CRE Math Review

A purchaser desires to offer $174,900 for a home. The buyer will put a total of 15% down of which 1% will be put down as an earnest money deposit. How much will the new loan be for?

$174,900 X 15% = $26,235 $174,900 - $26,235 = $148,665

Gross Income Multiplier

$800 x 12 mnths = $9,600 / yr * 6 units = $57,600 $850 x 12 months = $10,200 / yr * 4 units = $40,800 Total Income = $98,400 minus bad debt/vacancy = $4,920 Net income = $93,480

A home was appraised for tax purposes at 70 percent of its $150,000 purchase price. The mill rate is 28.6. What are the annual taxes?

($150,000 x 70 % x .0286) = $3003

6. The total commission paid a brokerage firm was $33,500. The firm was paid 7% on the first $200,000, 6% on the next $200,000 and 5% on the remainder. What was the sales price of the property?

A. $450,000 B. $550,000 C. $650,000 D. $750,000 $200,000 x 7% = $14,000 $200,000 x 6% = $12,000 $14,000 + 12,000 = $26,000 $33,500 - $26,000 = $7,500 $7,500 divided by 5% = $150,000 $150,000 + $200,000 + $200,000 = $550,000

Property Tax

Assessed Value x tax rate = tax bill Mill rate = tax rate = .001 or 1/10 of 1 cent Market Value = $100,000 Assessment/Tax Rate = 40% of Market Value Assessed Value = $100,000 x .40 = $40,000 Tax Bill = $40,000 x 52 mil (.052) = $2800

The water bill has been paid in advance by the seller for the month of August. The bill was $35.82. The closing is August 25. The correct entry on the settlement statement would be:

Credit Seller $8.09, Debit Buyer $8.09

Interest Owed to Lender for New Loan

Debit Buyer / Credit BROKER Paid in Arrears Broker will pay interest to lender Loan amount =$190,750 Interest Rate = 7.5% Closing Date = May 10 1. Calculate annual interest $190,750 * 7.5% = $14,306.25 2. determine daily interest $14,306.25 / 365 = $39.1952 3. Determine # days buyer owned (May 10 - May 31 = 22 days) $39.1952 * 22 days = $862.29 Debit Buyer / Credit BROKER

If Joe's quarterly interest payments are $1,500 on a $120,000 loan, then what is her annual interest rate?

Divide the income by the investment. So, $150 x 4 (quarters a year) = $600, and $600/$12,000 = 5%

A lender has agreed to loan $55,000 with monthly interest payments of $424. What interest rate has the lender agreed to?

I = $424 / month x 12 = $5,088 annual; P = $55,000; R = $5,088 / $55,000 = 0.0925 = 9.25%

A broker received a commission for $20,940 for the sale of a $349,000 house. What was the commission rate?

IRV $20,940 / $349,000 = 6%

Capitalization Rate

Income = Value * Capitalization Rate Value = Income / Capitalization Rate Capitalization Rate = Income / Value Value = $100,000 * 8% cap rate = $8,00 income Income = $26,000 / 11% = $236,363.64 Value

Value

Net Income divided by Cap Rate

So, let's say you are asked to determine the acreage in the SW ¼ of the SE ¼ of the NW ¼. The easiest way to calculate the acreage of a tract by using the Government Rectangular Survey System is to simply multiply the denominator of the description and then divide that number into 640 (total acres in 1 sq. mile or section): 4 x 4 x 4 = 64 | 640 / 64 = 10 acres.

Please note: there will be instances where the tract will contain two parcels. In those cases the description will join the various sections by the word "and." For example, the E ½ of the NE ¼ of the SE ¼ of section 15 AND W ½ of the NW ¼ of the SW ¼ of section 14. Section 15: 2 x 4 x 4 = 32 640 / 32 = 20 acres Section 14: 2 x 4 x 4 = 32 640 / 32 = 20 acres 20 + 20 = 40 acres total in tract

Mr. Jones has a property valued at $150,000. The 2003 taxes were 27.65 mills. In 2004 the mill levy was reduced to 25 mills but the assessed value increased 10%. Did the taxes:

Property increase 10% = 150,000 * 1.10 = $165,000 150,000 *.02765 = $4147.5 165,000 *.025 = $4125 property taxes decreased

Gross Rent Multiplier

Sales price / monthly rent = multiplier $275,000 / $1815 = 151.22

A house is closed on April 15. The property taxes are $960 for the year. They have not been paid. How much does the buyer receive from the seller at closing?

