Unit 22 Flashcards
If a buyer borrows $4,400, agreeing to pay back principal and interest in 18 months, what annual interest rate is the buyer paying if the total payback is $5,588?
18%
The sale of a home is to close on September 28. Included in the sale is a garage apartment that is rented for $350 per month. The tenant has paid the September rent. What is the rent proration, using actual days and prorating through the day of closing? Round your answer to the nearest cent.
$23.33
A teacher earns an annual income of $60,000, and the teacher’s spouse earns $2,400 per month. How much can the couple pay monthly for their mortgage payment if the lender uses a 28% qualifying ratio?
$2,072
The answer is $2,072. $60,000 annual salary ÷ 12 months = $5,000 wife’s monthly salary + 2,400 husband’s monthly salary = $7,400 total monthly salary; $7,400 total monthly salary × 28% (0.28) = $2,072 monthly payment.
What percentage of profit will there be if a property buyer pays $20,500 for a lot, builds a home on the lot that costs $133,000, and then sells the lot and house together for $194,550? Round your answer to the nearest percent.
A tract of land measures 1.25 acres. The lot is 150 feet deep. How much will the lot sell for at $65 per front foot?
$23,595
An owner agrees to list his property on the condition that the sale proceeds be at least $47,300 after the owner pays a 5% broker’s commission and $1,150 in closing costs. At what price must the property sell?
$51,000
The buyer is purchasing a fourplex and closing on November 4. Each apartment rents for $875 per month. As of November 1, one apartment is vacant and the other tenants have paid their November rent. Compute the rent proration through the day of closing.
$2,275.00
An income-producing property has $62,500 annual gross income and monthly expenses of $1,530. What is an estimate of the property’s value using a 10% capitalization rate?
$441,400
A 28-unit apartment house is being valued using the income approach. Each unit rents for $775 a month, an amount that is consistent with like rental units in the vicinity. For the past five years, the annual expenses of operation for the property have averaged $82,460 and the building has maintained a consistent vacancy rate of 5%. A potential investor is only interested if the cap rate is at least 9.5%. What is the property’s likely value using these variables?
$1,736,000
A warehouse is 80 feet wide and 120 feet long with ceilings 14 feet high. If 1,200 square feet of floor surface has been partitioned off, floor to ceiling, for an office, how many cubic feet of space will be left in the warehouse?
117,600
The buyer has agreed to a $175,000 sales price, 2.5 loan discount points, and a 1% loan origination fee. If the buyer receives a 90% loan to value, how much will the buyer owe at closing for points and the origination fee?
$5,512.50
The annual tax bill on a home was $1,282 and was paid in December. The home sold the following March and will close on April 23. How much will the tax proration be, using a calendar year and prorating to the day of closing?
$393.34
A gift shop pays rent of $600 per month plus 2.5% of gross annual sales in excess of $50,000. What was the average monthly rent last year if gross annual sales were $75,000? Round your answer to the nearest cent.
$652.08
A buyer is assuming the balance of a seller’s second mortgage loan. The interest rate is 8%, and the last monthly payment of $578.16 was paid on April 1, leaving an outstanding balance of $18,450. Using a banker’s year, compute the interest to be paid by the seller if the sale is to close on April 19. Prorate through the day of closing.
$77.90
A property sells for $295,200. If it has appreciated for a total of 20% over the past five years, what did the owner pay for the property five years ago?
$246,000
