For most sellers, their main concern is the amount of money they take away at the end of a real estate transaction. This often is a deciding factor on whether the Seller wants to or is able to sell the home. A net sheet is a simple tool that allows a seller to better understand the costs required to sell the property and shows approximately what the amount of the proceeds will be after all costs have been considered. Required costs include paying any existing mortgages/loans secured by the property, Realtor commissions and administrative fees, Owners Title Policy, real estate taxes, HOA(s), closing fees, utilities and other miscellaneous fees. Fees not required to sell the home except as indicated by an accepted contract include buyer closing costs paid by seller, home warranty, and repairs, to name a few.
When Should I Do a Net Sheet?
The listing appointment with a potential seller is the opportune time to impress them with an immediate estimate of their closing costs and estimated net proceeds along with your knowledge of the industry and marketing expertise.
It is also helpful for assisting with the decision to accept or counter an offer from a potential buyer.
How do I get started?
The best way to start is to order an O&E on the property. You may do this by emailing firstname.lastname@example.org or phone 303-850-4190. This will give you a snapshot of who owns the property and for how long, and also the liens that are of record against the property, how much the original liens were and when they were recorded. Based on this information, you will also be able to determine if the sellers are qualified for a reissue rate on title insurance.
How do I prepare the Seller(s) for the appointment so that I have the information I need to prepare the net sheet?
Ask the Sellers to have the following information handy for your upcoming appointment:
- Last mortgage statement(s)
- Statements or coupons for any and all HOA dues
- Last billing statements for water, sewer, and/or wastewater as applicable
Ask the Sellers to consider the following before your meeting:
- Are they willing to consider any concessions to the buyer?
- Will they offer and pay for a Home Warranty for the buyer?
Preparing Net Sheet
When utilizing a net sheet calculator such as the one available on Land Title’s website (http://www.ltgc.com/rates/calc) and Land Title’s mobile app LTGConnect, the following information is needed to provide the Seller a best estimate of costs and net proceeds:
1. Estimated purchase price as determined by you and the Seller
2. Who will pay for the Owner's Title Policy (Traditionally paid by Seller)
3. Who will pay for Title Closing Fee? (Traditionally split between Buyer and Seller)
4. Who will pay for OEC (Owners Extended Coverage)? ($65 additional and traditionally paid by
5. Has the property had title insurance issued in the last five years? The property may qualify for a
discounted rate on the above title policy fees.
6. Estimated closing date based on the average DOM (days on market) and an additional 30 to 45
days to close the deal.
7. Will the Seller offer a home warranty? What is the cost?
8. Agent commissions and administrative fees
9. Are water, sewer, and/or wastewater paid by the owner? A minimum $500 escrow will be required
for final bills as required by the title company.
10. Estimate $350 for each HOA transfer fee
11. What are the total monthly HOA dues considering all sub and master associations?
12. Amount of previous year's taxes
13. Status of previous year's taxes - Amount due or Paid in full
14. Amount of any past due taxes due
15. Principal balance of existing loan(s)/mortgages secured by the property including HELOC's.
a. You will want to consider that interest on a traditional mortgage is paid one month in arrears
and interest for the current month of closing will be due and added to the payoff quote from
the bank. Suggested to add one full month of interest and $75 to cover fax/statement fees
along with the principal balance amount.
b. If any loan/mortgage is a Home Equity Line of Credit, confirm any recent draws or large
payments and adjust estimates entered accordingly.
16. Will the seller offer any concessions?
17. Are there any outstanding utility liens, tax liens, county liens, and/or seller judgments, etc. that
will be paid at closing?
Net Sheets can be prepared via Land Title’s mobile app LTGConnect or at www.ltgc.com. The net sheets can be emailed directly to clients or any other recipients immediately after input.