If you’re in the business of selling your house, you already know how many expenses you have to pay before you sell. It’s like the old saying, you have to spend money to make money, right?
But at the end of the day, when you have sold your house, there is a payout involved. That means more money in your pocket.
When most people think about their home sales, they only think about the market price and how much the house ultimately sold for. Unfortunately, it’s a bit more complicated than just that.
So how do you calculate all of these home sales? Well, friend, let’s get into the specifics.
What Do I Need to Calculate?
Before you calculate, you need to know what it is that you’re going to be calculating.
What we’re focusing on for today is what home sales we’re actually going to be needing to calculate to know how much we’re walking away from the deal with.
That number is called your net house sale proceeds.
What Are My Net House Sale Proceeds?
So what exactly are your net house sale proceeds?
This ending proceeds number is what money you come out of the deal with, ultimately. It’s the pure profit that you’re actually making, minus all of the other expenses that you put into getting your house ready for market and any other house-related expenses.
How to Calculate Those Sales
So how exactly do you calculate what that final home sale number is going to look like?
There are a few different things to keep in mind, so let’s take a look at what you need to take into consideration.
What Expenses to Subtract
What you will ultimately need to do is figure out the expenses that you need to subtract. There are quite a few of these sale-related expenses, some of which you may not even think about when you’re calculating.
Start With Market Value
Before you start all of that subtracting, you need to know what you’re subtracting from. This starting number is always going to be the market price of your house.
This number is approximately how much your house was listed for. Once you have that number prepared, get ready to see it get smaller.
Factor In the Cost of Any Repairs
The first thing you need to subtract is any money that you spent repairing or upgrading your house. This means any paint you bought, new light fixtures, appliances, and deep cleaning service.
If You Used a Real Estate Agent, Subtract Realtor Commissions
If you enlisted the help of a real estate agent to sell your home, they are going to get paid a 5% or 6% commission on your final sale price. This number is going to be subtracted as well since they have to get paid.
Consider Any Holding Costs
While your house is on the market, you will need to continue paying bills on it. These include electricity, rent, water, trash, etc, and all need to be subtracted to get to that final house sale number.
Don’t Forget About Closing Costs
Lastly, you will need to pay around 2% of the cost of your house to close it and hand over ownership.
Use a Calculator
If that all sounds like a lot to calculate by hand, you can easily find a home sale calculator online. Then all you have to do is plug in the numbers and let it do the work.
Your Home Sale May Not Be As Large As You Thought
With all of the services and expenses associated with selling your house add up, your final home sale might be smaller than you thought.