Seller owns house for 104 days $960/365 = $2.6301 $2.6301 * 104 = $273.53

The potential gross income of a warehouse is $36,000 per year, and the vacancy rate is 2%. The taxes are $2,000 per year; monthly maintenance costs are $300. Quarterly reserves are $450, debt service is $13,500 annually and depreciation is $3,500 annually. If the capitalization rate is 12% what is the estimated value of the warehouse?

Step 1) $36,000 Potential Gross Income is given by the question Step 2) $36,000 (Potential Gross Income) X .98 (100% - Vacancy Rate of 2%) = $35,280 (Effective Gross Income) Step 3) $35,280 (Effective Gross Income) - $2,000 (Taxes) - ($300 (monthly maintenance) X 12 = $3,600 (Annual Maintenance)) - ($450 (Quarterly Reserves) x 4 = $1,800 (Annual Reserves)) = $27,880 (NOI) Step 4) $27,880 (NOI) / 12% (Cap Rate) = $232,333 (Market Value of Property)

Calculate Acreage

Take denominators multiply and then divide into 640 acres 1/2 * 1/4 = 2 * 4 = 8 = 640 / 8 = 80 acres Section 2 = 640 acres SE 1/4 of 640 = 160 acres West 1/2 of 640 = 160 / 2 = 80 acres

A home closes for $365,000, how much would you pay the county clerk and public trustee?

The fee is one penny per every $100. $.0001 x $365,000 = $36.50

You have listed a house for $197,800. If the house sells for the listed price, the seller will make a profit of 15%. What price did the seller pay for the house?

The selling price is 115% of what the seller paid for it. To find out what the seller paid for it divide $197,800 by 115% = $172,000

Q: A home closes for $365,000 how much would you pay the county clerk and public trustee? 1) $3,650 2) $45 3) $365 4) $36.50

a documentary fee authorizes county clerks to collect a fee on all real-estate related documents received for recording or filing. The fee is one penny per every $100. Once you know what you are dealing with It is a very simple equation to find the answer: $.0001 x $365,000 = $36.50

A building was sold for $115,000. Earnest money in the amount of $15,000 was deposited, and the buyer obtained a loan for the balance. The lender charged a fee of 2% of the loan. What was the total cash used by the buyer for this purchase?

$115,000 - $15000 = $100,000 * .02 = $2,000 + $15,000 = $17,000

Davis owns a property with a market value of $144,000. The county assessment for the property is 40% of its appraised value. What will a 4.3 mill special assessment tax levy cost Davis annually?

$144,000 market value X 40% assessment ratio = $57,600 assessed value X .0043 mill levy = $247.68

A house is closed on October 15. The annual insurance payment is $578 for the fiscal year of July 1 to June 30. The buyers will assume the seller's policy. Since the policy has been paid, how much does the buyer owe the seller at closing?

$167.86 July - Oct 14 = 106 days $578 / 365 = $1.58356 106 days * $1.58356 = $167.86

A $175 water bill is paid on June 1 for three months, the home is sold and the closing is August 25. How is this shown on the settlement statement?

$175 / 92 = $1.9022 X 7 = $13.31 credit seller debit buyer

A $75,000 loan requires $1,875 in discount points to be paid by seller and $375 in discount points to be paid by the buyer. This is how many total discount points?

$1875 + $375 = $2,250. I / V = R. $2,250 / $75,000 = .03

A $75,000 loan requires a $1,875 in discount points to be paid by seller and $375 in discount ponits to be paid by the buyer. This is how many total discount points?

