Exactly How Much Money can You Make Selling an Omaha Home?
The incredibly hot seller's market in Omaha from 2020 through 2022 came to a cool down as mortgage interest rates began to rise in the second half of 2022. This has many Omaha homeowners wondering if now is a good time to sell their home and what exactly they might be able to make off the sale of their current Omaha home.
Coming to a good estimate of how much you can actually make on the sale of your Omaha home is more than just subtracting your current mortgage loan balance from the fair market value list price you plan to set for your home. It is best to have a firm foot on the ground realizing the difference between net proceeds and profit to help you arrive at just how much money you actually made off of your Omaha home.
What is a net proceed?
The net proceeds represent the actual amount of money a seller will receive after selling their home minus all of the expenses that come with the entire home sale not just paying off the current mortgage on the property. This can include fixing up the home with minor repairs, real estate commissions, inspection, transfer fees, and all bank-related closing costs and more. Your net proceeds are the final number on the check you will receive when everything is said and done on the home sale.
Calculating net proceeds on a home sale
Calculating the net proceeds of a home sale is not difficult. In fact, most of it is pretty much done for you through the closing paperwork on your home sale. Pretty much every cost is calculated in the paperwork that you sign acknowledging that you are releasing ownership to the new buyer as they hand over a check for the agreed-upon purchase price.
One cost of selling your home that probably won't be in this paperwork however and you want to keep track of is the money you put into your home to get it ready for showings. This could be through a pre-listing inspection, any small repairs or updates you make, and any staging costs. You will want to deduct this from the final check you receive from the bank upon selling your home. This will get you to your net proceeds number. Often this is the number most people take as what they made on their home. But if you truly want to get a real number of what you gained you have to take into account the actual profit you made. If you end up subject to capital gains tax you of course want to add that as well. (But purchasing a new property within a certain time frame saves many Omaha home sellers from being subject to this.)
What is profit?
Profit adds an additional expense to the calculation of what you make on your home. This takes the actual gains of your home one step further by calculating the price you paid for that home when you moved in. To determine the true profit and what you actually really made off of the sale of your home taking into account what you paid in the first place will give you the clearest and best picture. This will give you the most honest and true look into the money that you made on the investment in the property.
Why does the profit number matter?
If you receive a check for the net proceed amount why would it matter what your profit is? Especially since the proceed amount is what you can take to put down on the purchase of a new home.
Savvy homebuyers will always look at the actual profit of their investment to help them determine how to best make their next investment. Investing in real estate is a long-term game and seeing your true profit in your investment can help you to determine your best next investment and help you better understand making the smartest investment in a home purchase as possible.
Realizing exactly how your Omaha home investment has benefited you helps you to continue to make the best homebuying strategy moving forward to not only find a home you will love but help you to build wealth as well.
If you are considering the sale of an Omaha home contact me. I can help you to determine the best list price for your home to get it sold successfully and as quickly as possible for the best proceed possible.
