Net Sales Proceeds

Net Sales Proceeds refer to the amount of money that a seller receives from the sale of a property after all costs associated with the sale have been deducted. These costs can include items such as real estate agent commissions, closing costs, legal fees, repairs or improvements made for the sale, and any remaining mortgage balance.

The formula for calculating Net Sales Proceeds is as follows:

Net Sales Proceeds = Gross Sales Proceeds - Selling Costs

For example, if a property is sold for $1 million (the Gross Sales Proceeds), and the total costs associated with the sale amount to $100,000, then the Net Sales Proceeds would be $900,000 ($1 million - $100,000).

In the context of real estate financial modeling, the Net Sales Proceeds provide a more accurate picture of the profit realized from the sale of a property, and can be used to calculate metrics such as the Internal Rate of Return (IRR) and Equity Multiple.