When deciding to put your home up for sale, the biggest question you’ll be asking is: “How much will I make if I sell my house?”
Whether you are just toying with selling your Hampton Roads home or your property is already listed and has received multiple offers, this post will take you through the steps to accurately estimate how much you will make from the sale using our Home Sale Proceeds Calculator.
Click here to download our easy-to-use tool and follow along with the steps in blue.
Step 1: Determine the purchase price
To begin estimating how much you will profit from selling a house, you must first start with an estimated sales price. The most accurate way to predict the purchase price of your home is to have a licensed real estate professional complete a comparative market analysis on your behalf. However, if you are looking for a quick estimate or are not quite ready to talk to an agent, apps like Homesnap can serve as a basic substitute for an analysis of your home’s value.
Or you may already have multiple offers on your home, in which case use a multiple offer seller net sheet (like our home sale proceeds calculator) that allows you to compare the offers side-by-side.
Based on information provided by a comparative market analysis or a buyer’s offer, enter your home’s Estimated Sales Price.
If you have multiple offers or want to compare different potential scenarios, enter them into side-by-side columns to compare potential profits.
Step 2: Calculate the expenses
When selling a house, several additional expenses will affect how much money you will make in the end. Here are some of the most common expenses you may come across when selling your home:
Pre-listing expenses:
Prior to listing, you may consider making some minor improvements to increase the value of your house. It’s important to be strategic with the amount of money you spend on pre-listing expenses.
Renovations: Make sure the increase in added home value from a potential renovation far exceeds the cost. In some cases, it may make more sense to leave that dated bathroom as-is.
Listing photos: Many real estate professionals, like CGP Real Estate, provide professional listing photography to homeowners at no cost. If you are going the for-sale-by-owner route, professional photos can range from $125 for a basic photo package to $500+ for photos, aerial shots, and 3D virtual walk-through tours.
Cleaning/Storage/Other: Decluttering and cleaning your house can have a significant impact on how much your home sells for - and how quickly it will sell. Be sure to budget these items into estimated net calculations.
Contract expenses:
Depending on the type of property you own and the offer you accept, several additional expenses may come out of your bottom line on closing day.
Condo/HOA/POA resale package: If your property is located within a condominium, homeowners, or property owners association, you will be required to provide your future buyer with a resale package. Depending on your association, this package can cost anywhere between $200-500, typically paid at closing.
Inspection costs: If your agreement is contingent on any type of inspections that you said you’d pay for, like a moisture or termite inspection, these costs will affect your bottom line as well. Here's why you might want to get a home inspection before you list your house.
Concessions: It’s possible that the buyers will negotiate some repairs needed on the house - which they may either ask you to complete or request a reduced sales price so they can have them done.
If you’re already deciding between multiple offers, enter the Concessions you know about now. If you haven’t listed yet, it can be helpful to consider any part of your property that a buyer may want to have you update or fix and estimate a cost for that here.
Commissions: How much commission you will owe to real estate professionals helping you sell your home and who will pay that commission will be negotiated prior to listing the house. Commonly, sellers will cover commission costs for both their agent and the buyer’s.
Enter the pre-negotiated fees on the Commissions line of your expenses. If you haven’t chosen a real estate professional to work with yet, a good bet is to estimate paying 4-6% of the purchase price in commissions.
Note: Many expenses like concessions and inspection costs can be difficult to predict without an actual offer in hand. If you want to set an ideal goal for your net profit, feel free to leave these blank.
Prorations and Adjustments:
Depending on how your local taxes and condo dues are paid, you may be due a refund or need to cover a portion of the taxes/condo dues for the remaining time period you own the house. If you have pre-paid your taxes or condo dues, they will be prorated and credited back to you at closing.
Closing costs:
Unless otherwise stated in the Purchase Agreement, the seller pays for their own closing costs and the buyer pays for theirs. Here are a few costs the typical seller will encounter as a part of closing:
Title Search: If you’re selling a house, the buyer’s lender will likely require you to guarantee a free and clear title to the property - showing you fully own the property and have the right to convey the title to someone else. A clean title also means that there are no judgments or liens against the property that a creditor could come after a new owner for. Sellers pay for a title search to confirm their legal ownership and right to sell the property. (In Hampton Roads, a title search typically costs $85-100.)
Settlement Fees: When selling your home, you will work with a closing or settlement company to prepare all the paperwork needed to close the deal. The most common types of settlement companies are title companies and real estate lawyers. (The average costs for these fees in Virginia Beach range from $350-600.)
Transfer Fees and Taxes: County or state deed taxes and other local taxes related to selling a property in your municipality should also be taken into account. These vary by location and property.
Judgments or Liens: If your title search brings up any debts on the property (just as from medical judgments or liens on the property), they must be paid off before the sale goes through or be deducted from how much you will profit from selling your house in order to provide the clean title the buyer’s lender will require.
Debt Payoff and Fees:
If you have a current mortgage or other outstanding debt, calculate what you owe as a debit to your bottom line. Lenders typically also charge a small fee (from about $50-$200) to process the final payoff of a loan.
Step 3: Subtract your total expenses & outstanding debt from the purchase price to get your home sale net profit
When you subtract the estimated expenses plus any debt pay-off from your estimated purchase price, you’ll have a good idea of how much you can expect to make from selling your house. Seasoned homeowners and investors will use a spreadsheet tool (like our Home Sale Proceeds Calculator) that allows them to estimate their net proceeds quickly and efficiently prior to making any decisions.
The Bottom Line
Knowing how much you will make from selling your home doesn’t have to be difficult to calculate. Whether you are an owner or an agent, download our free and easy Home Sale Proceeds Calculator today. Our tool allows you to compare multiple offers or different scenarios side-by-side so that you can make an informed decision when selling your home.
For help navigating the sale of your house, CGP’s licensed broker provides potential Hampton Roads sellers with a free consultation, comparative market analysis, and net proceeds estimate. You can contact us here.