Seller's net proceeds and buyer's cash to close

Bottom line: two questions drive every closing. The seller asks, "How much do I walk away with?" The buyer asks, "How much do I wire?" Both answers are plain addition and subtraction. You, the broker, must get them right: the broker with a client in the deal is responsible for the proper closing and must make sure the client gets an accurate, complete, detailed closing statement signed by the broker (4 CCR 725-1 Rule 6.19.A; C.R.S. 12-10-217(1)(j) as cited in that rule).

Seller's net proceeds

Net proceeds means the money the seller actually receives at closing. Start with the sales price and subtract every charge that belongs to the seller:

• Loan payoff: the exact amount the seller's lender needs to clear its loan. The lender writes a payoff statement that includes interest up to a certain day, and it changes a little each day.
• Commission: what the seller agreed to pay the brokerages. It is a percent of the price, and it is negotiable. Brokerage fees are set by each brokerage and its client, not by law.
• Owner's title policy: insurance for the buyer's ownership. The purchase contract says who pays. Many Colorado contracts have the seller pay, but the contract controls (lesson c3-07).
• Documentary fee: a county fee charged when a deed is recorded. By statute it is one cent for each one hundred dollars of price (major fractions round up) (C.R.S. 39-13-102(2)(b)). On a $525,000 sale that is 5,250 hundreds x $0.01 = $52.50. The contract says who pays it. Do not mix it up with a separate "document preparation" fee a brokerage or title company may charge on its own.
• Prorated property taxes: the seller's share of this year's tax bill (see below).
• HOA charges: a homeowners association (HOA) is the group that runs a community and collects dues. The seller often pays a transfer fee and status-letter fee, and dues up to the closing date.
• Closing fee: what the title company or closing company charges to run the closing. It is often split between the two sides.
• Seller credits: money the seller agreed to give the buyer toward the buyer's costs. It comes off the seller's side.

Formula: Net = Price - payoff - commission - title policy - documentary fee - prorated taxes - HOA charges - closing fee - seller credits. If the seller is owed money back (for example, HOA dues the seller prepaid), add it.

Buyer's cash to close

Think of it as a bill with debits (the buyer owes) and credits (the buyer already paid or is being given). Cash to close is the final difference.

• Debits: the price, the buyer's closing costs (lender fees, appraisal, lender's title policy, closing fee, recording, HOA capital fee) and prepaids. Prepaids are costs paid before they are due: a year of homeowner's insurance, interest from closing day to the end of that month, and escrow deposits, which are a few months of taxes and insurance the lender holds in advance.
• Credits: the new loan, the earnest money (the good-faith deposit the buyer already put down; the broker must deliver it to the holder named in the contract, with a dated and signed receipt: Rule 5.12), the seller's credit, and the seller's tax proration.

Formula: Cash to close = (price + closing costs + prepaids) - (loan + earnest money + credits). The Loan Estimate and Closing Disclosure (lesson c3-06) show the lender's version of this.

Prorations: taxes paid in arrears

A proration splits a bill by days of ownership. Colorado property tax is paid in arrears: the 2026 tax bill arrives in early 2027, after the year is over. So at a 2026 closing nobody has paid 2026 taxes yet. The seller owned part of the year, so the seller gives the buyer a credit for the seller's days, and the buyer pays the whole bill when it comes. The contract picks the method (a 365-day year or 30-day months) and which figure to use (usually the last known bill). The examples use 30-day months and the prior year's bill.

Example with real numbers: $525,000 Boulder County house

Closing July 1, 2026. Buyer owns from July 1; seller owes taxes for Jan 1 to June 30 = 6 months x 30 = 180 days. Last year's bill: $3,600, which is $3,600 / 360 = $10 a day. Tax proration: 180 x $10 = $1,800.

