Jim now prepares an offer for 123 Beach Rd. and it is for $313,000. The deposit

Question

Jim now prepares an offer for 123 Beach Rd. and it is for $313,000. The deposit is $8,000 and it is to be submitted upon acceptance of the offer. There will be a supplementary deposit of $12,500 payable on the 18th of June. The deposits will come out of the buyer’s down payment of $115,000. The offer is conditional on being approved to assume an existing first mortgage on the property of $146,000. To make sale attractive to the buyers, the seller has agreed to take back the mortgage for the balance of the offer price for period of three years at a rate of 5% with an amortization of 15 years. The
agreement is presented to the seller who, after much discussion with his representative, counters the offer by increasing the purchase price by $7,000; increasing the deposit by $2,000 and increasing the supplementary deposit by $3,000. The buyers are not in a position to increase their down payment so the seller agrees to increase his seller take back mortgage to cover the purchase price.
Calculate the balance due on completion based on the counter offer outline in this question.

Explanation / Answer

Price = 320000

Less: down payment including deposits = 115000

Balance = 205000

Less: Assumed morgage = 146000

Balance (take back)= 59000

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