Kathy Henne: A tale of two nets


By Kathy Henne



If you could conjure up the ideal home sale, it would probably be a full price, for cash, with closing in a week. If that happened, and your price was $130,000, how much would you net?

There is a difference, of course, between “gross” and “net” selling prices. If you sell for $130,000, then your “gross” would be the full amount: $130,000. The “net” is an entirely different story.

Anytime you sell a home, even for cash, you will have at least a small amount of closing costs. Those costs are deducted from the “gross” price to determine your “net.” Strangely enough, sometimes a lower offer may result in a higher “net” sales price to the sellers.

Example: The sellers receive two offers from different buyers. The first buyer plans to secure a new mortgage loan for 30 years. The lender will be charging three “points” in order to give the buyers the lowest possible interest rate. The buyers’ offer asks the seller to pay the three discount points and half of the closing costs.

The buyers offered full price of $130,000, but the sellers will net only about $116,000 after all expenses of the sale.

The second buyer offers only $126,000, which is $4,000 less than the asking price. However, the plan to secure a 15-year loan, with no discount points and to pay their own closing costs. In this case, the sellers will “net” about $118,400.

In other words, the sellers will net $2,400 more from the lower offer. When considering offers to purchase your home, ask your agent to explain your net proceeds. You may be pleasantly surprised by an offer that at first glance seems to be lower than another.

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By Kathy Henne

Contact the Kathy Henne Team RE/MAX FINEST by calling (937) 778-3961.

Contact the Kathy Henne Team RE/MAX FINEST by calling (937) 778-3961.