Understanding Math Problems Flashcards
Intangible taxes are charged against the amount borrowed by the buyer (less any part of the seller’s loan assumed by the buyer). Alex bought a condo for $110,750 and put $11,500 down.
What would the intangible recording tax be?
$110,750 – $11,500 = $99,250 in new debt / 500 = $198.50 (round up to $199) x $1.50 = $298.50
A home sold for $375,900. The buyers obtained a mortgage for $305,750. What will the transfer tax be on this sale?
Transfer taxes are calculated against sales, not loans, Multiply the sales price by 1/10 th percent to determine the tax: $375,900 x .001 = $375.90
Transfer taxes are charged against the sales price of the property (less any part of the seller’s loan assumed by the buyer) A home sold for $375,900. The buyers obtained a mortgage for $305,750. What will the transfer tax be on this sale?
Transfer taxes are calculated against sales, not loans, Multiply the sales price by 1/10th percent to determine the tax: $375,900 x .001 = $375.90
Dain and Sheryl’s home sold for $751,150. They owe $657,900 on their mortgage. What will their net be after they pay $24,500 in expenses and a 6.8% commission?
Commission = ($751,150 x .068) = $51,078,20
$751,150 Price - $657,900 Mortgage - $24,500 Costs - $51,078 Commission = $17,672 Net Proceeds
If a seller prepaid the taxes of $4,400 and the closing is set for May 19, using the 12-month /30- day method what will the buyer owe the seller as prorated taxes?
Notice that the taxes have already been paid by the Seller.
Find the daily taxes: ($4,400 annual / 360 = $12.22 per day)
Find the number of days from the beginning of the tax year (assume January 1) through the May 19 closing (assume that day is paid by the seller): (4 months x 30 days + 19 days = 139 days)
To find the seller’s cost multiply the daily tax rate by the days ($12.22 x 139 = $1,698.89 or round to $1,700).
Subtract the seller’s cost from the amount prepaid to find the amount owed the seller by the buyer as a refund. ($4,440-$1,700 = $2,700).
If Jessica purchases a property for $290,000, and borrows $200,000 she is said to have a LTV ratio of….?
A $200,000 loan that is obtained to purchase a $290,000 property is a ($200,000 / $290,000 = 68.9% or 69%) LTV Ratio.
Emma’s property is assessed at $650,000. Her property qualified for a $50,000 homestead tax exemption and was appraised at $800,000. What is the taxable value of Emma’s property?
The assessed value of a property is usually only a portion of its appraised value, and the amount is usually determined by the state government. But some properties have partial or total exemptions depending on their use (farm or family home, perhaps). In this case the Assessed value is $650,000 and the exemption is $50,000 so the taxable value is $600,000. The appraised value is not needed to answer this question.
How many acres are there in the W 1/2 of the S 1/2 of the SW 1/2 of a section of land?
A rectangular survey is composed of Townships. A Township has 36 square miles, each one of which is called a Section. Each one-square-mile Section contains 640 acres. To determine the acreage in a plot of land described as the W ½ of the S ½ of the SW ½ of the Section one can do it mathematically as:
2 x 2 x 2 = 8 and 640/8 = 80 acres
Or more visually:
640 acres / 2 = 320 acres; 320 acres / 2 = 160 acres; 160 acres / 2 = 80 acres
A retail property valued at $710,000 earns $4,650 per month. What is the annual percent of return?
($4,650x 12 months=$55,800) $55,800 / $710,000 = .07859 (7.9%) return
In a comparative market analysis, the subject property has 2 bedrooms, 2 baths, a ½- acre lot and a swimming pool. A $115,000 comparable has 2 bedrooms, 1 bathroom, no pool, a ½-acre lot, and a screened porch. The appraiser adjusts by $9,000 for the bath, $11,000 for the pool, and $5,800 for the porch. What is the indicated value of the subject?
