Home Sale Proceeds Calculator

The short answer

• Selling a $450,000 home with 5% total commission and 1% other closing costs costs $27,000, or 6% of the price.
• With a $250,000 payoff, you walk away with $173,000.
• Most homeowners pay no tax on the gain: up to $250,000 ($500,000 for a married couple filing jointly) is excluded on a main home lived in for 2 of the last 5 years.
• Since August 2024, whether you pay the buyer’s agent is a separate negotiation. In the example, not paying it would leave you $11,250 more.

Equity is not what you walk away with

Equity is the home’s value less what you owe. Net proceeds are what is left after you actually sell: the price, less every cost of selling, less the mortgage payoff, less any tax. The gap between the two is usually 6% to 10% of the price, which on a typical home is tens of thousands of dollars.

That gap matters most when you plan the next purchase. If you are counting on the sale for a down payment, budget from net proceeds, not the Zestimate minus your balance.

A worked example

A married couple sells for $450,000. They bought for $300,000, spent $20,000 on improvements and owe $250,000. The listing agent charges 2.5%, they agree to pay the buyer’s agent 2.5%, and other closing costs are 1%.

Their gain is $103,000: $423,000 after selling costs, less a $320,000 basis. It is well inside their $500,000 exclusion, so they owe no tax and keep the full $173,000.

Agent commissions

Commission is usually the biggest selling cost. It is a percentage of the sale price, set in your listing agreement, and paid at closing out of the proceeds. Rates are negotiable and vary by market, by agent and by the services included. Some brokerages charge a flat fee or a lower rate for less service.

On a $450,000 sale each percentage point of commission is $4,500.

The 2024 commission settlement

A settlement between the National Association of Realtors and home sellers changed how agents are paid, from August 17, 2024:

• Offers to pay the buyer’s agent can no longer be shown on the multiple listing service (MLS).
• Buyers working with an agent must sign a written agreement, which sets that agent’s pay, before touring homes.
• Sellers can still offer to pay the buyer’s agent, off the MLS, or agree to it in the purchase contract.

In practice many sellers still pay something toward the buyer’s agent to attract offers, and many buyers ask for it in their offer. The calculator keeps the two commissions separate so you can see what each decision is worth. In the example, paying nothing to the buyer’s agent would raise the proceeds from $173,000 to $184,250.

Seller closing costs

Besides commission, sellers usually pay some of these:

• The owner’s title insurance policy, in states where the seller customarily buys it.
• Escrow or settlement fees, or an attorney’s fee.
• Transfer taxes, where local custom puts them on the seller.
• HOA transfer and document fees.
• Property tax owed for the part of the year you owned the home, credited to the buyer.
• Recording fees to release your mortgage.

The calculator takes these as a percentage of the price (1% by default) plus separate fields for transfer tax and the property tax proration. A title company can give you a seller’s net sheet with exact local figures.

Transfer taxes

Many states charge a tax when real estate changes hands, and some counties and cities add their own. Many others charge none. Who pays is set by law in some places and by custom or negotiation in others. Rates range from a small fraction of a percent to well over 1% in some cities. Enter your share as a percentage; your agent or title company will know it. Buyers can see the other side in our closing cost calculator.

Concessions and repairs

After an inspection, buyers often ask for repairs or a credit. A seller concession is money you give the buyer at closing, usually toward their closing costs. It comes straight off your proceeds, and it also lowers your gain, because it reduces the amount you realize.

Repairs, cleaning, staging and moving that you pay for yourself are different: they are paid in cash, and they don’t lower the taxable gain unless they are improvements. In the example, a $10,000 concession and $5,000 of preparation would cut the walk-away amount from $173,000 to $158,000.

Your mortgage payoff

The payoff amount is not the balance on your statement. It adds the interest from your last payment to the payoff date and any fees, so ask your servicer for a payoff quote dated near closing. A home equity loan or HELOC must be paid off too. Few home loans have a prepayment penalty today, but check yours.

Our mortgage calculator shows how the balance falls over time, which helps when you are deciding when to sell.

