Tennessee Real Estate Exam Practice Question
A seller sold a property for $375000 with the closing on July 1st in a jurisdiction where the buyer pays for the day of closing. The seller had a mortgage balance at the time of closing of $301000 and had recently paid invoices of $400 for the second quarter's water and electricity $1200 for new appliances and roofing repairs of $700. Based only on these items how much will the seller receive at closing?
Correct Answer: A
Rationale: To determine the amount the seller receives at closing, start with the sale price of $375,000. Subtract the mortgage balance of $301,000, which leaves $74,000. However, the seller must also account for recent expenses. The seller has paid $400 for water, $1,200 for electricity, and $700 for repairs, totaling $2,300 in expenses. By subtracting these expenses from the $74,000, the final amount received is $71,700.
Options B, C, and D incorrectly account for expenses or do not subtract them, leading to inflated amounts. Thus, only option A accurately reflects the seller's net proceeds.
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