Math Final CRES

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?

$13.31 credit to the seller, debit to the buyer

A parcel of land was sold for $17,500 which was a 22% profit. What price did the seller originally pay for the property?

$14,344.26 $17,500 / 1.22 (122 %) = $14,344.26

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?

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

A building sold for $180,000. The buyer put up 10% cash and obtained a loan for the balance. The lending institution charged a 1% loan origination fee. What was the total amount the buyer used for this purchase?

$180,000 X .9 = $162,000 X .01 = $1,620 + $18,000 = $19,620 The loan origination fee is a lender charge for the purpose of securing a new loan

If the interest for four months on a loan of $80,000 was $3,200, what was the annual rate of interest?

$3,200 X 3 = $9,600 (annual interest) / $80,000 = 12%

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

The taxes on a house valued at $60,000 are $450.00. The tax ratio is 16%. What are the taxes on the house next door with a market value of $75,000?

$450/60,000=.0075 x $75,000= 562.50

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. 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).

A house was listed for $84,900, and the seller received $71,424 after the broker deducted her 7% commission. What was the selling price?

$71,424 / .93 = $76,800

Purchase price is $180,000 and buyer has a 90% loan at 7%; if the closing is July 7 how will the interest be shown on the settlement sheet?

$776.71 debit to the buyer, credit to the broker

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

The new owner of a house needs hazard coverage for $98,000. The annual premium is $0.44 per $100.00 of the amount insured. The insurance company agreed to make the cost of the policy 2 ½ times the annual rate for a 3 year policy. How much would the monthly insurance payments be to pay for this policy?

$98,000 / 100 = 980 X $.44 = $431.20 X 2.5 =$1,078 / 36 = $29.94

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?

( 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.)

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

An apartment building has potential gross annual income of $50,000. The vacancy factor is 5%. The maintenance expenses are $1,000 per month. The property taxes are $3,500 per year. The insurance is $2,500 per year. The reserve account is built at a rate of $200 per month. The mortgage payments are $1,500 per month. If the value of the building is $338,750, what is the capitalization rate?

.08 (Gross rents $50,000 - vacancy (5%) $50,000 x .05 - 2,500 = $47,500 (Maintenance $1,000/mo x 12 =) $12,000 + (Property taxes) $3,500 + (Insurance) $2,500 + (Reserve acct. $200/mo x 12 =) $2,400 = Total $20,400 $47,500 - $20,400 = $27,100 R = I / V R = $27,100 / $338,750 = .08 = 8%)

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

0.06

A broker sold a residence for $85,000 and received $5,950 as her commission in accordance with the terms of the listing. What was the commission rate?

0.07

Find the annual rate of return percentage on an $88,000 investment if the weekly gross income is $225 and monthly expense is $370

0.0825 (Calculate the annual income which is $225 X 52 = $11,700. Then calculate the annual expenses $370 X 12 = $4,440. Next subtract $4,440 from $11,700 = $7,260 then divide this by $88,000 = 8.25 %)

Sue and Joe paid a total of $6,600 in interest payments for the year. They borrowed $66,000. What is their interest rate?

0.1 I divided by P = R;$ 6,600 divided by $66,000 = .10 = 10%

The sellers have agreed to give the buyers an allowance to recarpet the living room. They will allow $22.95 per square yard for carpet plus $6.00 per square yard for pad and installation. If the living room is 21 feet x 12 feet, how much will it cost the sellers?

1 sq. yard = 9 sq. feet $22.95 +$6.00 = $28.95 21 ft * 12 ft = 252 ft/9 = 28 sq. yard $28.95 * 28 sq. yards = $810.60

You lease a storeroom on a percentage basis. The lease calls for a minimum rental of $300 per month and 5% of the gross annual sales over $80,000. How much is the annual rent with a gross annual business of $150,000?

1) Calculate minimum annual rent: $300 (monthly minimum rent) x 12 (months) = $3,600 (annual minimum rent) 2) To calculate rent from percentage of gross sales: a. $150,000 (annual gross sales) - $80,000 = $70,000 (amount of gross sales to be applied towards percentage rent) b. $70,000 X .05 (5%) = $3,500 (5% of gross sales over $80,000) 3) $3,600 (annual minimum rent) + $3,500 (5% of gross sales over $80,000) =$7,100 annual rent

A man earns $20,000 per year and can qualify for a monthly PITI (Principal, Interest, Taxes, Insurance) payment equal to 25% of his monthly salary. If the annual tax and insurance is $678.24, what loan amount will he qualify for given a monthly PI (Principal Interest) payment factor is $10.29 per $1000 of loan amount? To be clear, a payment factor Is the amount of money a borrower will pay for each $1,000 of loan amount.

1)First, we better figure out how big a monthly payment he can afford. He makes $20,000 a year. $20,000/12 months = $1,666.67 a month. $1,666.67 x 25% = $416.67 monthly payment he can afford 2) Next, lets subtract the taxes and insurance to see how much will be left for the loan. $678.24 (annual Taxes and Insurance / 12 months = $56.52. $416.67 - $56.52 = $360.15 left over to pay Principal and Interest each month. 3) Last up - how many thousands worth of loan can he get for $360.15 amonth? The PI (Principal Interest) payment factor is $10.29 per $10000 of loan (comes from a chart). In English this means each $1000 of loan amount will cost him $10.29 per month. So......$360.15 (money he has available to pay principal and interest each month) / $10.29 = 35 thousands or $35,000.

