42. 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%?
Answer: C
The seller should net $110,090.
To determine the seller's net proceeds, we start with the sale price of $160,000, subtract the mortgage balance of $30,000, the closing costs of $3,600, and the brokerage fee of 5.5% on the sale price, which is $8,800. This calculation results in a net amount of $110,090.
A) 108,250
This option is incorrect as it does not accurately account for the total deductions from the sale price. After calculating the brokerage fee and other costs, this figure falls short of the actual net proceeds the seller would receive.
B) 109,900
This figure is also incorrect. While it is closer to the correct answer than option A, it still fails to include the full deduction of the brokerage fee and the other closing costs, resulting in an insufficient net amount.
C) 110,090
This is the correct option. It accurately reflects the seller's net proceeds after deducting the mortgage balance, closing costs, and the brokerage fee from the sale price. The calculations confirm that this figure is the actual amount the seller would receive.
D) 116,500
This option is incorrect because it suggests a higher net amount than is feasible after factoring in all necessary deductions. It does not consider the brokerage fee and other costs that significantly reduce the seller's proceeds.
Conclusion
The correct answer of $110,090 reflects an accurate calculation of the seller's net proceeds after all deductions, including the brokerage fee, mortgage balance, and closing costs. The other options fail to provide correct figures as they either overlook essential deductions or miscalculate the amounts involved.