What Is a Seller’s Net Sheet and How Do You Read Every Line?

This post focuses specifically on the practical mechanics of reading a seller's net sheet – a topic important enough that it's worth addressing in detail beyond the overview provided in earlier posts. When your net sheet arrives, here's how to work through it line by line.

What You Should Have Before the Net Sheet

Before your agent produces a net sheet, you need two pieces of information that only you have access to: your current mortgage payoff amount and any additional liens on the property.

Your mortgage payoff amount is obtained by calling your lender or logging into your loan servicer's online portal and requesting a payoff quote for a specific date – typically your anticipated closing date. This quote includes the outstanding principal balance, interest accrued through the payoff date, and any applicable fees. It also notes the "good through" date – the date through which the quote is valid. If your closing is delayed past this date, you'll need a new payoff quote.

If you have any other loans, liens, or encumbrances against the property – a HELOC, a home equity loan, a judgment lien – these must also be paid off at closing and should be included in the net sheet.

Reading the Net Sheet: A Worked Example

Let's work through a specific example to make each line concrete.

Property sold for: $725,000

Gross proceeds: $725,000

Less: Agent commission (5.5%): ($39,875)

This represents the total brokerage compensation – both the listing agent's side and the buyer's agent compensation – as specified in your listing agreement. Confirm this percentage matches your signed agreement.

Less: NY State Transfer Tax (0.8%): ($5,800)

Fixed calculation: 0.8% of the sale price. No negotiation.

Less: Real estate attorney fee: ($2,500)

Your attorney's fee for the transaction. Confirm this matches what was quoted when you engaged your attorney.

Less: Mortgage payoff: ($312,000)

The outstanding balance on your primary mortgage as of the closing date, from your lender's payoff quote. This should be the actual payoff figure, not just your last statement balance – the closing date interest accrual matters.

Less: HELOC payoff (if applicable): ($45,000)

Any additional debt secured by the property must be paid at closing.

Less: Prorated property taxes: ($3,200)

The portion of the current tax year that has elapsed but for which taxes haven't yet been paid. Calculated based on your annual tax bill and your specific closing date. Confirm the calculation period is correct for your local tax calendar.

Less: Pre-listing repairs and preparation (already paid): ($4,500)

Not on the formal closing statement, but a real cost to include in your total analysis. You paid this out of pocket before listing.

Estimated net proceeds: $312,125

This is the amount that will be wired to your bank account at closing, before considering any income taxes on the gain.

What to Verify

When you receive your net sheet, verify four things in sequence:

The sale price is correctly recorded. Confirm the gross proceeds match the actual contracted purchase price.

The commission calculation is correct. Multiply the sale price by the agreed commission percentage and confirm the dollar amount matches.

The mortgage payoff is current and accurate. Call your lender to confirm if you haven't received a payoff quote recently.

All prorations are calculated from your actual closing date. Prorated taxes in particular change based on the closing date – a closing on the first versus the last of the month can make a meaningful difference.

If any line item looks wrong or unfamiliar, ask your attorney or agent to explain it before closing day – not at the table.

What the Net Sheet Doesn't Include

The net sheet doesn't account for income taxes on any capital gain, which is a separate calculation that your CPA handles. It also doesn't account for your moving expenses or the transaction costs of your next purchase, which are separate cash flows that you'll need to plan for alongside your net proceeds.

I make sure every seller I work with has a complete, accurate net sheet well before their closing date – and that they understand every line on it. Informed sellers make better decisions and have better experiences. Call me at (321) 447-4259 or visit movewithricky.com.

 

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Rakesh (Ricky) Khanna | Licensed Real Estate Salesperson
Better Homes and Gardens Real Estate Realty Connect
Call or text: (321) 447-4259 | movewithricky.com