How Much Will I Actually Keep When I Sell?

Seller Question of the Week | Seattle + Eastside

How much will I actually take home when I sell?

Direct answer: Start with a realistic sale-price scenario, then subtract the actual loan payoffs, selling expenses, agreed credits and closing adjustments. Your equity estimate is a starting point. It is not a promise of the cash you will receive.

Build the estimate from the transaction

If a home might sell for $1,000,000 and the mortgage balance is roughly $600,000, the simple equity estimate is $400,000. That calculation has not paid for the sale. It has also not established what the home will sell for. In Seattle and on the Eastside, the price scenario still needs close comparable properties, current alternatives, condition and the terms of an actual offer.

I would separate the worksheet into five lines of inquiry. First, what price and closing date are we modeling? Second, what does each lender require to release its lien? Third, what selling expenses are payable under the actual agreements? Fourth, what credits, repairs or other obligations have been negotiated? Fifth, which prorations or outstanding property charges need to be settled?

Ask for a dated payoff statement rather than relying only on the last mortgage statement. Confirm any second mortgage, home-equity balance or other lien with the appropriate parties. Ask escrow how interest through the payoff date, fees and any applicable penalty affect the figure. A preliminary worksheet should label an estimated payoff as estimated.

Washington excise tax belongs in the estimate

Washington’s real estate excise tax, or REET, generally applies to the sale of real property unless a specific exemption applies. The seller usually pays it. The state portion is graduated, with a separate local portion added. The highest bracket reached is not applied to the entire sale price.

For a taxable $1,000,000 residential sale under the state thresholds in effect in November 2026, the first $525,000 at 1.10% produces $5,775. The remaining $475,000 at 1.28% produces $6,080. State REET is therefore $11,855. The DOR local-rate table effective May 1, 2026 lists 0.50% for Seattle, Bellevue, Kirkland and Redmond. In one of those jurisdictions, that adds $5,000, for $16,855 in this example, before the separate state technology fee.

Use the property’s actual jurisdiction, transfer date, classification and any applicable exemption. DOR has announced new state thresholds beginning January 1, 2027. A worksheet for a 2027 transfer needs that year’s calculation; a decision to wait also needs to account for ownership costs and market uncertainty. Tax timing alone does not establish the better sale plan.

A complete example is more useful than a percentage shortcut

The $3,500 is an invented planning allowance for other seller-paid title, escrow, recording or related charges, the $5 state technology fee, and net prorations. It is not a local fee schedule. The 5% compensation is a hypothetical negotiated agreement, not a standard or required rate. Actual agreements control who pays each charge. This example assumes no other liens, repairs, assessments, moving costs, advance preparation costs or separately payable taxes.

The difference between the $400,000 simple equity estimate and $319,645 is $80,355. That gap is why I would not build the next purchase around the equity number alone. Some costs happen before closing rather than appearing as a deduction on the settlement statement. If you already paid for staging or repairs, show them separately when evaluating the whole move, without subtracting them twice.

Keep the estimate current as the deal changes

A seller credit can alter the cash result even when the headline price stays unchanged. A later closing can change loan interest, ownership costs and prorations. A condo or townhome may have association-related charges that need property-specific confirmation. A detached home can have its own unpaid obligations. None of those items can be settled by a countywide market average.

Ask escrow to reconcile the final statement against the current contract and payoff information. Separately confirm when proceeds can be disbursed and made available under the receiving bank’s process. Do not commit the next down payment to an assumed availability date. Our selling-and-buying guide explains why sequencing matters.

Let’s build a property-specific sale and proceeds comparison with conservative, expected and stronger price scenarios, then identify which figures escrow and your tax professional need to confirm.

Another Question Sellers Are Asking | Seattle + Eastside

Does paying off my mortgage reduce the taxable gain?

Direct answer: Paying off the mortgage reduces the cash you keep, but it does not itself reduce the gain used to determine federal home-sale tax. The IRS addresses this distinction directly. Taxable gain and net proceeds need separate worksheets.

