Real Estate math

Inventory in a store cost $9,200 net. It was sold for 25% profit, but 15% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year?

$1,955

How many acres are in the S 1/2 of the NE 1/4 plus the SW 1/4 of the SW 1/4 of section 12? 10 20 100 120

120 640 / (4 (1/4) X 4 (1/4)) = 16 = 40 acres + 640 / (4 (1/4) X 2 (1/2)) = 80 acres = 120 acres

Mr. Brown sells a piece of land. It is free of all encumbrances. The broker will receive a 6% commission and Mr. Brown's total settlement charges are $345. Mr. Brown received a check at closing for $16,300. The selling price was approximately:

$17,707.

In order to be able to earn $75.00 per month from an investment that yields a 5% return, you must invest:

$18,000.

If 1.86 acres are for sale at 22 1/2 cents per square foot, what is the asking price?

$18,229.86

Investors want to build an apartment house which will have a gross income of $3,000 per month and annual expenses of $7,000. The investors require a 8% capitalization rate on the investment. If the improvements cost $175,000, how much can the investors pay for the land?

$187,500

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

Mr. Stevens received a straight loan on which he paid only the interest at 6%, all due and payable in one year. His monthly interest payment was $23.00. What was the amount of the loan?

$4,600

An investor purchased a home for $144,000, with a $40,000 down payment and financing the balance with $104,000 straight note. The investor then sold the property for double the purchase price. If the investor had made no principal or interest payments on the loan, each dollar invested would now be worth:

$4.60.

Mr. Jones purchased a home for $72,000 with a $20,000 cash down payment and a $52,000 loan. This loan was interest free and required no payments of principal for five years. One year later, he sold the home for double its purchase price. Each dollar of his original cash investment now equals:

$4.60.

An apartment house has 100,000 square feet of floor space. If the owner has 60% of the floor space covered with carpeting at a cost of $6.00 per square yard, his approximate cost would be:

$40,000.

Assume a second trust deed has a face amount of $6,000, payable at $75 a month plus 8.2% interest per year. What would be the amount of the interest due on the first monthly payment?

$41

Measurements of a driveway are 24' x 36'. How much would it cost to replace the driveway if a concrete slab 4" thick cost $15.00 a cubic yard to install and the cost of labor amounted to $272.00 over and above the cost of the concrete?

$437

An apartment's financial statement discloses the following: (1) gross income-$10,000; (2) vacancy factor-10%; (3) operating expenses-$4,000; (4) payments to amortize the existing 1st and 2nd deeds of trust-$250 monthly. Using a 10% capitalization rate, what is the value of the property?

$50,000

In order to earn $250 per month, the amount an investor would have to invest at 6% is:

$50,000.

A buyer has agreed to buy a home for $210,000. She has deposited $6,000 into escrow. A lender has agreed to loan 80% of the appraised value, which is $200,000, and the settlement costs to be charged the buyer amount to 3% of the purchase price. How much additional money must the buyer deposit into escrow prior to closing?

$50,300

Jane purchased a home for $150,000. She received a loan from the bank for 75% of the purchase price, payable at $1,600 per month including 10% interest. She then sold the home for $165,000 before she even made the first payment on the loan. What was her equity at the time of the sale?

$52,500

A 20-unit apartment building is valued at $600,000 based on a 10% capitalization rate. If the rent for each unit increased $10 per month, what would the value of the same building be based on a capitalization rate of 12%?

$520,000

Mr. Kent received a straight loan on which he paid only the interest at 4-1/2%, all due and payable in one year. His monthly interest payment was $22.50. What was the amount of the loan?

$6,000

What would be the total property value of a four unit apartment building if each unit rented for $206.25 per month, vacancies were 5% of gross rents, annual operating expenses were $4,140, and the net income represented an 8% capitalization rate?

$65,812.50

Rudolfo held a $1,968 straight note bearing 8.5% interest for 3 years, 10 months and 20 days. Approximately, how much interest did he earn? q

$650

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?

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

Angie owns a single family home which rents for $600 per month. A home across the street rents for $690 per month and recently sold for $78,000. If Angie applied the same gross rent multiplier to her home as was used on the home across the street, what would be the value of Angie's home?

$67,800

Assuming that the real property taxes on an income property increased $700 per year and all other expenses and income remained the same. The value of the property would decrease by which of the following amounts if you used a capitalization rate of 10%?

