It’s fairly common, especially for first-time home sellers, to finalize the purchase of their home, receive their money, and then ask, “but where’s the rest of it?”
That’s because, if you sell your home for, say, $300,000, you end up receiving significantly less than that in actual cash. Selling a home costs money; there are dozens of associated fees that come with a home sale, some of which are percentage-based, and some of which are flat fees. In general, sellers owe closing costs equivalent to 8-10% of the final sale price. So when you agree to a final sale price, it’s hard to know, off the top of your head, how much money you’ll actually receive.
That’s what a seller’s net sheet is for. A properly filled out and formatted seller’s net sheet will tell you exactly how much money you’ll make from your home sale. Read on to find out what a seller’s net sheet is, a definition for the most common terms on a seller’s net sheet, who provides the seller’s net sheet, and more.
We’ll even provide a usable seller’s net sheet template that you can use to project how much money you might clear from your home sale. But first— some definitions.
Skip ahead to the following sections of this article:
- What is a seller’s net sheet?
- Do you need a seller’s net sheet?
- Who creates the seller’s net sheet?
- When will you receive the seller’s net sheet?
- Seller net sheet terms to know
- How to sellers can save on expenses
What Is a Seller’s Net Sheet?
A seller’s net sheet is a spreadsheet that itemizes all the fees and expenses in your transaction, to give you a pretty accurate estimate of what you’ll net in the sale.
Experts say that sellers can expect to pay up to 10% in closing and transaction costs; for a $300,000 home, that’s a whopping $30,000. A seller’s net sheet will show you exactly where all that money is going and, depending how creative and motivated you are, potentially point to ways you can shave hundreds or thousands of dollars off those costs.
Pro tip: We’ll show you how to save thousands on real estate commission (the biggest expense) at the end of this article.
Do You Need a Seller’s Net Sheet?
The law doesn’t require you or your agent to fill out a seller’s net sheet. But it’s almost always a good idea to use one. Think of a seller’s net sheet as a financial road map to your real estate transaction. You’re going to have tens or hundreds of thousands of dollars going in and out the door, into your account, and to various other people and entities; it’s in your best interests to have an idea of where everything is going.
Experts say that a seller’s net sheet is especially important if the amount you still owe on your home is close to the sale price. A seller’s net sheet can show you exactly how much margin for error you have before the transaction starts taking money out of your pocket.
The bottom line is this: unless you’re an extremely experienced home seller, the closing process, and its associated costs, can be puzzling and, when you see the final number, deflating.
A seller’s net sheet helps you stay on top of the process so you don’t end up disappointed or shocked. In real estate, as in many other things, knowledge is power.
Who Creates the Seller’s Net Sheet?
Typically, the seller’s net sheet is prepared by the seller’s real estate agent. But again, they’re not legally required to supply you with one, and it’s been reported that some agents are reluctant to present their client’s with a seller’s net sheet.
The implication is that these agents are worried that when the seller sees how much money they’re paying out just to sell their home, they’ll either seek out a different agent (who’ll work for lower commission), or decide to sell as a For Sale By Owner (FSBO) listing.
But the many agents will fill out a seller’s net sheet for their clients, either upon request or, in the interests of full transparency, proactively. If your agent refuses to give you a seller’s net sheet, you’d be within your rights to find a different agent.
Alternatively, a seller’s net sheet can be supplied by the title company. The title company has a comprehensive, inside view of the transaction, and is a truly neutral third party, so they’re ideally positioned to fill out the seller’s net sheet. Some agents even prefer that the net sheet comes from the title company, so that any disappointment as the net figure is deflected away from the agent.
When Will You Receive the Seller’s Net Sheet?
There are multiple points in the selling process where a seller’s net sheet can provide valuable insight.
The first opportunity is when the seller sets a list price. The seller’s net sheet can set realistic expectations right off the bat by showing exactly how much they can expect to pocket if the home sells for the list price.
The next time you’ll want to fill out some seller’s net sheets is when buyer offers start coming in. A quick net sheet can show how much the seller could potentially pocket for each individual offer.
And finally, it’s a good idea to do one final seller’s net sheet just before closing. The agents may have negotiated various discounts and contingencies that could significantly impact the bottom line, so it’s smart to take stock one last time before the sale is finalized.
This also brings us to one of the actionable benefits of doing a seller’s net sheet. Once you have an itemized list of all the expenses associated with your sale, you can start negotiating some of those fees down. But before we get into how you can use a seller’s net sheet to save hundreds or even thousands of dollars on your home sale, let’s go over some of the most common terms you’ll find on a typical seller’s net sheet.