The basic gain calculation begins with the amount realized from the sale, generally the sale price less qualifying selling expenses, and subtracts adjusted basis. Basis often starts with acquisition cost and is affected by eligible capital improvements and other adjustments. The remaining loan balance is not a substitute for basis. The IRS’s Publication 523 provides the detailed framework; the currently available edition is for 2025 returns, so confirm any later developments and the applicable filing-year rules with your tax professional.

One example, two different answers

Suppose a hypothetical sale price is $1,000,000, qualifying selling expenses are $70,000 and adjusted basis is $650,000. The amount realized is $930,000 and the gain before any exclusion is $280,000. If the mortgage payoff is $600,000, that same simplified scenario leaves $330,000 in cash after those selling expenses and payoff. Changing the mortgage payoff to $500,000 would leave $430,000 in cash, while the gain calculation would still begin with $280,000.

Those are separate hypothetical assumptions from the first answer’s net sheet. They do not determine which expenses qualify, anyone’s adjusted basis, exclusion or final tax bill. Keep improvement records and earlier closing statements, then have the tax calculation reconciled by someone qualified to prepare it.

The exclusion has conditions

IRS Topic 701, updated October 12, 2026, explains a possible exclusion of up to $250,000 of gain, or up to $500,000 for qualifying married taxpayers filing jointly. These are potential limits, not automatic deductions from the sale price. Ownership, use and prior-exclusion rules matter. Generally, the ownership and residence tests look at at least two years within the five years before sale. Joint-return rules treat the spouses’ ownership and use tests differently, and other limits and exceptions can apply.

A former rental, business use, depreciation, inherited ownership, divorce, an earlier exclusion or a sale before meeting the general tests needs more careful review. Do not assume every home sale qualifies for the full exclusion or that a general article resolves a partial exclusion. Reporting may still be required when an exclusion applies, including when you receive Form 1099-S.

Washington DOR lists real estate as exempt from the state’s capital gains tax. That does not erase federal obligations or the separate Washington REET calculation. Distinguish the taxes rather than concluding that a Washington home sale is tax-free.

For a Seattle or Eastside move, the practical step is to establish a cash reserve for any obligation your tax professional identifies before assigning all the proceeds to the next home. Bring the sale timeline into your planning conversation, and have your CPA or tax adviser confirm basis, eligibility, reporting and any reserve before choosing the final move budget.

What Buyers Are Asking | Seattle + Eastside

How do I verify wiring instructions before sending closing funds?

Direct answer: Confirm the instructions through a trusted, independently established contact method before sending the money. Do not use the phone number or link supplied in an unexpected message to verify that same message.

The CFPB’s closing-fraud guidance explains that criminals can impersonate a real estate or settlement professional and send false instructions. A convincing email thread, familiar logo or knowledge of your closing date does not establish the destination’s authenticity. This is a standing prevention issue, not a claim that a new Seattle fraud wave has been measured.

Set the process before the deadline

Early in escrow, establish the settlement team’s identity and verified callback number through an independent trusted route. Agree on how instructions will be delivered and how you will verify them. Washington DFI’s Spring 2025 escrow guidance recommends verifying transfer details in person or by calling a previously known and verified number, and says email alone should not confirm wire instructions.

When it is time to send funds, call that established number yourself. Confirm the recipient name, bank details and account information directly with the authorized settlement professional, and follow your bank’s verification process. Confirm the amount and timing separately against the closing figures. An accurate dollar amount does not validate the receiving account.

If instructions change, pause and repeat the independent verification. A message saying the bank changed, the deadline moved or secrecy is required deserves a direct conversation through your established route. Do not let a deadline turn a verification step into an optional courtesy. Tell the settlement team promptly if a problem could affect closing; contract timing still needs attention.

If money may have gone to the wrong account

Contact your bank or wire-transfer company immediately and ask for a recall. Notify your trusted settlement contact through the verified channel and report the incident to the FBI’s Internet Crime Complaint Center. The CFPB recommends immediate action, but recovery is not guaranteed. Preserve the messages and transaction details for the bank and investigators.

This process matters whether you are buying a Seattle condo, a townhome or an Eastside detached home. The transaction size does not replace the verification. Let’s put the closing-funds check into your purchase plan before the final week, with the settlement professional confirming the actual instructions.