You are selling your house and you think it will sell for $275,000. You talk to a real estate agent who is willing to list your house for $279,900. His fee is 7%. You currently owe $175,000 on your home.

a. How much will the real estate agent’s fee be if you get a full price offer?

b. How much will it be if you accept an offer for $275,000?

c. After you pay off your existing mortgage, how much money will you have for a down payment on your next house in (a) and (b)? Assume you continue to use the same real estate agent.

d. If you sell the house on your own for $275,000, how much money will you have for a down payment on your next house?

e. If the buyer wants you to pay closing costs of $3,500, how much money will you have for a down payment on your next house in (a), (b), and (d)?

f. You decide not to sell your house but to remodel and put on an addition. What is the equity in your house? (See (a) and (b)).

g. The bank will let you borrow 90% of the appraised value of your house, which appraises at $275,000. What is the maximum home equity loan you can get?