How to calculate net proceeds from a home sale
Net proceeds are what you keep after the sale pays off your mortgage and all selling costs.
The formula
Net proceeds = sale price − mortgage payoff − commission − closing costs − repairs and credits
Worked example
A $400,000 sale with a $250,000 payoff, 5% commission ($20,000) and 2% in other closing costs ($8,000) leaves $122,000.
How to use this calculator
Enter the sale price you expect and your mortgage payoff. Add the agent commission, your other closing costs and any repairs or credits you have agreed to give the buyer. The net proceeds calculator subtracts each one from the price and shows what is left. Ask your loan servicer for a payoff figure, because it is a little higher than the balance on your statement.
What the result means
The result is an estimate of the money you receive at closing. In the example, $122,000 is 30.5% of the sale price. The rest goes to your lender, the agents and closing costs. If you plan to buy again, this is the cash you have for the next down payment and moving costs. The final figure appears on your closing statement and can differ from this estimate.
More examples
Proceeds at different sale prices
Each row keeps the $250,000 payoff, 5% commission and 2% in other closing costs.
| Sale price | Commission (5%) | Other closing costs (2%) | Net proceeds |
|---|---|---|---|
| $380,000 | $19,000 | $7,600 | $103,400 |
| $400,000 | $20,000 | $8,000 | $122,000 |
| $420,000 | $21,000 | $8,400 | $140,600 |
With costs at 7% of the price, each extra $10,000 in price adds $9,300 to your proceeds.
The payoff is a fixed dollar amount, so it does not shrink when the price does. That is why a 5% lower price of $380,000 cuts the proceeds by about 15%, from $122,000 to $103,400.
Proceeds at different commission rates
On the $400,000 sale, a 4% commission leaves $126,000, 5% leaves $122,000 and 6% leaves $118,000. Each point of commission is $4,000.
With a repair credit
If the buyer’s inspection leads you to give a $5,000 credit, the example falls from $122,000 to $117,000.
What changes the result
- Sale price. It is the starting point, and most costs are a percentage of it.
- Mortgage payoff. Every dollar you still owe comes straight off the result. A second mortgage or home equity line is paid off at closing too.
- Commission. Usually the largest selling cost. Rates are negotiable and not set by law.
- Repairs and credits. These are agreed during the sale, so leave room for them.
Common mistakes
- Using the list price. Work from the price you expect buyers to pay.
- Using your loan balance in place of the payoff, which includes interest up to the payoff date.
- Leaving out a home equity loan or line of credit that is secured by the home.
- Forgetting transfer tax and prorated property tax where they apply.
- Treating proceeds as profit. Tax is worked out on your gain, which is a different number.
Related calculators
Work out the agent fees in the real estate commission calculator and the tax on the deed in the transfer tax calculator. If the proceeds are going into your next home, the down payment calculator shows how far they go.
Frequently asked questions
What do sellers pay at closing?
Agent commission, title and escrow fees, transfer tax where it applies, and prorated property tax.
Is the mortgage payoff the same as my balance?
It is slightly higher because it includes interest up to the payoff date.
Will I owe tax on the proceeds?
Tax is based on your gain, not your proceeds. See the capital gains calculator.
Can net proceeds be negative?
Yes. If the payoff and selling costs add up to more than the sale price, the result is below zero and you would need to bring money to closing.
Do seller credits reduce my proceeds?
Yes. A credit to the buyer comes out of your side of the sale, dollar for dollar. A $5,000 credit lowers your proceeds by $5,000.
How do I get my payoff amount?
Ask your loan servicer for a payoff statement. It gives the amount needed to close the loan on a set date.
Are proceeds the same as equity?
No. Equity is the home’s value minus what you owe. Proceeds are lower because commission and closing costs come out as well.