A licensee who is helping a seller price the property for a listing will conduct a comparative market analysis (CMA). While an appraiser who employs the Sales Comparison Approach to Appraisal only considers sold properties the CMA put together by a licensee considers all recently sold, still listed and formerly listed similar properties near the subject property. An appraiser will only adjust the sold prices of comparable properties, never the subject property. He will subtract value when the comparable has more features than the subject and add when there are less features. In this case, the comparable has one less bathroom and no pool but does have a screen porch. So the adjustment calculation is:
($115,000 + $9,000 for the bath + $11,000 for the pool - $5,800 for not having a porch resulting in an indicated value of $129,200)
A lender is charging 2.75 points on a $275,000 loan. The borrower must therefore pay the lender an advance amount of…?
A point is one percent (1%) of the LOAN AMOUNT (not the price) that is paid up front when a loan is obtained. A point can also be regarded as on eighth of a percent of the interest rate (a 6 and 7/8 % rate reduced by paying three points up front will be a 6 and 4/8 % rate or 6.5%). So… ($275,000 x 2.75 points will cost $7,562.50 or $7,563)
A borrower earns $8,000/month and makes credit card and car note payments of $900. A conventional lender requires a 30% income ratio. What monthly amount for housing expenses (principal, interest, taxes, insurance) will the lender allow this person to have in order to qualify for a conventional mortgage loan?
In applying for a loan a lender will only allow a potential borrower to count a certain amount of his income as available to pay the loan. In this case the income ratio is 30% of allowable income. $8,000 x .30 = $2,400 total payments allowed - $900 other debt payments = $1,500 income available to pay for a conventional loan.
A small apartment building has a NOI of $40,000, interest expense of $14,000 and annual depreciation of $6,000. Assuming a 30% tax bracket, what is its income tax liability?
When calculating income tax on a commercial property the owner is allowed to deduct interest and depreciation from the Net Operating Income before calculating the taxable income. ($40,000 NOI - $14,000 - $6,000 = $20,000 Taxable Income x .30 tax rate = $6,000 taxes due
Good Springs has a tax base of $90,000,000 and a budget of $1,100,000. What is the tax rate in terms of mills?
When the tax base (taxable value of the property in a community) is divided into the budget required to operate the local government a tax rate is derived, based on mills. A mill is one tenth of a cent. So it is expressed like this. One mill is .001; ten mills is .010; and one hundred mills is .100. So…$1,100,000 / $90,000,000 = .0122 or 12.2 mills.
The Roberts carry a property insurance policy which covers 70% of the replacement cost of their insurable property, valued at $360,000. They have an 80% co-insurance requirement in the policy. If the family incurs a $290,000 loss, what amount will the Roberts recover?
Co-insurance is a requirement by the insurance company that the property be insured to the appropriate value. There is a penalty for not complying with this requirement. In this proble4m the property was insured for 70% while the Co-insurance requirement was 80%. To calculate the penalty figure both numbers and then divide to calculate the payment ratio. $290,000 x .70 = $203,000. $290,000 x .80 = $232,000. $203,000 / $232,000 = 87.5%
$290,000 x .875 = $253,750 recovered rather than $288,000 (80% x $360,000 value).
Broker Jim works on a flat 3% commission. He sells an in-house listing for $270,000 and also earns a $2,800 bonus from the listing client. What is owed Broker Jim?
$270,000 x .03 = $8,100 + $2,800 = $10,900
Kate bought a home for $210,000. However, all the town’s jobs disappeared when the local factory closed. Kate sold this home one year later for $120,000. What was her percentage of loss?
$210,000 - $120,000 = $90,000 / $210,000 = .428 or 43%
Taxes on the property buyer Tamara is purchasing are $8,200, due on December 31. If the closing is set for June 29th, using the 365-day method, how much of the taxes will be credited to the buyer? (Assume it is not a leap year and the day of closing belongs to the seller.)
$8,200 annual taxes / 365 days = $22.46 per day; Seller’s ownership is Jan 1 – June 29 = 180 days; 180 x 22.466 = $4,044 credit buyer.
