Lesson 20

Question 1

Property is sold July 15th. Annual property tax of $1,200 was prepaid in full January 1. A water bill is $840 in arrears. What amount will be a credit or debit to the seller?

Answer 1

$290 debit to seller 
(July 15  to Dec. 30   is 5.5 months.
1,200/12 = $100 Monthly
5.5 x $100 = $550 credit to seller
$840 - $550 = $290 debit to seller)

Question 2

Mr. W (70) lives in a town that allows a one-time $5,000 deduction from assessed value for anyone 65 years or older. Mr. W’s home is valued at $90,000 and is assessed at 20% of market value. The tax rate is $44.00 per $1,000 of assessed value. What is MR. W’s tax payment?

Answer 2

$572 (18k Assessed Value
90k x .2 = -5k
18-5=13k
13k*.044=$572)

Question 3

Mrs. Tomas received a net of $73,320 for her lot after the broker deducted a 6% commission. What was the gross sales price of the lot?

Answer 3

$78,000 ($73,420 / .94)

Question 4

Tom Brady wishes to sell a lot at a 14% net profit. He purchased the lot for $37,000. What would the sales price have to be to give Mr. Brady a 14% profit after paying the selling broker a 5% commission on the sales price?

Answer 4

$44,400

37k x 1.14 = 42,180 / .95 = 44,400

Question 5

Jay’s lake cabin sold for $62,250, which was 75% of the list price. What did the cabin list for?

Answer 5

83k

62,250 / .75

Question 6

A building measures 120’ by 50’ and is 25% of the total land area of a parcel. If X buys 15% of the total lot, how many square feet are left?

Answer 6

20,400

120*50 = 6k * 4 = 24k * .85 = 20,400SF

Question 7

Q wishes to sell and recover his investment plus $5,500. He paid $44,500. Interest costs will be $5,000, taxes are $850, other costs of $283. The agent commission is 7%. The sales price should be?

Answer 7

$60,306
(44,500+5500+5000+850+283=56133 + 7% = Selling price
56,133/.93 = 60,360)

Question 8

Broker charges a leasing fee of one-half of the first month’s rent and a management fee of 7% of all rents collected. Broker negotiates a three-year lease at a monthly rental of $650. What will the broker earn?

Answer 8

$1,963

650 x 36 = 23,400 x .07 = 1638 +(650/2) = 1963

Question 9

Closing costs on a property; title insurance is $450; title search is $250; miscellaneous fees are $165. If buyer pays 60% of the costs and seller pays the balance, how much more will buyer pay than seller?

Answer 9

$173

Question 10

Monthly payment of principal and interest for a $50,000 loan at 9% interest for 25 years is $419.60. After the first payment, what is the outstanding load balance?

Answer 10

$49,955
(419.6-(4.5/12) = 375 = 44.6
50 - 44.6 =49955)