A property sells 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 5.5%?

Rationale

The seller should net $110,090.

To determine the seller's net proceeds from the sale, we subtract the existing mortgage balance, closing costs, and brokerage fees from the sale price. After calculations, the seller's net amount is $110,090.

A (108,250) YOUR ANSWER

This amount does not account for the correct brokerage fee calculation. The brokerage fee is calculated as 5.5% of the sale price, which should be deducted along with the mortgage balance and closing costs to find the net proceeds.

B (109,900) YOUR ANSWER

While this figure appears close, it underestimates the brokerage fee deduction. The correct calculation of the brokerage fee from the sale price leads to a higher net amount than this option reflects.

C (110,090) CORRECT

This figure accurately represents the seller's net proceeds after deducting the mortgage balance of $30,000, closing costs of $3,600, and a brokerage fee of 5.5% on the sale price of $160,000. The calculations yield a precise net amount of $110,090, making this the correct choice.

D (116,500) YOUR ANSWER

This option mistakenly suggests a higher net amount by failing to account for the necessary deductions from the sale price. The seller must subtract the mortgage balance and closing costs, as well as the brokerage fee, resulting in a significantly lower net than this figure suggests.

Conclusion

To calculate the seller's net proceeds, it is essential to deduct the mortgage balance, closing costs, and calculated brokerage fee from the sale price. The accurate computation reveals that the seller nets $110,090, confirming option C as the correct answer while the other choices miscalculate deductions or misinterpret the net proceeds.

A property sells 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 5.5%?

The seller should net $110,090.

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