Calculate Your Proceeds

  • When an offer comes in, a seller can accept it exactly as it stands, refuse it (seldom a useful response), or make a counteroffer with the changes they want.

  • In evaluating a purchase offer, sellers estimate the amount of cash they'll walk away with when the transaction is complete. For example, when they're presented with two offers at once, they may discover they are better off accepting the one with the lower sale price if the other asks them to pay points to the buyer's lending institution.

  • Once a seller has a specific proposal, calculating net proceeds becomes simple. From the proposed purchase price, they subtract the following:

    • Payoff amount on present mortgage

    • Any other liens (equity loan, judgments)

    • Broker's commission

    • Legal costs of selling (attorney, escrow agent)

    • Transfer taxes

    • Unpaid property taxes and water bills

    • If required by the contract: cost of survey, termite inspection, buyer's closing costs, repairs, etc.

  • The seller's mortgage lender may maintain an escrow account into which they deposit money to pay property tax bills and homeowner's insurance premiums. In that case, remember sellers will receive a refund of money left in that account, which will add to their proceeds.