A property listed for $435,000 sold for 80% of the listed price. The seller had a mortgage balance of $189,254 on the first mortgage and a balance of $8,542 on a home equity loan. The seller also paid 5% commission and $6,800 in closing costs. What was the seller's net at closing

Rationale

$128,004

To calculate the seller's net at closing, we first determine the sale price, subtract the mortgage balances, commission, and closing costs. The property sold for $348,000 (which is 80% of $435,000). After deducting the mortgage balances and expenses, the seller's net proceeds amount to $128,004.

A ($128,004) CORRECT

This choice correctly reflects the seller's net at closing. The calculation is as follows:
Sale Price = $435,000 * 0.8 = $348,000
Total Mortgage Debt = $189,254 + $8,542 = $197,796
Total Costs = 5% commission on $348,000 = $17,400 + $6,800 closing costs = $24,200
Net Proceeds = $348,000 - $197,796 - $24,200 = $128,004.

B ($141,346) YOUR ANSWER

This amount incorrectly assumes lower costs or higher proceeds than calculated. The calculations clearly show that the seller's total deductions, including mortgage balances and closing costs, exceed this value, leading to a lower net.

C ($215,454) YOUR ANSWER

This figure miscalculates the total deductions from the sale price. It does not account for both the commission and closing costs appropriately, resulting in an inflated net amount that does not reflect the financial reality of the sale.

D ($330,600) YOUR ANSWER

This choice suggests that the seller retained nearly the entire sale price after expenses, which is inaccurate. It disregards the significant mortgage balances and costs that must be deducted from the sale proceeds, leading to an unrealistic and incorrect net figure.

Conclusion

The seller's net at closing is accurately calculated as $128,004 after considering the sale price, mortgage debts, commission, and closing costs. This calculation underscores the importance of accounting for all financial obligations when determining the final proceeds from a property sale. All other options fail to represent the seller's financial outcome accurately due to miscalculations or misunderstandings of the deductions involved.

A property listed for $435,000 sold for 80% of the listed price. The seller had a mortgage balance of $189,254 on the first mortgage and a balance of $8,542 on a home equity loan. The seller also paid 5% commission and $6,800 in closing costs. What was the seller's net at closing

$128,004

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