Net Sales Price
The definition of net sales price in real estate is the combined total cost to the buyer of a listing, excluding any auxiliary costs such as the sales fee, appraisal fee, real estate agent commission and any other supplementary costs. Net sales price differs from gross sales price in several regards in that gross sales price includes all supplementary costs, while net sales price only includes the cost paid by the buyer.
So how is net sales price calculated, and what is and is not counted while calculating it? In the following section, we’ll provide some examples of how net sales price is used as a term in real estate, and how it is calculated. Let’s begin.
Example of net sales price in real estate
Harold is a junior partner at a well established law firm. A skilled defense lawyer, Harold, or Harry as his friends call him, is as cunning as he is unscrupulous. With a bustling clientele that includes many distasteful individuals, he has amassed a small fortune and is in the market to sell his home. He finds a real estate agent and begins the process of selling his current domicile.
After some searching, Harold manages to find a buyer for his current home, a beautiful two story cape-cod style home in a quiet suburb adjacent to the city. After completing the preliminary paperwork, Harold proceeds to calculate how much he’ll receive after the sale of his home. However, misfortune befalls him.
In a twist of irony, it turns out that the real estate agency Harold chose to sell his home is as disingenuous as he is. After applying a myriad of hidden fees and costs in addition to the universal fees that must be paid after the sale of a home, Harold records a net sales price far lower than he believed he would when he began the process of selling his home.
Popular Real Estate Terms
Legal action of a landlord to remove a tenant.The tenant may have violated the lease agreement such as for the tenant's failure to pay the rent. ...
Risk resulting from possible increases or decreases in price levels that can substantially impact real estate values. ...
Another residence in addition to the main residence where a person or family resides. An example is a second home out of the city used on weekends and during vacations. Interest and real ...
Factor used in present value computations to determine the current value of future cash flows. It is used to get the current value of what the selling price would be when the property is ...
Amount received by a seller of real property in the form of credit rather than cash. Interest is typically received on the note. If a house is sold for $300,000 of which $100,000 is cash ...
Restraining a person or business from denying an appropriate conveyance of property evidenced by a deed has given. ...
Expected period of benefit used to depreciate business property, plant, and equipment. The guidelines may be developed by the industry or Internal Revenue Service (IRS). ...
Supplementary narrow pathway, such as to a building. ...
If you're involved in real estate, whether buying, selling, or investing, you might have come across the term "alluvium." It's not just a fancy word but an important concept. Let's delve ...
Have a question or comment?
We're here to help.