Real Estate Calculations Flashcards
A person sold a property for $125,000 which represented an increase of 25% over the original cost. What was the original cost? A » $93,750 B » $100,000 C » $105,500 D » $112.000
B » $100,000
Note: $125,000 divided by 125% = $100,000 for original cost.
An industrial building sold for $535,000. The listing broker charged a 4.5% commission agreeing to cooperate with other brokers and split the commission 50/50. If a cooperating broker sold the property, how much would each of the brokers receive? A » $10,535.50 B » $12,037.50 C » $24,075.00 D » $28,975.00
B » $12,037.50
Note: $535,000 x 4.5% = $24,075 divided by 2 = $12,037.50 for each broker.
A person bought a rental property for $43,750. It was assessed for tax purposes at a value of $39,950 with an assessment rate of $1.50 per $100 (15 mills). What would be the monthly tax assessment amount to the nearest cent? A » $44.37 B » $49.94 C » $54.69 D » $59.99
B » $49.94
Note: $39,950 x 1.5% = $599.25 divided by 12 = $49.94.
A buyer bought a property for $60,000 which had an appraisal of $58,000. If the lender charged 1 1/2 discount points, with the borrower receiving a 90% loan, how much were the points? A » $783 B » $900 C » $1,200 D » $1,435
A » $783
Note: A lender makes a loan on the lower of sale price or appraisal. Discount points are computed based upon the actual loan amount. In this case, the lower of the two figures is $58,000 x 90% = $52,200 for the loan x 1.5% = $783
A property was sold with a 300-gallon fuel tank being part of the sale. The tank was 2/3 full at closing with a cost of $1.45 per gallon. What would be the proration at closing? A » $100 B » $145 C » $290 D » $435
C » $290
Note: 300 x 2/3 (300 x 2 / 3) = 200 gallons x $1.45 per gallon = $290
A broker sells a property receiving $8,400 by charging a 6% commission. What was the sale price? A » $140,000 B » $157,000 C » $182,000 D » $302,000
A » $140,000
Note: $8,400 \ 6% = $140,000
What would the seller net if the property was sold for $650,000 with a 6.5% commission? A » $601,350 B » $607,750 C » $614,580 D » $622,300
B » $607,750
Note: $650,000 x 6.5% = $42,250. $650,000 - $42,250 = $607,750
A buyer purchased a property for $130,000 putting 20% down. The buyer also immediately took out a $10,000 home equity loan. Five years later, the home has a current value of $175,000 while the home equity loan is down to a balance of $4,500 and the first mortgage has a current balance of $98,000. What is the seller's equity in the property? A » $61,500 B » $68,750 C » $72,500 D » $98,000
C » $72,500
Note: $175,000 - $4,500 - $98,000 = $72,500
Taxes of $1,200 were prepaid for the year on January 1st. If the property was sold with a closing date of March 1st and the buyer was credited with the day of closing, what would be the tax proration? A » $ 200 B » $ 500 C » $ 800 D » $1,000
D » $1,000
Note: $1,200 / 360 = $3.33 per day x 300 days = $1,000 (The buyer owes from March through December which is 10 months or 300 days)
A property had a list price of $164,000, an actual sale price of $158,000 and a $124,000 loan. If the transfer fee was $3 per $1,000, what was the fee? A » $250 B » $372 C » $474 D » $492
C » $474
Note: $158,000 / $1,000 = 158 x $3 = $474 The transfer fee is based on sale price
A property with a value of $73,500 had a loan of $72,500. If the mill rate was 1 1/2, what were the monthly taxes? A » $9.06 B » $9.19 C » $9.54 D » $9.80
B » $9.19
Note: $73,500 x .15% = $110.25 for yearly taxes / 12 months = $9.19 per month
A buyer purchased a property for $100,000 obtaining an 80% loan to value ratio. The appraisal came in at $80,000. What would be the down payment? A » $12,800 B » $16,000 C » $19,200 D » $36,000
D » $36,000
Note: $80,000 x 80% = $64,000 loan. The loan is based on the lower of sale price or appraisal. $100,000 price less a loan of $64,000 = $36,000 down payment.
A property purchased for $115,000 had a capitalization rate of 12%. What would be the monthly net income on this property? A » $ 1,150 B » $ 3,550 C » $ 6,220 D » $13,800
A » $ 1,150
Note: $115,000 x 12% = $13,800 annual net income / 12 months = $1,150 monthly
Taxes on a property were paid in arrears running from July 1st to June 30th. If closing was on April 15th and the annual taxes were $912, what was the tax proration? A » $191 B » $437 C » $721 D » $912
C » $721
Note: As taxes were paid in arrears, the seller would owe from July 1st to April 15th of the next year which is 9 months and 15 days or 285 days. $912 annual taxes / 360 days = $2.53 per day for taxes x 285 days = $721.