Defining Each Term on the Seller’s Net Sheet
Sale price: This is the final, agreed-upon sale price of the property.
Agent commission percentage: This is the percentage you’ve agreed to pay in commission. Generally, it’ll be 3% to the buyer’s agent, and up to 3% for your listing agent, depending on what you negotiated.
Agent commission amount: This converts that percentage into a specific dollar figure. With certain brokerages, you’ll only pay a flat fee, rather than a percentage.
Owner’s title insurance: The title company tries to clear the title of any claims before closing but, occasionally, a claim will surface down the line. The owner’s title insurance protects the owner against any of these potential claims.
Title search: This is the fee for the service that clears any liens, debts, or claims from the title of the home, and that things like property boundaries have been recorded accurately.
Taxes (prorated): The seller has to pay a prorated amount of property taxes for the year up until the day the property changes over.
Attorney’s fees: While Florida doesn’t require a real estate attorney to be involved in a real estate transaction, they can still help, especially if you’re executing an unusual deal.
Documentary stamps tax on deed: This is a tax that’s basically a transfer tax; it’s assessed at $0.70 for every $100.
Recording/satisfaction fee: A small fee for officially clearing the title, via the County Recorder or Recorder of Deeds.
Home warranty: This is the cost of the warranty that covers a home’s appliances and systems.
HOA or CDD prorated fees: This is for any homeowner’s association fees you might be responsible for.
Repair contingency: This is the amount of money (if any) your agent’s negotiated to allow the buyer for repairs.
First mortgage payoff: This is where you record the settling of any outstanding mortgage balance you might have.
Breaking Down an Example Seller Net Sheet
Users can substitute their own values to create their own custom seller net sheet calculator.
How to Save On Expenses
Not all of the expenses on a seller’s net sheet are negotiable. For example, you can’t haggle with the county about how much property tax you’re willing to pay, or the recording fee. But there are a number of large expenses that can be reduced— if you know where to look.
Comparison shopping between lenders can provide serious savings. But to get an accurate sense of how much each lender is going to charge you, you need to acquire a Loan Estimate form from each one. Lenders are legally required to provide you with this form within three business days of receiving your mortgage application, although some lenders will proactively provide one before you even apply for financing.
The three-page Loan Estimate form provides a detailed, itemized list of costs, typically including your interest rate, your estimated monthly payment, closing costs, taxes, insurance, and any future changes to the terms of your loan. It’s essentially a summary of the prospective mortgage, and since lenders are required to use the same standardized form, it’s the easiest way to do a side-by-side comparison between lenders.
Real estate commission is almost always going to be one of the biggest single expenses associated with your home sale. If the average closing costs are around 10%, the typical 6% commission is over half of that.
But agent commission is one of the most negotiable expenses you’ll pay. If your home is priced toward the upper end of the market, or if it sold quickly, many listing agents will be open to accepting less commission– either because it took less time and effort on their part to sell the home, or because 1-2% of a $1,000,000 home is just as good or better than 3% of a home that sells for a third of that.
Keep in mind that closing is not the time to renegotiate your agent’s commission; they’ve already put in the time and work, and it’s slightly unethical to try to reduce their payment at the tail end of the process. Ideally, you’ll want to renegotiate your agent’s commission at the beginning of the sale, before you’ve signed your contract agreement.
Important note: If your agent won’t budget on price, consider reaching out to Clever Real Estate to learn more about their 1% or $3,000 flat fee model.
Title insurance protects the homeowner in case the title search missed obligations like tax liens, fraud issues, or other financial obligations. But like car, homeowner, or dental insurance, rates vary between providers; if you’re looking to cut costs, shopping around for title insurance can net you a big discount.
Negotiate Everything Else
All the smaller associated fees— everything from inspections to pest treatments— can be negotiated between the buyer and seller. A home sale is one big negotiation that contains dozens of smaller negotiations, and all of them are fair game.
Of course, cutting costs and bargaining on each and every component of your transaction costs is going to be a lot easier if you’re working with an experienced, savvy agent. A great agent knows where all the money is going, has insight into the willingness of the other side to compromise, and is able to stake out a firm position at the negotiating table.
Real Estate Witch has partnered with Clever Real Estate to help our readers get access to elite, local agents who can help them achieve their real estate goals. Sellers who work with Clever get a full-service selling experience for a low, flat fee of $3,000, or 1% if their home sells for more than $350,000— and because they’re seasoned agents with proven track records, they’ll be able to negotiate down your transaction costs to the bare minimum. Contact Clever today for a free, no-obligation consultation!