How Much Money Do You Keep After Selling Your Home?

How much money do you keep when selling your home? If you look online, many personal finance websites will say that, aside from paying your mortgage, the common cost to sell a home is about 10% of your home sale price. Here’s a simple formula to give you a ballpark estimate of your profit after selling your home:

Profit = Selling Price - Outstanding Loan - Closing Cost (10% of the selling price)

However, if you want something more accurate than that, let me quickly walk you through the three main expenses and show you how to get a proper estimate.

1. Mortgage payment. Look at your monthly statement for your mortgage payment. It should show you what you still owe on the loan. If it doesn’t, call the number on the statement and ask them how much money you would need to pay off the loan. Below is an example computation:

For example, if your home sells for $300,000 and your mortgage loan balance is $200,000, you would be left with $100,000 before accounting for other costs.

2. Closing costs. Your closing costs usually include property taxes, administrative fees, title fees, attorney fees, transfer taxes, and more. They typically range from 2% to 5% of the sales price.

Continuing our sample computation above, let’s assume a 2% deduction from the $300,000 selling price. This will give you $6,000 to $15,000 in closing costs.

Every situation has to be evaluated differently, and the exact amount of your closing cost will depend on your property. The best thing to do if you want to have a clear idea of what your house is worth is to let me give you a free home estimate. Then, I can prepare a free seller’s net unique to your property so that you can see the breakdown of the expenses.

If you want to reduce these fees, you need to increase the amount of money you’ll get to keep in the end by hiring an agent who is an expert in marketing and negotiating to secure the biggest sales price possible.

3. Real estate agent commissions. Commissions are completely negotiable. Keep in mind, though, that it’s usually the sellers who get sued. That’s why it’s important to have an agent on your side who offers professional contracting, negotiation, and marketing. Also, make sure that your agent knows how to handle errors and omissions insurance in case they make a mistake that can take the liability off of you in good faith.

You get what you pay for.

Research shows that you will get over 6% more for your house when you work with a professional real estate agent. I’ve seen a lot of people trying to sell their house on their own, but at the end of the day, they almost always resort to hiring an agent.

That’s why I don’t mind taking calls to help people prepare to sell their houses on their own—any questions you have or any advice you need—that’s fine. I’m hoping that they will remember me when they decide to bring in an agent, like most people do.

These are some of the things that usually happen when you decide to sell your home without a professional Realtor:

You get call after call of lowball offers. Then you do open houses, where you get swarmed with nothing but real estate agents trying to convince you to hire them to sell your house. You get nosy neighbors or buyers who are not even close to being ready to make an offer.

All of those are a waste of your time.

It’s even worse when sellers accept an offer from a buyer who never stood a chance at getting a loan through. The catch is that the seller doesn’t find out until they’ve been taken for a ride for 30 to 45 days.

And now they’re back to square one.

So, why not invest in an experienced real estate agent who can be your partner, understand the market, and help you connect with the right buyer? Not to mention all the other perks that come with hiring representation.

Bonus tip:

Capital gains tax. When you sell your home, you may have to pay capital gains tax on the profit you make. However, if you lived in your home for two of the last four years, you will probably qualify for a capital gains tax exemption—meaning you won’t have to pay any capital gains tax on the sale of your home.

For example, if you bought your home for $280,000 and sold it for $300,000, your profit would be $20,000. If you qualify for the capital gains tax exemption, you can keep the $20,000 tax-free, which is great because it’s a large sum of money.

Selling your home is not just a financial transaction. It is a bittersweet farewell to a place that has held your dreams and memories. Understanding the costs will help you be more confident while selling your home.

If you have an agent, you can be as hands-off as you want. As you look ahead, just remember that working with a trusted real estate agent can make all the difference. I just can’t say it enough.

By embracing this process with an open heart and a clear plan, you can achieve the best possible outcome and move forward into your next chapter, ready for all the new adventures that await.

If you have any questions about how much money you get to keep when you sell your home, or if you’d like a free home estimate or a free seller’s net sheet—a breakdown of everything that you would pay when selling your home—reach out to me either through HowToAffordHomes.com or call me at (502) 338-2861.

Lastly, here’s the link to Dave Ramsey’s video about the risks of For Sale By Owner.