Question

A property that was assessed at $360,000 is sold for $635,000 on August 12th, leaving 141 days remaining in the year. The seller of the property paid $19,800 in taxes (at a 5.5% tax rate) for the year, $1,275 in insurance premiums for the year, and $46,000 in closing costs. What are the seller's proceeds from the sale?

(Note: Round all results to 2 decimal places [i.e. ".05"])
(Annual Tax Rate / 356 days = Daily Tax Rate)
(Annual Insurance Premium Rate / 365 = Daily Insurance Premium Rate)
(Assessed Property Value x Daily Tax Rate x Number of Days Remaining in the Year = Buyer's Reimbursement Owed to Seller for Taxes)
(Daily Insurance Premium Rate x Number of Days Remaining in the Year = Buyer's Reimbursement Owed to Seller for Insurance Premiums)
(Buyer's Reimbursement Owed to Seller for Taxes + Buyer's Reimbursement Owed to Seller for Insurance Premiums = Buyer's Total Reimbursement Owed to Seller)
(Sale Price - [Annual Taxes + Annual Insurance Premiums + Closing Costs] + Buyer's Total Reimbursement Owed to Seller = Seller's Proceeds)

Answer 1

To calculate the seller's proceeds from the sale, we need to consider taxes, insurance premiums, closing costs, and the sale price. We use the assessed property value, daily tax rate, daily insurance premium rate, and the number of days remaining in the year to calculate the buyer's reimbursement owed to the seller. Finally, we subtract the buyer's reimbursement, annual taxes, annual insurance premiums, and closing costs from the sale price to find the seller's proceeds.

Step-by-step explanation:

To calculate the seller's proceeds from the sale, we need to consider the taxes, insurance premiums, closing costs, and the sale price. First, we calculate the annual taxes paid by the seller by multiplying the assessed property value by the daily tax rate and the number of days remaining in the year. Then, we calculate the annual insurance premiums paid by the seller by multiplying the daily insurance premium rate by the number of days remaining in the year. Next, we calculate the buyer's total reimbursement owed to the seller for taxes and insurance premiums. Finally, we subtract the annual taxes, annual insurance premiums, closing costs, and the buyer's reimbursement from the sale price to find the seller's proceeds.