A property seller for $160,000. The existing mortgage balance is $30,000 and the seller's closing costs are $3,600. What should the seller net if the brokerage fee is 6.5%?

Rationale

The seller should net $110,090.

To determine the seller's net proceeds, we start with the sale price and subtract the existing mortgage balance, closing costs, and brokerage fee. After calculating these deductions, the resulting amount is $110,090.

A (108,260) YOUR ANSWER

This amount is too low and does not account correctly for the deductions from the sale price. The calculation likely omitted the appropriate brokerage fee or miscalculated the total deductions, leading to an incorrect net result.

B (109,900) YOUR ANSWER

This figure is also incorrect as it does not accurately reflect the total deductions required. The brokerage fee and closing costs have not been correctly applied to the sale price, resulting in a net that is still lower than the correct answer.

C (110,090) CORRECT

This is the correct calculation. The seller's net proceeds are calculated as follows: Sale price of $160,000 minus the mortgage balance of $30,000, closing costs of $3,600, and the brokerage fee of $10,400 (6.5% of $160,000). This results in a net of $110,090, accurately reflecting the seller's proceeds after all deductions.

D (116,500) YOUR ANSWER

This choice is incorrect as it suggests that the seller would net more than the sale price after all deductions. It fails to account for the mortgage balance and the brokerage fee, suggesting a misunderstanding of the calculation process involved in determining net proceeds.

Conclusion

The seller's net proceeds can be correctly calculated by subtracting the existing mortgage balance, closing costs, and brokerage fee from the sale price. In this case, the proper deductions yield a net amount of $110,090. Understanding these financial calculations is crucial for property sellers to accurately assess their financial outcomes in real estate transactions.

A property seller for $160,000. The existing mortgage balance is $30,000 and the seller's closing costs are $3,600. What should the seller net if the brokerage fee is 6.5%?

The seller should net $110,090.

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