PSI Oklahoma Real Estate Practice Test

If a seller wants to walk away with a specific amount after closing, which element must be considered in determining the listing price?

1. The sales tax rate

2. The estimated closing costs and loan payoff

3. The property's market value only

4. The seller's desired profit margin only

The correct answer is: The estimated closing costs and loan payoff

To ensure that a seller can walk away with a specific amount after the closing, it's essential to take into account the estimated closing costs and the loan payoff. The listing price should be set not just based on what the property is worth in the current market, but also by factoring in these additional financial obligations. Closing costs may include various fees such as title insurance, attorney fees, transfer taxes, and other expenses that arise during the sale process. Likewise, the seller's existing mortgage balance or any other liens must also be subtracted from the sales proceeds. By calculating these amounts, the seller can determine the necessary listing price to achieve their desired net profit after all costs and liens have been settled. While the property's market value is important, just knowing this figure isn't sufficient for devising a listing price that aligns with the seller's financial goals. Similarly, the desired profit margin alone does not provide a complete picture without considering the actual costs involved in the transaction. Thus, it is the combination of estimated closing costs and loan payoff that truly guides the appropriate listing price for achieving the seller's financial objective.