Monthly rent of $2,400 has been collected by the seller for the full month. Closing occurs on September 11 with the seller owning the day of closing (360-day year, 30-day months). How much rent does the seller owe the buyer at closing?
Correct Answer
A) $1,520
Step 1: Daily rent = $2,400 ÷ 30 = $80. Step 2: Seller owns days 1-11 (11 days). Step 3: Buyer owns days 12-30 (19 days). Step 4: Seller owes buyer = 19 × $80 = $1,520.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Commission splits refer to the division of the total real estate commission among the listing and selling brokerages, and then between each broker and their respective agents. Commission rates and splits are always negotiable.
Determining ownership days involves calculating the number of days each party (buyer and seller) owned the property during the relevant period (usually a year). This calculation is crucial for accurate proration.
The gross rent multiplier (GRM) is a quick method for estimating the value of income-producing property by multiplying the property's gross rent by a factor derived from comparable sales. GRM = Sale Price / Gross Rent.
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