Sale proceeds in residential real estate refer to the money that is received from the sale of a home. The proceeds from the sale are typically the difference between the sale price and any outstanding mortgages, liens, or other debts that are associated with the property.
Sale proceeds can be used for a variety of purposes, such as paying off outstanding debts, making a down payment on a new home, or as a source of income for the seller.
Typically, the sale proceeds are disbursed at closing of the sale transaction and are distributed among the parties involved in the sale. This includes the seller, real estate agents and their brokerage firms, and any other parties involved in the transaction, including co-owners, like Ourboro.
For example, let’s say an owner sells their property for $1,000,00 and, at the time of sale, there is $600,000 of mortgage outstanding on the property. In this case, total sale proceeds would be $400,000.
When selling an Ourboro co-owned home, we don’t immediately split the sale proceeds. Instead, whatever has been paid toward the mortgage principal is allocated to the co-owner first. Then, pending any adjustments like Renovation Credits or Homeowner’s Advance Fund repayments, whatever is left will be distributed based on our equity split.
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