$7,000

Mr. Sing purchased a brand new piece of income property for $190,000. The listed price was $220,000. Mr. Sing considered this a good deal on his part, since he only put $10,000 down and acquired a new first trust deed for the difference. The tax assessed value was indicated at $150,000. Mr. Sing's cost basis for income tax purposes would be:

$190,000.

Property Z is comparable to a house being appraised. Property Z sold for $220,000, but has an oversized lot valued at an extra $25,000. The indicated value for the subject property using this comparable is:

$195,000.

A man who needed money to purchase a new car had a real estate broker arrange a fully amortized 3-year loan using his home as security. The note was for $2,400 calling for payments of $77.00 per month, including 10% interest. If the borrower received $1,980 cash proceeds from the loan after deducting all expenses, the total amount of principal that must be paid to the lender on the note is:

$2,400.

A man needed money to purchase a new car and had a real estate broker arrange a fully amortized 3-year loan using his home as security. The note was for $2,500 calling for payments of $80.00 per month, including 10% interest. If the borrower received $1,900 cash proceeds from the loan after deducting all expenses, the total amount of principal that must be paid to the lender on the note is:

$2,500.

Debbie paid $6.40 per square foot to purchase a rectangular lot contain 40,000 square feet. The lot was 400 feet deep. What was the cost per front foot?

$2,560

John paid $6.50 per square foot to purchase a rectangular parcel of land containing 40,000 square feet that was 400 feet deep. What was the cost per front foot?

$2,600

To buy a car, Bob executed a second trust deed and note on his home for $2,600, payable at $66.00 per month, including interest at 8%. When he sold his home, he paid off the entire loan balance of $1,989.50. What was the total face amount of the principal on the loan?

$2,600

Alfred bought a piece of property for 20% less than the listed price. He later sold it for the listed price. His gain was:

25%.

The Bakers bought a vacation home with a $90,000 first loan. Current conventional rates are 10.5%, 30-year term. The seller agreed to pay three points, which will amount to:

$2,700.

A property is valued at $30,000 and is insured for $24,500 at a rate of 16 cents per $100. The premium for a 3-year policy is 2 1/2 times the premium for 1 year. For a 3-year policy, the monthly cost will be:

$2.72.

Property is valued at $240,000 using a capitalization rate of 10%. What would the value of the same property be using a capitalization rate of 12%?

$200,000

How much money must be loaned to receive $15,000 if the money is loaned for five years at 12% interest?

$25,000

How much money would have to be invested at 6% interest to provide an income of $125.00 per month?

$25,000

Fred owns an apartment building with 40,000 square feet of living space and wants to carpet 75% of the area. If the carpet costs $7.50 per square yard, the total cost of carpeting was most nearly:

$25,000.

Ned, a salesperson working for Broker George, received a 45% share of a 8% commission. His share came to $9,000. What was the selling price of the property?

$250,000

X A property's gross income is $27,600 and has monthly expenses of $550. It has been valued at $483,000. What is the capitalization rate?

$27,600 - ($550 X 12 = $6,600) = $21,000 / $483,000 = .0435 or 4.35%

If 2.50 acres are for sale at 27-1/2 cents per square foot, what is the asking price?

$29,947.50

How much interest would a $6,000 loan earn in five years at 10% simple interest?

$3,000

Sue sold her property for $27,500 and realized a 7% profit over what she paid for it. Her profit was:

$1,800.

Fred pays $16,240 for a home. If it costs 10% to sell his home before he could sell it at a profit, how much would it have to appreciate?

$1,804.44

Steve sold his home which had no loans against it. He received a settlement check in the amount of $96,400 after paying closing costs of $1,365.00 plus a 6% real estate broker's commission. What was the selling price?

$104,005

Ken, an investor, wants to build a rental property which will have a gross income of $3,200 per month and annual expenses of $6,500. The investors require a 10% capitalization rate on the investment. If the improvements cost $200,000, how much can the investors pay for the land?

$119,000

John purchased an income property for $575,000. The land is valued at $200,000. If straight line depreciation is used over a 30 year period, the annual depreciation would be:

$12,500.

There was fire insurance on a building valued at $9,000. The cost of the policy was $158.40 for a three-year period. The policy became effective on March 1, 1992. On November 16, 1992, the owner sold the building and canceled the policy. What was the value of the unused portion of the policy?

$121.00

A House sold at $138,240 which was at a loss of 4% . What was the original cost of the house?

