Real Estate Math

A Massachusetts property sells for $775,000. The deed excise is $4.56 per $1,000. The commission is 5%. The attorney's fee is $2,200. What are the total seller's closing costs for these three items?

Q: A Massachusetts property sells for $775,000. The deed excise is $4.56 per $1,000. The commission is 5%. The attorney's fee is $2,200. What are the total seller's closing costs for these three items?

Deed excise = 775 × $4.56 = $3,534. Commission = $775,000 × 5% = $38,750. Attorney = $2,200. Total = $3,534 + $38,750 + $2,200 = $44,484. Closest to A ($44,034). Minor rounding: 775 × $4.56 = $3,534; $38,750 + $3,534 + $2,200 = $44,484.

A$44,484✓ Correct

B$40,934

C$42,700

D$45,000

Explanation

Deed excise = 775 × $4.56 = $3,534.

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Key Terms to Know

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

Amortization

The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.