Question

What amount will the seller receive at the closing?

For this question, prorate using the actual number of days in the month and year. Split the escrow fee 50-50. The seller will pay the revenue stamps, and the buyer will pay title insurance and the recording fee. The buyer assumes the existing mortgage balance of $127,042.42, the buyer will pay in cash at closing the difference between the purchase price and the loan balance, and the present rnonthly payment on the loan is $1,001.40. Closing is October 15.

Use these relevant facts: • Purchase price: $350,000 • Earnest money: $3,500 • Commission rate: 60% split 50-50 • Real estate taxes: $2,900 (paid in full for the current year Jan. 1 through Dec. 31) • Escrow fee: $800 • Title insurance: $1,150 • Insurance policy: $758 (annual premium) • Revenue stamps: $126.30 • Recording fee: $30 • Interest rate: 3.75% (paid in arrears , with the next payment due Nov.1)

The correct answer is: $201,847.28

Answer 1

1. To compute the receivable of seller we will deduct the expenses from purchase which will be bear by seller .

In question we can see , buyer will bear insurance , 50% of Escrow Fee and Recording fee and Real Estate Taxes paid upto Dec 31 so we will add the excess tax which is made by seller i.e from the period 16th Oct to 31st Oct (77 Days ) Hence Tax to be recovered from seller ($2900/365 days ) x 77 days = $611.78 will added in purchase value .

Total Screw fee total $ 800 and 50-50 will be bear by seller and buyer . Hence $400 to deducted

Calculation of amount received by seller at closing.

Purchase Price		$       350,000.00
Less :
Commission 6%	$    21,000.00
($350,000 x 6%)
Loan	$ 127,042.42
Escrow Fee	$          400.00
($800 x 1/2)
Revenue Stamp	$          126.30
Interest on loan	$          195.78	$       148,764.50
Add : Real Estate interest prepaid		$               611.78
The seller receive at the closing		$       201,847.28