How to Gauge Your Net Profit after Selling Your Capital Region Home
You’ve finally done it! You sold your Capital Region home. After all the home repairs, staging and negotiating, it’s time to relax and take a look at your net profit, which will be incredibly important in helping you decide how much you can spend on your next home.
Contrary to popular belief, it’s not always easy to gauge exactly how much you’ll be able to sell your home for. There are a lot of factors – some you can and other you cannot control – that will bring down your final net profit.
Looking to sell your home for the biggest profit? Here are a few factors to consider when trying to gauge your net profit after selling your Capital Region home.
Home Repairs
No Capital Region home is perfect. After a buyer’s inspection, you may be required to make certain repairs to your home, such as repairing a leaky roof or a broken hot water heater. These extra costs will eat into your profits, but if you keep your home in good condition, then your costs may be minimal.
Taxes
You will have to pay a certain amount of taxes. The exact number will depend on the timing, when you sold your home, and the state’s tax cycle.
Commissions
Though you may have paid off your mortgage, you’re not done yet. After all your property loans have been repaid, you will have to pay a sales commission for any realtor you worked with. That number will vary, but generally it ranges from 4 to 8 percent.
Buyer’s Credit
Some closing deals will include a buyer’s credit. If your deal includes one, then you will need to subtract that number from your net profit to give yourself an accurate number.
Loans
Read the fine print of your loan. If your contract outlines a pre-payment penalty within the loan, then you will owe your bank or mortgage lender a fee. Read this contract first before you buy a new home.
Settlement/Escrow Fees
When it’s finally time to close the deal, you will need to pay your closing agent’s fee. Most closing agents are either escrow agents or real estate attorneys, and their fees will vary from agent and state. You should also consider any wiring or courier fees that were accumulated during the negotiation process. In most cases, the seller and buyer split these costs, but they are something to consider when thinking about that net profit number.
While all of this may seem like you’re losing money, don’t panic. There are plenty of opportunities to make money on the sale. You might have a tax credit to look forward to or maybe even an escrow.
Once you know your how much your Capital Region net profit might be, you will be able to confidently sit down with a real estate professional and get to work.