Seller side (commission 3% listing + 2.5% buyer-side = 5.5%):

Item	Math	Amount
Price		$525,000.00
Loan payoff	from payoff statement	$318,400.00
Commission	$15,750 + $13,125	$28,875.00
Owner's policy (seller pays)		$1,850.00
Documentary fee (seller pays)	5,250 x $0.01	$52.50
Property tax proration	180 x $10	$1,800.00
HOA transfer and status fees		$350.00
Closing fee (seller half)		$450.00
Credit to buyer		$3,000.00

Step 1, add the charges: 318,400 + 28,875 = 347,275; + 1,850 = 349,125; + 52.50 = 349,177.50; + 1,800 = 350,977.50; + 350 = 351,327.50; + 450 = 351,777.50; + 3,000 = 354,777.50. Step 2: 525,000 - 354,777.50 = $170,222.50 net to the seller. Check: 354,777.50 + 170,222.50 = 525,000. Good.

Buyer side (20% down, loan $420,000, earnest money $10,000):

• Down payment check: 525,000 - 420,000 = $105,000 (20%).
• Closing costs: origination 1% x 420,000 = 4,200; appraisal 650; lender's title policy 1,100; closing fee half 450; recording 120; HOA capital fee 250. Add: 4,200 + 650 = 4,850; + 1,100 = 5,950; + 450 = 6,400; + 120 = 6,520; + 250 = 6,770.
• Prepaids: homeowner's insurance 1,560; interest for 31 days of July at $70 a day (420,000 x 6% = 25,200; / 360 = 70) = 2,170; escrow deposits of 2 months of tax (600) and insurance (260). Add: 1,560 + 2,170 = 3,730; + 600 = 4,330; + 260 = 4,590.
• Debits: 525,000 + 6,770 + 4,590 = 536,360.
• Credits: loan 420,000 + earnest 10,000 + seller credit 3,000 + tax credit 1,800 = 434,800.
• Cash to close: 536,360 - 434,800 = $101,560. Total out of the buyer's pocket, counting the earlier deposit, is 101,560 + 10,000 = $111,560.

The shared lines match on both sides: the $3,000 credit and the $1,800 tax proration.

Example with real numbers: $320,000 condo

Closing September 15, 2026. Seller pays taxes through September 14. Last year's bill $2,160 = $6 a day (360-day year). Days: Jan to Aug = 8 x 30 = 240; plus Sept 1 to 14 = 14; total 254. Taxes: 254 x 6 = $1,524. HOA dues are $450 a month, paid by the seller on Sept 1 for the whole month. The buyer owns Sept 15 to 30 = 16 days, so the buyer repays the seller: $450 / 30 = $15 a day; 16 x 15 = $240. Documentary fee: 3,200 hundreds x $0.01 = $32.00, split $16 each.

Seller: payoff 201,000 + commission 5% (16,000) = 217,000; + doc fee 16 = 217,016; + closing fee 300 = 217,316; + HOA transfer fee 275 = 217,591; + taxes 1,524 = 219,115; - HOA dues owed back 240 = 218,875. Net: 320,000 - 218,875 = $101,125. (The buyer pays the owner's policy here, which shows the contract can shift it.)

Buyer: loan 288,000 (10% down = 32,000). Costs: origination 2,880; appraisal 600; lender's policy 900; owner's policy 1,200; closing fee 300; doc fee 16; HOA capital contribution 900; recording 100. Add: 2,880 + 600 = 3,480; + 900 = 4,380; + 1,200 = 5,580; + 300 = 5,880; + 16 = 5,896; + 900 = 6,796; + 100 = 6,896. Prepaids: insurance 480; interest 16 days x $50 (288,000 x 6.25% = 18,000; / 360 = 50) = 800; tax escrow 360; total 1,640. Debits: 320,000 + 6,896 + 1,640 + 240 (dues owed to seller) = 328,776. Credits: 288,000 + earnest 6,400 + tax credit 1,524 = 295,924. Cash to close: 328,776 - 295,924 = $32,852.

What brokers watch for

Different lenders and contracts count days differently, so always follow the contract. Run the numbers early so your client is not surprised. Do not give legal or tax advice; tell clients to confirm with the closing company and their lender.