A property sold for $125,000 with a loan of $50,000. The seller paid $2,000 in closing costs and a 7% commission? How much would the seller net? A » $54,250 B » $57,000 C » $61,300 D » $64,250
D » $64,250
Note: $125,000 x 7% = $8,750 in commission. $125,000 - $50,000 - $2,000 - $8,750 = $64,250 net.
Carpeting costs were $19.95 per square yard plus an extra $5.00 per square yard for padding. If a room measured 22.5' by 15', what would be the total cost to install the carpet? A » $748.13 B » $935.63 C » $956.75 D » $998.99
B » $935.63
Note: 22.5` x 15’ = 337.50 square feet / 9 = 37.50 square yards x $24.95 = $935.63
A property was purchased for $43,950 with an assessed value of $39,950. If the tax rate was $3 per $1000, what were the annual taxes? A » $119.85 B » $131.85 C » $157.98 D » $180.00
A » $119.85
Note: Assessed value of $39,950 / $1,000 = 39.95 thousands x $3 per $1,000 = $119.85.
A buyer purchased a property for $60,000 putting 15% down and paying two discount points. How much in dollars were the points? A » $1,020 B » $1,200 C » $1,320 D » $1,500
A » $1,020
Note: $60,000 x 85% = $51,000 loan x 2% = $1,020.
A property was purchased for $92,000 putting $11,000 down. A few years later, the property appraised for $116,000 while the loan balance was down to $79,000. What is the owner's equity in the property? A » $11,000 B » $25,000 C » $32,000 D » None of the above
D » None of the above
Note: $116,000 - $79,000 = $37,000 of equity. The answer is none of the above.
A seller received $75,000 at closing after paying a 6.5% commission. What would have been the sale price? A » $79,875 B » $80,214 C » $82,570 D » $85,356
B » $80,214
Note: $75,000 / 93.5% = $80,214 You can check your answer by taking the sale price of $80,214 x 6.5% = $5,214 in commission. Price of $80,214 less commission of $5,214 = $75,000 net.
A buyer obtained a $50,000 loan with a 9% interest rate. The loan was amortized over 30 years with a monthly payment of $403. Which of the following statements is true?
A » The total amount of interest paid over the term was $145,080
B » The total amount of interest paid over the term was $135,650
C » The amount of principal in the first month’s payment was $129.00
D » The amount of principal in the first month’s payment was $28.00
D » The amount of principal in the first month’s payment was $28.00
Note: $403 (P & I per month) X 12 months (per year) X 30 years = $145,080 (total P&I paid over the 30 years) - $50,000 (principal) = $95,080 interest paid over the term of the loan (so A & B are both wrong). $50,000 X 9% = $4,500 (interest per year) / 12 months = $375 (interest the first month); $403 (P&I) - $375 (int.) = $28 principal paid the first month.
A person obtained a $15,000 term loan at an 11% annual interest rate. If the loan was repaid in a single payment after 18 months, what would be the total amount of the payment? A » $ 2,475 B » $15,000 C » $16,650 D » $17,475
D » $17,475
Note: $15,000 (loan) X 11% = $1,650 (interest/year). $1,650 / 12 months = $137.50 (interest/mo). $137.50 X 18 (months = $2,475 (interest. $2,475 (interest) + $15,000 (principal) = $17,475 (total paid back).
A house sold for $39,379. The buyer paid 20% down. Monthly interest on the loan was $229.69. What was the annual interest rate on the loan? A » 6% B » 8 3/4% C » 14% D » 16%
B » 8 3/4%
Note: $39,379 (sale price) X 80% (loan) = $31,503.20 (loan amount). $229.69 (int./mo) X 12 months = $2,756.28 (interest/year). $2,756.28 / $31,503.20 = 8.75%.
A property sold for $129,000 with the buyer putting 20% down. The lender charged 2 points and $750 closing costs. What was the total due from the buyer at closing? A » $ 2,814 B » $ 3,330 C » $28,614 D » $29,130
C » $28,614
Note: Total due at closing includes down payment, points and closing costs. $129,000 X 20% = $25,800 (down). $129,000 - $25,800 (down) = $103,200 (loan). $103,200 (loan) X 2% (discount) = $2,064 (points). $25,800 (down) + $2,064 (points) + $750 (closing costs) = $28,614 (total due).
