Arizona Seller Net Sheet Guide 2026: What Will You Actually Walk Away With After Selling?

What Is a Seller Net Sheet and Why Every Arizona Seller Needs One Before Listing

A seller net sheet — also called a seller’s estimated proceeds statement or seller closing cost worksheet — is a financial projection that translates your anticipated sale price into your estimated net proceeds after all selling costs are deducted. It is not a final accounting; it is a pre-listing planning tool that allows you to make informed decisions about pricing strategy, timing, and whether the sale makes financial sense under current market conditions. A well-prepared net sheet is the starting point of every listing conversation Ryan has with a prospective seller, because it is impossible to make a rational selling decision without understanding the bottom line.

In Arizona, the seller net sheet is especially important because sellers bear several costs that buyers in other states sometimes pay — most notably the owner’s title insurance policy, which is customarily a seller expense in Arizona. Combined with real estate commission, property tax prorations, HOA transfer and disclosure fees, and mortgage payoff, total seller closing costs in Arizona commonly range from 6% to 10% of the sale price. On a $600,000 home, that range represents $36,000 to $60,000 in costs that come off the top of your proceeds. Knowing that number before you list is not optional — it is essential to any reasonable financial plan around a home sale.

The net sheet is also the primary tool for evaluating different pricing scenarios. Should you list at $649,000 hoping for a slightly higher offer, or price at $625,000 for faster sale and potentially more buyer competition? The net sheet lets you model both scenarios with their associated costs, prorations, and projected payoff amounts so you can see how the bottom-line numbers actually compare. A $24,000 difference in gross sale price may translate to a smaller net proceeds difference once closing costs (many of which scale with price) are factored in. And if a faster sale at the lower price allows you to avoid carrying costs (mortgage, HOA, utilities, insurance) for an additional two or three months, the true comparison may favor the lower price more than the gross number suggests.

Ryan provides a detailed, itemized net sheet to every seller prospect before the listing agreement is signed — not after, not at the listing appointment as a formality, but as the foundation of the conversation about whether and when to sell. The net sheet is also revisited when an offer comes in, because the actual offer price, requested concessions, and proration calculations replace the estimates with real numbers. And it is reconciled one final time when the escrow officer prepares the closing disclosure, which is the binding document that governs the actual transaction. Understanding each version of the net sheet — pre-listing estimate, offer-stage revision, and closing disclosure — keeps sellers informed and confident through every stage of the transaction.

The Five Major Cost Categories on the Arizona Seller Net Sheet

Every Arizona seller net sheet contains costs that fall into five primary categories: (1) real estate commission; (2) title and escrow fees; (3) prorations for property taxes and HOA dues; (4) mortgage payoff including per diem interest; and (5) seller concessions and repair credits. Within each category there are multiple line items, and the relative weight of each category varies based on the specific home, location, HOA situation, and market conditions. The remainder of this guide covers each category in detail so you can understand, estimate, and verify every line on your net sheet before signing a listing agreement.

The one thing that is conspicuously absent from the Arizona seller net sheet that surprises many out-of-state sellers: a deed transfer tax or documentary stamp tax. Arizona does not impose a transfer tax on real estate sales. This is a meaningful advantage compared to selling in California, Colorado, Nevada, or virtually any eastern state. On a $600,000 home, a California-style transfer tax at 0.11% would add $660 in county taxes; at typical Los Angeles county rates the number can be much higher. Arizona sellers pay nothing comparable. The only government-level transaction fee in Arizona is the recording fee ($100–$300), which is nominal in comparison. This “no transfer tax” advantage is particularly significant for sellers who previously sold homes in high-tax states and are calibrating expectations based on that prior experience.

The Five Categories of Arizona Seller Closing Costs

Understanding the structure of Arizona seller closing costs requires going category by category. Each category has its own drivers, its own range of variability, and its own set of questions you should be asking before you commit to a list price. What follows is a high-level overview of all five categories; each is then covered in greater depth in its own dedicated section later in this guide.

Real Estate Commission in Arizona: Post-NAR Settlement 2024

The single most significant change to Arizona real estate transaction costs in the past decade came from the National Association of REALTORS® (NAR) settlement that took effect in August 2024. The settlement fundamentally altered how buyer’s agent compensation is structured, disclosed, and negotiated, and it has had meaningful practical effects on how commission is handled in Arizona transactions in 2025 and 2026. Understanding the current commission landscape is essential to accurately modeling your seller net sheet.

