To estimate how much money you will make from selling your house, you can use a simple calculation method. Here’s a step-by-step guide to help you:
1. Determine the Selling Price: Estimate the price at which you plan to sell your house. You can research similar properties in your area or consult a real estate agent for an accurate market analysis.
2. Calculate Outstanding Mortgage Balance: Find out how much you still owe on your mortgage. This includes the principal balance and any remaining interest.
3. Estimate Selling Costs: Account for expenses related to selling your home, which typically include:
– Real estate agent commissions (usually 5-6% of the selling price)
– Closing costs (which can range from 2-5% of the selling price)
– Repairs or renovations needed before selling
– Other fees (such as staging costs and marketing expenses)
4. Use the Formula: The basic formula to calculate your potential profit is:
Selling Price – (Outstanding Mortgage + Selling Costs) = Profit
5. Example Calculation:
– Selling Price: $400,000
– Outstanding Mortgage Balance: $250,000
– Estimated Selling Costs (let’s say 7%): $28,000 (which includes agent fees and closing costs)
Profit Calculation:
$400,000 – ($250,000 + $28,000) = $122,000
So, in this example, you would make approximately $122,000 from the sale of your house.
Using this method allows you to gauge your potential earnings accurately. For a more precise calculation, consider speaking with a financial advisor or real estate professional who can take into account specific local factors and provide tailored advice.
