What Are Seller Net Proceeds in Real Estate?

Seller net proceeds—often called simply net proceeds—represent the amount of money a homeowner receives after subtracting all selling expenses from the final sale price. This number shows the seller’s true financial payout at closing.

Net Proceeds: Simple Definition

Net proceeds are the seller’s total profit after deducting closing costs, outstanding loans, prorated taxes, concessions, and other selling expenses from the home’s sale price.

A seller net sheet is often used to estimate this amount before listing the property.

How Seller Net Proceeds Work

Net proceeds are calculated by taking the final contract price and subtracting all expenses the seller is responsible for at closing. These may include:

  • Mortgage payoff and home equity loan payoff
  • Buyer concessions such as a seller credit
  • Prorated property taxes and HOA dues
  • Title fees and closing costs
  • Attorney fees (in attorney states)
  • Liens or judgments tied to the property

FSBO sellers often use net proceeds to decide their minimum acceptable price.

How to Calculate Net Proceeds

Net Proceeds Formula:

Sale Price – (Loan Payoff + Closing Costs + Taxes + Seller Credits + Liens) = Net Proceeds

Example:

  • Sale price: $400,000
  • Loan payoff: $250,000
  • Closing costs: $6,500
  • Prorated taxes/HOA: $1,200
  • Seller credit to buyer: $4,000

Net Proceeds = $400,000 – $261,700 = $138,300

This is the amount the seller receives at settlement.

Real-Life Net Proceeds Scenarios

  • High-equity seller: With a small mortgage payoff, the seller keeps most of the sale price.
  • Low-equity seller: Seller credits or concessions may reduce proceeds significantly.
  • FSBO seller: Avoiding a full agent commission increases net proceeds.
  • Investor seller: Often calculates net proceeds after tax implications and depreciation recapture.

Why Net Proceeds Matter

  • Helps sellers decide listing price strategy
  • Determines affordability for the next home purchase
  • Reveals whether repairs or credits are financially feasible
  • Guides FSBO pricing decisions by showing true bottom line

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