Question

Seller of a property wants to net $92,500 after paying $1,200 in points; $500 in closing costs and 7% commission. What must the property sell for? Please show steps

Answer 1

To calculate the selling price of the property so that the seller of the property can receive $92,500 net of all costs and commissions, we need to add back all the costs (points + closing costs) and the commission fee to arrive at the selling price.

Since commission is deducted from Selling price, we will first add the points and closing costs to the net amount i.e. $92,500 + $1200 + $500 = $94,200

Now, we will add back the commission fee (7%) to $94,200 to arrive at the selling price of the property.

Selling price = $94,200/0.93 = $101,290.3

Hence the property must sell for $101,290.3