STL Home Buyer Journey
George Kindler
13 Years Of Real Estate Experience At Your Fingertips
The sale price is not your number. The number that matters is what you walk away with after commissions, title, prorated taxes, closing credits, and your mortgage payoff. For most St. Louis sellers, that number is 8 to 11 percent lower than the sale price -- before the mortgage payoff comes out.
Most agents will give you a net sheet at listing. The problem is that net sheets are often built on optimistic assumptions -- full price sale, no concessions, no last-minute credits from inspection. The real number is what you get after a realistic sale with realistic terms.
Your net proceeds are calculated as:
The following examples use 6% commission, $1,400 title and closing costs, $1,500 estimated prorated taxes, and a 2% seller concession -- realistic terms for most St. Louis transactions.
| Sale Price | Commission (6%) | Title + Closing | Taxes + Concession | Net (no mortgage) |
|---|---|---|---|---|
| $150,000 | -$9,000 | -$1,400 | -$4,500 | $135,100 |
| $200,000 | -$12,000 | -$1,400 | -$5,500 | $181,100 |
| $250,000 | -$15,000 | -$1,400 | -$6,500 | $227,100 |
| $300,000 | -$18,000 | -$1,400 | -$7,700 | $272,900 |
| $350,000 | -$21,000 | -$1,400 | -$8,500 | $319,100 |
| $400,000 | -$24,000 | -$1,400 | -$9,500 | $365,100 |
Net proceeds minus your mortgage payoff equals the cash you receive at closing. Call your lender for a payoff statement -- it will include your remaining principal, accrued interest through a specific date, and any prepayment penalties if applicable. The payoff amount changes daily as interest accrues, so get a statement dated around your expected closing date.
If you have a home equity line of credit or second mortgage, that must also be paid off at closing.
The single most common source of net proceeds surprise for sellers is an inspection credit or price reduction that was not anticipated. In the current St. Louis market, the majority of transactions involve some negotiation on inspection findings. Budget for a realistic inspection credit of $2,000 to $8,000 on most homes, more on older housing stock with deferred maintenance.
A home that has been pre-inspected and had major items addressed before listing reduces this risk significantly. If you know the sewer lateral has a crack that will cost $6,000 to repair, you can either fix it before listing or price accordingly -- rather than learning about it after you are under contract and losing negotiating position.
There are four levers that meaningfully affect your net proceeds:
Net proceeds and equity are related but not the same thing. Your equity is the difference between the home's value and what you owe. Your net proceeds are the cash you receive after all transaction costs. In a normal sale, net proceeds = equity minus 8 to 11% of sale price in transaction costs.
Sellers who bought in the last few years may have less equity than they expect if they put down a small down payment and the market has not appreciated significantly since purchase. Run the math before you assume you will walk away with a large check.
If you have owned and lived in the home as your primary residence for at least 2 of the last 5 years, you may exclude up to $250,000 of gain from federal capital gains tax ($500,000 for married couples filing jointly). This is not tax advice -- consult a tax professional before closing, particularly if you have owned the home for many years and it has appreciated significantly. The exclusion has requirements and exceptions that matter in specific situations.
How much do you net selling a house in St. Louis?
Net proceeds on a St. Louis home sale typically run 89 to 92 percent of the sale price before mortgage payoff. At a $250,000 sale price, expect to net approximately $220,000 to $230,000 after commission, title costs, prorated taxes, and a typical seller concession -- before any mortgage balance is paid off.
What percentage does a seller pay in closing costs in Missouri?
Missouri sellers typically pay 8 to 11 percent of the sale price in total transaction costs. The largest component is agent commission at 5 to 7 percent. Title and closing costs add approximately $1,200 to $1,500. Prorated property taxes and any seller concessions make up the remainder.
Do sellers pay closing costs in Missouri?
Yes. Missouri sellers pay agent commission, owner's title insurance, their prorated share of property taxes through the closing date, and any seller concessions agreed to with the buyer. These costs are typically deducted from sale proceeds at closing rather than paid out of pocket.
How do I calculate my net from a home sale?
Start with the expected sale price. Subtract estimated commission (5 to 7 percent), title and closing costs ($1,200 to $1,500), prorated taxes (varies by timing and tax rate), any seller concessions, and your mortgage payoff amount. The result is your estimated net cash at closing.
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