Home Sale Proceeds Guide: What You Net
Last reviewed October 25, 2026
What you net on a home sale is the sale price minus everything it costs to sell and settle. The honest one-line answer: net proceeds = sale price − agent commissions (observed ~5.4–5.7% combined) − seller closing costs − mortgage payoff − prorated property tax, with capital-gains tax entering only on gain above the IRS Section 121 exclusion. After commissions and closing costs, a seller typically walks away with roughly 90–93 cents per dollar of sale price — before paying off the mortgage.
Agent commissions — the largest single line
Commissions changed after the NAR settlement (August 17, 2024): buyer-agent compensation no longer appears on the MLS, buyers sign written agreements before touring, and compensation is fully negotiable. What sellers actually pay, post-settlement:
- Buyer-agent commission: averaged 2.40% in Q1 2025 (Redfin research), stable since Q3 2024 (2.36%). Sellers still offer buyer-agent compensation on roughly 60–65% of listings.
- Listing-agent commission: conventionally ~2.9% — the calculator's editable default.
- Combined observed total: ~5.4–5.7% — an observed range from secondary aggregation, not a rule, and negotiable in both directions.
Seller closing costs
Beyond commissions, the seller's side of settlement carries its own line items: title insurance (owner's policy) typically 0.5–1.0% of price in GR's merged defaults; transfer taxes (0% in 14 no-tax states, 4%+ where they stack, with who pays a matter of state custom); escrow/settlement/attorney fees of ~$500–$1,500; plus prorated property taxes and HOA transfer/estoppel fees. Commission plus prep, staging and concessions runs 7–10% of sale price in the merged defaults — the ~90–93¢ per dollar convention above is this same estimate before mortgage payoff. These are observed ranges, not rules — itemize them with the closing-cost calculator.
The mortgage payoff — and the rate you retire
Your net proceeds pay off the remaining mortgage balance at closing — and the payoff is where a legacy below-market rate ends. The 30-year fixed average was 7.03% the week ending 2026-09-24 (Freddie Mac PMMS). A seller holding a 3.x% legacy mortgage forfeits that rate on a sale and would replace it with one near the current average — the rate lock-in effect. For payoff-vs-keep math specifically, see the mortgage-payoff calculator and the refinance break-even guide.
The Section 121 capital-gains clock
The federal exclusion on primary-residence gain is the clock most sellers never check. Under IRS Section 121 (Pub 523 / Topic 701):
- Exclusion amounts: $250,000 of gain for single (and married-filing-separately / head-of-household) filers; $500,000 for married filing jointly.
- The tests: you must have owned the home 2 of the last 5 years and used it as your primary residence 2 of the last 5 years (24 months need not be consecutive). For the $500k joint exclusion, one spouse must meet the ownership test, both must meet the use test, and neither may have claimed the exclusion on another home in the prior 2 years.
- The sell-by date: the lookback is 5 years — rent the place out and each year of renting consumes the exclusion window. Sell before the 2-of-5 window closes and the full exclusion still applies.
- Gain math: taxable gain = amount realized − adjusted basis (purchase price + capital improvements − depreciation); only gain above the exclusion is taxed.
- The recapture trap: depreciation claimed after May 6, 1997 cannot be excluded — unrecaptured §1250 gain, taxed at up to 25%. Partial exclusions exist for job moves, health, and unforeseen circumstances; uniformed-service and foreign-service members can suspend the 5-year test up to 10 years.
This is the published federal framework, not tax advice — your situation may differ; confirm with a tax professional.
The hold alternative
Keeping the house while you decide has an annual price. The calculator defaults to a ~3–6% of home value per year composite — a composite of industry conventions, not a single-source statistic — itemized as maintenance 1–2%, property taxes 0.5–2.5%+, insurance 0.4–1.0%, utilities ~$3,000–$5,400/yr, HOA $0–$3,600/yr if applicable. In assessment-limit states (California Prop 13, Florida Save Our Homes, Michigan Proposal A), selling resets the property-tax clock; in no-reset states (Oregon Measure 50, Washington's levy cap) it does not.
Worked example
An illustrative run — round numbers, for shape only. Run your own with the home sale proceeds calculator:
| Line | Amount | Note |
|---|---|---|
| Sale price | $500,000 | user input |
| − Buyer-agent commission (2.40%) | −$12,000 | Redfin Q1 2025 average (negotiable) |
| − Listing-agent commission (2.90%) | −$14,500 | calculator default; observed total ~5.4–5.7% |
| − Seller closing costs (~2%) | −$10,000 | title 0.5–1.0% + transfer/escrow; range, not rule |
| = Net before payoff | $463,500 | ~92.7¢ per dollar (within the 90–93¢ convention) |
| − Mortgage payoff | −$300,000 | remaining balance, dollar-for-dollar |
| = Cash to seller (pre-tax) | ~$163,500 | before any capital-gains tax |
| − Capital-gains tax | $0 if gain ≤ exclusion | Section 121: $250k single / $500k MFJ, 2-of-5 tests |
Illustrative figures only. The sum is the point: commissions and closing costs take ~7–10% off the top, the payoff takes the balance, and Section 121 is what keeps the gain out of tax — if the clock is met.
