Profit is the amount earned versus the amount spent. When selling a house, calculating profit is slightly more complicated than subtracting the original purchase price from the price of sale. Real estate agent fees, closing fees and other costs factor into the amount of profit earned. Single homeowners who make more than $250,000 profit and married homeowners who make more than $500,000 profit are required to pay capital gains taxes.
Calculating Your Profit
Subtract the current mortgage balance from the price of sale. The current mortgage balance is on your monthly mortgage statement. You can also get it by calling your mortgage company. If any other home loans or a second mortgage exist, subtract these amounts next.
Obtain a copy of the seller net sheet from your realtor. This sheet contains all fees that are paid to sell the house including closing costs, realtor fees, prorated taxes and any other fees that apply.
Add all fees contained on the seller net sheet. While this sheet often has the estimated profit for the seller, do the math yourself to double-check what the real estate agent has prepared.
Subtract the fees from the difference obtained in step one. This is your net profit.
Subtract any money you spent on major home repairs, such as remodeling, adding a new roof, landscaping fees or adding new appliances, to determine the final net profit.