A broker was paid commission of 5% of the first $50,000 of a sale price and 3% of all over $50,000. If the total commission was $3,475, what was the sale price? A » $32,500 B » $43,438 C » $82,500 D » $97,500
C » $82,500
Note: $50,000 X 5% = $2,500. $3,475 (total commission) - $2,500 = $975 (3% of all over $50,000). $975 / 3% = $32,500 (sales price over $50,000). $32,500 + $50,000 = $82,500 (total sales price).
A property manager is compensated at 10% of the gross income. The total rents collected were $12,000 with expenses of $600 for utilities, $350 for insurance, $219 for repairs and maintenance, and $60 for advertising. What was the property manager's compensation? A » $1,000 B » $1,077 C » $1,200 D » $1,229
C » $1,200
Note: $12,000 (gross income) X 10% = $1,200 (compensation). The other numbers are just there to see if one knows the difference between gross (before expenses) and net (after expenses).
A licensee lists a 30 acre property for $10,000,000. The seller originally paid $5.50 per square foot for the property. How much per square foot has the property increased in value? A » $1.65 B » $2.15 C » $7.65 D » $9.15
B » $2.15
Note: 30 acres X 43,560 sq. ft. per acre = 1,306,800 sq. ft. of land. 1,306,800 sq. ft. X $5.50 = $7,187,400 (original price of land). $10,000,000 (today`s price) - $7,187,400 (original price) = $2,812,600. $2,812,600 / 1,306,800 sq. ft. = $2.15 increase.
A building was to be constructed with the dimensions of 130 feet long, 30 feet wide and 24 feet high. Contractor A was going to build the building at $8.90 per square foot while Contractor B was going to build it at $.375 per cubic foot. How much could be saved by using Contractor A rather than Contractor B? A » $200 B » $390 C » $2500 D » $7332
B » $390
Note: Square feet is determined by multiplying the length X width. Cubic feet is length X width X height. 130` X 30’ = 3,900 sq. ft. X $8.90 = $34,710 (Cost of Contractor A). 130’ X 30’ X 24’ = 93,600 cubic ft. X $.375 = $35,100 (Cost of Contractor B). $35,100 - $34,710 = $390 savings (2).
A person bought a lot for $28,000 and then added improvements in the amount of $150,000. The owner wanted to make a profit of 5% on the lot and 40% on the improvements. What would the sale price have to be? A » $210,000 B » $228,000 C » $239,400 D » $258,100
C » $239,400
Note: $28,000 X 5% = $1,400 profit. $150,000 improvements x 40% = $60,000 profit. To come up with the total sale price, we take the $28,000 lot + $1,400 profit + $150,000 improvements + $60,000 profit which equals a total of $239,400.
A buyer was considering purchasing a house that contained 1,500 square feet. Based on the comparable houses that had sold in the area, houses were selling for $70 per square foot. The agent told the buyer, however, that the house needed painting which would cost $3,000 and new shingles which would cost $5,000. What price should the buyer offer for the house? A » $ 97,000 B » $105,000 C » $113,000 D » $118,000
A » $ 97,000
Note: 1,500 square feet times $70 per square foot equals $105,000. $105,000 minus the $3,000 for the painting and the $5,000 for the shingles means the buyer would offer $97,000.
A buyer bought a lot for $28,000 and a house for $250,000. The owner wanted to sell the property making a 5% profit on the lot and 30% on the house. What would the sale price have to be? A » $354,400 B » $368,700 C » $380,900 D » $415,985
A » $354,400
Note: $28,000 times 5% equals $1,400. $250,000 times 30% equals $75,000. $28,000 plus $1,400 plus $250,000 plus $75,000 equals a total price of $354,400.
A building was to be constructed with the dimensions of 110 feet long, 25 feet wide and 20 feet high. Contractor A was going to build the building at $8.20 per square foot while Contractor B was going to build it at $.45 per cubic foot. How much could be saved by using Contractor A rather than Contractor B? A » $2,000 B » $2,200 C » $3,300 D » $3,750
B » $2,200
Note: Square feet is determined by multiplying the length X width. Cubic feet is length X width X height. 110` X 25’ = 2,750 square feet X $8.20 = $22,550 (Cost of Contractor A). 110’ X 25’ X 20’ = 55,000 cubic feet X $.45 = $24,750 (Cost of Contractor B). $24,750 - $22,550 = $2,200 savings (2).
A property had a land value of $30,000. The replacement cost of the improvements was estimated at $120,000. If an appraiser estimated the depreciation at 30%, what is the current value of the property? A » $ 36,000 B » $ 45,000 C » $105,000 D » $114,000
D » $114,000
Note: Land does NOT depreciate. $120,000 (improvements) X 30% =$36,000 (depreciation) $120,000 (improvements) - $36,000 (depreciation) + $30,000 (land) = $114,000.