$138,240/ .96 (100% - 4% = 96%) = $144,000

A man sold a parcel of land for $14,400, which was 20% more than he paid for it. The parcel was described as the S 1/2 of the NE 1/4 of Section 6. The price he paid per acre was:

$150.

Lot "A" is 3/4 of an acre. Lot "B" is 2/3 of the size of lot "A." The owner of these lots paid $14,000 for lot "B." He subdivided two lots into as many parcels as possible, all measuring 110' by 82.5' each. He sold each parcel for $7,500. His total selling price gave him a 50% profit on his original investment. What was the purchase price of lot "A?"

$16,000

Mr. Smith sells a piece of land. It is free of all encumbrances. The broker will receive a 6% commission and Mr. Smith's total escrow charges are $215.30. Mr. Smith received a check at the close of escrow for $15,290. The selling price was approximately:

$16,495.

A property is valued at $200,000 using a capitalization rate of 8%. What would the value of the same property be using a capitalization rate of 10%?

$160,000

Bill sold his office building for $185,000. This was 15% more than what he paid for it. His original cost was approximately:

$160,869.

Bill paid $240,000 for some income units. The land was valued at $16,500, and improvements at $35,640. Using the previous figures for depreciation for income tax purposes, which of the following most nearly reflects the depreciable amount?

$164,160

A contract calls for the buyer to pay $165,000 for a house and one acre of land, plus $5,000 for each additional acre of land. The total acreage of the property is 4.3 acres. What is the total amount paid for the house and the land?

$165,000 + (3.3 acres X $5,000) = $181,500

Ms. Williams purchased a house in a run-down condition and spent an amount equal to 10% of the purchase to fix it up and bring it to its present value. The house in now worth $18,700. The cost of the house is equal to the existing loan of the property. The amount of the loan is:

$17,000.

Sue agreed to buy a home for $310,000 and she deposited $15,000 as a down payment. A bank has agreed to loan her 80% of the appraised value which is $295,000. The settlement costs are to be charged to the buyer and amount to 5% of the purchase price. How much additional money must the buyer deposit?

$74,500

A corner lot has dimensions of 100 feet by 100 feet. The owner decided to put a 6-foot wide sidewalk along the street frontage on two sides of his lot. The sidewalk was outside of his property line. If the walk costs 60 cents per square foot, how much did the sidewalk cost?

$741.60

The original value of a property was $130,000, with the land valued at $20,000. If the economic life of the improvements were estimated to be 30 years using the straight line approach, what was the book value of the property after 15 years?

$75,000

A property is valued at $195,600 at $5.00 per square foot. If the depth of the lot is 150 feet, what is the value per front foot?

$750

A man sold his home and escrow closed January 1, 2008. The taxes for the fiscal year of 2007-2008 were unpaid. His property was assessed at $150,000, and the tax rate was 1% of assessed value. The amount of taxes with which he would be debited in escrow would be:

$750.

The entire stock of a retail store was sold for $9,400 to Bill Smith. Mr. Smith then sold the stock for 20% more than he paid for it, but due to some debts he lost 10% of the selling price. The net profit on Mr. Smith's' investment was:

$752.

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

A 120-room building has 14 1-bedroom units renting monthly at $150.00. 12 2-bedroom units at $200.00, and 8 3-bedroom units at $250.00. The gross annual rental would be?

$78,000

Ben sold two parcels of land for $9,775 which was 15% higher than their cost four years ago. While Ben owned the parcels, he paid taxes each year at a rate of $7.00 per $100 on an assessed value of 30% of the purchase price. Assuming an annual loss of 4% imputed interest on Ben's original investment as an expense, how much did Ben lose on the transaction?

$799

Broker Bob listed a home for sale for $200,000. He presented the seller with an offer which was 15% less than the listed price. The seller said he would accept the offer if the Broker Bob agreed to reduce her 6% commission by 16-2/3%. If Broker Bob agreed, how much commission would he receive?

$8,500

Waylon purchased a home for $82,500. He got a first trust deed from a bank for 80% of the purchase price and put up a cash deposit of $1,800. In a separate transaction he sold a $9,600 trust deed for a 30% discount and applied the proceeds to the purchase price. If the seller will carry a second trust deed for the balance of the purchase price, what will be the amount of the second trust deed carried by the owner?

$7,980

John owns a single family home which rents for $800 per month. A home across the street rents for $890 per month and recently sold for $78,000. If John applied the same gross rent multiplier to his home as was used on the home across the street, what would be the value of John's home?

