What calculation is involved in determining Sale Proceeds Cash Flow?

The calculation for determining Sale Proceeds Cash Flow takes into account several important financial elements involved in a real estate transaction. The correct approach involves deducting various costs and liabilities from the sale price to arrive at the actual proceeds that the seller will receive after the sale.

In this context, the sale proceeds reflect the net amount the seller takes home after considering the costs directly associated with the sale, including the costs of sale (like real estate commissions and closing costs), any remaining mortgage balance that must be paid off at the close of the sale, and any tax liabilities that may be applicable. Therefore, the formula encompasses:

• Sale Price: The total amount received from the sale of the property.

• Minus Cost of Sale: Expenses incurred during the sale process, which can include agent commissions and other closing costs.

• Minus Mortgage Balance: The amount still owed on the mortgage that must be paid off.

• Minus Tax Liability: Any taxes that must be settled from the sale proceeds, ensuring that all financial obligations are cleared.

This comprehensive approach ensures that all pertinent financial factors are considered, leading to an accurate representation of the seller's cash flow from the sale. The other choices either add costs incorrectly or do not reflect the net cash flow after all liabilities are settled,