Before August 2024, the dominant convention in Arizona (and most of the United States) was for the seller to agree to pay a total commission — typically 5%–6% — to the listing brokerage, which then offered a portion (typically 2.5%–3%) to the buyer’s agent through the MLS cooperative compensation offer. The entire commission was funded from seller proceeds, and it was disclosed in the listing agreement but was not a point of independent negotiation from the buyer’s side. The NAR settlement changed this structure by eliminating MLS cooperative compensation offers, requiring buyers to have signed buyer agency agreements before touring homes, and requiring that buyer’s agent compensation be negotiated and disclosed independently.

In practice, the post-settlement Arizona market has evolved as follows: listing agents still charge sellers a listing-side commission, which is negotiated directly in the listing agreement. Many sellers continue to offer buyer’s agent compensation as a seller concession at closing — this keeps the home competitive by making it accessible to buyers who are working with buyer’s agents but may not be in a position to pay their agent directly out-of-pocket in addition to their down payment and closing costs. However, the amount of buyer’s agent compensation offered is now a separate negotiating point, buyers can negotiate their agent’s compensation on the buy side, and the full compensation structure is more transparently disclosed throughout the transaction than it was under the prior cooperative compensation model.

The Arizona Association of REALTORS® (AAR) updated its standard purchase contract and buyer-broker agreement forms to reflect the new requirements. Buyers must sign a buyer-broker agreement specifying their agent’s compensation before the agent begins showing them properties. If the seller is offering buyer-side compensation that equals or exceeds what the buyer agreed to pay their agent, the buyer pays nothing additional out of pocket. If the seller’s offered compensation is less than what the buyer agreed to pay their agent, the buyer makes up the difference directly. In a competitive offer situation, buyers may waive or reduce their agent’s compensation to make their offer more competitive — something that was not possible or even conceptually available under the prior structure.

For sellers, the practical implication is that total commission costs are in many cases similar to what they were before the settlement — because sellers who want to attract buyers using buyer’s agents (which is most buyers) continue to fund that compensation as a concession. However, the flexibility is real: sellers who have buyers willing to pay their own agents directly can offer lower buyer-side compensation or none at all, reducing the total commission funded from sale proceeds. Ryan discusses commission structure candidly with every seller in the context of the specific property, market conditions, and the seller’s priorities around price versus speed of sale. There is no one-size-fits-all answer to commission in the post-settlement environment.

Typical Commission Ranges in the Current Arizona Market

In the 2025–2026 Arizona market, total commission costs (listing-side plus buyer-side, when both are funded from seller proceeds) commonly fall in the range of 4%–6% of the sale price. On a $600,000 home, that is $24,000–$36,000. On a $1,000,000 home, that is $40,000–$60,000. These numbers are real, they are significant, and they should be on the first page of every listing conversation. Sellers should always know their total commission cost in dollars, not just percentage terms, and should understand the strategy and market rationale for the structure being recommended.

It is also worth noting that commission is one area where the cheapest option frequently is not the best economic outcome. A listing agent who charges less but produces fewer showings, weaker marketing, and lower offer prices may cost the seller more in net proceeds than an agent who charges more but generates competitive offers quickly. The relevant comparison is not commission rate versus commission rate — it is net proceeds under each scenario. A strong listing agent who negotiates the sale price up by $20,000 more than a discount agent would achieve, while charging $6,000 more in commission, still nets the seller $14,000 more. Ryan presents this analysis explicitly when discussing commission, because the net proceeds number is what matters, not the gross commission percentage in isolation.

Title and Escrow Fees in Arizona: What Sellers Pay and Why

Arizona is a title insurance state, and the seller customarily pays for the owner’s title insurance policy in most Phoenix metro transactions. This customary allocation is not a legal requirement — it can be negotiated — but it is the default in standard Arizona Association of REALTORS® purchase contracts, and departing from it typically requires an explicit negotiation and contract addendum. Understanding what the owner’s title policy costs, what it covers, and what other title and escrow fees appear on the seller’s closing statement is essential for accurate net sheet preparation.

The owner’s title insurance policy protects the buyer (and subsequent future buyers) against title defects, undiscovered liens, boundary disputes, errors in public records, and other claims against the ownership of the property. It is a one-time premium paid at closing and provides lifetime protection to the buyer. In Arizona, the policy premium is regulated and based on the sale price. On a $600,000 home, the owner’s title policy typically costs approximately $2,700–$4,800, representing a rate of roughly 0.45%–0.80% of the sale price. Title companies in Arizona are licensed and regulated by the Arizona Department of Insurance, and their rate schedules must be filed and approved — so while rates vary slightly by title company, they are within a regulated range rather than truly negotiated line by line.

