How to Determine Net Proceeds From Real Estate

You finally got a contract on your house and are wondering how much your proceeds check for the real estate will be at the closing. It's fairly simple math, just be sure and include everything. You have the right to review the HUD 1 settlement statement 24 hours prior to closing and it is always a good idea to do so.

Instructions

Difficulty: Easy

1. Determine the expenses charged on the sales contract and add them up. These may include real estate commission, title policy, survey, home service contract, buyer's closing cost and down payment assistance.
2. Calculate the escrow and/or title company fees. These can include a recording fee, courier fee, copies, tax certificate, escrow fee, attorney fee, document preparation fee, transfer tax, pest control, points, home owner association transfer fee, any repair invoices previously unpaid and any IRS tax lien.
3. Figure out your property tax pro-ration. Take your annual property taxes, divide by 365, and then multiply by the number of days that will have elapsed on the day of closing. You can know how many days have elapsed by looking up the closing date at Franklin Covey's website.
4. Get your loan payoff from your lender's 1-800 customer service line. Be sure and include one additional month of interest to the payoff because you will be charged for this since mortgages are paid in arrears.
5. Add up all the totals from above and subtract from the sales price. This will be your net proceeds.