A California property is sold for $1,200,000. The seller has an existing mortgage balance of $450,000. The seller agreed to pay a 5% commission to the listing brokerage, which splits 50/50 with the buyer's brokerage. What are the seller's approximate net proceeds from the sale, before considering closing costs, taxes, and other fees?
Correct Answer
C) $690,000
Step 1: Calculate total commission: $1,200,000 × 5% = $60,000. Step 2: The commission split is between the brokerages, but the seller pays the total commission. Step 3: Calculate net proceeds: $1,200,000 - $450,000 (mortgage payoff) - $60,000 (total commission) = $690,000.
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