90. In preparing a seller's net proceeds estimate, which of the following would be considered as a cost to the seller?
Answer: B
Commission paid to the broker
The commission paid to the broker is a direct cost incurred by the seller when selling a property. This expense reduces the seller's net proceeds from the sale and is a standard consideration in net proceeds estimates.
A) Anticipated property tax increase
While an anticipated property tax increase might impact the seller's overall financial situation, it is not a direct cost associated with the sale of the property. It does not affect the immediate net proceeds calculation at the time of the sale.
B) Commission paid to the broker
This option is correct as the commission paid to the broker is a necessary cost that sellers must account for in their net proceeds estimate. It is typically a percentage of the sale price and significantly affects the final amount that sellers receive.
C) Mortgage application fee
A mortgage application fee is typically a cost incurred by buyers when securing financing, not by sellers. Therefore, it is not relevant to the seller's net proceeds estimate.
D) Mortgage title insurance
Mortgage title insurance is generally a cost associated with protecting the lender's interest in the property and is typically paid by the buyer. While it may be negotiated in certain sales, it is not a standard cost that directly impacts the seller's net proceeds.
Conclusion
The commission paid to the broker is the only option that directly reduces the seller's net proceeds from the sale, making it the correct choice. Other options do not directly affect the seller's financial outcome at the time of sale or are costs incurred by buyers, thus confirming that they are incorrect in this context.