A seller sells his house at $128,000. He takes back a mortgage from the buyer for $63,000. He pays off $43,000 balance on the existing loan and pays a 5.5% brokerage fee. What are his proceed from the sale?
*To determine the seller’s proceed, start with the selling price of ($128,000) subtract the seller financing ($63,000) subtract the existing loan balance payoff ($43,000) and subtract the brokerage fee ($128,000 x .055 = $7,040) The result is $14,960 ($128,000 - $63,000 - $43,000 - $7,040 = $14,960. Note that “Proceeds” is generally understood to mean money actually taken away at closing. Money received over the years for the sell-financed mortgage is part of the check the seller gets on closing day, so it’s not considered proceeds