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 thirty years. The buyers’ offer asks the seller to pay $4500 of the closing costs.
The buyers offered full price – $130,000 – but the sellers will net only about $125,500 from the first offer.
The second buyer offers only $126,000 – $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 $126,000.
In other words, the sellers will net $500 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.
Contact the Kathy Henne Team RE/MAX FINEST by calling (937) 778-3961.