Understanding What You'll Actually Keep: Breaking Down Your Net Proceeds From a Home Sale

When you sell your home, that sale price isn’t what ends up in your bank account. Between the mortgage payoff, realtor fees, and various closing expenses, your actual net proceeds—the money left after all deductions—can be significantly less than the figure on the purchase agreement. Knowing how to properly account for these costs is essential before you list your property.

The Real Cost Breakdown of Selling

The journey from listing to closing involves numerous financial obligations. According to financial experts, the primary cost categories include your outstanding mortgage balance, realtor commissions, pre-sale property repairs, settlement fees, and staging or preparation expenses.

Your Outstanding Loan Balance

Most homeowners carry a mortgage. Before you can pocket any proceeds, your lender must be paid in full. The remaining balance—not your monthly payment, but the total amount still owed—comes directly from your sale proceeds. Contact your mortgage servicer for the exact payoff figure, as this amount typically decreases monthly with your payments.

Realtor Commissions and Agent Fees

Real estate agents typically receive a percentage-based commission from the sale price. This percentage varies by region and market conditions, and it’s negotiable. Understanding the specific percentage you’ve agreed to upfront prevents surprises at the closing table. This is often one of the largest single expenses in a home sale.

Repairs and Property Preparation

Your home may require fixes to be market-ready—replacing damaged fixtures, addressing inspection findings, or making cosmetic improvements. Additionally, if the buyer requests repairs as a condition of sale, you may cover those costs. Staging, landscaping improvements, fresh paint, or professional cleaning all fall into this category.

Settlement and Closing Expenses

These administrative costs complete the transaction. They may include loan origination fees, credit inquiries, property appraisals, title insurance, recording fees, and property tax adjustments. Your lender and local regulations determine which fees apply. While buyers sometimes cover certain closing costs, others may shift to your side of the settlement statement depending on your negotiated terms.

Additional Preparation Costs

Beyond the major categories, consider moving expenses, storage fees for decluttering, or any other costs directly tied to the sale process.

Calculating What You’ll Actually Receive

Once you’ve identified and quantified each expense, the calculation is straightforward:

Sale Price – Mortgage Payoff – Agent Commission – Property Repairs – Closing Costs – Other Expenses = Your Net Proceeds

For example, if your home sells for $400,000 with a $250,000 mortgage remaining, 6% agent commission ($24,000), $8,000 in repairs, $5,000 in closing costs, and $3,000 in other expenses, your net proceeds would be approximately $110,000.

Why This Matters for Your Pricing Strategy

Understanding your net proceeds influences your asking price. If your net proceeds fall short of your financial goals, you may need to either adjust your price upward, negotiate lower commissions, or reduce preparation expenses. Conversely, if your calculations show healthy proceeds, you have flexibility in your negotiations.

Before you commit to selling, use these categories to build a realistic financial picture. This approach ensures you’re not surprised by the final settlement amount and helps you make informed decisions about your home sale from start to finish.