Home Sale Proceeds Calculator: How Much Will I Make Selling My House?

If you’ve ever asked yourself, “What will be my net proceeds when selling my house?” you know it’s not as simple as subtracting your mortgage balance from the home’s sale price. Many factors come into this equation.

A recent Zillow survey published in CNBC reveals that 84% of first-time home sellers regret selling their homes at lower prices than expected. Nine out of 10 first-time home sellers believe their properties could have fetched higher prices if they had embraced a different decision.

One big problem is that some property owners set unrealistic prices in a misguided attempt to fetch higher profits.

Understanding sound real estate principles and accurately gauging your potential profits and net proceeds is crucial when planning to sell your home- which is why you should use a net proceeds calculator.

Local real estate agents can also provide valuable insights into your home’s market and suggest appropriate home improvements to boost your property’s appeal and expected sale price.

Proceeds vs. Profits From Home Sales

You should understand the difference between proceeds and sales to keep realistic expectations when listing your house for sale.

Net Proceeds

Net proceeds are the money that you receive after selling your home, less home-selling costs, including;

• Mortgage payoff
• Agent commission
• Inspection costs
• Transfer fees 
• Repair costs
• Taxes (if any)

Net proceeds result from one transaction, subtracting expenses and mortgage and settling the mortgage loan. 

Profits 

Profits consider one extra expense — the money you spent to purchase your home. This, and not the mortgage balance at the time of sale, determine the profit you make from selling your home. The mortgage balance doesn’t include refinancing or a down payment. To determine your profits, subtract the selling expenses and the house’s original purchase price from your sale price. 

Consider house improvement costs when determining your net profits. Then, consult with an accountant or real estate agent about the taxes levied on your profit and subtract the value to establish your net value.

Knowing these concepts will help you avoid underpricing or overpricing your home. Consider all the costs and projected profits as you price your home listing. 

Average Proceeds From Selling a House

According to a report by real estate data provider ATTOM, home sales in the U.S. in 2022 resulted in substantial profits for the sellers, with those in the western and southern regions experiencing the most significant increase in returns. 

On average, home sellers nationwide made $112,000 in profit, marking a noteworthy 21 percent increase from $92,500 the previous year and a massive 78 percent increase from $63,000 two years ago. 

The average homeowner who sold in the fourth quarter of 2022 had owned the property for 5.85 years, the third-shortest period since 2012. 

So if you plan to list your house for sale, you can expect a good return now more than ever. 

Typical Costs Associated With Selling a Home

A buyer’s fee is lower than a seller’s because the latter includes transaction and commission costs. The settlement costs that include the seller fees include:

• Title fees
• Deed transfer 
• Escrow fees 
• Attorney fees 
• Conveyance fees

Other costs that affect how much you make from selling your home include:

Mortgage fees

These are your primary mortgage balances and any fee you owe the lender. In addition, the lender may charge you 2 percent of your outstanding balance as a prepayment fee. Remember to request a payoff quote from your lender. 

Seller concessions 

These are the costs that you agree to pay to the buyer, including;

• Home appraisal fees 
• Inspection costs 
• Title insurance
• Attorney fees 
• Loan origination fee 

Sellers offer concessions as incentives to attract a quick potential buyer. 

Homeownership overlap

Set aside a budget worth 2 percent of your home’s sales value for your transition between two homes. This will help you cover associated costs. 

Home repair

Conducting minor and major repairs on your home before listing it is a worthy undertaking. Speak to your real estate agent to assist you in determining crucial repairs. 

Staging costs

Prep and staging fees account for approximately 3 percent of your home’s selling price. These costs include painting, cleaning, decluttering, and furniture for rental homes. 

Closing costs 

The closing account for about 2 percent of your home’s sale price. Associated costs include escrow fees and taxes. 

Do You Pay Taxes When You Sell a House?

The proceeds you get from selling your home are not income, although they are subject to capital gains tax. So what’s the procedure for determining this tax from selling a house? Or what percentage do you pay when selling a house? 

The capital gains tax is the difference between the money you spent purchasing the property and your selling price. For example, if you bought your home for $200,000 and sold it for $550,000, the capital gains are $350,000. 

Taxation depends on the time you’ve owned and lived in the property and the selling value. The IRS exempts you from paying capital gains tax if you’re single and the capital gains amount is equivalent to or below $250,000, or you’ve been married for two or fewer years, and the capital gains are equal to or below $500,000. Also, you won’t pay capital gains taxes if you’ve lived in the house for less than two years. 

The law requires you to report your home to the IRS by completing the 1099-S form if you don’t qualify for tax exemption benefits. You’re likely to pay up to 20 percent in taxes from the value of your sale if you are selling a second home. The tax levied is subject to factors such as:

• How long you’ve stayed in the home
• Ownership cost
• Capital improvements 
• Other fees 

Contact experienced realtors to guide you in navigating the complex aspects of the real estate industry and advise you on the best steps to take to maximize your profits when putting your home on sale. 

How Do You Make (More) Money Selling Your House?

