After selling your house, the money you have left over—known as net proceeds—is the final sale price minus your outstanding mortgage balance, agent commissions (typically 5–6%), and closing costs (another 1–3%). Generally, sellers keep 60% to 85% of the total sale price, with total costs often hovering around 10% of the sale price.
After selling a house, you keep your net proceeds, which is the sale price minus your mortgage balance, real estate agent commissions (around 5-6%), closing costs (transfer taxes, title fees), and any repair or staging costs, often leaving you with 70-80% of the sale price, but this varies significantly by location and expenses. To estimate, use an online home sale calculator by inputting your sale price, mortgage payoff, and estimated costs.
Start an Emergency Fund
“Financial experts typically recommend three to six months of necessary living expenses in your emergency fund, but don't let that number scare you; just start putting away as much as you can.
Net cash proceeds from a home sale are the total amount of money you walk away with after paying off the existing mortgage, closing costs and any other associated fees. This will be different for every home seller, even if they sell their home for the same price.
After selling your home, you must pay any outstanding mortgage, agent commissions, and closing fees. You keep the remaining money after settling these costs. After all the deductions, you have 60 to 85 percent of the house's total sale.
But it's important to keep in mind that you almost certainly won't get that entire amount in cash. Your profit from a home sale—or “net proceeds”—is the amount that's left over after deducting your expenses, including your remaining mortgage balance.
In general, any inheritance you receive does not need to be reported to the IRS. You typically don't need to report inheritance money to the IRS because inheritances aren't considered taxable income by the federal government. That said, earnings made off of the inheritance may need to be reported.
When you sell your primary residence, $250,000 of capital gains (or $500,000 for a couple) are exempted from capital gains taxation. This is generally true only if you have owned and used your home as your main residence for at least two out of the five years prior to the sale.
By owning a home for at least five years, mortgage payments and potential appreciation typically build enough equity to increase your profit when you sell. Selling sooner may yield a smaller return, while waiting around five years generally helps homeowners get the most from their investment.
The "3-3-3 rule" in real estate isn't a single guideline but refers to different strategies: for buyers, it's about financial readiness (3 months savings, 3 months reserves, 3 property comparisons) or a financial affordability check (30% income, 30% down, 3x income); for agents, it's a marketing habit (call 3, note 3, share 3) or prospecting (talking to everyone within 3 feet). There's also a developer rule (1/3 land, 1/3 build, 1/3 profit), though it's considered outdated by some.
The "27.39 rule" (often rounded to $27.40) is a simple financial strategy to save $10,000 in one year by consistently setting aside $27.40 every single day, making it an achievable micro-saving habit to build wealth or an emergency fund. It turns the daunting goal of saving $10,000 into a manageable daily action, emphasizing consistency over large lump sums.
In a standard real estate transaction, both the homebuyer and the home seller are responsible for paying closing costs. However, each party incurs different types of closing costs.
If the home is a rental or investment property, use a 1031 exchange to roll the proceeds from the sale of that property into a like investment within 180 days.
Selling AS-IS means that you're listing your home in its current condition without making repairs or upgrades. Whatever issues the buyer discovers during an inspection, they're agreeing to accept the house as it is. While it may seem simple, the AS-IS label can often raise red flags for buyers.
The 70% rule in real estate is a guideline for house flippers: don't pay more than 70% of a property's After Repair Value (ARV) minus the estimated cost of repairs, ensuring a built-in profit margin and buffer for other expenses like closing costs and unexpected issues. The formula is: Maximum Allowable Offer (MAO) = (ARV x 0.70) - Repair Costs. It helps investors quickly assess if a deal has potential, but market conditions and accurate ARV/cost estimates are crucial.
If you use your former home to produce income (for example, you rent it out or make it available for rent), you can choose to treat it as your main residence for up to 6 years after you stop living in it. This is sometimes called the '6-year rule'. You can choose when to stop the period covered by your choice.
Under our scenario above, if the homeowner were single, her federal capital gain would be $400,000 - $250,000 = $150,000, and her federal capital gain tax would be $150,000 x 15% = $22,500.
Children generally inherit significant amounts tax-free due to the high federal estate tax exemption, which is $13.99 million per individual for 2025, with a planned reversion to a lower amount ($5 million adjusted for inflation) in 2026, meaning very large estates are taxed, but most inheritances fall below this threshold, though some states have their own inheritance taxes. Heirs also benefit from the "step-up in basis," which lowers capital gains tax on inherited assets like stocks and real estate.
You can typically inherit a very large amount from your parents without paying federal tax, as the federal estate tax exemption is around $15 million per person for 2026, meaning only estates larger than that pay tax, not you directly. While you generally don't pay income tax on inheritances (except for pre-tax retirement funds like IRAs/401(k)s, which are taxed as income when withdrawn), some states have their own estate or inheritance taxes with much lower thresholds, affecting a smaller portion of wealth.
You can typically inherit a very large amount from your parents before hitting federal estate tax thresholds, which are around $15 million per individual in 2026, meaning most heirs receive tax-free inheritances because estates rarely exceed this limit; however, some states have their own estate or inheritance taxes, and income from inherited assets (like IRAs or rental income) is usually taxable, according to this U.S. Bank article, this Fidelity article, this Domain Money article, and this Tax Foundation article.