In addition to the owner’s title policy, sellers pay a portion of the escrow or settlement fee. Arizona closings are handled by escrow companies or title companies acting in an escrow capacity — a neutral third party that receives funds, pays off liens, coordinates the deed recording, and distributes proceeds. The total escrow fee ranges from approximately $800–$1,800 depending on the complexity of the transaction and the title company involved, with the seller and buyer each paying a portion. On a standard residential transaction, the seller’s share of the escrow fee is typically $400–$900. The seller also pays recording fees for documents related to clearing their liens and recording the deed, typically $100–$300 total.

One of Arizona’s most favorable characteristics for sellers is the complete absence of a deed transfer tax or documentary stamp tax. Many states impose a transfer tax as a percentage of the sale price at the moment of recording the deed. California counties charge various rates, many in the range of $1.10 per $1,000 of value, with some cities charging additional amounts. Colorado charges 0.01% (a very small amount). Nevada charges 0.26% on the first $500,000 and a higher rate above that. New York, Maryland, and many other eastern states have transfer taxes that can meaningfully add to seller closing costs. Arizona charges nothing equivalent. A seller who moves from Phoenix to sell a comparable home in California may find their transfer tax bill alone adds $1,000–$5,000+ to their cost structure. Arizona sellers comparing their situation to family members who sold in other states should factor in this difference explicitly when reading net sheets from other jurisdictions.

The lender’s title insurance policy, which protects the buyer’s mortgage lender, is typically paid by the buyer — not the seller — in Arizona. This is a separate policy from the owner’s policy, and because it protects the lender rather than the owner, it is considered a buyer’s closing cost. However, in transactions where the seller agrees to pay buyer’s closing costs as a concession, the lender’s title policy cost can end up funded from seller proceeds through the concession mechanism. Understanding which title costs are customarily seller costs and which are customarily buyer costs — and how concessions can shift that allocation — is part of accurate net sheet preparation.

Property Tax Proration in Arizona: Paid in Arrears

Arizona property taxes operate on an arrears basis, which is a critical detail for anyone preparing a seller net sheet. When we say taxes are paid in arrears, we mean that the tax bill you receive and pay is for the fiscal year that has already occurred (or is still occurring), not for the upcoming year. The practical effect at closing is that the seller owes a credit to the buyer representing the seller’s share of the current year’s property taxes for the period the seller owned the home during that tax year — taxes that will not actually be billed until later in the year.

In Arizona, the property tax fiscal year runs from January 1 through December 31, matching the calendar year. Property taxes are typically billed and paid in two installments: the first half is due October 1 (covering January 1 through June 30), and the second half is due March 1 of the following year (covering July 1 through December 31). The October bill covers the first six months of the prior January–June period; the March bill covers the second six months of the prior July–December period. This arrears structure means that at any point during the year, the seller has accrued tax liability for the portion of the current year that has elapsed, but has not yet received or paid the bill.

At closing, the escrow officer calculates the property tax proration by dividing the prior year’s tax assessment (the closest approximation of the current year’s tax) by 365 days and multiplying by the number of days the seller owned the home in the current calendar year through the closing date. This produces a daily proration rate and a total credit owed to the buyer. The buyer receives this credit at closing as a reduction to their cash-to-close, and when the actual tax bill arrives later in the year, the buyer pays it in full — including the portion for the time the seller owned the home, which they were credited for at closing.

To estimate your property tax proration, you need your home’s annual property tax amount. For Maricopa County, you can look up your parcel’s assessed value and tax rate at the Maricopa County Assessor’s website. Maricopa County property taxes for the 2025–2026 fiscal year reflect effective rates that vary by city and applicable levies, but commonly fall in the range of 0.9%–1.2% of the home’s market value for residential properties. On a $600,000 home at a 1.0% effective rate, annual taxes are approximately $6,000. A closing on June 23, 2026 (day 174 of the year) generates a proration of approximately $6,000 × (174/365) = $2,860. That $2,860 appears as a credit to the buyer on the closing statement, reducing the seller’s net proceeds by the same amount.

Sellers who have a mortgage with an escrow account (impound account) for property taxes should be aware that the lender’s escrow balance is returned separately — it is not part of the closing statement but is refunded by the lender after the loan is paid off, typically within 2–4 weeks of closing. This escrow balance refund is an additional cash inflow for the seller that happens after closing and should be factored into the seller’s overall financial plan even though it does not appear on the closing statement itself.

