Selling Your Property: How Much Money Will You Make?

Summary

Selling a property is one way for a homeowner or real estate investor to make a significant amount of money.

Here is how to figure out how much money you will make.

Your Real Estate Profits

The first thing to figure out is how much you can sell your property for.

If you sell it through a real estate agent you will also need to agree on a commission rate. This can be sliding commission rate based on the sale price of the property, or a straight percentage. This is up to you.

When you do have an offer from a buyer you will need to decide if you are willing to contribute anything to closing costs. Lenders often allow up to 6% of the sales price of a property to be used to pay for closing costs.

You may be able to increase the sales price of your property and credit the increase back to the seller to cover closing costs. This depends on if the appraisal can support the sales price and what the lender requirements are.

If you have a current mortgage on your property you will need to find out what the payoff will be. This is how much you will need to pay your current loan off completely.

You may have a prepayment penalty on your mortgage. You will usually have to pay this prepayment penalty. This can often be thousands of dollars or more. A prepayment penalty usually lasts from one to several years. Check to see when your prepayment penalty expires. You may want to sell after that. Also, there are two kinds of prepayment penalties: hard and soft. A hard prepayment penalty is charged whether you refinance or sell a property. A soft prepayment penalty is only charged when you refinance, and not when you sell a property.

These are the basic costs and issues you will need to face to figure out what your real estate selling profits will be.