Know what you can and can’t offer to make the deal attractive. This way, you can sell your home faster without compromising your profits.

Know Your Selling Points

Location is a vital consideration. Some places will always command better prices than others. Key considerations include transportation and facilities. This is part of the reason for the absurd prices of urban real estate. Prime locations like in the city center are always much higher.

The reverse is also true, but not always so. Up until recently, more isolated homes didn’t sell as well. People can move farther from the city center for cheaper, bigger houses. But they pay the price in commute times and isolation. Telecommuting has removed much of that pressure from many buyers. In the wake of the COVID-19 pandemic, more people began working from home. This led to a rising number of people looking for homes in neighborhoods they didn’t consider before.

Use your location to attract a specific buyer. If you want to target families, for instance, emphasize the location of nearby schools and parks. If you have provisions for a home office, mention it in your home’s description.

Another key factor is the condition of your home. All things being equal, the physical state of your home will sway buyers one way or another. This is one of the few factors that you have direct control. The amount of renovation your home receives is up to you alone.

Start with the basics. Put yourself in your buyer’s shoes and understand what you want or need from your home. Use your common sense to find out what your buyers are looking for. But be careful. Too many renovations can break your budget. Don’t fix everything up right away, but offer to shoulder its costs as a bargaining chip.

Your Closing Costs

Pricing is only the first part of the home selling equation. You must also factor in the closing costs of the selling process. In the U.S., both buyer and seller handle the closing costs. The majority of these, however, fall on the seller.

This table lists down the chief closing costs of a home sale:

Cost	Description
Mortgage Balance	You must pay off the remaining mortgages and liens on your property. Paying off mortgages too early may also come with fees and prepayment penalties.
Agent Fee	Real estate agent fees cost about six percent of the home’s sale price. This fee goes to agents on both sides of the sale. They are often the chief responsibility of the seller.
Transfer Taxes and Recording Rees	Local and state governments may charge fees tied to the transfer of the property’s title. These costs can vary by state.
Attorney Fees	Both parties can have their own legal representation. In most cases, a single attorney represents both parties. Who pays the attorney is a matter of local convention. In some areas, it could be either the buyer or seller.
Title Insurance	This policy protects lenders and buyers from costs incurred if the title falls under dispute. Sellers often shoulder the cost of this coverage.
Homeowners Association (HOA) Fees	These concern property holders who belong to a HOA. Before selling their property, they must pay all dues up to the present. Some HOAs charge a flat fee to bring in the new owner. To see if this applies, check with your association.
Prorated Property Taxes	These taxes are calculated from January 1 through whichever day you sell the property.

Sometimes, buyers and sellers may agree to add or remove extra closing requirements. These actions may carry a hefty price tag. Negotiations may swing some of these costs toward either the buyer or seller. These can include the following:

• Repairs to plumbing, lighting, and electrical fixtures
• Replacing or cleaning worn household features like carpeting
• Closing cost credits, where you offer to pay part of the closing costs of the buyer

Investors also face a few costs unique to fixing and flipping. Besides the mortgage balance, they must also pay for the recurring cost of their mortgage. On top of this, they must pay for the costs of the renovation itself. Overenthusiastic flippers risk spending too much on improvements. Often, these will not raise the price of the home by the margin they want to make a profit.

Each situation is different; don’t expect the same costs to apply to your situation. Negotiations with your buyer may change the terms you need to pay.

Predicting Your Profits

In our example, we’ll assume that you plan to sell a house that you’ve lived in since March 2011. At the time you bought the house, it was worth $350,000. You financed the home through a 30-year fixed-rate mortgage with an annual percentage rate (APR) of 4 percent. Your payments are due every 15th of the month.

We’ll use our mortgage payment calculator to find out your monthly principal and interest payments. Assuming you paid a 20 percent down payment, here’s where you’ll be in February 2021:

30-Year Fixed-Rate Mortgage
Home Value: $350,000.00
20% Down: $70,000.00
Principal: $230,000.00
Rate (APR): 4%
Monthly P + I: $1,336.76
Mortgage Balance as of February 2021: $220,595.09

In the past ten years, the land values in your neighborhood grew by a considerable margin. You sell your home for $550,000, which you expect to close in March 2021. First, let’s look at what your escrow costs are per month.

Annual Property Tax: $2,553.00
Annual Homeowner’s Insurance: $1,250.00
Escrow Costs Per Month: $438.00

As the seller, you shoulder the real estate commissions of both agents, which is agreed upon at 6 percent. You also pay a 3 percent transfer tax. 

Total Commissions: $49,500

Here’s the total of your other miscellaneous costs:

Category	Cost
Revenue stamps	$350.00
Title Policy	$2,000.00
Attorney Fees	$2,500.00
Attorney Fees	$125.00
Repair Allowance	$1,000.00
Home Warranty	$600.00
Survey Fee	$500.00
Appraisal Fee	$450.00
Termite Inspection	$150.00
TOTAL	$7,675

Using our calculator above, let’s find out how much you stand to make:

Category	Value
Seller Gross Proceeds	$550,000.00
Total Seller Costs	$278,208.09
Net Proceeds	$271,430.00

In total, you’ve made a profit of $271,430. If you choose to move elsewhere, this can pay for a substantial down payment (or the price of a cheaper new home).