HOA Transfer and Disclosure Fees: The Closing Cost That Surprises Arizona Sellers

If your home is in a homeowners association — and in the Phoenix metro, the majority of homes built since the 1980s are — your seller net sheet will include a category of fees that surprises many sellers: HOA transaction fees. These fees are separate from the ongoing monthly or quarterly HOA dues and are charged specifically because a property sale is occurring. They can collectively total $500–$1,500 or more, and because sellers rarely think about them until escrow opens, they frequently show up as an unpleasant addition to an already-significant closing cost total.

Arizona law governing HOA disclosures in real estate transactions is found primarily in ARS §33-1806 (for condominium associations, §33-1260 is the parallel statute). Under ARS §33-1806, a seller of a property in a planned community is required to disclose to the buyer a variety of HOA-related information, including the governing documents, financial statements, pending assessments, litigation, and other material information. To facilitate this disclosure, the HOA provides what is called a “resale disclosure package” or “resale certificate” — a comprehensive set of documents that the HOA assembles and delivers to the escrow company. The HOA charges the seller for this service, and the charge is set by the HOA (or its management company), not by any competitive market or regulatory rate schedule.

The HOA demand fee is a separate charge for the document that shows the seller’s current HOA account balance — essentially a payoff statement confirming whether dues, assessments, fines, or other balances are owed. This is required to ensure that any outstanding HOA balance is paid from the seller’s proceeds at closing rather than transferred as an unpaid liability to the buyer. The demand fee is typically $150–$350 and is charged by the HOA or management company.

The HOA transfer fee is charged to cover the HOA’s administrative cost of transferring membership from the seller to the buyer — updating ownership records, account information, and contact information in the HOA’s system. Transfer fees are commonly $200–$500 and may be split between buyer and seller or charged entirely to one party depending on the HOA’s rules and what is negotiated in the purchase contract. Some HOAs also charge a capital contribution or working capital fee — a one-time payment that funds the HOA’s reserve account — which may be charged to the buyer, but which some sellers agree to pay as a concession in competitive negotiations.

The resale disclosure package fee is often the largest single HOA transaction fee. This fee covers the HOA’s (or its management company’s) cost of assembling and delivering the required disclosure documents. Arizona’s statutes cap certain aspects of these fees, but HOA management companies have increasingly found ways to charge for “expedite” services, electronic delivery fees, and document preparation charges that can elevate the total package cost to $300–$600 or more. In communities managed by large national HOA management firms, fee schedules can be aggressive. Ryan always requests the HOA fee schedule as part of pre-listing due diligence so that these costs are estimated before the net sheet is prepared rather than discovered as closing surprises.

Multiple HOAs: More Common Than Most Sellers Realize

Many Phoenix metro communities have layered HOA structures — a master HOA governing the broader community plus one or more sub-HOAs or neighborhood HOAs covering specific sections, cul-de-sacs, or amenity zones. Each HOA in the chain typically has its own set of transaction fees. If your home has both a master HOA and a sub-HOA, you may be paying demand fees, disclosure package fees, and transfer fees to each association separately. This is not unusual in large planned communities like Gainey Ranch, DC Ranch, Trilogy, or Vistancia — and it can push the total HOA closing fee category well above $1,500. Ryan always asks sellers about the number of HOAs on their property at the initial listing conversation so the net sheet reflects the full picture.

Sellers who are delinquent on HOA dues at the time of sale will have the outstanding balance collected at closing from their proceeds. HOAs in Arizona have a priority lien right under certain circumstances, and escrow officers are required to satisfy any recorded HOA liens from the sale proceeds before disbursing the remaining balance to the seller. If you are behind on HOA dues or have unpaid special assessments, disclose this to Ryan early so the net sheet can accurately reflect the payoff amount.

Mortgage Payoff Calculation: Balance, Per Diem, and Dry Funding

The mortgage payoff is the amount required to fully satisfy your outstanding mortgage lien so the title can be conveyed to the buyer free and clear. It is not the same as your current principal balance. The payoff amount is your current principal balance plus accrued interest from your last payment date through the recording date, plus any lender fees associated with payoff (wire fee, reconveyance fee), and minus any unapplied payments or credits. Requesting a formal payoff quote from your lender at the beginning of escrow — rather than relying on your current balance from your statement or online account — is essential for accurate net sheet preparation.

Mortgage interest is paid in arrears in the United States, which means when you make your July 1 mortgage payment, you are actually paying interest for the month of June. This arrears structure means that between your last payment date and the recording date of your sale, interest is accruing on your outstanding principal balance — and that accruing interest is part of your payoff amount. The per diem interest rate is calculated as: (Current Principal Balance × Annual Interest Rate) / 365. On a $400,000 balance at 7%, per diem interest is $400,000 × 0.07 / 365 = $76.71 per day. From the last payment date to the recording date is typically 20–35 days, generating per diem interest of approximately $1,534–$2,685 on top of the principal balance.