How much you make from selling your home depends on several factors. Follow these tips to increase your chances of making more money from your sale:

Listing Your Home With a Realtor

The realtor’s commission is 5 to 6 percent of your home’s selling price, but they play a crucial role in finding the right buyer for your property. One of the methods of slashing costs and making more profits is listing your home with low-commission realtors. However, always go for reputation and experience. 

Choose a reputable agent licensed to operate in your state. Ask for suggestions from families, friends, and colleagues before making your choice. Take a good deal, but beware of agents offering huge discounts on their commissions. A good realtor will get the best prices for your home and save you thousands of dollars despite their commission. 

Listing Your Home at the Right Price

Buyers do a comparative market analysis to establish that homes are listed at fair asking prices. Overpriced houses scare them off and make your home take longer to sell, as well as decrease the chances of a high profit. 

Look at the competing properties or comparables in the market and what they offer. Factors to consider when setting a price for a home include:

• What the home offers 
• The age
• The condition of the house 
• Comparables 
• Location 

Listing Your Home in Spring

A Zillow study established that 25 percent of house sellers believed they chose the wrong timing when listing their homes for sale.

Sometimes you need to find a buyer as soon as possible because of circumstances beyond your control, such as the death of a loved one, mounting medical bills, or loss of a job.

However, if that’s not the case, listing your home in spring when the demand for homes is high helps you to fetch better prices for your property.

A National Association of Realtors (NAR) survey notes that spring accounts for the highest home sales annually. 

>>DISCOVER: Why Isn’t My House Selling?

Renovate Your Home

Many property owners shy away from this step because of costs.

However, repairing your home and fixing any physical issues will increase your property value significantly more than the cost incurred in renovations. 

How to calculate profit from selling a house?

The home sale calculator helps you determine how much profit you’ll make.

Nationwide, home sellers pay between 7.59 and 8.59 percent as home selling charges, meaning the average selling cost for a $400,000 home in the U.S. is about $34,360.

Here’s how to estimate your profits:

• Home sale value – expenses and pending mortgages = net proceeds. 
• Net proceeds – original buying price and taxes (if any) = profit. 

Frequently Asked Questions 

There are many things to consider before selling your home, including whether it is for rental or vacation purposes. To avoid possible regrets later, some crucial questions to ask include:

How much do I save by selling my house privately?

The terms of For Sale By Owner (FSBO) vary greatly across different states in the U.S. The three options:

• Sell only to cash buyers
• Sell by yourself 
• Hire a real estate attorney 

FSBO is a tricky, stressful, and time-consuming process if you lack home-selling experience. Your house might also fetch lower profits if you sell by yourself than if you hire an experienced real estate agent. Sealing your home-selling deal privately with cash offers a shortcut to avoid the stress and hassle of processes such as:

• Making repairs
• Staging your house
• Juggling competitor offers 

Selling your home on cash is a quick way to find a seller, but it has significant financial ramifications that you need to consider. Prospective buyers will pay less than 75 percent of your home’s sale value minus fixing expenses. 

If I sell my house, how much do I keep?

After selling your home, you must pay any outstanding mortgage, agent commissions, and closing fees. You keep the remaining money after settling these costs. After all the deductions, you have 60 to 85 percent of the house’s total sale. 

When you sell a house, where does the money go?

In a typical house sale, a third party, such as a bank or title company, holds the money from the sale in an escrow account until all the conditions of the sale are met. This ensures a fair transaction for the buyer and seller and guarantees a smooth sale. The seller only receives the funds from the escrow account once all necessary conditions have been fulfilled.

What happens if you sell your house for more than you owe?

You must pay the difference between the money you generate from selling the property and the balance that you owe your mortgage lender. Consider digging into your savings or taking a short-term bridging loan to settle the debt. 

How much equity do I need to sell my house?

If you plan to sell your house, ensure you have enough equity to pay off your current mortgage and also have funds for a 20 percent down payment on your next home. By doing so, you ensure that you have enough funds to cover the purchase of your new home while avoiding private mortgage insurance. However, the minimum equity needed to sell your house can vary depending on your specific circumstances, such as the local real estate market, financial goals, and the cost of your next home.

When do I get the money from selling my house?

The timeline for receiving the funds for selling your house can vary based on several factors, such as the type of purchase agreement, the closing date, and the mortgage payoff. Generally, the seller can expect to receive the proceeds within a few days of closing. However, unexpected delays can occur, so communicate with your agent, lawyer, and lender to ensure a smooth and timely transaction.

Final Thoughts

Selling your house can be a stressful and time-consuming process, but it can also be incredibly rewarding.

The amount of money you keep from the sale will depend on several factors, such as your outstanding mortgage balance, agent commissions, taxes, and closing fees. The best way to determine how much you will keep is to speak with a trusted real estate agent, lawyer, or financial advisor.

If you’re planning to sell your home and wondering how to list it for a profitable sale, Fast Expert can help you find the right real estate agent for your needs. Contact us today to learn more about our services.