A New Jersey salesperson is representing a seller in the sale of a $1,050,000 home. The seller asks whether the mansion tax will affect her net proceeds. Which of the following responses is MOST accurate?
Correct Answer
B) No, the mansion tax is the buyer's obligation and will not reduce the seller's net proceeds, though it may affect the buyer's ability or willingness to close
The mansion tax under N.J.S.A. 46:15-7.2 is specifically the buyer's obligation, not the seller's. Therefore, it does not directly reduce the seller's net proceeds. However, a knowledgeable salesperson should also note that the mansion tax could indirectly affect the transaction — for example, if the buyer is unprepared for this additional $10,500 cost, it could affect their financing or willingness to proceed. The seller's direct obligations include the standard RTF (not the mansion tax), which does reduce her net proceeds.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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