Seller of a property wants to net $92,500 after paying $1,200 in points; $500 in closing...

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

Solutions

Expert Solution

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

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

A seller would like to net $250,000 from the sale of her home. If closing costs...

A seller would like to net $250,000 from the sale of her home. If closing costs are expected to be $4,000 and the real estate commission is 6%, her home must sell for what price?

Clayton Company wants to purchase a manufacturing plant from a seller. The net book value of...

Clayton Company wants to purchase a manufacturing plant from a seller. The net book value of the manufacturing plant on the books of the seller is $200,000. To fund the purchase, Clayton has issued 10,000 shares of common stock at a par value of $10 per share and a market value of $35 per share, along with $20,000 from its existing cash balances. Which of the following is INCORRECT based on the above information? A Upon purchasing the manufacturing plant,...

On February 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set for April 1.

On February 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set for April 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month. Answer: $288

One of your Client wants to buy a Rental Property, with estimated Net Operating Income (NOI)...

One of your Client wants to buy a Rental Property, with estimated Net Operating Income (NOI) for the next year of 80,000, using a (L/V) Ratio of 85%, amortized at a Mortgage Rate of 6.5% over 25 years. Your Client wants to have a Return on Equity (ROE) of 12%. You have decide to use a Band of Width Investment Method to estimate the Cap Rate and then apply this Cap Rate to Calculate Value of the Rental Property. According...

Walt is a wealthy businessman from out west. He wants to buy some property in Florida, but he's concerned that if the seller, Donald, knows that he's the buyer, the seller will insist on a higher price

Walt is a wealthy businessman from out west. He wants to buy some property in Florida, but he's concerned that if the seller, Donald, knows that he's the buyer, the seller will insist on a higher price. So he sends his agent, Mickey, to Florida to buy the property (you may assume that Mickey has full agency authority). He instructs Mickey not to tell Donald that he is acting as an agent for Walt. In fact, to be safe, he...

Week 9 Alps Ltd has a net income after tax of $1 500 000 for the...

Week 9 Alps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginning of the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 Alps Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last...

Alps Ltd has a net income after tax of $1 500 000 for the year ended...

Alps Ltd has a net income after tax of $1 500 000 for the year ended 30 June 2019. At the beginning of the period Alps Ltd has 900 000 fully paid-up ordinary shares on issue. On 1 December 2018 Alps Ltd had issued a further 300 000 fully paid-up ordinary shares at an issue price of $2.00. On 1 March 2019 Alps Ltd made a one-for-six bonus issue of ordinary shares out of retained earnings. The last sale price...

Week 9 Alps Ltd has a net income after tax of $1 500 000 for the...

Cornerstone Exercise 16.4 (Algorithmic) After-Tax Profit Targets Olivian Company wants to earn $600,000 in net (after-tax)...

Cornerstone Exercise 16.4 (Algorithmic) After-Tax Profit Targets Olivian Company wants to earn $600,000 in net (after-tax) income next year. Its product is priced at $400 per unit. Product costs include: Direct materials $120.00 Direct labor $88.00 Variable overhead $20.00 Total fixed factory overhead $405,000 Variable selling expense is $16 per unit; fixed selling and administrative expense totals $255,000. Olivian has a tax rate of 40 percent Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of $600,000....

Cornerstone Exercise 16.4 (Algorithmic) After-Tax Profit Targets Olivian Company wants to earn $300,000 in net (after-tax)...

Cornerstone Exercise 16.4 (Algorithmic) After-Tax Profit Targets Olivian Company wants to earn $300,000 in net (after-tax) income next year. Its product is priced at $300 per unit. Product costs include: Direct materials $90.00 Direct labor $66.00 Variable overhead $15.00 Total fixed factory overhead $420,000 Variable selling expense is $12 per unit; fixed selling and administrative expense totals $270,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of $300,000....

Subjects