Working out your gain

Your gain is the amount realized less your adjusted basis:

• Amount realized: the sale price less selling costs, commissions and concessions.
• Basis: what you paid, plus buying costs such as title insurance and recording fees, plus improvements.

Improvements are additions that last and add value: a new roof, a kitchen remodel, an addition, central air, a fence. Repairs and maintenance (painting a room, fixing a leak) don’t count. Keep receipts for as long as you own the home.

The $250,000 and $500,000 exclusion

Section 121 of the tax code lets you exclude up to $250,000 of gain on the sale of your main home, or $500,000 if you are married filing jointly. To qualify:

• Ownership: you owned the home for at least 2 of the 5 years before the sale.
• Use: you lived in it as your main home for at least 2 of those 5 years. The two years don’t need to be continuous.
• Once every two years: you didn’t exclude the gain on another home in the 2 years before.

For the $500,000limit, either spouse can meet the ownership test, but both must meet the use test. A partial exclusion may apply if you move early for a job, health or unforeseen circumstances; the calculator doesn’t work that out. If the whole gain is excluded and you get no Form 1099-S, you usually don’t need to report the sale.

When the gain is over the limit

A single owner sells for $1,200,000 a home bought for $400,000, with $20,000 of improvements and $72,000 of selling costs. The gain is $708,000. After the $250,000 exclusion, $458,000 is taxable, at 15% and 20% on top of $120,000 of wages, plus the 3.8% net investment income tax.

Our capital gains tax calculator shows the rates and brackets behind these figures in more detail.

Second homes and rentals

A vacation home or rental gets no exclusion, so the whole gain is taxable. With the same $450,000 sale and a married couple’s $120,000 of wages, the $103,000 gain costs $13,785 of federal tax if held more than a year, and $21,360 if held a year or less, when it is taxed as ordinary income.

State tax on the gain

Most states tax capital gains as ordinary income, and the calculator works it out that way. In the $1,200,000 example, a single seller in California would owe about $45,867 of state tax on top, leaving $698,249. Some states tax long-term gains at lower rates, which the calculator doesn’t model, and states with no income tax charge nothing.

When you owe more than it sells for

If the price doesn’t cover the selling costs and the payoff, you must bring the difference to closing. Selling a $300,000 home with a $290,000 payoff and 6% selling costs leaves you $8,000short. If you can’t cover it, a lender may agree to a short sale, accepting less than it is owed. Talk to your servicer early; a short sale takes time and affects your credit.

From listing to wire

1. Before listingAgent and pricing

   Sign a listing agreement that sets the commission; decide on buyer's agent pay.

2. Under contractInspection and appraisal

   Negotiate repairs or credits.

3. Before closingPayoff quote and net sheet

   The title company orders the payoff and prepares the figures.

4. ClosingSettlement statement

   Costs and the payoff come out; the rest is wired to you, often the same or next business day.

5. Early next yearForm 1099-S

   The closing agent may report the sale to the IRS.

Planning the next purchase

If the proceeds fund your next down payment, use the walk-away figure, then subtract the buyer’s closing costs on the new home. Our home affordability calculator shows what price that down payment and your income support.

Timing matters too: buying before selling may mean carrying two mortgages, while selling first may mean renting in between. Keep part of the proceeds in a high-yield savings account or CD if the next purchase is months away.

Common mistakes

• Treating equity as cash, without subtracting 6% or more of selling costs.
• Using the statement balance instead of a payoff quote.
• Losing improvement receipts that would have raised the basis.
• Assuming the exclusion applies to a home you moved out of more than three years ago.
• Forgetting state tax, or depreciation recapture on a home office or rental.
• Wiring proceeds to an account given only by email.

Using the calculator well

1. Enter the expected price, a payoff quote and the commission rates in your listing agreement.
2. Enter what you paid for the home and your filing status.
3. Under More options, add improvements, concessions, transfer tax and other costs, and check the main home switch.
4. Use the price table to see what a lower or higher offer would mean.

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