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GlossarySellingClosing

Net sheet

2 min read
Short answer
A net sheet estimates what a seller walks away with: the sale price less the mortgage payoff, commission, deed tax, prorated property taxes, closing fees and any repair credits. It is an estimate rather than a settlement statement, and it is the number that actually matters to a seller deciding whether a sale works.

A net sheet estimates what a seller actually receives from a sale. It starts with the price and subtracts everything that comes out before the seller sees anything.

For a seller it is the only number that matters, and it is frequently prepared too late to be useful.

What comes off#

Mortgage payoff, including any second mortgage or line of credit.

Commission, per the listing agreement.

Deed tax — 0.33 percent of net consideration in Minnesota, or 0.34 percent in Hennepin and Ramsey.

Prorated property taxes, which in Minnesota's arrears system can run in either direction.

Closing and title fees, and recording costs.

Repair credits or concessions negotiated after inspection.

Any liens that must be cleared — judgments, mechanic's liens, unpaid assessments, certified vacant building fees.

The payoff is where estimates go wrong#

The largest single number on the sheet is usually the mortgage payoff, and it is usually an estimate.

A balance from a recent statement is not a payoff. A payoff adds interest accrued to the payoff date, fees, escrow deficiency, and any prepayment penalty — and it carries a good-through date after which it grows.

On a marginal sale, the difference between an estimated balance and an actual payoff quote decides whether the seller leaves with money or brings money.

Ask for the written payoff before relying on the sheet.

Get one before listing#

The single most useful piece of advice about net sheets.

Prepared before the property goes on the market, it answers whether a sale at a realistic price works at all. Where it does not, the seller has options — waiting, a different price strategy, a conversation with the lender about a short sale.

Prepared after an offer is accepted, it delivers the same information at the point when the options have closed.

Where it becomes a short sale conversation#

A net sheet showing negative proceeds is the moment a normal sale becomes something else.

That is not a dead end. It is the start of a different conversation — with the lender about approving a sale for less than the debt, or about the other loss mitigation options.

Discovering it early is what makes those conversations possible. Discovering it a week before closing generally means the sale collapses.

For distressed sellers specifically#

A seller in a redemption period has a fixed deadline and a payoff that grows daily at the rate on the sheriff's certificate.

The net sheet in that situation needs the redemption figure rather than a mortgage payoff, and it needs a per diem, because the number changes every day the sale is delayed.

Common questions

How accurate is a net sheet?
It is an estimate, and the payoff figure is the largest source of error — an estimated mortgage balance is not a payoff, which adds accrued interest and fees. Ask for an actual written payoff quote before relying on the bottom line.
What does a net sheet leave out?
Frequently the things discovered later: repair credits negotiated after inspection, a septic or well compliance cost, an unrecorded lien found in the title search, or an escrow shortage. Ask what assumptions were used rather than only reading the total.
Should I get one before listing?
Yes, before listing rather than after an offer. It tells you whether a sale at a realistic price actually works, and where the answer is no, that is far better learned before the property is on the market.
Keep reading
Settlement statement
The itemised accounting of every debit and credit in a property closing, showing exactly what each party pays and receives at the table.
Closing costs
The fees and prepaid items paid at a property closing, separate from the down payment, typically running several percent of the purchase price.
Deed tax
Minnesota's transfer tax on recorded conveyances, charged at 0.33 percent of net consideration with an additional levy in Hennepin and Ramsey counties.