Why does a seller-net problem divide by the percentage the seller keeps?
Staff Q&A from the 63Hours team.
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Why does a seller-net problem divide by the percentage the seller keeps?
Staff Q&A from the 63Hours team.
A percentage selling cost changes as the price changes, so it cannot be treated like a fixed dollar charge. If the seller needs $285,000 after a hypothetical 5% commission and there are no other costs, divide $285,000 by 0.95 to get $300,000. Mortgage payoff and fixed costs must also be included when the problem specifies them.
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Discussion prompt: Which costs in your example are fixed, and which depend on price?