section 5 part 4 math

A seller wishes to net $30,000 on the sale of his house after paying the balance of $6,000 on his loan, expenses of $472, and a broker commission of 6%. What is the price of the house?

$30,000 + $6,000 + $472 = $36,472 (net + expenses). 100% - 6% = 94%. $36,472 / .94 = $38,800. The correct answer is: $38,800

A purchaser agrees to buy a house for $47,000, obtaining a 90% loan. The buyer makes an earnest money deposit of $2,500. If attorney fees are $225, how much will the buyer need to bring to closing?

$47,000 x .90 = $42,300 loan amount. $47,000 - 42,300 = $4,700 down payment - $2,500 deposit = $2,200. Subtract the deposit because that has already been paid. $2,200 + $225 attorney fee = $2,425. The correct answer is: $2,425

A house sells for $47,000 and the buyer made a $2,500 earnest money deposit. The buyer will obtain a 90% loan. The buyer pays four loan discount points and 1% of the sales price for attorney fees, but will receive a prorated tax credit of $400. How much money must the buyer bring to closing?

$47,000 X .90 = $42,300 loan X .04 = $1,692 points. $47,000 X .01 = $470 attorney fees. $47,000 X .10 = $4,700 down payment. $1,692 + $470 + $4,700 = $6,862 - $2,500 deposit - $ 400 credit of tax = $3,962 cash needed. The correct answer is: $3,962

A seller wants to net $275,000 from the sale of his home. He has an existing mortgage with a loan balance of $78,500 and the closing costs are expected to be $6,500. If the listing broker is receiving a 6% commission, how much must the home sell for in order to meet his objective?

This must be worked "backwards," meaning from the net sale proceeds up to the gross sale price. First, add the closing costs of $6,500 and the loan balance of $78,500 to the desired net proceeds of $275,000 for a figure of $360,000. Since the commission is 6% of the gross sales price, this $360,000 must equal 94% of the gross sales price. $360,000 divided by .94 = $382,979 (rounded.) (You need to add the closing costs and loan balance before you compute the commission because the commission is based the full sale price, not the sale price after closing costs.) The correct answer is: $382,979.

What price must a house sell for if the seller is to net $28,000 after paying $1,500 in settlement fees and the broker's commission of 6%?

Start by adding the items the seller needs to pay. $28,000 + $1,500 = $29,500 (net to seller + expenses). If the selling price is 100% and the commission is 6%, the seller pay-outs are 94%. The selling price X 94% will equal the seller pay-outs. Therefore $29,500 (seller pay-outs) / 94% (.94) will equal the selling price. $29,500 / .94 = $31,382.97 or $31,383 sales. The correct answer is: $31,383

Fred and Wilma are buying a house for $185,000. They have put up a deposit of $10,000 and will be obtaining a loan for 80% of the purchase price. Their closing costs will be $3,500. How much cash will they need to bring to closing?

The purchase price is $185,000. Subtract the $10,000 deposit already made and also subtract the loan amount of $148,000 ($185,000 X .80). Now add the closing costs of $3,500 for a result of $30,500 they will need at closing. The correct answer is: $30,500.

A house sold for $145,500. The seller paid $3,490 in closing costs and 5% commission to the broker. The seller received $31,400 from the proceeds of the sale after paying off an existing loan. What was the amount of the loan?

Commission Paid: $7,275 ($145,500 X 5%). Closing Costs: $3,490. Total Paid out: $10,765. Seller received cash: $31,400. Sales price ($145,500) less pay-outs ($10,765) and cash received ($31,400) = $103,335 required to pay off existing loan. The correct answer is: None of the above

Fred and Ethyl recently sold their house. They paid a 6% commission which came to $10,500. They also paid off their loan and paid $2,750 in closing costs. They received net sales proceeds of $110,250. What was the amount of the outstanding loan balance?

At first glance it might seem that there is insufficient information to answer this question since the question give neither the loan amount nor the sale price. However, we can compute the sales price because we know the 6% commission came to $10,500. $10,500 divided by .06 gives us a sale price of $175,000. If we start with the $175,000 sale price and subtract the $10,500 commission and the $2,750 closing costs we arrive at a figure of $161,750. Now if we subtract the $110,250 net proceeds, the difference of $51,500 will be our loan amount. The correct answer is: $51,500

A seller wants to net $350,000 from the sale of her home. The listing broker will receive a 5% commission. The closing costs are estimated at $7,500. At what price must this home sell to achieve this goal?

This must be worked "backwards," meaning from the net sale proceeds up to the gross sale price. First, add the closing costs of $7,500 to the desired $350,000 for a figure of $357,000. Since the commissions are 5%, this figure represents 95% of the gross sale price. $357,000 divided by .95 = $376,316 (rounded). (You need to add the closing costs before you compute the commission because the commission is based the full sale price, not the sale price after closing costs.) The correct answer is: $376,316.

A seller received net sales proceeds of $128,000 from the sale of a home. If the seller paid a 6% commission on the sale, paid off a loan of $76,500 and closing costs of $7,000. What was the sale price?

This must be worked "backwards," meaning from the net sale proceeds up to the gross sale price. Start with the $128,000 net proceeds, add the $7,000 closing costs and the $76,500 loan balance for a figure of $211,500. This represents the sale price after the 6% commission. $211,500 divided by .94 = $225,000, which is the sale price. The correct answer is: $225,000.