$1875 + $375 = $2,250. I / V = R. $2,250 / $75,000 = .03

A $75,000 loan requires a $1,875 discount to be paid by seller and a $375 discount to be paid by the buyer. This is how many total discount points?

$1875+375 = $2250 $2250/75,000 = .03 3 points

A real estate agent is paid $200.00 a month salary and a 2 ½ % commission on everything sold over $150,000 in one year. If the agent makes $22,000 one year. How much did the agent sell?

$200 X 12 = $2,400 (total salary); $22,000 - $2,400 = $19,600 (total commission sales) / .025 (commission rate) = $784,000 (sales above $150,000 that earned the $19,600 commission) + $150,000 = $934,000 (Total Sales)

A commercial warehouse produces an income of $ 2,200 per month. The maintenance contract costs $ 1,250 per quarter. The taxes are $ 1625 annually. If an investor wants a 15% rate of return, how much should he pay for the warehouse?

$2200 * 12 = $26,400 $1250 *4 = $5,000 $1625 + $5,000 = $6625 $26,400 - $6,625 = $19775 $19,775 / .15 = $131,833

A house is closed on April 15. The property taxes are $960 for the year. They have not been paid. How much does the buyer receive from the seller at closing?

$274 $960 / 365 days = $2.6301 per day the seller owned the property and owes the Buyer for 104 days. $2.6301 x 104 = $273.53

f the buyer is assuming an 8.5% loan with a balance of $127,538.00 at a closing on July 11, what is the interest proration?

$297.01 debit to the seller, credit to the buyer

Your client wants a 12% return on their investment, the property they are looking to buy nets $3,000 per month and has annual expenses of $12,000. What should be the most they would pay for the property

$3,000 X 12 = $36,000 (Annual Income) - $12,000 (Total expenses) = $24,000 / .12 (Rate of Return) = $200,000

The water bill has been paid in advance by the seller for the month of August. The bill was $35.82. The closing is August 25. The correct entry on the settlement statement would be:

$35.82 / 31 (days in August) x 7 (Buyer owned days in month, including day of closing)= $8.09 Credit Seller $8.09, Debit Buyer $8.09

An apartment building produces $4,000 per quarter in gross rents. The maintenance expenses run $350 per month. Property taxes are $1,750 per year. The mortgage payments are $650 per month. If the building is worth $83,750 what is the cap rate?

$4,000 * 4 = $16,000 $350 * 12 = $4200 $4200 + 1750 = $5950 $16,000 - $5950 = 10,050 $$10,050/ 83,750 = 12% I / V = R

A new loan for $165,000 is taken out at 6 1/2 % by the buyer the closing is May 16. How will the interest be shown on the settlement sheet?

$470.14 debit to the buyer, credit to the broker $165,000 (loan amount) x .065 (Interest Rate) = $10,725 (annual interest) / 365 (days in year) =$29.38356 (interest per day) x 16 (days owned by buyer in May -May 16-31) = $470.14 Debit to the buyer (because they owe the interest) credit to the broker (because the money is being paid into the escrow account controlled by the broker/closing agent so that they can cut a check for the interest to the lender).

A new loan for $165,000 is taken out at 6 1/2 % by the buyer the closing is May 16. How will the interest be shown on the settlement sheet?

$470.14 debit to the buyer, credit to the broker$165,000 (loan amount) x .065 (Interest Rate) = $10,725 (annual interest) / 365 (days in year) =$29.38356 (interest per day) x 16 (days owned by buyer in May -May 16-31) = $470.14 Debit to the buyer (because they owe the interest) credit to the broker (because the money is being paid into the escrow account controlled by the broker/closing agent so that they can cut a check for the interest to the lender).

Charlie Brown sold a home. The commission rate was 7%. Charlie gave Linus Brown, half of the $4,760 commission - what was the selling price of the house?

$4760 (Total Commission) / 7% = $68,000. Use the IRV method form the math moment.

