Module 14

Question 1

To convert decimals to percents__

Answer 1

move the decimal two places to the right

0. 80 —– 80%
1. 05 ——5%
2. 625 ——62.5%
3. 0045 ——.45%

Question 2

To convert percent to decimals___

Answer 2

Move the decimal two places to the left.

7.25% —-0.0725
55.5% —0.555
200% —2.0
0.01% —0.0001

Question 3

There are times when an appraiser will have to solve for the percent. For example, if the taxable value of a $150,000 property increased $20,000, what was the percent of the increase?

Answer 3

Divide $20,000 by $150,000.

13.33%

Question 4

The T-Bar works for 3 formulas

Answer 4

Total = part/rate
Part = Rate x Total
Rate = Part/ Total

Question 5

T-bar

Answer 5

Part
Divide\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_Divide
                              I
                Rate       I          Total
                              I
                         Multiply

Question 6

$5,000 is 5% of what number?

Answer 6

$5,000 divided 0.05 - $ 100,000

Question 7

12% of what number is $18,000

Answer 7

$18,000 divided 0.12 = $150,000

Question 8

How much money does Torres need to deposit to earn interest of $3,000 every year when the annual interest rate is 6%?

Answer 8

$3,000 divide 0.06 = $50,000

Question 9

If conventional financing requires a 20% down payment and the buyer has $70,000 cash available and assuming the buyer is qualified for the payments, what is the maximum price the buyer can afford?

Answer 9

$70,000 divide 0.20 = $350,000

Question 10

The Fairchild’s property was listed for $250,000, but it was reduced in price to $230,000 due to a lack of market interest.
What is the price discount expressed as a percentage?

Answer 10

$20,000 divide %250,000 = 8% discount

Question 11

Sue sold her property for $110,000. This price is 10% more than what she paid for it.
What was the original purchase price?

Answer 11

$110,000 divide 1.10 = $100,000

1.10 because its 100% plus 10 percent??

Question 12

Jim sold his property for $90,000 during a down market period. The price was 10% less than what he paid for it. What was the original purchase price?

Answer 12

$90,000 divide 0.90 = $100,000

Question 13

John sold his condo for $126,000. This price was 5% more than she paid for it. What was the original price?

Answer 13

$126,000 divide 1.05 = $120,000

Question 14

An appraiser selected a property that sold for $253,000 as a comparable sale in an assignment. If the sale is 15% superior to the subject property, what is the value of the subject property? (CLUE)appraisers adjust the comparable sale, not the subject property. However, when you run into a question like this, treat the subject property as the base and solve it.

Answer 14

$253,000 divide 1.15 = $220,000

Question 15

A commercial property sold for $850,000, but the sale fell through and the property eventually sold for $816,000. What is the discount as a percent?

Answer 15

Divide the difference by the larger number to obtain the % of the discount.
$34,000 divide $850,000 = 0.04 or 4%

Question 16

A mill is equal to

Answer 16

one-thousandths of a dollar, which is expressed as $1.00 of tax for every $1,000 of assessed value.

Question 17

If the mill rate in the area is 25, and the assessed value is $125,000 then multiply the assessed value by the mill rate.

** multiply the mill rate by .001 then multiply the assesses value by that rate

.001 x 25 = .025

Answer 17

$125,000 assessed value x 0.025 mill rate = $3,125

Question 18

Effective tax rate

Appraisers can also calculate the effective tax rate by dividing the property tax amount by its market value

Answer 18

For an effective tax rate, the property’s market value or sale price is used rather than an assessed value

** efective tax rate is by the value or sales price not the assessed rate

Question 19

Assessed Value and effective tax rate: If the market value is $246,000 and the assessment ration is 60% of market, then you simply multiply the market value by 0.60 to calculate the assessed value.

Answer 19

The assessed value is then multiplied by the mill rate.

Question 20

Petrie’s property has a market value of $140,000 and is assessed at 60% of its value for tax purposes.

If the mill rate is 18 mills, what is the annual tax on the Petrie property?

Answer 20

$140,000(MV) x 0.60 (assessed rate) = $84,000 assessed value

$84,000 x 0.018 (i.e., 18 mills divided 1,000) = $1,512)

Question 21

The McIntosh Farm has a semiannual tax of $12,000. The mill rate in the area is 30 mills, and properties are assessed at 80% of market value. What market value did the assessor assign for the McIntosh property?

Answer 21

$12,000 x 2 = $24,000 annual property taxes
$24,000 divide 0.030 = $800,000 assessed value
$800,000 divide 0.80 = 1,000,000

Question 22

A property sold for $635,000, and the credit union provided a commitment to the buyer for $508,000. What down payment percentage did the credit union require?

Answer 22

$635 - $508,000 = $127,000 (down payment amount)

$127,000 divided $635,000= 20% down payment

Question 23

The subject property was overpriced and sat on the market for an extended period before it sold for 20% of the below the market price at $160,000. What should the subject property have sold for if it had not been overpriced?

Answer 23

$160,000/ 0.80 = $200,000

Question 24

Median prices for townhouses in the Brandondale subdivision have declined 15% over the last 3 years to $170,000. What was the median price 3 years earlier?

Answer 24

$170,,000 divided by 0.85 = $200,000

Look .85 not .15

Question 25

The pension fund for acme steel lost 20% in their Reit fund in the last two years. The real estate market has not turned around and showing positive returns each quarter. What percent will the REIT fund need to increase for Acme to fully recover its loss?

Answer 25

20% loss divided by 80% current holding = 25% needed return to recover the loss.

Question 26

A truth-in-housing inspection uncovered an issue with a home’s electrical system. The buyer negotiated a 15% concession on the purchase of the home. If the discounted price was $142,800, what was the price before the concession

Answer 26

142800 / .85

Question 27

An existing building contains 2,500 square feet of space on each of four floors. The site contains a total of 50,000 square feet. What is the floor area ratio?

Answer 27

..20