$70,112

John Brown purchased a 1/2 acre vacant lot which was 100 feet deep. He paid $0.50 per square foot and now wants to sell the lot and make a 25% profit after paying $250 in costs plus a 10% commission. At what price per front foot must the lot sell?

$71

How many square feet of cement would be needed for a 7-foot wide continual sidewalk around the outside edge of a 60 foot by 90 foot corner lot?

1,099 square feet

A rectangular parcel of land has an area of 770 square yards. It has a 55-foot frontage. How deep is the lot?

126 feet

Jim owns a lot with 14,500 square feet. The lot has a depth of 160 feet. He buys two more lots adjacent lots both with a depth of 160 feet. Together, the two new lots contain 6,000 square feet. What is the total front footage of all the lots combined?

128 feet

If building costs increase by 15%, the purchasing power of the investment dollar decreases by:

13%.

Ted paid $85,000 for a house, putting up a 15% cash down payment and borrowing the balance at 8.5% interest. The loan is payable over 30 years with monthly payments of $560, including principal and interest. If Ted makes the payments as scheduled, the percentage that the original cost of the house increased because of the use of credit is?

152.2%

An individual borrowed $9,000 on a straight note and an interest of 7%. If the total interest paid on the note totaled $840.00, the term of the loan was:

16 months.

How many acres are in the following described area: the NW 1/2 of the NE 1/2 of section 5?

160

How many acres are in the following described area: the W 1/2 of the N 1/2 of section 5?

160

A road runs across the entire northern boundary of a section of land. The road contains two acres of land. The approximate width of the road would be:

17 feet.

A rectangular-shaped building that is 45 feet wide and 65 feet long has a perimeter of:

220 feet.

How many acres are in the S 1/2 of the SE 1/4 of Section 5 and the N 1/2 of the NW 1/4 of Section 13 and the N 1/2 of the NE 1/4 of Section 32?

240

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 20000 21600 240000 2400000

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

A 60-acre tract was purchased for $30,000 per acre and divided into 3 parcels and sold for $750,000 each. What was the percentage return on the purchase price?

25

One cubic yard is equal to how many cubic feet?

27 cubic feet

A man purchases a $8,000 straight note for $6,500. Interest rate on the note is 5%. What was his percentage of profit made on his investment if the note is paid off in one year?

29.2%

Of the following, which is equivalent to a board foot?

6" x 12" x 2"

XX A loan company will provide a loan to Bill and Hillary for 75% of the appraised value of their home. The interest rate is 10.5%. The first monthly interest payment is $820. The bank requires 4 discount points (hint: a discount point is 1% of the loan amount) to obtain this interest rate. How much will the discount points cost?

$820 x 12 = $9,840 annual interest paid. $9,840 / .105 (annual interest converted to a decimal) = $93,714.28 Total Loan Amount. $93,714 x .04 (A discount point is 1% of the loan amount - you have 4 of them) = $3.749.57 in Discount Points

To receive a 12% return on an investment of $750,000, what would be the required net operating income?

$90,000

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

$90,000 / 94% = $95,745; $95,745 x 6% = $5,745

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

Dave financed a $120,000 home with an 80% first mortgage from his local credit union, a 10% second mortgage from the seller and a 10% down payment. The seller offered terms of 9.5% INTEREST ONLY on the second mortgage. What are Johnson's monthly payments on the second mortgage?

$95.00

A house is to be sold in probate. The first bid submitted is $92,000. If the court asks for additional bids and you wish to raise the first bid of $92,000, your second bid must be at least:

$97,100.

A property's gross income is $27,600 and has monthly expenses of $550. It has been valued at $483,000. What is the capitalization rate? 0.0621 0.0529 0.0496 0.0435

