Parts of the “Best Offer”: Seller Net
As a seller you’ll likely receive an offer that is a gross price to purchase your home. That is the price the buyer is offering to pay from which debits will be deducted by the title company in order to calculate your net proceeds amount, which is the money you as the seller will receive at closing. The debits will include everything owed on the house including mortgages, lines of credit, back taxes and liens as well as title company fees, state and country taxes, any commissions owed to real estate agents and any contributions you have be asked to make to the buyer’s closing costs. If you’re working with an agent either listing or facilitating your sale, ask them to prepare an estimated seller net sheet so that you can get an idea of what you proceeds will be at closing and so that you can compare selling scenarios or multiple offers “apples to apples”.
If you own a home that’s paid off and are pursuing an as-is sale to an investor, you may consider asking for a net offer. Roughly speaking that means a price that the buyer will ensure you walk away from at the closing table. Your settlement statement may still show debits for items like state and county taxes, however the buyer can give you a credit via the settlement statement for those items so that the agreed price is what you walk away with. Keep in mind that an investor may be unwilling to make a net offer on the spot, because they’ll need to research how much additional money they’ll be spending for the house based on covering your expenses and fees. Net offers while rarely given and agreed can give you an easy view as to the money you’ll get at closing and the simplest way to compare multiple offers.