Question

your clients received a check for $395,000 when they sold their property, which they owned free and clear. their closing expenses were $4,575, and they paid 5% in brokerage fees. what was the sales price of their property? round to the nearest whole dollar.

Answer 1

The sales price of the property was $420,605, calculated by first adding the amount received and closing expenses, then dividing by 0.95 to account for the 5% brokerage fee.

Step-by-step explanation:

To calculate the sales price of the property, we need to consider the amount received by the clients after selling the property ($395,000), the closing expenses ($4,575), and the brokerage fees (5%). First, we add the closing expenses to the amount received to find out how much the clients had before the closing expenses were deducted.

Sales Price after Brokerage Fee = Amount Received + Closing Expenses

$395,000 + $4,575 = $399,575

The amount above is after the brokerage fees have been deducted. Since the brokerage fee is 5% of the sales price, we can find the sales price by dividing the amount after the brokerage fee by 95% (100% - 5%).

Sales Price = Sales Price after Brokerage Fee / 0.95

$399,575 / 0.95 = $420,605.26

Rounding to the nearest whole dollar gives us a sales price of $420,605.