Mortgage Matters

Of all the costs, your mortgage balance may be the biggest contributor. Your proceeds should first go toward paying your remaining mortgage balance. In most cases, all you need is to pay off your remaining principal. Yet there are factors that can complicate this process.

For starters, some mortgages have prorated interest. This means that much of their interest charges were already calculated. Your total costs might be higher than your present balance! Extra liens on your property can also cut into your profits. If you have, at any point, taken out a second mortgage, you must pay the balances for both with the proceeds of your sale.

Finally, there are prepayment penalties. These are charges for paying or refinancing a mortgage too early. Early repayment cuts into a lender’s profits by a considerable margin. Thus, they put penalties in place to discourage prepayments for a set period. In the past, prepayment penalties could last for a long time. The most common period is between three to five years. In some cases, they could last through the life of your mortgage.

These rules still apply to mortgages before 2014. Since then, mortgage prepayment penalties only apply for a maximum of three years. The best way to avoid this situation is to request a mortgage without a prepayment penalty. This is a handy option for house flippers, who need only to sell the home. If you bought your home after 2014, you can also wait it out for three years.

Keep Your Titles Clean

You can only sell and buy real estate that has a clear title. A title is said to be cleared if it has no pending liens or other disputes (defects) attached to it. Should your property’s title come into dispute midway through the selling process, you cannot sell it until they are resolved. Thus, most sellers are by law required to buy title insurance for both their buyers and lenders

The most common liens that make a title “dirty” are as follows:

• Unpaid property taxes
• Boundary disputes
• Ownership disputes
• Outstanding lawsuits and other liens
• Noncompliance with building codes and their attendant penalties
• Incorrect, fraudulent, or forged signatures on documents
• Restrictive covenants such as unrecorded easements (e.g. utility poles built into the property)
• Conflicting wills

All these situations call the true ownership of the property into dispute. Even erroneous judgments can sully your land title. Thus, you must resolve these issues before selling. Pay off your creditors, be they government taxes or mortgages. If you have co-owners, buy their share of the property before you complete the sale. Make sure your building is up to code.

Even then, it is possible to miss some of these liens by the end of the sale. Some tax records, for instance, aren’t available to the public. These issues may become the responsibility of the new owner if the sale pushes through. This is where title insurance kicks in. The coverage provided can reduce the costs they incur when resolving these liens.

Considerations for Flippers

Selling costs become more important if you plan to sell homes for a living. For the fix-and-flip investor, reducing costs becomes a way of life. To make a profit, you must keep your costs low across every aspect of the process.

Selecting the home is the first and most important factor. The home you choose must be in the right place and the appropriate condition. All things being equal, a house in a less desirable neighborhood won’t be as profitable. Likewise, it takes a lot to justify especially expensive repairs. Some homes are just too far gone to renovate.

Don’t let yourself get carried away with the repairs. Choose improvements that add long-term value to the home. Focus on getting better fixtures and features for your property. These would often be practical considerations rather than over-the-top faddish structures. Better doors and windows, open floor plans, and extra living spaces are a few good features to add.

Speed matters to the home flipper. You must get your house into the market fast to lower your costs and bolster your profits. Your running costs, such as mortgage payments, can add up over time.

Real Estate Agent Alternatives

Agent commissions consist a large part of your closing costs. By selling the property yourself, you drop half of the agent commissions you must pay. For sale by owner (FSBO) has other advantages. You have total control over pricing and marketing that you can’t always get from an agent.

However, this comes with its own challenges. You must also do everything from the legal legwork to the market research. Thus, FSBO is a difficult option for most casual home sellers. Unless you know what you’re doing, you are going to have a hard time doing it all yourself. This option is recommended if you are a skilled salesperson.

Alternatively, you can also seek out a flat-fee broker instead. As their name suggests, you pay a flat price upfront instead of a cut of your home’s price. Flat-fee brokerages vary in their services. Some provide a full suite of services comparable to agents. Others provide more basic consultations.

In Summary

Take a cue from the Boy Scouts and think ahead. Know what the standard fees and costs are in your area. Understand the responsibilities you have to your HOA and to your buyer. Make the necessary preparations before pushing through with any plans to sell. Be honest and objective when looking at the condition of your house and lot. This will give you a clear idea of what you need to spend on before you sell your home.

Do not count your chickens before they hatch. Your mortgage balance isn’t the only thing you need to pay off to make a profit. If you sell a home for $500,000 with a $250,000 mortgage balance, you can’t realistically expect to pocket the difference. Make a profit projection only after you’ve listed down most of your expected costs. By knowing what to expect and planning ahead, you can maximize your earnings from your home sale.

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