Net Proceeds Formula

The formula is straightforward: Start with the sale price. Subtract your mortgage payoff (including first mortgage and any second mortgage or HELOC). Subtract agent commissions (typically 5-6% of sale price, split between buyer and seller agents). Subtract seller closing costs (1-3% of sale price for title insurance, taxes, HOA fees). Subtract any credits you give the buyer (repairs, closing cost assistance, home warranty). The result is your net proceeds.

The meaning: the formula is subtraction, plain and simple, and the money you walk away with is what is left after every line is paid.

The money consequence: because the deductions total eight to ten percent of the price, the net is smaller than most sellers expect, which is exactly why the net sheet comes before the champagne.

Line-Item Breakdown

The major deductions include: mortgage payoff (your remaining principal balance plus accrued interest), listing agent commission (2.5-3%), buyer agent commission (2.5-3%), owner's title insurance ($1,800-$2,200), prorated property taxes (your share of the year's taxes), recording fees (Texas has no transfer tax or document stamps), any HOA transfer or estoppel fees, and repair credits or concessions negotiated in the contract.

The meaning: each line is a real cost with a number, and the payoff plus the commissions are the two that dominate.

The money consequence: the payoff quote should include every mortgage on the property, because the second loan or HELOC is the line that surprises sellers who only think about the first.

Example Calculation: $300K Home

Here is a realistic example: Sale price $300,000. Mortgage payoff: $200,000. Agent commissions at 6%: $18,000. Seller closing costs: $6,000 (title insurance, taxes, fees). Buyer repair credits: $3,000. Net proceeds: $300,000 - $200,000 - $18,000 - $6,000 - $3,000 = $73,000. This is the amount you would receive at closing, subject to any additional adjustments.

The money consequence: on the $300K example, every tenth of a point on the rate side or every credit dollar shows up directly in the $73,000, which is why the negotiation and the listing price both matter to the net.

The real-world play: run this math before you set the listing price, because the net you need determines the price you ask.

What Changes Your Net Proceeds

The list price is only the starting point. The offer price, the concessions you agree to, the repair credits, the closing date for proration, and your payoff balance all move the final number. A slightly lower offer with zero concessions can net more than a higher offer with heavy credits, which is why the comparison belongs on the net sheet, not the list price.

The real-world play: when two offers arrive, ask for the net sheet on both, Patriot Nation, because the offer that looks bigger on paper is not always the one that puts more in your pocket, and that is the number that decides. Make it a great one.