Where this fits on the exam
| Official syllabus topic | Real Estate Calculations: Seller Proceeds, Buyer Cash, Debits, and Credits |
|---|---|
| Official PSI area | Real Estate Calculations |
| Published weight | 7% of the national portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes a weight for the complete official area, not a guaranteed count for this individual comparison. Use the source, document, actor, event, and timing stated in the question before applying a memorized definition.
Side-by-side comparison
Read across each row. The terms are deliberately compared on identical dimensions so the difference remains clear when the exam hides the vocabulary inside a scenario.
| Decision dimension | Seller net | Buyer funds needed |
|---|---|---|
| Starting point | Sale price and seller credits | Purchase price plus buyer costs, or down payment plus buyer costs |
| Subtract | Mortgage payoff, commission, seller costs, taxes, prorations, and agreed credits | Loan proceeds only if starting with the full price; earnest money already paid and other buyer credits |
| Add | Seller credits and amounts owed to seller | Buyer closing costs, prepaid items, prorations, and other buyer debits not already included |
| Question result | Proceeds payable to seller | Cash the buyer must bring through approved funds |
Decision rule
Georgia-specific distinction
Worked example
Scenario. A property sells for $400,000. The seller owes a $250,000 payoff, a 5 percent commission, and $6,000 in other seller costs. No other credits or debits apply.
Reason it through. Commission is $20,000. Subtract $250,000, $20,000, and $6,000 from the $400,000 sale price.
Answer. The seller net is $124,000.
Common exam traps
- Mixing buyer and seller columns
- Counting earnest money twice
- Ignoring the loan payoff in seller net
- Using a sale-price percentage for a fixed closing charge
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1A home sells for $400,000. The seller owes a $250,000 loan payoff, a 5 percent commission on the sale price, and $6,000 in other seller costs. No other credits or debits apply. What is the seller's net?
- A. $124,000
- B. $130,000
- C. $144,000
- D. $150,000
Show answer and explanation →
Answer: A. $124,000
Seller net is the sale price minus the seller's debits. The commission is $400,000 x 0.05 = $20,000, so $400,000 - $250,000 - $20,000 - $6,000 = $124,000. Forgetting the commission gives $144,000, and forgetting the other costs gives $130,000.
- A. Correct. Commission is $400,000 × 0.05 = $20,000. Net is $400,000 - $250,000 - $20,000 - $6,000 = $124,000.
- B. Incorrect. $130,000 subtracts payoff and commission but omits the $6,000 other seller costs.
- C. Incorrect. $144,000 subtracts payoff and other costs but omits the $20,000 commission.
- D. Incorrect. $150,000 is sale price less payoff alone. Commission and the $6,000 costs still must be deducted.
Question 2A buyer purchases a home for $300,000 with a loan of $240,000. The buyer already paid $5,000 in earnest money, owes $9,000 in closing costs, and receives a $3,000 seller credit. How much must the buyer bring to closing?
- A. $56,000
- B. $61,000
- C. $64,000
- D. $66,000
Show answer and explanation →
Answer: B. $61,000
Buyer funds equal the price plus buyer costs minus the loan, the deposit already paid, and credits: $300,000 + $9,000 - $240,000 - $5,000 - $3,000 = $61,000. Forgetting to credit the earnest money gives $66,000, and ignoring the seller credit gives $64,000. Subtracting the deposit twice gives $56,000.
- A. Incorrect. $56,000 deducts the $5,000 earnest money twice. A deposit already paid receives one credit.
- B. Correct. $300,000 + $9,000 - $240,000 - $5,000 - $3,000 = $61,000. Both the deposit and seller credit reduce the buyer's remaining cash.
- C. Incorrect. $64,000 omits the $3,000 seller credit. The buyer receives that credit against the stated costs.
- D. Incorrect. $66,000 omits the $5,000 deposit credit. That earnest money has already been paid toward the transaction.
Question 3Which item reduces the cash a buyer must bring to closing?
- A. The seller's mortgage payoff
- B. The buyer's prepaid homeowner's insurance
- C. Earnest money the buyer already paid
- D. The lender's origination charge
Show answer and explanation →
Answer: C. Earnest money the buyer already paid
Earnest money already deposited is a buyer credit because the buyer has already paid it toward the price. Prepaid insurance and an origination charge are buyer debits that increase the cash needed. The seller's payoff is plausible because it is a large closing figure, but it is a seller debit and does not affect the buyer's funds.
- A. Incorrect. The seller's mortgage payoff is a seller debit. It is not a credit for money this buyer has already contributed.
- B. Incorrect. Prepaid insurance is a buyer cost and increases the required cash unless some separate stated credit covers it.
- C. Correct. The deposit is money already paid toward the transaction. Crediting it reduces what the buyer still must bring.
- D. Incorrect. An origination charge is a lender fee owed by the buyer under the stated costs. It increases cash needed rather than supplying a credit.
Ready to move on?
You have this distinction down when all of these are true.
- Define every compared term without using the other term as the definition.
- Rebuild the comparison table from memory.
- State the decision rule and Georgia distinction without notes.
- Solve the worked example after changing one key fact.
- Explain the rule or fact that makes each distractor wrong.
- Answer all three original questions correctly in mixed practice on a later day.
Recommended next lesson
Continue with Potential Gross Income Versus Effective Gross Income Versus NOI. Next, potential gross income versus effective gross income versus NOI brings the same subtract-in-order care to income property, where vacancy comes out before operating expenses and debt service never comes out at all.
Return to the complete exam-concept library or the Real Estate Calculations hub.