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A home sold for $400,000. It was appraised for $402,000, and the assessed value was $320,000. Assume in this situation, the real estate transfer tax of 1% is paid by the grantee. How much will the seller owe at closing for transfer fees?
Suggested Answer: A
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In New Jersey, the Realty Transfer Fee (RTF) is typically paid by the seller, but the question specifies that the tax is paid by the grantee (buyer). When the buyer pays the transfer tax, the seller does not owe any amount at closing for transfer fees.
Additionally, the RTF is calculated based on the consideration amount (sale price), not the appraised or assessed value. But since liability is shifted to the buyer here, the seller's responsibility = $0.
14 comments · newest first
JE
Jess
10 months ago
I thought it would be more, honestly.
JO
Joesph
10 months ago
Yep, so that’s $4,000!
LE
Lemuel
10 months ago
The transfer tax is 1% of the sale price, right?
RI
Rikki
10 months ago
Wait, how does the assessed value affect this?
CA
Candra
10 months ago
Totally agree, it’s just based on the sale price!
JO
Josefa
11 months ago
I feel like the answer might be $4,020 because of some additional fees, but I need to double-check my notes on that.
CL
Claribel
11 months ago
I practiced a similar question where the tax was based on the assessed value, but I can't recall if that applies here.
SH
Shantell
11 months ago
I think the transfer tax is calculated on the sale price, which is $400,000, so that would be $4,000, right?
ON
Onita
11 months ago
I remember something about calculating transfer taxes based on the sale price, but I'm not sure if it's always 1%.
IO
Iola
12 months ago
Alright, I'm feeling good about this one. The key is recognizing that the transfer tax is 1% of the sale price, which is $400,000, so the answer is C) $4,000.
ER
Erin
12 months ago
No problem, I've got this. The transfer tax is 1% of the sale price, which is $400,000. So the transfer fee the seller owes is $4,000.
TR
Tran
12 months ago
Wait, I'm a bit confused. Does the question say the grantee pays the transfer tax? I need to double-check that detail.
OR
Orville
1 year ago
Okay, I think I understand this. The transfer tax is 1% of the sale price, so I just need to find 1% of $400,000.
LE
Lemuel
1 year ago
Hmm, this looks like a straightforward real estate transaction question. I'll need to calculate the transfer tax based on the sale price.