When you sell, the price is the headline, but the number that matters is what lands in your account afterward. That is your net proceeds. Let me walk you through everything that comes out between the two, so the figure you plan around is the real one.
Written by Adam L. Engel, Esq., Principal and real estate attorney at Prime Title & Escrow
Sellers often ask me why the wire they receive is smaller than the sale price. The answer is that a handful of real costs come out at the table, and a clear estimate up front turns that from a surprise into a plan. Here is the full list, in plain order.
Net proceeds are your sale price minus the payoff of any existing loan, the real estate commission, the grantor’s tax and any Northern Virginia regional fees, your share of prorated property taxes, anything attached to the title such as a second lien or association balance, and the settlement charges. What remains is yours.
Your loan payoff
If you still owe on the property, that balance is paid in full at closing from the proceeds, including the interest that has accrued up to the payoff date. The figure comes from your lender on a payoff statement, and because interest accrues daily, the exact number depends on the closing date. I request payoffs early so a slow lender does not hold up your sale, which is one of the items I cover in what can delay your closing.
The real estate commission
For most sellers, the commission is the single largest deduction. It is set by your listing agreement and paid from the proceeds at closing. Since this is your agreement with your agent, the rate and terms are between you and them, and they are negotiable.
Transfer taxes: the grantor’s tax and Northern Virginia fees
The seller pays the grantor’s tax, Virginia’s transfer tax, at $1 per $1,000 of the greater of price or value. I explain it in the Virginia grantor’s tax. If your property is in the close in Northern Virginia jurisdictions, two regional fees apply on top, which I cover in the Congestion Relief Fee and WMATA Capital Fee. Together these belong in your estimate from the start.
Prorated property taxes
Property taxes are split between you and the buyer as of the closing date, so you are responsible only for the part of the tax period you owned the home. Depending on your locality’s billing cycle, this shows up as a credit to one side or the other. I explain the mechanics in how property tax proration works in Virginia, and I calculate it for your specific jurisdiction.
Anything attached to the title
If there is a second mortgage, a home equity line, an unpaid property tax balance, a homeowners association balance, or a judgment against the property, it has to be cleared to deliver good title, and it comes out of your proceeds. Finding and clearing these early is part of the title work, which I describe in what a title and escrow company does.
Settlement charges
Finally, there are the settlement charges for the work of closing: the settlement or closing fee, the cost of preparing the deed, and recording costs for releasing your old loan. These are modest compared to the commission and the payoff, but they are real and they appear on your settlement statement.
Your proceeds do not change hands across the table. Under Virginia’s Wet Settlement Act, I record and disburse within two business days of settlement, and most sellers receive their funds by wire within a day or so of recording. I confirm your payout details with you by phone before sending, never by email alone. You can read the rule in my guide to the Virginia Wet Settlement Act.
How to estimate your net before you list
The simplest approach is to take your expected price, subtract the commission and your loan payoff first, since those are the largest, then add the grantor’s tax and any Northern Virginia fees, your prorated tax share, anything attached to the title, and the settlement charges. For the full set of seller costs and how they fit together, see my overview of closing costs in Virginia and the buyer and seller split in who pays closing costs in Virginia.
Net proceeds matter on residential and commercial sales across Virginia and West Virginia. The deductions are predictable once you know them, and the surest way to plan is a clean estimate built from your actual numbers. I am glad to prepare one from your contract and payoff so you know your bottom line before you sign.
Send me your contract and loan details and I will prepare a line by line estimate of what you will actually take home.
Get Your Free Quoteor call (703) 552-4155Frequently asked questions
What are net proceeds when selling a house in Virginia?
Net proceeds are what you actually keep from a sale after everything that comes out at closing: the payoff of your existing loan, the real estate commission, the grantor’s tax and any Northern Virginia fees, prorated property taxes, any liens or association balances, and the settlement charges. The price is the top line; the net is the bottom line.
How do I estimate my net proceeds in Virginia?
Start with your sale price, then subtract your loan payoff, the commission, the grantor’s tax plus any Northern Virginia regional fees, your share of prorated property taxes, anything else attached to the title, and the settlement charges. I prepare a clean seller estimate so the number is real before you sign.
When do I get my money after selling in Virginia?
Under Virginia’s Wet Settlement Act, the settlement agent records and disburses within two business days of settlement. Most sellers receive their proceeds by wire within a day or so of recording. I confirm your payout method with you by phone, never by email alone.
Does the grantor’s tax come out of my proceeds?
Yes. The grantor’s tax is the seller’s transfer tax, and in Northern Virginia two regional fees apply on top of it. All of them are deducted from your proceeds at closing, so they belong in your estimate from the start.
What reduces a seller’s proceeds the most?
For most sellers the two largest deductions are the real estate commission and the payoff of the existing mortgage. The transfer taxes, prorations, and settlement charges are usually smaller by comparison, though they still add up.
This article is general information about seller net proceeds in Virginia and West Virginia. It is not legal or financial advice for your specific transaction, and figures change with your price, payoff, commission, and locality. Please confirm the numbers that apply to your sale with me directly.