Question 10

Commission paid to the broker

The commission paid to the broker is a direct cost associated with the sale of the property and impacts the seller's net proceeds significantly. This fee is typically a percentage of the sale price and is deducted from the seller's proceeds at closing.

A) Anticipated property tax increase

While property tax increases may affect the seller's future expenses, they do not represent a direct cost incurred during the sale process. Therefore, they are not considered in the calculation of net proceeds from the sale.

B) Commission paid to the broker

This option is correct as it represents a standard cost incurred by the seller when selling a property. The broker's commission is a necessary expense that directly reduces the seller's net proceeds at the time of the sale.

C) Mortgage application fee

The mortgage application fee is typically a cost associated with obtaining a new mortgage rather than a direct cost to the seller in the context of selling a property. As such, it is not included in the seller's net proceeds estimate.

D) Mortgage title insurance

Mortgage title insurance is generally a cost borne by the buyer, as it protects the lender against losses from defects in the title. Therefore, it is not a cost that directly affects the seller's net proceeds from the sale of the property.

Conclusion

The commission paid to the broker is the only option that directly affects the seller's net proceeds during the sale process. Other options either pertain to future expenses or are costs associated with the buyer, thus making them irrelevant in this context. Hence, option B is definitively the correct choice when estimating the seller's net proceeds.