Given a listing price of $240,000, seller's expenses of $17,600, tax and interest prorations of $6,700, and a mortgage payoff of $196,500, what is the estimated net proceeds to the seller?

• A. $16,000
• B. $21,000
• C. $18,000
• D. $19,200

Answer: (D)

When estimating what the seller walks away with, you start with the sale price and subtract the amounts that must be paid out of those proceeds at closing: selling expenses, prorations for taxes and interest, and the mortgage payoff.

Here, the sale price is 240,000. The seller owes 17,600 in selling expenses, 6,700 in tax/interest prorations, and 196,500 to pay off the mortgage. Add these deductions: 17,600 + 6,700 + 196,500 = 220,800. Subtracting from the sale price gives 240,000 − 220,800 = 19,200.

So the estimated net proceeds to the seller are 19,200.