home sale net profit How to Calculate Your Net Profit or Loss from Selling your Home
Every year starting in January, homeowners will often decide whether to sell their home either for pending employment change, school change or other reasons such as getting a larger home for a growing family. When getting ready to put your home on the market, it is important to figure out your estimated gain or net profit from selling the home. This will help you to understand whether you will have money to invest in your new home, break even or need to consider a short sale. In today's markets this calculation can also help you to understand just how low you can go – in price and and still exit ownership of the home. For condos in Chicago this is often critical as condo owners often make less profit and but have strong needs to move based on increased home size .
How to Calculate Your Net Profit or Loss
Sale Price $
- 1st Mortgage Balance
- 2nd Mortgage Balance
- Any Grants or mortgage type liens that have not been forgiven such as a closing cost grant or IHDA grant.
- Realtor Commission (6% of sales price – to be safe use this figure) (do not include if for sale by owner)
- Title Costs: $7000 (may be less bits good to have extra in this area)
- Tax Prorations ($5000 in Chicago) $8000 to $14,000 in suburbs)
- Any Taxes that are unpaid or sold and must be redeemed. – Get Redemption Quote from Tax Assessor
- Attorney Fees: $500 to $2000 depending on simple closing or for sale by owner)
While not an exhaustive discussion of how to figure out your net profit or loss, this can be helpful in figuring out right away whether you need a short sale. Short sales are covered in other articles on this site, but needless to say these are much more involved with only one goal which is to exist the home and hopefully not have any remaining liability. As discussed before this is most common in Chicago with condos in Chicago, but can apply to any property.
Please see our other articles on Tax Prorations and Short Sales