Sellers don't really care about the sale price. They care about what's left. A seller net sheet turns "we can list at $600,000" into "here's about what you'll walk away with." It's the most useful page in a listing presentation and the most useful page when offers come in. Here's how I build one and explain it.
The short answer
Net proceeds equal the sale price minus the mortgage payoff and other liens, minus seller closing costs, minus concessions or credits, plus or minus prorations. Build it as a range, not a single number, and update it with every offer. Use the lender's payoff, not the balance on the statement, and get the title company's fee estimates when you can.
Step by step
- Get the payoff. The balance online isn't the payoff. Payoffs include interest through the closing date and any fees. Ask the seller to request a payoff estimate or use an authorization so title can order it later.
- List other liens. Second mortgages, HELOCs, solar loans or leases tied to the property, judgments, unpaid HOA balances.
- Estimate seller costs. Brokerage compensation as agreed, title insurance (if the seller is paying the owner's policy), closing fees, HOA transfer and status letter fees, recording, and any agreed repairs.
- Add concessions. Credits to the buyer for closing costs or rate buydowns come off the top. See seller concessions.
- Add prorations. In Colorado, property taxes are paid in arrears, so sellers usually credit buyers for their share of the current year. HOA dues prorate too.
- Show scenarios. List price, a little below list, with a credit, and with a price cut. Sellers see how each choice changes net.
- Update with every offer. Put each offer on its own net sheet. See handling multiple offers.
- Remind them about moving costs. Moving, storage and next-home costs aren't on the closing statement but are real.
A worked example (illustration only)
| Item | At list | With $10,000 credit |
|---|---|---|
| Sale price | $600,000 | $600,000 |
| Mortgage payoff | -$310,000 | -$310,000 |
| Seller closing costs (estimate) | -$24,000 | -$24,000 |
| Buyer credit | $0 | -$10,000 |
| Tax proration (estimate) | -$2,500 | -$2,500 |
| Estimated net | $263,500 | $253,500 |
Illustration only. Numbers are made up. Real costs depend on the agreements, the title company and the payoff. Compensation is negotiable and set by agreement.
How to explain it to your client
"This page shows what you'd walk away with. We start with the price, take out your loan payoff, your closing costs, and anything we give the buyer, and add or subtract the tax adjustment. I put three versions side by side: full price, with a credit, and with a small price cut, so you can see what each choice really costs you. When offers come in, I'll redo this for every one."
Watch-outs
- Payoff vs balance. Using the statement balance overstates net.
- Don't forget the second lien. HELOCs and solar agreements surprise sellers at closing.
- Show a range. Estimates change. Say so.
- No guarantees. It's an estimate, not a promise.
- Underwater sellers. If the net is negative, the conversation changes. See short sale basics.
Further reading
- Equity, net proceeds and cash for your next move on kennarealestate.com
- Seller concession worksheet on kennarealestate.com
This is training for real estate agents. It isn't legal, tax or lending advice. Check with your managing broker.
Questions
What's the difference between equity and net proceeds?
Equity is value minus debt. Net proceeds also subtract selling costs and credits.
Why is the payoff higher than my balance?
Payoffs include interest through closing and any fees.
Who prepares the final numbers?
The title company prepares the closing statement.
Should I show net at different prices?
Yes. Scenarios help sellers make decisions.
When should I first show a net sheet?
At the listing appointment, next to your pricing report. Sellers decide on price better when they see what each price nets them.
What if the seller has a solar lease or loan?
Find out early. Some must be paid off or transferred to the buyer, and either path can change net and timing. Get the agreement and call the provider.
Do prorations really matter?
Yes. Taxes and HOA dues can change net by thousands.
Brian Lee Burke is the founder of PadLeaders, a Colorado real estate broker licensed since 2003, team leader of The Kenna Group at Keller Williams DTC (formerly Kenna Real Estate Group) and the author of Mastering Real Estate and The Real Estate Playbook. More about Brian.