83. 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
Answer: A
The seller's net at closing was $128,004.
To determine the seller's net at closing, we need to calculate the selling price after commission and closing costs, and then subtract the total mortgage balances. The property sold for $348,000 (80% of $435,000), and after deducting the 5% commission and $6,800 in closing costs, the seller's net proceeds resulted in $128,004.
A) $128,004
This option is correct. The calculation starts with the selling price of $348,000. After subtracting the 5% commission ($17,400) and $6,800 in closing costs, the seller receives $323,800. From this amount, the total mortgage balances of $197,796 ($189,254 + $8,542) are deducted, resulting in a net of $128,004.
B) $141,346
This option is incorrect. While it may seem like a plausible figure, it does not account for the necessary deductions from the selling price. After calculating the commission and closing costs, the remaining amount, when the mortgage balances are subtracted, does not lead to $141,346.
C) $215,454
This option is incorrect. This figure might arise from not fully accounting for the commission and closing costs. A proper calculation shows that after these deductions, the net proceeds cannot be as high as this amount given the total mortgage obligations.
D) $330,600
This option is incorrect. This amount would suggest that the seller did not have any deductions from the selling price. However, the commission and closing costs significantly reduce the seller's actual take-home amount, making this option unfeasible.
Conclusion
The correct answer, $128,004, reflects the accurate calculation of net proceeds after all relevant deductions, including commission and closing costs, as well as the outstanding mortgage balances. All other options fail to appropriately account for these necessary subtractions, leading to inflated figures that do not represent the seller's actual net at closing.