Question
Consider the following real estate transaction described for the settlement of a deal by a broker who is the procuring cause for the deal. John
Consider the following real estate transaction described for the settlement of a deal by a broker who is the procuring cause for the deal.
John and Jane Johnson have signed a contract to sell their home, on which they owe a mortgage balance of $13,466, to Bassey and Betsie Beacon for $375,000. Their original loan amount, taken twenty eight years ago, was $83,000 for 30 years at 8% annual interest compounded monthly. The 336th payment due on May 1, 2020 has already been paid and the remaining loan balance will be paid at closing.The closing date has been set for June 1, 2020. The sellers will pay a 6% commission to their Century 21 broker.The buyers' loan application for95%ofthevalue of the houseat 3.6% for 30 years has been approved. The assessed value of the house is $320,000 for both land and improvements while the tax rate is 80 mills.The 2020 property tax is due in arrears on December 31, 2020 and has not yet been paid.
The following additional charges will be paid at closing by the stipulated parties.The buyers will pay title examination fee of $375, recording fees of $250, and additional legal fees of $750. The sellers will pay legal fees of $1050, appraisal fee of $500,and a well examination and certification fee of $250.
Answer the following questions in respect of the transactions enumerated above. Show your computation where necessary.
- How much brokerage commission is owed to the broker at settlement?
- Calculate the amount of property tax due on December 31, 2020.
- Determine the proration of the property tax between the sellers and buyers at closing
- list and sum up all items owed by the sellers at closing.
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