The sale price is the headline. The net is the part you keep.
The sale price is the number your neighbors hear about. The number you live on is the net, and on a typical seller statement it sits a long way down the page, after the payoff, the commissions, the taxes and a dozen small charges nobody mentioned at the listing appointment.
I kept the books at a small title and escrow office in Carmichael for twenty-two years. I balanced a lot of seller statements, and the first line was almost never the interesting one. This site works through the lines below it, with the arithmetic left in so you can check me.
What sits between the price and your check
Every seller statement I ever balanced had the same skeleton. The price goes in as a credit to you. Then the debits start.
The biggest one is usually the loan payoff, and it is not the balance on your last mortgage statement. It is a payoff demand from your lender that adds interest through the payoff date, and California makes the lender produce it. Under Civil Code section 2943, a lender has 21 days from a written demand to deliver the statement, and it has to include enough information to work out the payoff on a per-day basis.
After that come agent compensation, title insurance and escrow fees, transfer taxes, your share of property taxes, any HOA charges, repair credits you agreed to after the inspection, and a few recording and document fees. One more item isn't a cost at all, but it can still take a bite at closing: state income tax withholding.
| Cost category | Who usually sets it | Where to verify |
|---|---|---|
| Loan payoff(s) | Your lender, by payoff demand | Lender's written payoff statement |
| Agent compensation | You and your agent, by negotiation | Your listing agreement |
| Title insurance and escrow | Each company's filed rates; who pays follows local custom | A written quote from the title and escrow company |
| County documentary transfer tax | State law and county ordinance | Sacramento County Clerk-Recorder |
| City of Sacramento transfer tax | City code, inside city limits only | City of Sacramento Revenue Division |
| Property tax proration | County tax bill, split by escrow | Your current secured tax bill |
| HOA documents and fees | Your association | The association's written fee estimate |
| Repairs and credits | Negotiated with the buyer | The signed repair addendum |
| State withholding (prepayment, not a fee) | Franchise Tax Board rules | Form 593, filed through escrow |
Why the net matters more than the headline price
Picture two offers $10,000 apart, where the higher one asks for a $12,000 repair credit after inspection. The higher offer is now the lower one, whatever the purchase contract says on page one.
Some costs grow with the price, which shrinks the gap a little more. Inside City of Sacramento limits the county charges $1.10 per $1,000 and the city adds its own $2.75 per $1,000, so every extra $10,000 of price costs $38.50 in transfer tax before anybody's commission is figured. The city posts its rate on its real property transfer tax page, and the transfer tax article runs the numbers at six prices.
Title insurance is less predictable. According to the California Department of Insurance's consumer guide to title insurance, each title insurer files its own rates with the Insurance Commissioner, so prices differ by company. Who pays the premium is set by local custom, not by law. Two net sheets for the same house can disagree on this line, and neither has to be wrong.
How to read an estimated net sheet
An estimated net sheet is a forecast, and it is only as good as its inputs. When one lands in your inbox, go down it in this order:
- Check that the price and the closing date are the ones you agreed to. The date drives interest on the payoff and the tax proration.
- Ask whether the payoff came from a lender's payoff demand or from your last monthly statement. If it came from the statement, it is low.
- Multiply the commission yourself. Compensation is negotiated, so the sheet should match your listing agreement and any written offer to a buyer's agent, nothing more.
- Look for both transfer taxes if the house is inside city limits, and only the county's if it isn't.
- Find the property tax line and see which installment it assumes you have paid. The county's fiscal year runs July 1 to June 30.
- Ask whether withholding applies. The Franchise Tax Board says real estate withholding is a prepayment of income tax. If the house qualifies as your principal residence, or was last used as your main home, Form 593 has a box for an exemption, and it goes to escrow before closing.
If a line says "estimate" with a round number like $2,000 next to it, that's a placeholder, not a quote. Ask who will charge it and get their number in writing.
Comparing different ways to sell
The net sheet is also how you compare a listing with the other options. A direct sale to a cash buyer may come in at a lower price, and in exchange some of the lines above shrink or drop out. The guide to five ways to sell a Sacramento house, compared lays the routes out side by side. Run each offer through the same sheet, line for line, before you sign anything.
The seller closing costs article has a worked example of exactly that comparison. The capital gains article covers the one cost that never shows up on the escrow statement at all.
My old rule still holds. If the net sheet doesn't add up to the penny, somebody owes you an explanation, and it's usually a short one.
Arlene Whitcomb kept the books for a small title and escrow office in Carmichael for twenty-two years and still balances her checkbook to the penny. She writes about the numbers on a seller's settlement statement. She is not an accountant, attorney or escrow officer.