A house is closed on October 15. The annual insurance payment is $578 for the fiscal year of July 1 to June 30. The buyers will assume the seller's policy. Since the policy has been paid, how much does the buyer owe the seller at closing?

$578 / 365 = $1.5836 per day. Seller paid for 259 days; he didn't own the policy (Oct. 15 through June 30) 259 x $1.5836 = $410.14

The Hackman's home is valued at $650,000. Properties in their area are assessed at 60% of the value, and the local tax rate is $2.85 per one hundred dollars of assessed value. How much are the Hackman's MONTHLY taxes?

$650,000 (value of home) X .60 (Assessment Ratio) = $390,000 (Assessed Value) X .0285 ) tax per $100 of value) = $11,115 (Annual Tax) / 12 (months) = $926.25 (monthly tax amount). The decimal conversion - in this problem you needed to convert $2.85 into a decimal. To do this simply divide $2.85 by 100 or move the decimal point 2 positions to the left For those of you who are decimally conversion challenged, another way of doing this part of the calculation is to figure out how many hundreds are contained in $390,000 and multiply that by $2.85. This approach looks like this $390,000 / 100 = 3,900 x $2.85 = $11,115.

Roberto and Maria Martinez have a new loan in the amount of $80,000. The interest rate is 10%. The monthly payments are $710, principal and interest. What is their loan balance after the they make two month's worth of loan payments?

$80k x 10% = $8,000 / 12 =$666.67; $710 - $666.67 = $43.33; $80,000 - $43.33 = $79,956; $79,956 x 10% = $7,995 / 12 = $666.30; $710 - $666.30 = $43.70; $79,956 - $43.70 = $79,912.8 ^ $79,913.00

A lender charged a 2% loan origination fee and 3 discount points to provide a conventional insured loan of $95,000. What was the cost of these charges to the borrower?

$95,000 loan amount X 2% origination fee = $1900) + ($95,000 loan amount X 3% discount points = $2850) = $1900 + $2850 = $4750

Calculate the number of acres in the following legal description. The NE ¼ of the SE ¼ and the SE ¼ of the NE ¼ and the N ½ of the NW ¼ of the NW ¼ of the SW ¼.

(640 / (4 X 4) = 40) + (640 / (4 X 4) = 40) + (640 / (2 X 4 X 4 X 4) = 5) = 85 acres

An income property has a gross annual income of $14,250 and monthly expenses of $300. It has been valued at $147,000. What is the capitalization rate?

.072 ($14250 - ($300 X 12) $3600 = $10,650/1$147,000 = .072 or 7.2%)

If a property's annual net income is $24,000, and it is valued at $300,000, what is the capitalization rate?

.08 ($24,000 (Net Income) / $300,000 (Value) = 8% (Rate))

The lender computed the interest for the previous month on a $120,000 mortgage loan balance at $825. What is the rate of interest?

0.0825 $825 X 12 = $9900 (Annual Interest) / $120,000 = .0825 or 8 1/4 %

Loan amount = $190,000 and wants to buy down 3 points Intersted rate = 7 1/8% Find new rate and cost of points

1 point = 1% of loan amount 3 points = 3% of $190,000 x $5,700 $5,700 = cost of 3 points New Rate 3 points = 3/8 7 1/8 - 3/8 = 6 6/8 or 6 3/4%

The city ordinances for Toon Town require a 25` front setback, a 20` rear setback, and 15` side setbacks. Your property measures 100` length (depth) X 90` width (front of the lot). What is the largest square foot single story home you could build on this lot?

1. Remove setbacks from dimensions 100 length - 25 (front setback) - 20 (rear setback) = 55 90 width - 15 (side setback) - 15 (other side setback) = 60 2. Calculate buildable square footage 55 x 60 = 3,300 square feet (largest single story house you can build)

Which of the following is the largest area?

10% of a township a township is 6 miles by 6 miles or 36 square miles and 10% of that would be 3.6 square miles Each section is 1 Square - mile therefore 3 sections would be 3 square miles. Two mile squared is 2 times or 4 square miles. And 5280 feet times 5280 feet is 1 square mile Therefore the largest area would be C or 2 miles squared.