Arizona’s dry-funding escrow process is a critical detail in the payoff calculation. Arizona is a dry-funding state, meaning that even after both buyer and seller have signed all closing documents, the transaction is not funded and the deed is not recorded until the lender releases funds — a process that typically occurs 1–2 business days after the signing appointment. This means the recording date (and therefore the interest accrual end date) is not the same as the signing date. Per diem interest continues to accrue through the recording date. Your payoff quote from the lender will specify the date through which the quoted amount is valid — and if recording is delayed beyond that date, a new per diem interest charge applies. The escrow officer manages this calculation and requests updated payoff quotes when needed.

Prepayment penalties are rare in modern Arizona mortgages but are worth verifying if your loan was originated more than 10 years ago or if you have a non-conventional loan structure (certain portfolio loans, some jumbo products from the 2005–2008 era, or seller-carried financing). To check: review your original loan documents (the Note) for any prepayment penalty provision. Modern conventional, FHA, and VA loans do not carry prepayment penalties under current federal guidelines, but non-conventional products may. If you are uncertain, contact your lender directly and ask specifically whether a prepayment penalty applies to a full payoff at closing.

If you have a Home Equity Line of Credit (HELOC) in addition to your primary mortgage, the HELOC payoff requires special attention. HELOCs are typically paid off at closing, and the lender must also close the credit line and record a release of the deed of trust. Many HELOC lenders require a “freeze” on the account before the payoff is accepted to prevent additional draws that would increase the payoff balance. The escrow officer coordinates the HELOC payoff and release as part of the closing process, but sellers should contact their HELOC lender early in escrow to understand the specific payoff and release process for their account — some lenders have documentation requirements that take 1–2 weeks to process.

Seller Concessions and Repair Credits: Post-NAR Settlement Landscape

Seller concessions are amounts the seller credits to the buyer at closing, typically to cover a portion of the buyer’s closing costs or to compensate for property condition issues identified during the inspection period. They are not price reductions — the contract price remains unchanged, but the seller contributes funds toward the buyer’s costs at closing. Understanding the difference between concessions and price reductions, and knowing when each is the more strategically advantageous tool, is part of sophisticated negotiation in the Arizona market.

The post-NAR settlement context is relevant to concessions because buyer’s agent compensation is now often structured as a seller concession. In many 2025–2026 Arizona transactions, the seller offers a specific dollar amount or percentage as a buyer’s agent compensation concession. If the buyer’s agent has an agreement specifying higher compensation than what the seller offers, the buyer makes up the difference. If the seller’s offer equals or exceeds the buyer’s obligation to their agent, the buyer owes nothing additional. This means that “concessions” on the closing statement may include both buyer’s agent compensation and other typical closing cost credits, and the seller’s net sheet must account for both when modeling proceeds.

In addition to buyer-side agent compensation, sellers in the current Arizona market (2026) are providing closing cost concessions at varying rates depending on market conditions. In a balanced or buyer-leaning market, seller concessions for buyer closing costs of 1%–3% are common. In a strong seller’s market, concessions may be minimal or zero. The strategic decision about whether to offer upfront concessions versus waiting to see what the inspection process produces is a pricing and marketing strategy conversation that belongs in the pre-listing discussion, not as a reactive decision under contract pressure.

BINSR (Buyer’s Inspection Notice and Seller’s Response) is the Arizona-specific inspection negotiation process. Under the AAR purchase contract, buyers have a 10-day inspection period by default during which they can order inspections, review the property, and then submit a BINSR requesting repairs, credits, or price reductions. The BINSR is not a binary “fix everything or the deal dies” document — it is a negotiation. Sellers can agree to all requested repairs, agree to some and decline others, offer a credit in lieu of repairs, offer a combination of repairs and credits, or decline the BINSR entirely (though declining everything is rarely the best response in a market where the buyer can then cancel during the inspection period).

From a net sheet perspective, repair credits function as an additional seller cost that reduces net proceeds dollar-for-dollar. A $5,000 repair credit on a $600,000 home reduces the seller’s net proceeds by $5,000. A price reduction of $5,000 also reduces net proceeds by approximately $5,000 after factoring in the small commission savings on the lower price (a $5,000 price reduction at 5% total commission saves approximately $250 in commission, so the net proceeds reduction is $4,750 versus $5,000 for a credit). In most cases, the difference between a credit and a price reduction is minimal on a pure net sheet basis — but lender guidelines for maximum seller concessions may make a credit more or less feasible depending on the buyer’s loan type and loan-to-value ratio.

