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Real Estate Study Materials > Real Estate Calculations > Flashcards

Real Estate Calculations Flashcards

1
Q 
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
A

B » $100,000

Note: $125,000 divided by 125% = $100,000 for original cost.

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2
Q 
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
A

B » $12,037.50

Note: $535,000 x 4.5% = $24,075 divided by 2 = $12,037.50 for each broker.

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3
Q 
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
A

B » $49.94

Note: $39,950 x 1.5% = $599.25 divided by 12 = $49.94.

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4
Q 
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

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

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5
Q 
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
A

C » $290

Note: 300 x 2/3 (300 x 2 / 3) = 200 gallons x $1.45 per gallon = $290

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6
Q 
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

A » $140,000

Note: $8,400 \ 6% = $140,000

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7
Q 
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
A

B » $607,750

Note: $650,000 x 6.5% = $42,250. $650,000 - $42,250 = $607,750

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8
Q 
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
A

C » $72,500

Note: $175,000 - $4,500 - $98,000 = $72,500

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9
Q 
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
A

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)

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10
Q 
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
A

C » $474

Note: $158,000 / $1,000 = 158 x $3 = $474 The transfer fee is based on sale price

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11
Q 
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
A

B » $9.19

Note: $73,500 x .15% = $110.25 for yearly taxes / 12 months = $9.19 per month

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12
Q 
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
A

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.

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13
Q 
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

A » $ 1,150

Note: $115,000 x 12% = $13,800 annual net income / 12 months = $1,150 monthly

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14
Q 
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
A

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.

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15
Q 
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
A

D » $64,250

Note: $125,000 x 7% = $8,750 in commission. $125,000 - $50,000 - $2,000 - $8,750 = $64,250 net.

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16
Q 
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
A

B » $935.63

Note: 22.5` x 15’ = 337.50 square feet / 9 = 37.50 square yards x $24.95 = $935.63

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17
Q 
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

A » $119.85

Note: Assessed value of $39,950 / $1,000 = 39.95 thousands x $3 per $1,000 = $119.85.

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18
Q 
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

A » $1,020

Note: $60,000 x 85% = $51,000 loan x 2% = $1,020.

19
Q 
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
A

D » None of the above

Note: $116,000 - $79,000 = $37,000 of equity. The answer is none of the above.

20
Q 
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
A

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.

21
Q

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

A

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.

22
Q 
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
A

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).

23
Q 
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%
A

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%.

24
Q 
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
A

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).

25
Q 
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
A

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).

26
Q 
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
A

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).

27
Q 
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
A

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.

28
Q 
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
A

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).

29
Q 
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
A

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.

30
Q 
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

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.

31
Q 
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

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.

32
Q 
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
A

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).

33
Q 
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
A

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.

34
Q 
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
A

C » $150,000

Note: $105,000 represents 70% (10% averaged over the 3 years) of the original value. $105,000 / 70% = $150,000.

35
Q 
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
A

C » $140,000

Note: $98,000 represents 70% of the original value (10% averaged over 3 years). $98,000 / 70% = $140,000.

36
Q 
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

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.

37
Q 
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

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).

38
Q 
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
A

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)

39
Q 
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
A

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

40
Q 
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
A

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).

41
Q 
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
A

B » $3360

Note: $120,000 (actual sale price) X 7% = $8,400 (total commission). $8,400 X 40% = $3,360 (salesperson`s share).

42
Q 
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
A

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).

43
Q 
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%
A

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%.

44
Q 
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
A

D » $16,500

Note: $600,000 X 2.75% = 16,500 (total commission)

Real Estate Study Materials (11 decks)

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