Selling a house is not a simple matter of exchanging a wad
of cash for the keys. Buying or selling a house is a huge purchase with a high price. Not only is there a lot of money involved, but there’s a process to transfer ownership of a house from a seller to a buyer. To help with this process are neutral, third-party companies, specialists in this process, that are hired to help ensure the transaction goes smoothly. These companies charge a fee based on the purchase price of the home. There are also local transfer taxes as well also based on the purchase price. These fees and expenses combined are called “closing costs.”
So you’re probably asking “how can I figure out what these closing costs will be?” You want to know how much money you will net after paying these closing costs. That’s easy enough, you can search online for a “selling house calculator” or “net sheet” to help you estimate what you will net.
What these calculators have in common is that it will deduct standard closing costs from the sale price. However, some of these calculators are designed for the entire country to use, everyone from Maine to California. These nationwide calculators can help you get a general idea of what your closing costs will be but it’s best to use a calculator for your specific area. The reason why you want to use a specific area calculator is because it will have the correct local transfer tax amounts built in.
For instance, if you are planning to sell your house located in the City of Los Angeles, you would have to pay the transfer tax for both the city and county. City transfer taxes will vary by city, for instance Los Angeles is a different rate from the City of Santa Monica. A nationwide calculator may not have this level of specific information. The better selling house calculators will also be able to calculate the prorated property taxes you will have to pay.
As a real estate agent, I provide my clients an estimate of how much they will net from the sale of their home. The selling house calculator I use is provided by a local title insurance company and is specifically for the Southern California area. It is very thorough and asks for the following information:
State where the property is located
County where the property is located
City where the property is located
Estimated closing date
Annual property taxes
Real estate agent fees
Home warranty cost
HOA transfer fees/dues
Because it’s a calculator specifically for Southern California, it has the correct transfer tax amounts so I don’t have to manually figure them out as I might have to with generic calculators for the entire country. The more information put into the calculator, the closer the estimate will be to the actual net.
The information needed to fill out the selling house calculator could easily be found on loan statement documents and property tax bills. If you live in a condo with a home owners association, the fees related to transferring ownership and HOA document preparation can be found out from the HOA manager.
Please note that these calculators do a good job of providing an estimate of a net amount after closing costs however closings costs will vary depending on the actual fees charged by the service providers as well as when the sale actually closes. Your final loan payoff for instance, most likely will not be the remaining balance on your loan statement as your lender will add prorated interest up through the closing date.
A selling house calculator is a tool to help you estimate what you will net after closing costs are deducted from the sale price of your home. To see which online selling house calculator I use, watch the video above. You can also contact me and I can run a personalized net sheet for you.