Capital Gains Exclusion: IRC §121 for Arizona Home Sellers

Beyond the direct closing costs that appear on the seller net sheet, Arizona home sellers need to understand the federal income tax implications of a home sale — specifically the capital gains exclusion provided by Internal Revenue Code §121. For many sellers, the §121 exclusion eliminates federal capital gains tax on the sale entirely. For others, particularly long-term homeowners or sellers of high-appreciation properties, it reduces the taxable gain significantly. And for sellers who own rental properties, the exclusion may not apply at all, and depreciation recapture may create a tax liability that should appear in the seller’s overall financial planning even if not on the closing statement itself.

The §121 exclusion allows sellers to exclude up to $250,000 of capital gain (single filer) or $500,000 of capital gain (married filing jointly) from federal income tax, provided they meet two basic requirements: (1) they owned the home for at least 2 of the 5 years preceding the sale (the ownership test); and (2) the home was their primary residence for at least 2 of the 5 years preceding the sale (the use test). The two years need not be consecutive, and the ownership and use periods do not need to overlap. Short-term absences — such as renting the home for a period while working abroad and then reoccupying it — may still satisfy the use test under IRS safe harbor provisions, though specific circumstances require CPA review.

Capital gain for purposes of the §121 exclusion is calculated as the net sale price (after real estate commissions and closing costs) minus the adjusted basis. Your basis starts with what you paid for the home (the purchase price) and is increased by the cost of any capital improvements made during ownership — renovations, additions, major systems replacements — and decreased by any depreciation taken (relevant for properties that had any rental or business use). On a home purchased for $350,000 in 2012 with $75,000 in documented capital improvements, the adjusted basis is $425,000. If the home sells for $800,000 net of commissions and costs, the capital gain is $375,000. A married couple filing jointly can exclude $500,000 — so the entire $375,000 gain is excluded and no federal capital gains tax is owed.

Arizona is a non-disclosure state for real estate sales prices — sales prices are not publicly recorded in the MLS or available in public databases in the same way as in disclosure states. However, this non-disclosure applies only to market reporting and does not affect how capital gains are calculated for federal income tax purposes. Federal capital gains calculations use the actual sale price (from the closing statement), not any publicly disclosed or estimated value. Arizona’s non-disclosure status has no bearing on the tax calculation.

For sellers who are approaching or exceeding the §121 exclusion limits, accurate calculation of the adjusted basis is critically important. Every documented capital improvement increases the basis and reduces the taxable gain. Ryan encourages sellers to pull together home improvement records — permits, contractor invoices, receipts — as part of the pre-listing process, particularly for long-term homeowners who may have made significant improvements over years or decades of ownership. A CPA familiar with real estate taxation can review these records and calculate the adjusted basis accurately, which may meaningfully reduce or eliminate a capital gains tax obligation that initially appeared significant.

Depreciation Recapture for Rental Properties

Sellers who previously rented their home — even for a limited period — face a specific tax issue that does not apply to pure primary residence sellers: depreciation recapture. When a property is used as a rental, the IRS allows (and in some cases requires) the owner to take depreciation deductions on the building structure over 27.5 years. This depreciation reduces taxable rental income during the rental period, but when the property is sold, the IRS “recaptures” the cumulative depreciation taken and taxes it at a maximum rate of 25% (the Section 1250 recapture rate), even if the seller otherwise qualifies for the §121 exclusion on the capital gain portion.

The practical impact: a seller who owned their home for 10 years, rented it for 3 years, and then lived in it as their primary residence for 7 years before selling may qualify for the §121 exclusion on the appreciation gain (having met the 2-in-5-year primary residence test) but still owe depreciation recapture tax on the accumulated depreciation taken during the rental years. The recapture amount can be substantial — on a $400,000 depreciable building value over 3 years, annual depreciation would be approximately $14,545/year ($400,000 / 27.5), and 3 years of depreciation equals approximately $43,636. The 25% recapture tax on $43,636 is approximately $10,909 in federal tax. This does not appear on the closing statement but should be in the seller’s financial plan. Any seller who rented their home for any period should consult a CPA before finalizing their net sheet expectations.

Arizona does not have a separate state capital gains tax structure. Arizona taxes capital gains as ordinary income, and the state income tax rate for higher earners is approximately 2.5% (Arizona has a flat income tax rate of 2.5% for tax year 2023 and beyond under Proposition 132). On a $100,000 taxable gain at 2.5%, the Arizona income tax would be approximately $2,500. This is materially lower than states like California (capital gains taxed as ordinary income up to 13.3%) or Oregon (up to 9.9%), making Arizona-domiciled sellers significantly better positioned from a state tax standpoint than sellers in high-tax states who are not Arizona residents at the time of sale.

