How To Properly Use A Cost-To-Sell Worksheet

Since you may not know what a cost-to-sell worksheets is, let me quickly explain it to you. It’s a fancy way to say you’re writing down all of the expenses a seller has when selling their house and you’re showing them why working with you is the best option.

For example: On a typical cost-to-sell worksheet you would start off with the sales price of the house. Let’s say its $300,000. Then you would show the seller they might have to take a 10% discount on the house to sell in today’s market conditions (minus $30k).

Next, you’d have the Realtors 6% commission on a $270,000 sales price, which comes out to about $16,000. (We’re now at $254k the seller would get). Then you factor in the 3% for closing costs and that brings the sellers amount to $246k.

But don’t forget that it could take 6 months or longer to sell the house.

If you factor in the carrying costs of a mortgage, insurance and taxes for a 6-month minimum, that’s $9,000 (assuming a $1,500 payment) and now the seller is looking at $237k. So the seller who thought they were selling for $300,000 is now looking at $237k.

And the best way to show the above math is to actually do it in front of them. Personally, I use a yellow legal pad and the seller’s watch me go through the whole thing. This is much better than just handing them a sheet with the numbers already on them.

Once you’re done showing the seller all of the calculations, it’s time to “sell” them on why they should work with you. And this is pretty easy to do. You simply tell them that you can give them $250,000 for the house and can take it off their hands in the next 10 days.

You can do this because your company doesn’t charge any fees or commissions and uses private funds so you don’t have to wait for any financing approvals.

Of course, you’ll be doing a lease option or subject-to and not an all cash deal this way. (For all cash you’d need a much larger discount.) But for the above example, if you got the house at $250k and sold it for $300k to a tenant/buyer you’d be looking at a $50,000 payday.

Whatever you do, remember that it still comes down to finding a motivated seller. If the seller isn’t motivated your yellow legal pad and math skills won’t impress them at all.

But if they truly want to sell, they’ll be more than happy to do a lease option, so they can sell their house quickly and even end up getting more cash down the line.