What is a seller net sheet?

How much you will earn on a home sale is largely a factor of how much equity you’ve built since you’ve owned it. Calculating the equity you have in your home is easy: You subtract what you owe on your home from the home’s current market value. When it comes time to sell you’d think you’d do the same to figure out how much profit you’ll make: subtracting what you owe on your mortgage from the price you sell your home for. Unfortunately, it’s not that simple.

Selling a home is a massive transaction, with dozens of associated expenses and (seemingly) dozens of documents. A net sheet, or seller net sheet, is one of these documents. It contains an itemized breakdown of all of the closing costs you’ll pay, and an estimate of the sum you’ll receive, or net, once the transaction is closed. You may actually receive several of them throughout the course of your sale. Here’s more about how net sheets work in the real estate world.

What is a net sheet in real estate?

A net sheet is an itemized tally of all the associated costs and expenses the seller will incur as a result of the transaction, set against the sum the buyer (or prospective buyer) is paying for the property.

The net sheet is not a legal document. It is unofficial, with estimated numbers, functioning as a kind of a worksheet or income statement. The idea is to give sellers a sense of how much they stand to gain once the deal goes through.

Who prepares it?

In most cases, a net sheet is prepared by your real estate agent or broker. They may provide a preliminary net sheet during your first meeting to discuss listing your home, and again with revised numbers when offers are submitted. If you’re not working with a real estate agent to sell your home, you can prepare your own version of a net sheet by gathering information and filling in the relevant fields on a worksheet. You could also enlist the assistance of an attorney or accountant to prepare one.

When do you get it?

A seller net sheet is not required by law, but a good real estate agent will likely provide you with one at multiple points throughout your transaction. Ideally, you’ll get your first ones while still interviewing candidates to decide which local agent you want to hire.

Agents may provide you an updated net sheet with every offer you receive, so you can make an apples-to-apples comparison. Different offers will likely contain different terms and prices, and a net sheet for each lets you easily see which offers will allow you to walk away with the most money.

What does a seller net sheet include?

Specific information included in a seller’s net sheet will vary based on your situation, but you can expect to have the sale price listed at the top, and then a series of expenses: your mortgage loan payoff amount, closing costs, Realtor commissions and other miscellaneous fees, plus any concessions or repair costs the buyer is asking for. Below is an example of what a net sheet might look like for a hypothetical home with two competing offers and sets of buyer demands.

                                              A sample net sheet

How is a seller net sheet calculated?

The net sheet is calculated by taking the home’s final sale price, or the amount of an offer, and then subtracting the expenses that will eat into that amount. This will include any encumbrances on the property (an outstanding mortgage being the most common), closing costs and various other fees.

A net sheet created before any offers are received will usually include an estimate of what the real estate agent thinks your home will sell for, along with the typical estimated closing costs in your area. Net sheets created after bids come in reflect agent commissions based on that selling price, plus any financially related contingencies related to those offers. As the example above shows, different buyers might ask the seller to shoulder different expenses, which can affect the amount you will net at the end of the day.

It is very easy to forget a step or an expense in a net sheet, or to make an incorrect estimate, so the calculations should be examined carefully. Neglecting to account for property taxes, HOA dues or title insurance premiums, for example, can all make a large difference in what you think you’ll earn versus the final number you’ll see on your closing statement.

Net sheet vs. closing statement

Net sheets and closing statements contain a lot of the same data. However, while nets sheets are largely informal documents prepared by your real estate agent, a closing statement (often referred to as the closing disclosure) is a legal document showing the exact amount you’ll receive after all closing costs and expenses are paid. It’s typically prepared by the title company or closing agent handling your home sale. Think of the net sheet as more of an estimate or rough draft, while the closing statement is the official, final document.