In the CMA scenario, what is the seller's equity?

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Multiple Choice

In the CMA scenario, what is the seller's equity?

Explanation:
Seller’s equity is the portion of the sale price that belongs to the seller after paying off any liens or loans on the property. In this CMA scenario, the property would sell for 240,000 and there is an existing mortgage balance of 196,500 that must be cleared at closing. Subtracting the loan balance from the sale price gives 43,500, which is the amount the seller would receive as equity, assuming no other encumbrances or closing costs affect the proceeds. (If there were closing costs or other liens, those would reduce the net equity further.) The remaining numbers reflect either the sale price or the loan balance, not the seller’s equity.

Seller’s equity is the portion of the sale price that belongs to the seller after paying off any liens or loans on the property. In this CMA scenario, the property would sell for 240,000 and there is an existing mortgage balance of 196,500 that must be cleared at closing. Subtracting the loan balance from the sale price gives 43,500, which is the amount the seller would receive as equity, assuming no other encumbrances or closing costs affect the proceeds. (If there were closing costs or other liens, those would reduce the net equity further.) The remaining numbers reflect either the sale price or the loan balance, not the seller’s equity.

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