When homeowners start thinking about selling, the first thing most of them ask is what the house is worth. What they usually mean, though, is how much money they will have in hand once the sale closes. Those are two very different numbers.

Online value tools can give you a rough idea of where to start, and a comparative market analysis is useful for pricing. Neither one tells you what you will actually net. For that, it helps to ask your agent for a closer look at your home’s cash value rather than just its market value. That figure depends on things like your list price and how much you still owe on your mortgage. When I prepare this kind of estimate, I look at what is happening in the current market, your remaining loan balance and the taxes involved so you get a much clearer picture of your likely proceeds.

Don’t Forget Closing Costs

Closing costs are the piece most sellers leave out of their math. They generally run somewhere around 6% to 10% of the sale price. Here is what typically falls into that category:

  • Commission: the fee paid to your real estate agent.
  • Transfer taxes: taxes owed when ownership of the property passes to the buyer.
  • Loan payoff: the amount required to pay off your existing mortgage in full.
  • Title insurance: the cost of a homeowner’s policy, which stays in place until the loan is paid off or refinanced.
  • Attorney fees: the cost of legal representation during the transaction, including advice and help sorting out any issues that come up.

Weighing Improvements Before You List

Putting money into your home before it goes on the market can increase what it sells for. At the same time, whatever you spend comes out of what you ultimately take home. Projects that can add value include refreshing the kitchen or bathrooms, a fresh coat of paint and installing a new AC system. Keep in mind that online value estimates will not reflect upgrades like these, which is one more reason to look at the real numbers with an agent.

Seeing the Whole Picture

Plenty of factors influence how much profit a sale produces, and your home’s estimated value is only one of them. Before you make a decision this significant, it is worth understanding the numbers that apply to your own situation. If you would like help working out what you could realistically walk away with, or a complimentary home value estimate to get started, reach out and I would be glad to run the numbers with you.