Question 1

What costs reduce your profit when selling a home?

Accepted Answer

The main costs that reduce your net proceeds include real estate agent commissions (typically 5-6% of the sale price), closing costs (1-3%), transfer taxes, title insurance, any outstanding mortgage balance, and seller concessions. Additional costs may include home repairs, staging, cleaning, and moving expenses. For investment properties, you may also owe capital gains taxes on the profit.

Question 2

How do you calculate net proceeds from a home sale?

Accepted Answer

Net proceeds equal the sale price minus all selling costs and the remaining mortgage balance. Start with the agreed sale price, then subtract agent commissions, closing fees, transfer taxes, title insurance, any seller concessions, and your outstanding mortgage payoff amount. The result is the cash you walk away with at closing. For accurate planning, also account for prorated property taxes and any prepayment penalties on your mortgage.

Question 3

What is a typical real estate agent commission?

Accepted Answer

Real estate agent commissions in the US typically total 5-6% of the sale price, historically split between the listing agent and buyer's agent. After the 2024 NAR settlement, commission structures are changing — sellers now negotiate the listing agent fee separately, and buyer's agents negotiate their own compensation with buyers. Commissions are negotiable and may vary by market, property price, and the services provided.

Question 4

How do selling concessions work in a home sale?

Accepted Answer

Selling concessions are costs the seller agrees to pay on behalf of the buyer, typically covering a portion of the buyer's closing costs. Common concessions range from 1-3% of the sale price and may include contributions toward loan origination fees, appraisal costs, or prepaid items like taxes and insurance. Offering concessions can make your listing more attractive to buyers, especially in a buyer's market, but they directly reduce your net proceeds.

Home Sale Proceeds Calculator

FAQ