Question
29) a) Suppose Cecil Celler wants to sell her house and she has a net price in mind of $300,000. You are her broker and
29) a) Suppose Cecil Celler wants to sell her house and she has a net price in mind of $300,000. You are her broker and she wants to know what will be the gross selling price at which she will be able to get what she wants after broker commission. The going rate of broker fee is 6%. Estimate the gross selling price she would have to sell the property for in order to receive the $300,000 and how much would you receive for the brokerage fee. (2 points)
b) Now assume the closing date of the transaction is September 18th. The annual property taxes are estimated to be $3,500 and the annual home owner insurance is $1,700. Estimate the sellers and buyers share of property taxes and home owner insurance. (2 points)
c) Finally, the buyer will finance this house with a mortgage and an equity. The mortgage has a loan to value ratio of 95%, and is a 30-year fixed rate mortgage loan with an interest rate of 5.1% per year with monthly payments. Calculate the monthly mortgage payment the buyer would have to pay, the amount of money the buyer needs to have available at closing to pay for the share of property taxes, home owner insurance, and down payment. (4 points)
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