Each unit in a duplex, rents for $400 per month, with a sales price of $96,000, the monthly gross rent multiplier would be:

120 ($400 x 2 = (duplex = $800 ); $ 96,000 sales price divided by $800 monthly rent = 120 Gross Rent Multiple (GRM))

A commercial warehouse produces an income of $ 2,200 per month. The maintenance contract costs $ 1,250 per quarter. The taxes are $ 1625 annually. If an investor wants a 15% rate of return, how much should he pay for the warehouse?

131833 $2,200 X 12 = $26,400 - ($1,250 X 4 = $5,000 + $1,625 =$6,625; $26,400 - $6,625 = $19,775 / 15 % = $131,833.33

In order for the seller to sell his property, he must replace the carpet in the living room. What would it cost to put new carpet in the room measuring 15 feet by 20 feet if the carpet costs $26.95 per square yard, plus $450 installation charge?

15 * 20 = 300 sq feet 1 sq yard = 9 feet 300/9 = 33 yards 33 * $26.95 = $898.35 + 450 = $1348

f a home that originally cost $142,500 three years ago is now valued at 127% of its original cost, what is the current market value?

180,975 = 142,500 *1.27

The selling landlord has collected the September rents from all five tenants: two at $845 and three at $925. Determine the proration to be allowed the buyer when the sale is closed on September 19.

2 x $845 = $1690 3 x $925 = $2775 $4465 total rent divided by 30 days = $148.8333 PER DAY x 12 (days the buyer owns the property) = $1786

The sellers have agreed to give the buyer a carpet allowance to replace the family room carpet. They will allow $19.95 per square yard for carpet plus $5 per square yard for pad and installation. If the family room is 22'6"x 15', how much will it cost the sellers (to the nearest cent)?

22.5 x 15 = 337.5 sq feet (22'6" = 22.5 feet) 337.5 / 9 = 37.5 sq YARDS $19.95 + $5 = $24.95 $24.95 * 37.5 = $935.63

A house is closed on April 15. The property taxes are $960 for the year. They have not been paid. How much does the buyer receive from the seller at closing?

274 $960 / 365 days = $2.6301 per day. the seller owes the Buyer for 104 days. $2.6301 x 104 = $273.53

A $75,000 loan requires a $1,875 in discount points to be paid by seller and $375 in discount ponits to be paid by the buyer. This is how many total discount points?

3 $1875 + $375 = $2,250. I / V = R. $2,250 / $75,000 = .03

Use the included Amoritization Chart (also called a mortgage factor chart) to find the shortest term for a $275,000 loan at 6.5% interest that keeps the monthly payment under the $1,800 the borrowers can afford.

30 years Explanation Amoritization charts are posted on the wall by your computer for use while taking the real licensing exam. This question is to give you some experience. The chart is easy, the factors shown for each interest rate and term are the amount of mortgage payment (principal and interest) charged per $1000 of loan. In this question - $275,000 has 275 $1000's in it. If you multiply 275 x 8.71 (the 15 year term factor) you get a monthly payment of $2395.25. That is too much! The 30 year factor of 6.32 x 275 = $1738 - well below the $1,800 amount the borrowers can afford.

A section is 1 mile by 1 mile. How wide is a four-acre (a hint: one acre contains 43,560 sq ft) easement that runs along the western edge of a section?

33 (A section is 1 mile by 1 mile. This means one edge of a section is 5280 feet (1 mile) long. Four acres (43,560 sq ft x 4 acres) contains a total of 174,240 sq. ft. 174,240 divided by 5280 equals 33. The dimension of this 4 acre easement is 5280 feet long by 33 feet wide.)

