Real Estate Calculations

Question 1

Converting a Decimal to a Percent

Answer 1

(Decimal Number) x 100 = percent number

Question 2

Converting a Percent to a Decimal

Answer 2

Percent Number / 100 = Decimal Number

Question 3

Area of a Square or Rectangle

Answer 3

Area (a) = Base (b) x Height (h)
a = b x h

Question 4

Area of a Triangle

Answer 4

A = B x H / 2

Question 5

Area of a Trapezoid

Answer 5

A = h (b1 + b2) / 2

Question 6

1 Foot

Answer 6

12 inches

Question 7

1 Yard

Answer 7

36 inches

Question 8

1 Rod

Answer 8

16.5 Feet

Question 9

1 Mile

Answer 9

5280 Feet

Question 10

1 Square Yard

Answer 10

9 square feet

Question 11

1 Acre

Answer 11

43,560 SQFT

Question 12

1 Square Mile

Answer 12

640 acres

Question 13

1 Section

Answer 13

640 acres

Question 14

1 Township

Answer 14

6 miles x 6 miles

Question 15

Calculating Area from Legal Description

Answer 15

1) Multiply all denominators of the fractions in the legal description together
2) Then divide 640 by the resulting product

Question 16

Co-Brokerage Commission

Answer 16

1. Sales Price x commission rate = total commission

Total commission x split rate = co-brokerage commission

Question 17

Agent’s Commission

Answer 17

Broker’s commission x agent’s split rate = agent’s commission

Question 18

“Percentage of Listing Price” Calculation

Answer 18

offer / listing price = Percentage of listing price

Question 19

Earnest Money Deposit Calculation

Answer 19

Listing price x required percentage = deposit

Question 20

Rent Escalations

Answer 20

Current rate x (100% + escalation rate) = new rate

Question 21

Gross Rent Multiplier (GRM)

Answer 21

Gross rent x Multiplier = Value

Question 22

Net Income Capitalization

Answer 22

Net Income (NOI) / capitalization rate = value

Question 23

Interest Only Loans

Answer 23

I = P x R
R = I / P
P = I / R

annual interest payment / 12 = monthly interest payment

Monthly interest payment x 12 = annual interest payment

Question 24

Loan-to-Value (LTV) Ratio

Answer 24

Market value x LTV = loan amount

LTV = loan amount / market value

Question 25

Income Underwriting Ratio Calculation

Answer 25

Conventional:
monthly PITI = (25-28%) x monthly gross income

FHA:
monthly PITI = 31% x monthly gross income

Question 26

Debt Underwriting Ratio Calculation

Answer 26

Conventional:
Expense = (36% x gross income) - monthly debt

FHA:
Expense = (43% x gross income) - monthly debt

Question 27

Points

Answer 27

1 point = 1% (.01) of loan amount

Question 28

Appreciation

Answer 28

total appreciation = current value - original price

Total appreciation rate = total appreciation / original price

1 year appreciation rate = 1 year appreciation / prior-year value

Question 29

Equity

Answer 29

Equity = current value - current loan amount

Question 30

Return, rate of return, and investment amount

Answer 30

NOI / price = return on investment (ROI)

Cash flow / cash invested = cash-on-cash return (C & C)

Cash flow / equity = return on equity (ROE)

Question 31

Tax Rate Calculation

Answer 31

tax requirement / tax base = tax rate (millage rate)