Run it: the home sale proceeds calculator
Home Sale Proceeds Calculator
Enter sale price, your mortgage (rate, remaining balance, original amount) and selling costs; the calculator reports "Sell today: you'd net ~$X" against "Hold N years: projected net ~$Y", plus the Section 121 clock panel (the sell-by date that preserves the full exclusion) and the state reassessment toggle. The neutral readout is comparative, never directive.
What no proceeds estimate can know in advance
- Your actual commission split — both sides are negotiated and the buyer side is no longer MLS-posted; ~5.4–5.7% is an observed range, not a rule.
- Your actual closing costs — title/transfer/escrow vary by state and county.
- Your actual mortgage payoff — balance, per-diem interest to the closing date, and any prepayment terms.
- Your actual gain and basis — ownership/use history, improvements, and any prior-rental depreciation (recapture cannot be excluded).
- How long you'll actually stay — the hold panel is only as good as the hold assumption.
- State reassessment rules — resets-on-sale vs no-reset changes the future tax line.
- Timing and market — the PMMS figure is a weekly national average, not your quote.
FAQ
What are home sale proceeds?
The cash a seller receives at closing: sale price minus agent commissions, seller closing costs, the mortgage payoff and prorated items. After commissions and closing costs, sellers typically net roughly 90–93 cents per dollar of price before payoff.
How much do sellers pay in commission now?
The buyer-agent side averaged 2.40% in Q1 2025 (Redfin research), stable since Q3 2024 at 2.36%. With the listing side conventionally near 2.9%, the observed total is about 5.4–5.7% — an observed range, not a rule; compensation is negotiable and no longer set on the MLS.
What is the Section 121 exclusion?
The federal rule that excludes primary-residence gain from tax: $250,000 single / $500,000 married-filing-jointly, provided you owned the home 2 of the last 5 years and lived in it as your primary residence 2 of the last 5 years (IRS Pub 523 / Topic 701).
Does selling trigger capital-gains tax?
Only on gain above the Section 121 exclusion. Gain = amount realized − adjusted basis; the exclusion covers up to $250k/$500k if the 2-of-5 tests are met. Depreciation claimed while renting cannot be excluded — it is recaptured at up to 25%.
What happens to my mortgage when I sell?
The remaining balance is paid off at closing from the proceeds, which ends any legacy below-market rate (the current 30-year average was 7.03% the week of 2026-09-24, Freddie Mac PMMS). A new purchase loan would price near the current market — the rate lock-in effect.
What does it cost to hold the house instead of selling?
The calculator's composite default is about 3–6% of home value per year (maintenance 1–2%, property tax 0.5–2.5%+, insurance 0.4–1.0%, utilities ~$3,000–$5,400, plus HOA if applicable) — a composite of conventions, not a single-source statistic, and every component is editable.
Do property taxes go up when the house sells?
Depends on the state. In assessment-limit states (California Prop 13, Florida Save Our Homes, Michigan Proposal A) a sale resets the assessed value toward market; in no-reset states (Oregon Measure 50, Washington's levy cap) it does not.
Related
home sale proceeds calculator · closing cost calculator · mortgage-payoff calculator · closing costs, explained · refinance break-even · home sale capital gains & the 2-of-5 rule · cost to own a house per year
Sources
- IRS — Topic 701, Capital Gains Tax on Home Sales (Section 121 exclusion: $250k single / $500k MFJ; 2-of-5 ownership & use tests)
- IRS — Publication 523, Selling Your Home
- Redfin — real estate commissions research (buyer-agent side averaged 2.40% in Q1 2025 post-NAR-settlement)
- Freddie Mac PMMS — 30-year fixed average 7.03%, week ending September 24, 2026
- Lincoln Institute — Significant Features of the Property Tax (assessment-reset taxonomy)
Commission/cost figures retrieved 2026-09-25/26 per the cited data layer (portfolio/research/geniusrealty/sell-vs-stay-facts-2026-09-25.md); verify current figures at the sources before acting. This page is an explanation of what a seller nets — not tax, legal or mortgage advice; we refer, we never advise. The live home-sale-proceeds calculator is the estimate tool; the Closing Disclosure is the binding settlement document.