A house is closed on October 15. The annual insurance payment is $578 for the fiscal year of July 1 to June 30. The buyers will assume the seller's policy. Since the policy has been paid, how much does the buyer owe the seller at closing? 167.86 410.14 408.56 169.44

410.14 $578 / 365 = $1.5836 per day. Seller paid for 259 days; he didn't own the policy (Oct. 15 through June 30) 259 x $1.5836 = $410.14

6 foot wide sidewalk is to be poured on the inside of a corner lot that measures 50 feet by 100 feet. If the cost of the sidewalk is $0.68 per sq. ft., how much will the sidewalk cost?

50 X 6 = 300 width + (94 X 6 =564) length (subtract 100 - 6 >> already in above calculation = 864 sq ft X $.68 = $587.52

A property appraised at $250,000 and has an assessed value of $200,000. The taxes on the house are $3,000. What would a house with an appraised value of $450,000 and an assessed value of $400,000 pay in taxes?

6000 ( find out the mill rate: divide the first property's taxes $3,000 and divide by the assessed value of that property $200,000 that will give you the tax rate of .15 or 15 mills; then multiply the .15 X the assessed value of property two $400,000 and that will give you the taxes on the second property $6,000.)

If Jon's property has a net income of $54,800, and returns 8 percent annually on the investment, then what is her property's value?

685000 ($54,800/.08 = $685,000)

The taxes on a house valued at $ 80,000 are $ 650. The tax ratio is 30%. What are the taxes on the house next door with a market value of $ 90,000?

731.25 $650 / $80,000 = .008125 (or 8.125 mills) X $90,000 = $731.25

A building sold for $949,000. The total commission was $54,990. What was the rate of commission?

949,000 / 54,990 = .058 = 5.8%

A section is 1 mile by 1 mile. How wide is a four-acre (a hint: one acre contains 43,560 sq ft) easement that runs along the western edge of a section?

A section is 1 mile by 1 mile. This means one edge of a section is 5280 feet (1 mile) long. Four acres (43,560 sq ft x 4 acres) contains a total of 174,240 sq. ft. 174,240 divided by 5280 equals 33. The dimension of this 4 acre easement is 5280 feet long by 33 feet wide.

Investor wants a 10.5% return on investment. What is the property worth if the annual gross income is $480,000 and the operating expense ratio is 79%

Annual operating expenses = $480,000 * 79% = $379,200 Annual net income = gross income - operating expenses $ 480,000 - $379,000 = $100,800 Value = annual net income / cap rate = $108,000/.105 = $960,000 (IRV)

Cost Approach to Value

Est value of land + improvements $25,000 Est current cost of construction = $200,000 Est. accrued depreciation = $10,000 Deduct depreciation from construction costs = $200,000 - $10,000 = $190,000 Add value of land + improvements = $190,000 + $25,000 = $215,000 Value = $215,000

Connie is buying a home using FHA financing, the purchase price is $108,000 the maximum LTV is 97.75% What is the minimum down payment Connie can make?

First take the purchase price of $108,000 X 97.75 = $105,570. Then subtract $105,570 from $108,000 = the down payment $2,430

A house is sold on June 15. The annual taxes in the amount of $850 for the year have not been paid. What does the seller owe the buyer at closing?

Jan. 1 - June 14 = 165 days. $850 / 365 = $2.3288 per day tax liability.165 days x $2.3288 = $384.25

A building was sold for $115,000. Earnest money in the amount of $15,000 was deposited, and the buyer obtained a loan for the balance. The lender charged a fee of 2% of the loan. What was the total cash used by the buyer for this purchase?

Lender's fees are not financed as part of the loan, so they need to be brought to the closing table as part of the cash to close. $15,000 + 2% of $100,000 = $17,000 cash to close.