Complete Net Sheet Example: $600,000 Sale Price, Line by Line

The most effective way to understand a seller net sheet is to walk through a complete, realistic example. The following net sheet is based on a hypothetical $600,000 sale in Maricopa County with a common set of assumptions that reflect typical conditions in the 2026 Phoenix metro market. Every seller’s specific numbers will differ — commission structure, mortgage balance, HOA fee schedule, and proration calculations vary by property — but this example provides a framework for understanding the magnitude and relative weight of each cost category.

How the Numbers Change at Different Sale Prices

Running the net sheet at multiple sale price scenarios is one of the most valuable exercises a seller can do before setting a list price. Many sellers anchor emotionally on a particular number — “we want $650,000” — without modeling what the difference in net proceeds actually looks like at $620,000, $635,000, and $650,000 after commission adjustments, faster sale timeline (fewer carrying costs), and potential concessions are factored in. Ryan builds multi-scenario net sheets for every listing conversation so sellers can make data-driven decisions about pricing strategy rather than anchoring on a gross number.

The key insight from multi-scenario net sheet analysis is usually that the relationship between gross price and net proceeds is not linear. Commission scales with price (so a higher sale price means higher commission). Property tax prorations are fixed regardless of price (they depend on the assessed value, not the sale price). HOA fees are fixed. These fixed costs mean that the marginal net proceeds from each additional $10,000 in sale price is somewhat less than $10,000 after commission is deducted. Conversely, a sale that closes faster at a slightly lower price saves the seller months of carrying costs (mortgage payment, HOA, utilities, insurance) that can be meaningful — particularly for sellers who have already relocated and are carrying two properties.

Sellers should also model the impact of different concession levels on their net proceeds. Offering $6,000 in buyer closing cost assistance at list price may attract offers faster, reduce days on market, and produce a better overall outcome than holding firm at list price with no concessions but sitting on the market for 60–90 days. The net sheet quantifies these tradeoffs so the decision can be made rationally rather than emotionally. Ryan builds these scenarios explicitly into his pre-listing consultation because sellers who understand their numbers are more confident, more decisive, and more effective negotiators than sellers who are reacting to each development without a clear financial picture.

Pre-Listing Net Sheet vs. Closing Net Sheet: How the Numbers Evolve

The seller net sheet exists in multiple versions across the lifecycle of a transaction, and understanding how and why the numbers change between each version is important for sellers who want to stay informed and avoid surprises. The three primary versions of the seller net sheet are: (1) the pre-listing estimate, prepared before the home goes on the market; (2) the offer-stage revision, prepared when a specific offer is received and actual contract terms replace the estimates; and (3) the closing disclosure, prepared by the escrow officer and representing the binding final accounting of the transaction.

The pre-listing net sheet is a planning document. It uses estimated sale price (the anticipated list price or a range of likely sale scenarios), estimated payoff amounts (based on your current mortgage statement balance, not a formal payoff quote), estimated proration amounts (based on the prior year’s tax assessment and an estimated closing date), and typical fee ranges for title, escrow, and HOA. Because each of these inputs is an estimate, the pre-listing net sheet has a built-in range of uncertainty. Ryan prepares pre-listing net sheets conservatively — erring toward higher cost estimates rather than lower — so that the actual closing numbers are equal to or better than what the seller expected, not worse.

The offer-stage net sheet replaces estimates with actual contract terms. When an offer is received at a specific price, with specific concessions, on a specific projected closing date, the net sheet can be recalculated with those actual numbers. The formal mortgage payoff quote (requested from the lender at the start of escrow) replaces the estimated balance. The actual closing date and recorded tax assessment replace the estimated proration. The specific concessions agreed to in the contract replace the estimated range. The offer-stage net sheet is the version that most closely predicts what the seller will actually receive at closing, and Ryan provides an updated net sheet as soon as offer terms are agreed upon so the seller can confirm the outcome meets their expectations before the contract is fully executed.

The closing disclosure (also called the Settlement Statement or HUD-1 in some contexts) is the final, legally binding accounting of every dollar flowing through the transaction. It is prepared by the escrow officer and provided to both parties before signing. At this stage, the only remaining variables are any last-minute adjustments — such as an HOA proration true-up if the closing date shifted, or a revised payoff quote if recording was delayed. Ryan reviews the closing disclosure with every seller before the signing appointment and reconciles it against the offer-stage net sheet to confirm that there are no unexplained discrepancies.

