Florida Real Estate Sales Associate Examination Content OutlineReal Estate MathMedium
A residential property sold for $420,000. The buyer's closing costs, excluding the down payment, totaled $12,500. The seller's closing costs, including the commission, amounted to $28,000. What are the net proceeds for the seller from this transaction?
- A$379,500
- B$392,000
- C$410,000
- D$407,500
Show answer & explanationAnswer & explanation
Correct answer: B. $392,000
Net proceeds for the seller are calculated by taking the sale price and subtracting the seller's closing costs. Buyer's closing costs are irrelevant to the seller's net proceeds. Calculation: $420,000 (Sale Price) - $28,000 (Seller's Closing Costs) = $392,000.
Why the other options are wrong
- A. This might result from incorrectly subtracting buyer's closing costs from the seller's proceeds.
- C. This would be an error in the subtraction or inclusion of other costs.
- D. This implies an incorrect addition or subtraction of costs.
Net Proceeds (Seller)
The amount of money a seller receives from a property sale after all expenses, including commissions and closing costs, have been deducted.
- Calculated from the sale price.
- Seller's expenses are subtracted.
- Buyer's expenses do not affect seller's net proceeds.
Memory trick: Net Nurtures New Necessities.