Basically, it’s the price the home sells for minus your current mortgage balance and related home-selling fees (broker fee, unpaid taxes, legal fees, etc.). This number will be useful as you begin searching for a new home.

How to estimate your net proceeds:

1. Determine the value of your home
This is what we did in the previous section. If you haven’t yet determined your home’s current estimated value, refer to the “Pricing Your Home” section above.

2. Determine your mortgage payoff
This is the amount required to pay off your mortgage completely. If you don’t have this information, call your mortgage lender. They can give you the amount.

3. Estimate your cost to sell
When you sell a home, you’ll pay costs for a variety of services. Therefore, those costs need to factored into your net proceeds calculation.

Costs to sell a home vary, but common costs include the following:

• Real estate agent’s commission. • Attorney, escrow agent and other professional fees. • Excise tax for the sale. • Prorated costs for your share of property taxes, HOA fees, and other annual expenses. • Any other fees typically paid by the seller in your area (surveys, inspections, etc.).

All that’s left to do is subtract your mortgage payoff and selling costs (items #2 and #3 above) from your selling price (item #1 above). This will give you an estimate of your net proceeds. With this information, you can more accurately answer some important questions:

Will your proceeds cover your costs to acquire a new home? If not, do you have other funds to make up the difference?