The most common reasons the final closing disclosure differs from the pre-listing estimate are: (1) the actual sale price differs from the estimated price; (2) concessions agreed to during BINSR negotiations were not in the pre-listing estimate; (3) the formal mortgage payoff quote differed from the estimated balance (due to per diem interest accrual not anticipated in the estimate); (4) the HOA fee schedule included items not captured in the initial estimate; or (5) proration calculations were adjusted due to closing date changes from the original projection. None of these variances are unexpected — they are the normal difference between planning estimates and actual transaction outcomes — but sellers who understand this in advance are better positioned to receive the final closing disclosure with calm clarity rather than surprise or concern.

Working with Ryan Moxley: Net Sheet on the First Call

Ryan’s approach to seller representation begins with the numbers. Before discussing marketing strategy, list price positioning, staging recommendations, or any other aspect of the listing process, Ryan prepares a detailed, itemized seller net sheet based on the seller’s specific property. This is not a generic “estimated proceeds” summary with ranges — it is a specific calculation based on the seller’s actual mortgage balance, their specific HOA situation, the Maricopa County tax assessment on their parcel, the anticipated sale price based on comparable sales analysis, and Ryan’s specific commission structure. Sellers who understand exactly what they will walk away with before the listing agreement is signed are sellers who make better decisions throughout the process — on pricing, on concessions, on timing, and on the negotiation of every offer they receive.

The net sheet conversation also opens up scenarios that sellers often do not think to ask about but benefit enormously from considering. What is the net proceeds difference if the home sells in 30 days at $10,000 below list price versus 90 days at the full list price? How do carrying costs (mortgage, utilities, HOA, insurance) during an extended listing period compare to a faster sale at a lower price? What is the net impact of offering buyer-side agent compensation upfront versus declining to offer it and potentially restricting the buyer pool? These are not abstract financial puzzles — they are specific calculations based on your property and your timeline, and Ryan works through them explicitly so you make an informed choice rather than a reactive one.

Ryan also never wants sellers to be surprised at the closing table. The closing statement contains every dollar that flows through the transaction, and it can be dense and intimidating if you have not been prepared for what each line means. Ryan reviews the preliminary closing statement with sellers before the signing appointment, explains every line item, confirms it matches what was agreed to in the contract, and answers every question the seller has before they sit down with the escrow officer to sign. Sellers who arrive at the signing appointment with Ryan have already seen the numbers, asked their questions, and confirmed the outcome meets their expectations. The signing itself is a confirmation of what they already know — not the moment they find out.

Ryan serves buyers and sellers throughout the Greater Phoenix metropolitan area, including Scottsdale, Paradise Valley, Chandler, Gilbert, Mesa, Tempe, Glendale, Peoria, Surprise, Goodyear, Buckeye, Queen Creek, San Tan Valley, Cave Creek, Carefree, Fountain Hills, and the broader Maricopa County market. He is a top 1% Arizona REALTOR® with My Home Group, ADRE SA643872000, and can be reached at (480) 227-9143 or moxleysellsaz@gmail.com. If you are thinking about selling and want a specific, detailed seller net sheet based on your home before you make any decisions, that conversation is free and carries no obligation. Call or text Ryan directly.

What to Bring to Your First Listing Conversation

To prepare the most accurate pre-listing net sheet possible on the first call, it helps to have a few pieces of information ready: your current mortgage balance (from your most recent statement or lender app), your annual HOA dues and the name of your HOA management company, your most recent Maricopa County property tax bill or your parcel number (so Ryan can look up the assessed value), and a general sense of your anticipated timeline. None of this is required — Ryan can prepare a reasonable estimate even with limited information — but the more specific the inputs, the more accurate the first-version net sheet will be.

The listing consultation is also the right time to surface any factors that could affect the closing cost picture in ways that a standard net sheet does not capture. These include: second liens or HELOCs, special assessments from the HOA, deferred maintenance that is likely to generate BINSR repair requests, any solar financing on the home (lease, PPA, PACE loan), tenant occupancy that needs to be addressed before closing, any known title issues such as unresolved liens, estate or trust complications, or divorce-related title concerns. None of these factors make a home unsellable — but they do affect the net sheet and the transaction strategy, and surfacing them early leads to better outcomes than discovering them mid-escrow.

Arizona’s real estate market in 2026 continues to offer strong fundamental demand from domestic migration, a growing employment base, and favorable climate and cost-of-living conditions relative to coastal California and Pacific Northwest markets. Sellers who understand their numbers, price strategically, and work with an agent who executes with process discipline consistently achieve better outcomes than sellers who approach the transaction reactively. The seller net sheet is where that understanding begins. Call Ryan at (480) 227-9143 to get yours.