Closing Statement Problem Answer the following questions based upon the informat

Question

Closing Statement Problem Answer the following questions based upon the information provided herein. Assume you negotiated the sale as a real estate broker and are entitled to a six percent commission The offer and acceptance contract calls for a sales price of $200,000. The buyer has tendered $2,000 for earnest money. The buyer has received loan approval on an 80% loan to value ratio loan. The property is presently encumbered with an existing mortgage with a balance of $130,789.56. The interest on the loan has been paid through May 31, 2017. The interest rate on the mortgage is 4.5%. Closing date is to be June 20,2017. All prorations are based on a 360 day year and 30 day month. The 2016 taxes have not been paid and the 2017 taxes are to be prorated based on the 2016 taxes which were 52.5 mills on an assessed valuation of $40,000. A homeowners insurance policy costing $1,200 for a one year period will be purchased by the buyer and paid at closing. The owners title insurance costing $850, a deed preparation fee of $60.00, and a termite policy costing $500.00 are to be paid by the seller. Title insurance costing $950, a credit report costing $60, and an appraisal fee of $450 will be paid by the buyer. The buyer's loan fees include a 1 point origination fee and $800 of additional costs. In addition, the following documents will be recorded: 1-page deed, 15-page mortgage, and a 1-page release deed. The broker's fee is payable at closing and revenue stamps at the usual rate must be paid by the seller and buyer. The closing fee of $500 will be split 50/50 between the buyer and seller.

How much would be the sellers share of the revenue stamps?

how much is the total real estate commission paid by the seller?

Explanation / Answer

Solution:

Property present value: $ 130789.56

Sale price $ 200000.00

Profit: $ 69210.44

Less: $

Interest on Mortogage: (5558.56*)

* 130789.56*4.5%*340/360

Title insurence costing (850)

Deed preparation fees (60)

Termite policy (500)

Closing Fees (250)

Net Profit (62041.88)

i.e. seller share on revenue stamps will be calculated on above value.

Further, Total real estate commission paid by seller calculated as follows:

Slae price $ 200000

Broker commission 6%

Amount paid to Broker $ 12000**

**200000*6%

Hence, total amount paid to broker by seller will be $ 12000.

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