If two lots each 75 feet wide by 100 feet long, cost $300,000 in total, what is the their approximate cost per square foot?

100 X 75 = 7,500 sq ft X 2 = 15,000 sq ft; $300,000 / 15,000 = $20 per square foot.

A buyer borrowed $82,500 which was 80% of the appraised value. What was the appraised value of the property?

103125x.80=82500

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 x .02 = 2000 + 15000= 17000

Ken works on a 50/50 commission split with his broker. A house he has listed at $170,000 sells for $154,000 at a 6% commission. How much will he receive?

154,000x.06=9240x1/2=4620

If the scale drawing for a lot is 3 inches by 4 inches and the actual lot is 90 feet x 120 feet, how many feet would be represented by 5 1/4 inches?

157.50 feet

ABC property management manages an office building with $60,000 annual leases. Their agreement with the owners is that they will be paid 7 % the first year , 5 % the 2nd and 3rd years, and 3 % for the next four of their seven year agreement. What will be the total management fee?

17400; Multiply $60,000 X .07 = $4,200. Multiply $60,000 X .05 = $3,000 X 2yrs = $6,000. Multiply $60,000 X .03 = $1,800 X 4yrs = $7,200 add all three together $7,200 + $6,000 + $4,200 = $17,400

Bob and Betty Brown have just applied for a new loan in the amount of $80,000. The interest rate of the note is 10.25%. The debt service is $708 per month. The note is a 30-year loan. What is the total interest, which will be paid by the borrower over the 30-year term?

174880 $708 X 360 payments = $254,880 - $80,000 = $174,880 This is one of those questions where it is best not to over think it. Since they have a 30 year loan of $708 a month, the total amount they are going to pay is 708 x 360 (months) = $254,880. They bought the property for $80,000. To determine the amount of interest they are paying over the life of the loan, all you need to do is deduct the purchase price from the total amount paid - 254,880 - $80,000 = $174,880.

An office rents for $4500 a month and measures 12 feet by 20 feet. The advertised monthly rent per square foot for this space would be:

18.75 12 x 20 = 240 $4500 / 240 = $18.75

If 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?

180975/1.27=142500

Kevin, a real estate broker, sold a property and received a 6-1/2% commission. Kevin gave the listings broker 30% of the commission, or $3,575. What was the selling price of the property?

183333

Broker Roger sold a property for $230,000, the commission was 6%, Roger will get 65% of the total commission. What will Roger's commission be on this sale?

230000 x .06 = 13800 x .65= 8970

A property sold for $80,000 and the buyer obtained an FHA insured loan for $77,000, how much money would the buyer pay in discount points the lender charged three points?

2310

A property has a monthly net income of $1800, and an appraiser believes a 9 percent rate of return is appropriate for the property. Its value would be estimated at 240000

240000 $1800 x 12 (months) = $21,600 (annual net income) / .09 (9%) = $240,000 estimated value

Mr. Baker sold his house for $27,000, which is a 10% loss over what he originally paid for it. What did he pay for the house originally?

27,000 x .90 = 300000

A property sold for $35,550 which was 11% more than the original cost of the house, The original cost of the house was?

32027 x .11 = 3522.97 + 32027 =35,550

Land has an assessed value of $274,550. If the assessment value is 85% of the market value. What is the market value of the property?

323000x.85=274,550

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

384.25

A lot with a depth of 80 feet and an area of 4,800 square feet was sold for $350 per front foot. What was the total sales price?

4800/80=60 * 350 = 21000

A 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 + (94 X 6 =564) = 864 sq ft X $.68 = $587.52

Katie's Construction Company has built a home in a new subdivision and it was sold 6 months after it was built, for $48,500. This amount reflected a depreciation amount of 3%. Knowing this, what was the original asking price on the home?

50000 x .03 = 1500 50000-1500=48500

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

7

The listing and selling broker will split the commission of 6.5% the selling broker received $2,593.50 as her share. What was the sales price of the property?

79800x.065=5187/2=2593.5

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

80x135=10800x.06=648

To net the owner $90,000 after a 6% commission is paid; the list price would have to be:

95745

Jean owes $80,000 at 12% interest on her home. How much interest will she pay in one year?

9600

The owner of a commercial warehouse has the building listed for $250,000. The net income of the building is $20,000. An investor wants to buy it at a cap rate of 12%. Will the investor offer the owner the same price as the owner has it listed for? If not, by how much will the owner have to change his price to meet the investor's request for a 12% cap rate?

Buyer's offer indicates a value of: V= I/ R = $20,000 / .12 = $166,667 No! He does not like the listed price of $250,000. Seller would have to lower his price by:$250,000 - $166,667 = $83,333

The loan on a property is 80% of the appraised value, and the interest rate is 8% which amounts to $460 for the first month. Then what is the appraised value of the property?

