Net Proceeds Calculator Formula

Understand the math behind the net proceeds calculator. Each variable explained with a worked example.

Use the Net Proceeds Calculator

Formulas Used

Net Proceeds

net_proceeds = sale_price - mortgage_balance - total_costs

Total Selling Costs

total_selling_costs = total_costs

Real Estate Commission

commission_amount = commission

Transfer Tax

transfer_tax_amount = transfer_tax

Selling Costs as % of Sale

costs_as_pct = total_costs / sale_price * 100

Equity Before Selling Costs

equity_before_costs = sale_price - mortgage_balance

Variables

VariableDescriptionDefault
sale_priceExpected Sale Price(USD)500000
mortgage_balanceRemaining Mortgage Balance(USD)300000
commission_pctReal Estate Commission(%)5
transfer_tax_pctTransfer Tax / Deed Stamps(%)0.5
title_and_escrowTitle & Escrow Fees(USD)2500
repair_concessionsRepairs / Seller Concessions(USD)5000
other_costsOther Costs (HOA prorations, etc.)(USD)1000
commissionDerived value= sale_price * commission_pct / 100calculated
transfer_taxDerived value= sale_price * transfer_tax_pct / 100calculated
total_costsDerived value= commission + transfer_tax + title_and_escrow + repair_concessions + other_costscalculated

How It Works

Calculating Net Proceeds

Net proceeds represent the actual cash you walk away with after selling your home. Understanding this number is critical for planning your next purchase or investment.

Formula

Net Proceeds = Sale Price - Mortgage Payoff - All Selling Costs

Common Selling Costs

  • Agent commission: 4-6% of sale price
  • Transfer tax: Varies by state (0-3%)
  • Title and escrow: $1,500-$4,000
  • Repairs and concessions: Negotiated during inspection
  • HOA prorations: Prepaid dues credited to buyer
  • Attorney fees: Required in some states ($500-$1,500)

    • What Reduces Your Proceeds

    Selling costs typically total 7-10% of the sale price. On a $500,000 sale, expect $35,000-$50,000 in costs before receiving your check.

    Worked Example

    Selling for $500,000 with $300,000 mortgage, 5% commission, 0.5% transfer tax, $2,500 title fees, $5,000 repairs, $1,000 other costs.

    sale_price = 500000mortgage_balance = 300000commission_pct = 5transfer_tax_pct = 0.5title_and_escrow = 2500repair_concessions = 5000other_costs = 1000
    1. 01Commission: $500,000 x 5% = $25,000
    2. 02Transfer tax: $500,000 x 0.5% = $2,500
    3. 03Title & escrow: $2,500
    4. 04Repairs & concessions: $5,000
    5. 05Other costs: $1,000
    6. 06Total selling costs: $25,000 + $2,500 + $2,500 + $5,000 + $1,000 = $36,000
    7. 07Net proceeds: $500,000 - $300,000 - $36,000 = $164,000
    8. 08Selling costs as % of sale: 7.2%

    Frequently Asked Questions

    What is the biggest selling cost?

    Real estate agent commissions are typically the largest selling cost, accounting for 4-6% of the sale price. On a $500,000 home, that is $20,000-$30,000. This is why some sellers explore FSBO or discount brokerage options.

    Are selling costs tax deductible?

    Selling costs are not directly deductible on your tax return, but they reduce your net sale price for capital gains calculations. This means commission, transfer taxes, and other selling costs lower your taxable gain.

    When do I receive my net proceeds?

    In most transactions, sellers receive their proceeds 1-3 business days after closing via wire transfer. Some closings provide a check at the closing table. The exact timing depends on your state and whether the buyer is using a mortgage.

    Ready to run the numbers?

    Open Net Proceeds Calculator