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
In preparing a seller's net proceeds estimate, the commission paid to the broker is a direct cost that sellers must account for. This fee is typically calculated as a percentage of the sale price and is deducted from the gross proceeds of the sale.
A) Anticipated property tax increase
While property taxes are an important consideration for sellers, an anticipated increase in property taxes is not a direct cost incurred at the time of sale. Instead, it may affect the seller's overall financial planning but does not directly impact the net proceeds from the sale.
B) Commission paid to the broker
The commission paid to the broker is a necessary expense that sellers must deduct from their sale proceeds. It is a significant cost directly related to the transaction and directly affects the seller's net proceeds, making it a relevant factor in the estimate.
C) Mortgage application fee
A mortgage application fee is typically a cost incurred by buyers when applying for a mortgage, not by sellers. Therefore, it does not affect the seller's net proceeds from the sale and is not relevant in this context.
D) Mortgage title insurance
Mortgage title insurance is generally a buyer's expense, ensuring the lender's interests are protected in the event of title issues. As such, it does not represent a cost to the seller when calculating net proceeds from the sale.
Conclusion
The commission paid to the broker is the only option that directly affects the seller's net proceeds estimate, as it is an unavoidable cost associated with the sale process. All other options either do not pertain to the seller's expenses or represent costs that do not impact the net proceeds directly, reinforcing the importance of accurately accounting for broker commissions in financial estimations.