A three year old property appraised for $105,000. If it depreciated an average of 10% per year, what was the original value of the property? A » $ 31,500 B » $136,500 C » $150,000 D » $350,000
C » $150,000
Note: $105,000 represents 70% (10% averaged over the 3 years) of the original value. $105,000 / 70% = $150,000.
A three year old property appraised for $98,000. If it depreciated an average of 10% per year, what was the original value of the property? A » $ 68,600 B » $132,000 C » $140,000 D » $326,667
C » $140,000
Note: $98,000 represents 70% of the original value (10% averaged over 3 years). $98,000 / 70% = $140,000.
A house valued at $350,000 will depreciate an average of 3.5% per year. What will be the value after 4 years? A » $301,000 B » $303,513 C » $325,500 D » $337,750
A » $301,000
Note: Since it is an average, you can take 3.5% (per year) X 4 (years) = 14% (total depreciation). $350,000 X 86% = $301,000.
A buyer obtained a 10% interest rate loan in the amount of $90,000. The term of the loan was 30 years and the monthly payment of principal and interest was $789.81. How much of the first month's payment will be paid on the principal? A » $ 39.81 B » $ 40.02 C » $750.00 D » $751.32
A » $ 39.81
Note: $90,000 X 10% = $9,000 (int/yr) / 12 months = $750 (int/mo); $789.81 (P&I) - $750 (int) = $39.81 (principal).
A buyer obtained a $60,000 loan at 11% interest for 30 years, with monthly principal and interest payments of $571.39. What was the total amount of interest paid over the 30 year term? A » $ 60,000 B » $145,700 C » $198,000 D » $205,702
B » $145,700
Note: $571.39 (P&I/mo) X 12 months X 30 years = $205,700.40 (P&I paid over 30 years); $205,700.40 (P&I) - $60,000 (principal paid back) = $145,700.40 (interest paid)
A buyer purchased a house obtaining a new loan with a 70 to 30 loan to value ratio. The annual interest rate was 9 3/4%. The first month's interest was $583.33. What was the sale price of the house? A » $ 43,520 B » $ 62,491 C » $ 71,794 D » $102,564
D » $102,564
Note: $583.33 (int/mo) X 12 months = $6,999.96 (int/yr) / 9.75% = $71,794.46 (loan); $71,794.46 (loan) / 70% = $102,563.52
A buyer took out a $6,000 loan for 10 years at 10.5% interest. The buyer made principal payments of $75 a month on the loan in addition to interest. What would be the principal loan balance after 6 months of payments? A » $5,000 B » $5,235 C » $5,550 D » $6,000
C » $5,550
Note; Each month the loan balance was reduced by $75. $75 X 6 months = 450 (total principal paid over the six months). $6,000 (original loan) - 450 (paid on principal) = $5,550 (loan balance).
A house was listed for $127,000. An offer of $120,000 was made and accepted. The commission on the sale was 7% of which the salesperson received 40%. How much would the salesperson receive? A » $1680 B » $3360 C » $3556 D » $5334
B » $3360
Note: $120,000 (actual sale price) X 7% = $8,400 (total commission). $8,400 X 40% = $3,360 (salesperson`s share).
A house sold for $84,500 with a commission rate of 6%. The listing broker received 50% of the commission. How much would the selling salesperson receive if the salesperson and the broker split their portion of the commission 40/60? A » $ 816 B » $1014 C » $1521 D » $2856
B » $1014
Note: $84,500 X 6% = $5,070 (commission). $5,070 / 2 = $2,535 (selling broker). $2,535 X 40% = $1,014 (the first name in the clause receives the first number).
A broker sold a commercial property for $1.5 million. The broker earned a total commission of $87,000. If the broker was paid 6% on the first $1.2 million of sales price, what was the broker's rate of commission on the amount of sale price over $1.2 million? A » 3% B » 4% C » 5% D » 6%
C » 5%
Note: $1,200,000 X 6% = $72,000; $87,000 (total commission) - $72,000 = $15,000 (the commission on the other $300,000 (1.5 million - 1.2 million). $15,000 / $300,000 = 5%.
A salesperson earned 2.75% commission on $600,000 in sales for the year. However, the salesperson had only taken a draw against commission of $150 per week for the entire year for the salesperson's salary. What would be the total amount earned by the salesperson? A » $ 7,800 B » $ 8,700 C » $12,400 D » $16,500
D » $16,500
Note: $600,000 X 2.75% = 16,500 (total commission)
