Headline price and net proceeds
The headline price is the number written as the purchase price. Your net proceeds are what reach you after closing.
Several items can come out of the price before you are paid. Knowing them helps you see the full picture of any sale.
The headline price matters, but it is only part of the picture. Two offers with the same price can leave you with different amounts.
Your loan payoff is usually the largest deduction. Your lender can give you a payoff statement with the exact figure as of a certain date.
- Your remaining mortgage balance and any other liens
- Agent commissions, if an agent is involved
- Closing costs the seller agrees to pay
- Property taxes or HOA dues owed up to the closing date
Commissions
When you sell directly to a local investor, there is often no listing agent involved. In that case, there may be no listing commission to pay.
If you do work with an agent, their fee is set by your agreement with them. Ask how it applies before you sign anything.
Commission terms are something you agree to, not a fixed rule. Understanding them helps you compare paths on equal footing.
If you have a listing agreement in place, check its terms before you accept another offer. Your agent can explain how it applies.
Who pays which closing costs
Closing costs can include title fees, escrow or settlement fees, recording fees and transfer taxes. Who pays each one is spelled out in the purchase agreement.
Local customs differ by state and county. Some investors offer to cover certain costs. Read the agreement closely so you know which costs are yours.
Transfer taxes are set by state or local law, and the rate and who pays can vary. The closing company can explain what applies where you live.
Prorated items are another common line. Property taxes and HOA dues are often split so each side pays for its share of the year.
- Ask for a list of the costs you will pay
- Ask the title or escrow company for an estimated settlement statement before closing
- Ask a real estate attorney if anything is unclear
Often no showings or repairs
A cash sale to a local investor usually skips open houses, showings and staging. Many sellers value the privacy and the time saved.
Many investors also buy the house as it is. That means you may not need to spend money on repairs or cleaning before you sell.
Skipping showings also means fewer interruptions to your daily life. You usually do not need to leave the house for buyer tours or keep it ready at all times.
Every dollar you do not spend on repairs or preparation stays part of your overall picture. That is one reason many sellers look closely at the net.
Comparing offers on a net basis
When you look at more than one option, compare the amount you keep, not only the price. Also weigh the timeline and how much work each option asks of you.
A clear net figure from the closing company is the best way to see what you will receive. This is general information, not legal or tax advice.
Ask each buyer which costs they plan to cover. Clear answers make it easier to line up options side by side.
A simple way to think about it
Start with the purchase price. Subtract your loan payoff, any liens and the costs you agree to pay. What remains is your estimated net.
Your closing company will give you the final figures on the settlement statement. Review it before closing and ask about any line you do not recognize.
General information, not legal or tax advice.