Sellers want to net $80,000 from the sale of their house. They must pay $50 for deed preparation, $150 for an appraisal fee, 5% of the sales price for brokerage fees, $450 for title insurance, and a mortgage balance of $36,000. What sales price will enable the sellers to net the amount they want?

Rationale

$122,800 is the sales price that will enable the sellers to net $80,000.

To determine the necessary sales price, we need to account for all the costs that will be deducted from the sales price to ensure the sellers receive their desired net amount of $80,000. These costs include deed preparation, appraisal fees, brokerage fees, title insurance, and the mortgage balance.

A ($120,000) YOUR ANSWER

If the sales price is set at $120,000, the total deductions amount to $50 + $150 + (5% of $120,000) + $450 + $36,000 = $36,950. Thus, the net amount received would be $120,000 - $36,950 = $83,050, which exceeds the desired net of $80,000.

B ($120,700) YOUR ANSWER

At a sales price of $120,700, the deductions are $50 + $150 + (5% of $120,700) + $450 + $36,000 = $36,950 + $6,035 = $36,950. The net amount would be $120,700 - $36,035 = $84,665, again exceeding the target net.

C ($122,500) YOUR ANSWER

With a sales price of $122,500, the deductions include $50 + $150 + (5% of $122,500) + $450 + $36,000 = $36,950 + $6,125 = $36,950. The net would be $122,500 - $36,125 = $86,375, still above the target.

D ($122,800) CORRECT

Setting the sales price at $122,800, the deductions total $50 + $150 + (5% of $122,800) + $450 + $36,000 = $36,950 + $6,140 = $36,950. Thus, the net received would be $122,800 - $36,140 = $80,000, meeting the sellers' goal.

Conclusion

To net $80,000 from the sale of their house, sellers must consider all associated costs, including brokerage fees and existing mortgage balance. After calculating the necessary deductions, a sales price of $122,800 ensures the sellers achieve their desired net amount, while lower sales prices would lead to greater net amounts than intended.

Sellers want to net $80,000 from the sale of their house. They must pay $50 for deed preparation, $150 for an appraisal fee, 5% of the sales price for brokerage fees, $450 for title insurance, and a mortgage balance of $36,000. What sales price will enable the sellers to net the amount they want?

$122,800 is the sales price that will enable the sellers to net $80,000.

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