The seller's Statement of Adjustments for a property sale on July 7th shows a credited amount of $1,200 for prepaid utilities. The property's annual property taxes, due January 1st, are $2,800. The existing mortgage balance as of closing is $310,000, with a prepayment penalty of 1.5% of the outstanding balance. The total commission payable to the brokerage is 6% of the $480,000 sale price, plus GST. Legal fees are $1,800 plus GST. What are the net proceeds to the seller?

Question: The seller's Statement of Adjustments for a property sale on July 7th shows a credited amount of $1,200 for prepaid utilities. The property's annual property taxes, due January 1st, are $2,800. The existing mortgage balance as of closing is $310,000, with a prepayment penalty of 1.5% of the outstanding balance. The total commission payable to the brokerage is 6% of the $480,000 sale price, plus GST. Legal fees are $1,800 plus GST. What are the net proceeds to the seller?

Answer options:

• $134,845.89
• $138,590.77 ✅ $136,390.77
• $135,190.77

Correct answer: $136,390.77

Explanation: Sale Price = $480,000. Commission = $480,000 * 0.06 = $28,800. Commission GST = $28,800 * 0.05 = $1,440. Total Commission = $30,240. Mortgage Prepayment Penalty = $310,000 * 0.015 = $4,650. Legal Fees = $1,800. Legal Fees GST = $1,800 * 0.05 = $90. Total Legal = $1,890. Property Taxes: Daily = $2,800/365 = $7.6712. Days seller lived in property: Jan (31) + Feb (28) + Mar (31) + Apr (30) + May (31) + Jun (30) + Jul (7) = 188 days. Seller's portion of taxes = $7.6712 * 188 = $1,442.20. Since taxes are paid annually on Jan 1, the buyer will reimburse the seller for the remainder of the year. Days buyer owes seller: 365 - 188 = 177 days. Buyer owes seller $7.6712 * 177 = $1,357.80 (credit to seller for prepaid taxes). Net Proceeds = Sale Price - Mortgage Balance - Total Commission - Mortgage Prepayment Penalty - Total Legal + Prepaid Utilities (credit) + Prepaid Taxes (credit) = $480,000 - $310,000 - $30,240 - $4,650 - $1,890 + $1,200 + $1,357.80 = $135,777.80.