1. What is Home Sale Proceeds?

The net proceeds from selling your home represent the actual amount you'll receive after accounting for all sale-related expenses. It's calculated by subtracting closing costs and any outstanding mortgage balance from the sale price of the property.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Sale Price — The agreed-upon price for which your home is sold
• Closing Costs — Fees associated with the sale (typically 1-3% of sale price)
• Mortgage Payoff — Remaining balance on your mortgage plus any prepayment penalties

Explanation: This calculation gives you the actual cash you'll walk away with after selling your home.

3. Importance of Calculating Proceeds

Details: Knowing your net proceeds helps in financial planning for your next home purchase, estimating tax obligations, and understanding your true profit from the sale.

4. Using the Calculator

Tips: Enter the sale price of your home, estimated closing costs (ask your realtor for typical percentages), and your current mortgage payoff amount (available from your lender). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's included in closing costs?
A: Typically includes realtor commissions (5-6%), title insurance, transfer taxes, attorney fees, and prorated property taxes.

Q2: How accurate is this calculator?
A: It provides a basic estimate. For precise figures, consult with your realtor and lender as costs vary by location and situation.

Q3: Are there taxes on home sale proceeds?
A: You may owe capital gains tax if profit exceeds $250,000 (single) or $500,000 (married). Primary residences typically qualify for this exclusion.

Q4: What if my proceeds are negative?
A: This means you owe money at closing, which can happen if your mortgage balance exceeds the sale price minus costs.

Q5: How can I increase my net proceeds?
A: Negotiate a higher sale price, reduce closing costs (e.g., FSBO to avoid realtor fees), or pay down your mortgage before selling.