Calculate the Principal Balance of Amortized Loan

Loan amount = $100,000 Monthly payment = $700 Interest rate = 6% $100,000 * 6% = $6,000 annual interest $6,000 / 12 = $500 monthly interest $700 - $500 = $200 monthly principal payment $100,000 - $200 = $99,800 loan balance month 1 $99,800 * 6% = $5,980 $5,980 / 12 = $499 $700 - $499 = $201 $99,800 - $201 = $99,599 loan balance month 2

Calculate Current Principal Balance

Loan payment = $625/month Interest is 9% Tax + Insurance = $47.50 Principal Amount = $27.75 Calculate monthly interest payment $625 - $47.50 + $27.75 = $549.75 monthly interest $549.75 * 12 = $6597 annual interest Part = Whole * Percentage $6597 = Whole * 9% $6597 /9% = $73,300 = loan amount (whole)

Calculate Property Tax

Market value * assessment rate = assessed value $100,000 * .20 = $20,000 = assessed value Assessed value * mil rate = annual taxes 10 mils = .010 $20,000 * .010 = $200 $200 = tax bill $285,000 = market value Mill rate = 21.8 Assessment rate = 40% $285,000 * 40% = $114,000 $114,000 * .0218 = $2485 taxes

Income Approach to Value

Net income generated from property estimate of value 1. Est annual gross income 2. Deduct vacancy rate = effective gross income 3.Deduct operating expenses = net operating income 4. Est capitalization rate fro comps (IRV) 5 Calculate value = Net operating income / Cap Rate

lHouse worth $174,000 and has depreciated 3% every year for 4 years. What was the value 4 years ago?

Now = Then * % Now = $174,000 = then * (100-3%) $174,000 / 97% = $179,381.44 (1 year ago) $179,381.44 / 97% = $184,929.31 (2 year ago) $184,929.31 / 97% = $190,648.77 (3 year ago) $190,648.77 / 97% = $196,545.12 (4 year ago) Value of house 4 years ago $196,545.12

Purchased a house for $$125,800 five years ago. Sold it this year for $140,900. What is the profit or loss?

Now = Then * Percentage $140,900 = $125,800* x% $140,900/ $125,800 = 1.12 % = 1.12 112% - 100% = 12% profit

Purchased a house for $262,500 five years ago. Sold it this year for $210,000. What is the profit or loss?

Now = Then * Percentage $210,000 = $262,500 * x% $210,000 / $262,500 = x% % = .80 100% - 80% = 20% loss

Purchased a house for $150,000 five years ago. Sold it this year for 30% more. What is the sales price?

Now = Then * Percentage Now = $150, 000 * 30% Now = $150,000 * 1.30 Now = $195,000

How many linear feet of fence is needed along 1-1/2 miles of roadway?

One mile equals 5280ft x 1.5 = 7920

Calculate Loan Interest Rate

Part = Whole * Percentage (Rate) Part = Amount of Interest Whole = Loan Amount Percentage = Interest Rate $450 = 6 months of interest $900 = annual interest $7,200 = loan amount $900 = $7200 * % $900 / $7200 = .125 or 12.5%

Income

Rate x Value

Mr. Davis was assessed by the city 6 cents per square foot of his property as a special assessment, his property measured 80 feet X 135 feet. What did the special assessment cost him?

Take the length 135 times the width 80 to get the total square footage = 10800 X .06 = $648

How many acres are there in the N-1/2 of the SE-¼ plus the NW-1/4 of NW- ¼ of section 17?

The big word in this question is "plus". It means there are two parcels. Calculate them both and add the two together. First parcel: A section is 640 acres. 1/2 of 1/4 means half of a quarter section. A quarter of a section is 160 acres (640/4,) half of that is 80 acres. Second parcel is 1/4 of a 1/4. 1/4 is equal to 160 acres, a quarter of that is 40 acres. Add the two parcels together 80 + 40 = 120 acres

Income Approach

The formula for determining the value of a property using this method is: 1) Estimate potential gross income 2) Subtract vacancy rate Result is Effective Gross Income 3) Subtract building operating expenses (note debt service also know as mortage payments are NOT considered an operating expense for determining value) Result is Net Operating Income 4) Determine Capitalization Rate - Capitalization Rate is the return on investment based on the income of the property. Find this by looking at the Cap Rate of other like properties in the area. 5) Net Operating Income divided by Capitalization Rate = Value of Property

Mr. Brooks has decided to offer to buy a farm. He has been told that farmland in the area is selling for $3,500 to $4,000 per acre. Mr. Brooks offers $3,750 per acre. The legal description of the farm is: The NW-1/4, of the SW-1/4 and the E-1/2, of the NW-1/4, of Sec 3 Township 37 Range 12E of the 3rd P.M.

