How to use the net proceeds calculator
Enter the price you expect or an offer you’re weighing, then the payoff and the costs you know. To firm up the estimate, ask your servicer for a payoff statement and your title or escrow company for a fee quote.
- Sale price ($3,000,000 default): the contract price before any credits.
- Loan payoff ($1,400,000 default): what you owe on every loan secured by the property, including accrued interest to the closing date.
- Prepayment penalty ($0 default): any yield maintenance, defeasance cost or step-down premium due when the loan is paid off.
- Broker commission (3% default): the commission percentage you’ve agreed to pay. Enter 0 if you sell direct.
- Transfer tax (1% default): the combined state, county and city rate you pay as the seller.
- Title, escrow, legal and other closing costs ($25,000 default): owner’s title policy if you pay it, escrow or settlement fees, attorney fees, recording and other charges.
- Seller credits and repairs ($15,000 default): money you give the buyer at closing for repairs or concessions, or repair work you pay for.
What the results mean
The calculator returns three numbers:
- Total selling costs: commission, transfer tax, closing costs and credits added together. The loan payoff and prepayment penalty are shown separately, since they repay debt rather than cost of the sale.
- Net proceeds before tax: sale price minus the loan payoff, prepayment penalty and total selling costs. That’s the cash wired to you, or to your qualified intermediary, before prorations and income tax.
- Net proceeds as a % of price: net proceeds ÷ sale price, a quick way to compare offers with different terms.
The formulas behind the calculator
Every line is simple subtraction, so a net sheet is easy to check by hand.
| Result | Formula |
|---|---|
| Commission | Sale price × commission % |
| Transfer tax | Sale price × transfer tax % |
| Total selling costs | Commission + transfer tax + closing costs + seller credits |
| Net proceeds before tax | Sale price − loan payoff − prepayment penalty − total selling costs |
| Net proceeds % of price | Net proceeds ÷ sale price |
Worked example: a $3,000,000 sale
With the default inputs, a building sells for $3,000,000 with a $1,400,000 loan payoff and no prepayment penalty. The 3% commission is $90,000 and the 1% transfer tax is $30,000. Add $25,000 of title, escrow and legal costs and a $15,000 repair credit, and total selling costs come to $160,000.
Net proceeds before tax are $3,000,000 − $1,400,000 − $0 − $160,000 = $1,440,000, or 48.0% of the price. If the loan carried a 1% prepayment premium on the $1,400,000 payoff, that $14,000 would cut net proceeds to $1,426,000.
| Line item | Amount |
|---|---|
| Sale price | $3,000,000 |
| Loan payoff | −$1,400,000 |
| Prepayment penalty | $0 |
| Broker commission (3%) | −$90,000 |
| Transfer tax (1%) | −$30,000 |
| Title, escrow, legal and other | −$25,000 |
| Seller credits and repairs | −$15,000 |
| Total selling costs | $160,000 |
| Net proceeds before tax | $1,440,000 |
| Net proceeds % of price | 48.0% |
What does a seller net sheet include?
A seller net sheet lists the sale price, every deduction the seller will see on the closing statement and the cash left over. Title and escrow companies and brokers prepare them before listing and again when an offer comes in, so the seller can compare offers on what they actually net.
A full net sheet has three groups of lines: debt payoffs, costs of the sale, and prorations and adjustments. This calculator covers the first two. Prorations usually move the final number by a smaller amount, and they’re covered below.
Each line item, briefly
Here’s what each input covers and where to find more detail. Our seller closing costs guide goes through every fee in depth.
| Line item | What it covers | Go deeper |
|---|---|---|
| Loan payoff | Principal, interest accrued to closing and servicer fees on every lien | Amortization schedule calculator |
| Prepayment penalty | Yield maintenance, defeasance cost or step-down premium | Defeasance and yield maintenance guide |
| Commission | The listing broker’s fee, usually a percentage of price | Seller closing costs guide |
| Transfer tax | State, county and city taxes on the deed or the price | Transfer tax calculator and state transfer tax pages |
| Title, escrow and legal | Owner’s title policy where the seller pays it, settlement fee, attorney, recording, payoff wires | Seller closing costs guide |
| Credits and repairs | Repair credits, concessions and repair work agreed after inspections | Seller closing costs guide |
Prorations and deposits that change your final number
Prorations split the closing month’s income and expenses between you and the buyer, and they show up as credits or charges on the closing statement. On a rental property, these are the usual ones:
- Property taxes: the tax year is split at the closing date. Federal tax law treats the part of the year before the sale date as the seller’s tax and the part starting on the sale date as the buyer’s. Whether you get a credit or a charge depends on whether the taxes are paid ahead or behind.
