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Suppose you are interested in selling your home and would like to clear a net value...

Suppose you are interested in selling your home and would like to clear a net value of $300,000. If you have agreed to pay your broker a commission of 5.5% (no matter who ultimately is responsible for finding the buyer), what price must you sell the home for in order to meet your net profit (rounded to the nearest dollar)?

The solution is $317,460 but, I am not sure how they came to that conclusion.

Any help will be appreciated!

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Answer #1

Gross Value = Net Value / [ 1 - Broker Commission ]

= $ 300,000 / [ 1 - 0.055 ]

= $ 300,000 / 0.945

= $ 317,460.3

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