A seller accepts an offer on her home for $60,000. At the time of the offer, a $2,000 earnest money check is deposited. Previously, the seller agreed to pay a 6% commission to the listing broker. As of the date of closing, she owes her lender $45,720, plus 15 days' interest. The interest rate on her loan is 10.75% per annum. Her monthly payment is $493.50. Assuming no additional closing costs and a 360-day year, approximately how much money will she receive at closing?

Rationale

$10,680

To determine the amount the seller will receive at closing, we must first calculate the total deductions from the sale price, which includes the commission and the payoff to the lender. After deducting these amounts from the sale price and adding the earnest money, the final figure is approximately $10,680.

A ($8,475) YOUR ANSWER

This option is too low because it does not account for the earnest money deposit and underestimates the amount received after deductions. The calculations should show that the total received, after all deductions and including the deposit, exceeds this figure.

B ($10,475) YOUR ANSWER

While this choice is closer, it fails to include the correct calculation of the interest owed on the loan. The interest for 15 days at a rate of 10.75% per annum is not accurately reflected here, resulting in an amount that is still less than the correct total.

C ($10,680) CORRECT

This is the correct amount the seller will receive at closing. It accurately accounts for the sale price of $60,000, subtracts the commission of $3,600 (6% of $60,000), subtracts the loan payoff of $45,720, adds back the $2,000 earnest money, and includes the proper interest calculation for the 15 days owed.

D ($10,885) YOUR ANSWER

This option is too high, as it incorrectly assumes additional funds beyond the calculated amount. The commission, loan payoff, and interest have been calculated correctly in the correct answer, making this total inaccurate.

Conclusion

To summarize, the seller’s final amount at closing is calculated by deducting the commission and loan payoff from the sale price, while also adding the earnest money deposit. The calculations lead to the conclusion that she will receive approximately $10,680 at closing, reflecting all financial obligations and deposits accurately.

$10,680

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