FREE Home Profit Calculator

Tips for Using the Home Profit Calculator

Everyone wants to know how much money they are going to get from the sale of their home. Once you have a good idea of the market value, you can more accurately calculate your potential profit. Profit or “Net proceeds” refers to the money you walk away with after selling a property. To calculate profit, take the price the home sells for minus your current mortgage balance and related home-selling fees (broker fee, unpaid taxes, legal fees, etc.).

• House Sales Price - The best number to enter here is, of course, the actual sales price of your home. If you haven't yet sold your home, or you are just now considering putting your home on the market, consider trying a range of likely sales prices from best to worst case.
  
  
• First Loan Balance - This should be the payoff amount for your first mortgage. This amount is usually slightly more than the remaining balance of the loan due to various fees that your bank may charge to close the account. Most banks will be happy to give you this number if you simply call them and ask for an "estimate payoff" amount.
  
  
• Second Loan Balance - This is the payoff amount for any second mortgages or home equity lines of credit (HELOCs) that are also associated with the property. Use the same process that you used to get the First Loan Balance.
  
  
• Other Loans - This is a catch-all space for any other loans you want to pay off from the proceeds of the sale, such as credit card debt.
  
  
• Estimated Close Month - This is important because a number of the fees you will pay a closing are based on "prorated" figures. That means that some fees (usually those paid for annually such as taxes) are divided between the buyer and seller such that the portions approximate the periods of ownership. For example, if you sell your home in July, you pay the portion from January until July and the Buyer pays from July until December of that year.
  
  
• Annual Property Taxes - Property taxes are one of the most significant fees that is prorated. Governments usually set it up so that their is always a tax lien on every property that must be paid upon the close of a sale. No matter what, the government always gets paid!
  
  
• Property Taxes Paid - This number is calculated for you by taking the Annual tax amount and prorating it using the Estimated Close Month to determine the portion of taxes you (the Seller) are responsible for.
  
  
• Transfer Taxes (%) - Real estate transfer tax is a tax that may be imposed by states, counties, or municipalities on the privilege of transferring real property within the jurisdiction. Total transfer taxes range from very small (for example, .01% in Colorado) to relatively large (2.2% in the District of Columbia). One good source for identifying these rates is the Federation of Tax Assessors. Prior to buying or selling, it is advisable to check with the Recorder of Deeds, a Realtor, or title company to confirm a specific jurisdiction's practices.
  
  
• Transfer Taxes Paid - This number is calculated for you by multiplying the Sales Price by the percentage entered in the Transfer Taxes field.
  
  
• Prepayment Penalty - If any of your loans include a pre-payment penalty, enter that amount here.
  
  
• Sales Commission - Enter the amount you expect to pay a real estate agent to list your home. This amount can vary quite a lot and there is no "standard" amount. The commission varies considerably depending on whether your agent is providing "full service" brokerage or "discounted" a la carte services. A reasonable range for estimating is between 2-4% of the Sales Price. If you are selling "For Sale By Owner" (FSBO) you can make this number 0. Be sure to enter a dollar amount and not a percent!
  
  
• Other Sales Commission - This is the amount that you will pay a real estate agent who brings you a buyer (a Buyer's Agent). This amount also varies from place to place, but is typically an amount equal to the Listing Agent's fee. Again, make sure you enter a dollar amount and not a percent!
  
  
• Other Fees - This is a catch-all for any other fees customary in your area. Again, consult a local Title or Escrow company in your area to get an idea of a good amount to enter here.