First calculate the annual interest which is $460 X 12 = $5,520 then divide this by 8% = The loan amount of $69000 then divide this by 80% for the appraised value of the home $86,250

As a property manager, you have an agreement that your fee will be 8% on the first $150,000 gross rent, 5% on the next $100,000, and 2.5% on everything over the $250,000. If last year's gross rent was $417,500 what was the management fee?

First calculate the commission earned on the first tier - ($150,000 X .08 = $12,000 commission) then calculate the commission on the second tier - ($100,000 X .05 = $5,000) then calculate the amount of the remaining gross rent over $250,000 - ($417,500 - ($150,000 + $100,000) = $167,500) then calculate the commission on the remaining amount ($167,500 X .025 = $4,187.50). Add the commissions together $12,000 + $5,000 + $4,187.50 = $21,187.50 total management fee

A house valued at $110,000 is assessed at 30% of its value. The school tax is 12 mills, what is the annual tax?

First multiply the Value $110,000 X the assessed rate of 30% = $33,000 then multiply this times the mill rate .12 = $396.00

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?

IRV 54800 / .08= 6850000

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?

It is the square yard conversion that got ya'. There are 9 square feet in a square yard, it's because 1 yard is 3 feet and in a square all sides are equal in length, which makes 1 sq. yard equals to 3 * 3 = 9 square feet. Soz,the calculation for this questions is 15 sq ft x 20 sq ft = 300 sq.ft. 300sq ft / 9 ( here it is - a square yard is 3 yards by 3 yards or 9 square feet a side) = 33.33 sq yds x $26.95 = $898.33 + $450 = $1348.33

An agent was paid $2,500, which was half of the 6% that the broker collected. What was the sale price of the property?

Multiply $2,500 by 2 = $5,000 divide this by 6% = $83,333

Donna lease 12 apartments for a total monthly income of $4,500. This figure represents an 8 % annual return. What was the original cost of the property

Multiply the monthly income $4,500 by 12 = $54,000 divide that by 8% = $675,000.

The potential gross income of a warehouse is $4,200 a month and the vacancy rate is 2 1/2%. The taxes are $3750, the monthly maintenance costs are $350, monthly reserves for replacement are $250, depreciation is $575 a month, management fees are $500 per month, debt service is $1200 per month and the quarterly landscaping fees are $600. If the cap rate is 12.5% what is the estimated value of the warehouse?

Part 1 $4,200 X 12 = $50,400 X .025 = $1,260 Part 2 $50,400 - $1,260 = $49,140 - ($350 X 12 = $4,200) - $3,750 - ($250 X 12 = $3,000) - ($500 X 12 = $6,000) - ($600 X 4 = $2,400) = $29,790 / .125 = $238,320 Since Cap Rate uses income, it is only used for income producing properties, not for example, the home you are buying for yourself. First let's define cap rate AKA Capitalization Rate: Cap rate indicates how fast an investment will pay for itself. For example, a 10% Cap Rate means you will get 10% of your purchase price back each year. If a commercial apartment building is purchased for $5,000,000 and it generates $500,000 a year in net operating income (the dollars left over after operating costs are subtracted from your gross income), then: $500,000 / $5,000,000 = 10% cap rate

A Building that cost $300,000 to build 10 years ago has depreciated 25% the land costs are $51,000; what is the current value of the property?

Take the value of $300,000 times the undepreciated amount of the property .75 = $225,000 and add in the land value of $51,000 = $276,000. Land is never depreciated

An offer is made on a property listed with broker Green for $93,000. The offer is for $91,000 and the buyer will be obtaining FHA financing. The appraisal comes in at $88,000. What recourse does the buyer have?

The buyer may get an FHA loan provided the difference between the appraised price is paid in cash

Mr. Thomas wanted to remodel his business, so he got a loan of $43,000 at a rate of 6% He paid the loan off in 8 months. How much did Mr. Thomas pay in interest.

The loan amount $43,000 times the interest rate 6% = The annual interest $2,580 divide by twelve to give you the monthly cost of interest $215 times 8 = $1,720.

At a trustee's sale, a property was sold for $160,800. The fees and court costs amounted to $1,600. The property was encumbered with a first deed of trust in the amount of $156,500 and a second deed of trust in the amount of $2,000. Which of the following is correct?

There would be a surplus, which would go to the trustor

A lot that is 65 feet wide by 80 feet deep will be fenced on both sides and the rear. How many linear feet of fencing would be needed?

To figure out the linear feet, you would need the sum of all the sides to be fenced. 65' + 80' + 80' = 225 feet

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:

see which one results in the lowest tax bill - 2003: $150,000 x .02765 = $4147.50 tax bill 2004: $165,000 x .025 = $4125 tax bill decrease

Ms. Nation, an eligible veteran, made an offer of $95,000 to purchase a condo she will finance with a VA-guaranteed loan. Four weeks after the offer was accepted, a certificate of reasonable value (CRV) for $92,000 was issued for the property. In this case:

the veteran may withdraw from the transaction without penalty or negotiate with the seller to reduce the price to $92,000