The offer is $450,000 and is 120 acres The word "and" in the legal description indicates there are two different parcels. You need to determine the acreage of each one separately and then add the two together. The first parcel is "The NW-1/4, of the SW-1/4." In simpleze this is one quarter (NW ¼) of one quarter (SW ¼) of a section. To determine one quarter of a section (SW 1/4) you divide 640 by 4 equals 160 acres. To determine one quarter of that number (NW 1/4), divide the previous 160 by 4 equals 40 acres total in the first parcel. The second parcel is "the E-1/2, of the NW-1/4." In simpleze this is one half of one quarter of a section. To determine one quarter of a section (NW ¼) you divide 640 by 4 equals 160. To determine one-half of that (E ½), you divide the 160 by 2 equals 80 total acres in the second parcel. 40 plus 80 equals 120 total acres in this legal description times the offer of $3750 per acre equals $450,000.

A house is closed on May 15. HOA dues are $108 per month and are due and payable on the first day of each month. The HOA dues will appear on the closing statement as a

The seller paid the HOA dues on May first for the entire month. With a closing on May 15 ( remember the Buyer is responsible for the day of Closing), this means the Seller paid 17 days (May 15-31) too much. Since the Buyer is receiving the advantage of the overpaid HOA dues, the Buyer owes this money to the Seller. $108 / 31 days = $3.4839 per day. $3.4839 x 17 days = $59.23 to be credited to the seller and debited to the buyer.

A parcel of land, described as the "NW-1/4 and the SW-1/4 of Section 6, Township 3N, Range 3E, of the 3rd Principal Meridian," sold for $875 an acre. The listing broker will receive a 5% commission on the total sales price. How much will the broker receive?

The size of SW 1/4 of section 16 is 640 acres / 4 = 160 acres; The size of NW 1/4 of section 16 is 640 / 4= 160 acres Add the two together = 160 x 2 quarter sections = 320 acres; 320 acres x $875 per acre = $280,000 purchase price $280,000 x .05 commission = $14,000 commission

Locate the number of acres contained in the following parcel: The NW1/4, NW1/4, NW1/4 and the S1/2, SW1/4, SW1/4.

There are 2 parcels in this description. The first is 640 acres divided by 4 =160 divided by 4= 40 divided by 4 = 10 acres. The second is 640 divided by 2 = 320 divided by 4 = 80 divided by 4 = 20 acres. 10 acres plus 20 acres = 30 acres.

A section is 1 mile by 1 mile. How wide is a four-acre (hint: one acre contains 43,560 sq ft) easement that runs along the western edge of a section?

This is a hard one. A section is 1 mile by 1 mile. This means one edge of a section is 5280 feet (1 mile) long. Four acres (43,560 sq ft x 4 acres) contains a total of 174,240 sq. ft. 174,240 divided by 5280 equals 33. The dimension of this 4 acre easement is 5280 feet long by 33 feet wide.

How many 50-foot by 110-foot lots could be obtained from an acre of land?

You've got two measures here - one is "50-foot by 110-foot" and the other is "acre". In order to calculate how many of one (the lots) can be carved out of the other (the acre), you need to convert them to the common measure of square feet. Multiply 50 x 110 to get the square footage of one lot or 5500 square feet. The acre is a little trickier; you have to just know the total square feet (for us and the state test). It is 43560. Divide 5500 into 43560 and you get 7.920 lots. The question wants to know how many 50 x 100 foot lots you can get of an acre - the answer is 7. The .920 is not a full lot.

Comparable property "A" has central air conditioning worth approximately $2,000. Comparable property "B" does not. The subject property does not have central air conditioning. To adjust, an appraiser should:

subtract air conditioning value ($2,000) from comparable "A" to make it more like the subject property