- Rents: rent you’ve collected for the days after closing is credited to the buyer. Delinquent rent is often handled by agreement in the contract.
- Tenant security deposits: deposits you hold are owed back to tenants, so they’re usually credited to the buyer, who takes over the duty to return them. Your state’s landlord-tenant law sets the rules for that handoff.
- Utilities, service contracts and HOA or association dues: split to the closing date or paid off by the seller.
- FIRPTA withholding: if the seller is a foreign person, the buyer generally must withhold 15% of the amount realized and send it to the IRS, which comes out of the seller’s cash at closing.
Why net proceeds aren’t your taxable gain
Net proceeds are cash, while taxable gain is the amount realized minus your adjusted basis, and the two can be far apart. Paying off a mortgage takes cash out of your hands, but it doesn’t reduce your gain.
Selling costs do reduce gain. IRS Publication 544 subtracts selling expenses from the amount realized, and the tax code treats transfer taxes paid on a sale as a reduction in the amount realized. A repair credit usually works like a price reduction.
In the example, the amount realized after commission, transfer tax, closing costs and the credit is $2,840,000. If the adjusted basis after depreciation is $1,100,000, the gain is $1,740,000, which is $300,000 more than the $1,440,000 of cash. That kind of gap shows up when an owner has pulled equity out with a cash-out refinance. Part of the gain may be taxed as depreciation recapture, and our capital gains tax calculator estimates the tax.
Net proceeds in a 1031 exchange
In a 1031 exchange, your net proceeds are wired to a qualified intermediary, not to you. Treasury regulations require the exchange agreement to bar you from receiving, pledging or borrowing against those funds during the exchange period, or the safe harbor fails.
Normal closing costs, such as commission, title fees and prorated taxes, can be paid from the exchange funds without counting as cash you received. Any cash you take out at closing, or that’s left over after you buy the replacement property, is boot and can be taxed. Our 1031 exchange calculator shows how much you need to reinvest.
Net proceeds on a 5+ unit apartment building
Apartment sales add lines a house sale doesn’t have, and each one moves your net. The rent roll drives rent prorations and the deposit credit, which can be large on a building with dozens of units. Buyers and lenders often ask for tenant estoppel certificates, and anything they turn up, like a disputed deposit or unpaid rent, can become a credit.
Commercial loans also tend to carry prepayment premiums, so the payoff can run well above the balance. Price that early, and compare it with a loan assumption if your rate is attractive. Once you know the net, have your CPA run the after-tax number.
Compare offers on net proceeds, not price
The highest price isn’t always the best offer, because commission, credits and terms change what you keep. Run each offer through the calculator and compare the net proceeds line.
Take the $3,000,000 offer in the example, which nets $1,440,000 after a 3% commission and a $15,000 credit. A $2,925,000 offer from a direct buyer with no commission and no repair credit, the same $1,400,000 payoff, $29,250 of transfer tax at 1% and $25,000 of closing costs nets $1,470,750. That’s $30,750 more on a price that’s $75,000 lower. Certainty matters too: an offer with a financing contingency or a long due diligence period has a bigger chance of falling apart.
See your net from a direct sale to Skyline
Selling direct can lower the commission line and shorten the timeline. Skyline Capital Investments buys apartment buildings with 5+ units nationwide as a direct buyer, and we can offer seller-carry terms, plan around prepayment dates and work with 1031 exchange timelines.
Send the address and unit count through the form on this page or call (469) 660-2977. We typically respond within 48 hours, and you can run our offer through this calculator to compare it with any other.
