Illinois Real Estate Practice Exam

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Prepare for the Illinois Real Estate Test. Practice with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

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What must the property sell for if a seller wants to net $180,000 after paying a broker's fee of 6%?

$191,489
$185,000
$175,000
$200,000

The correct answer is: $191,489

To determine the selling price that allows the seller to net $180,000 after paying a broker's fee of 6%, you need to calculate the total amount the seller must receive, which includes both the net desired amount and the broker's fee. When a property sells, the broker's fee is calculated as a percentage of the selling price. Therefore, if we let the selling price be represented as X, the broker's fee would be 6% of X, or 0.06X. The seller wants to keep $180,000 after this fee is deducted, leading to the equation: X - 0.06X = $180,000. This simplifies to: 0.94X = $180,000. Next, to find the selling price (X), divide both sides of the equation by 0.94: X = $180,000 / 0.94, X = $191,489.36. Rounding to the nearest dollar gives a selling price of $191,489, making this the correct answer. Understanding the calculations involved and recognizing how to manipulate percentages is crucial in real estate transactions, especially when determining how much must be sold for a seller to achieve their financial goals after paying applicable fees