Are you selling your home? Listing one for a potential client? Then you might have come across the seller net sheet.
But, what are these exactly and how do you even read one? Once you’ve deposited money into escrow and gone through the closing process, you will encounter a seller net sheet to help you determine the finances of your deal. This sheet serves to break down the sales proceeds, costs associated with closing on the house and any other additional obligations. The final amount after deducting the closing costs and existing obligations is called the seller’s net proceeds.
So, you or your client has accepted an offer on your home. As you go through the closing process, you are looking to prepare financially after the sale of your home. This is where a seller net sheet comes into play, and why it is so important.
Although a seller net sheet isn’t a legal document that the listing agent or any other party is obliged to supply, you can definitely ask your realtor for one. Any service-oriented realtor representing the seller will always work it out for their client, so they have the right expectations.
Read on to learn more about what you can expect to find on a seller’s net sheet. We’re breaking it down section by section, so you won’t be left scratching your head when this comes around.
Who Prepares a Seller Net Sheet?
Ideally, the listing agent should give the net sheet to the seller. However, some sellers may prepare it themselves as well. In many cases, the title company or attorney may also provide the document as they are a neutral party for both sides.
How to Read a Seller’s Net Sheet
Sellers want to know the final amount they expect to receive after deducting closing costs and existing obligations. This is called net proceeds.
Closing costs and obligations can take a big bite out of net proceeds. Most of the time, the actual proceeds from selling a home are always lower than what the seller expects due to closing costs and existing obligations.
To calculate the seller’s net proceeds, you simply add up all the costs for closing and subtract them from the sales price listed at the top of the sheet.
Costs Listed on a Seller’s Net Sheet
There are about 15 costs associated with closing on a house that you can expect to find on a seller net sheet. These costs may vary depending on the deal. Here’s a breakdown of each!
- Estimated Sales Price: The price at which the seller is hoping to list or sell the house, also known as the listing price.
- Loan Payoff: The mortgage amount the seller is yet to pay to the bank or a pending lien. If you do not have a loan or lien, you can simply put a zero in that space and move on.
- Attorney Fees: The amount paid to the attorney to create the seller’s net sheet, which can range from $200-$500.
- Grantor’s Tax: Also known as a “transfer tax,” a form of tax that sellers pay to the respective county during the transfer of the title. Generally, it varies from 1%-2% of the total sales price of the property.
- Release Fee: Lenders charge sellers a release fee to recover the legal expenses they paid to generate the title. This could be anywhere between $250-$400.
- Termite Inspection: Cost of inspection for termites, which is usually around $70-$100.
- Realtor Commission: If you worked with a realtor, this cost makes up 6% of the sales price – 3% for the listing agent, and 3% for the buyer’s agent.
- HOA Fee: Association monthly payments which vary based on the date the closing occurs and possession of the property.
- Home Buyer’s Inspection Repairs: Home buyers may request a home inspection that may reveal the need for repairs. This cost is paid by the seller.
- Appraisal Repairs: Lenders usually request an appraisal of the property which costs money. If an appraisal reveals the need for repairs, the seller pays for them.
- Miscellaneous: Any additional expenses incurred, such as when sellers opt for online closing.
- Septic Inspection: Inspection of the septic system is necessary as it costs thousands of dollars to repair. An inspection could cost around $100-$250.
- Well Inspection: If the house has a well system it must be inspected to verify that it is safe. It costs around $300-$400.
- Home Warranty: Contract that covers the cost to repair parts of home appliances and systems, which costs around $350-$600 for sellers.
- Buyer Closing Cost: In this condition, the seller pays for all the closing costs for the buyer. Thus, the seller receives an amount equal to the listing price of the property.
Receive a Virtual Seller Net Sheet With New Venture Escrow
Closing on a house can be a stressful and lengthy process. With so much on the line, you need the help of experts to learn on and guide you through each step. Our team of escrow officers at New Venture Escrow carry years of experience and are dedicated to helping you close.
What’s more, our virtual VentureTrac 4.0 app makes it easy to track your escrow process. You can receive and fill out a seller net sheet right from your phone! Or, you can download a seller net sheet on our website.
Ready to get started on the easiest and most convenient way to do escrow? Contact New Venture Escrow today!
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