0.0435 $27,600 - ($550 X 12 = $6,600) = $21,000 / $483,000 = .0435 or 4.35%

***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? 0.11 0.12 0.13 0.14

0.12 The formula for calculating cap rates are: Total Gross Income - Annual Operating Expenses = Net Operating Income / Value of Building = Cap Rate. Note that mortgage payments are not a part of expenses. Cap Rates are often used to value a building such as in the income approach to appraisals. The value of a building is not effected by the financing used to purchase the building. If an investor is buying a building for cash and another using a loan the value of the building is the same. The operating costs are the same for both. A close cousin to cap rate that does take financing into account is Return On Investment or ROI. ROI takes all the costs of a specific investor to determine how much profit they will receive each year. Profit is clearly impacted by the financing costs. $4,000 X 4 = $16,000 (annual gross income) - ($350 X 12 = $4,200 (annual maintenance expense) + $1,750 (annual taxes) = $5,950 (annual operating expenses)) = $10,050 ((Net Operating Income) / $83,750 (Value of Building) = 12% Capitalization Rate More about Cap Rate: 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 This means 10% of the building's purchase price is paid each year by the proceeds. Another way of saying this - the property will pay for itself in 10 years. To calculate a cap rate you deduct all operating expenses from gross revenue, this leaves you the Net Operating Income also known as NOI. NOI is another way of saying profit. Then you divide NOI by the value of the building to get the cap rate. How do you use this tool? Way one; it allows investors a fairly easy and quick method of comparing investment properties. For example: take two properties as identical as the cute twins you flirted with in high school, with the same net operating income. One has a cap rate of 8% (same income, priced higher) and the other a cap rate of 15% (same income, priced lower). The 15% cap rate property MIGHT just be a heck of a deal or the 8% one overpriced. BUT you have to dig deeper, because it might be that the higher cap rate property is in a bad neighborhood and the owner has to discount the price to get it sold. Higher risk means you as a buyer get more bang for the buck with the 15% cap rate property, but you are going to have to work harder for it and your spouse is mad because you haven't been able to take a vacation in years because of that "dang" property you bought. The 8% cap rate property may be more expensive and have a longer payback period, but that is because there is less risk and more investors want to buy it. The rents just come in without grief and it could save your marriage. Way two: Cap Rate is also used in the Income Method of appraisals to value a property. Generally, investors could care less if a property is pretty; they want to know how much they are going to make off it. The Income Method allows an investor to value a property based on its income. If most like investment properties in an area have an average cap rate of 7%. You can divide the net operating income of the property your client is interested in (provided by the listing agent) by the average cap rate in the area (digging in sold comps of various MLS's) and it will give you the approximate market value of the property. For example: $225,000 net operating income / 7% = $3,214,285 market value. If the property is listed for $5,000,000 you might want to pass it by because it is overpriced for the neighborhood. If it is listed for $2,500,000 you call your client quick because you think you found a good deal.

If two lots, one 85` X 100` and the other 120` X 135` cost $68,000, what is their approximate cost per square foot? 3.15 27.5 2.75 2.95

2.75 Part 1 (85 X 100 = 8,500) + (120 X 135 = 16,200) = 24,700 Part 2 $68,000 / 24,700 = $2.75

How many acres are in a lot that measures 660 feet x 1,320 feet?

20

Starting at the NW corner of the SE 1/4 of Section 16, thence to a point 1,320 feet directly east, thence 660 feet directly south, thence 1,320 feet directly west, thence north to the point of beginning. This description contains how many acres?

20

A farmer in Colorado owns property, which is legally described as S1/2, NE1/4, SW1/4, of Section 16. How many acres are included in the parcel? 20 40 80 60

20 640 acres divided by 4 equals 160 divided by 4 equals 40 divided by 2 acres.

A road comprising a total of 3 acres runs along the southern boundary of a section. Of the following, which is most nearly the width of the road?

20 feet

The number of linear feet on each side of an acre of land that is almost square would be approximately:

209.

How many linear feet of fencing is required to fence one standard section of land?

21,120

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

In the E 1/2 of the NW 1/4 of the SE 1/4 of the NW 1/4 of Section 38 is how many acres?

None of the above, 1-1/4 acres, 2-1/2 acres, 1/2 acre

John bought a house four years ago for $80,000. He just sold it for $86,900. What was the percent of profit?

8.6%

The N 1/2 of the NW 1/4 of Section 25 contains:

80 acres.

The SW 1/4 of the NE 1/4 and the NW 1/4 of the NW 1/4 of Sec. 25 contains:

80 acres.

Personality

Any mineral that has been removed from below the surface is personality.

Definition of 'Discount Points'

Discount Points are a form of prepaid interest. A borrower buys a point and in return gets a lower interest rate on the loan. Each discount point generally costs 1% of the total loan amount and depending on the borrower, each point lowers your interest rate by one-eighth to one one-quarter of your interest rate. As the IRS considers discount points to be prepaid interest they are tax deductible in the year in which they were paid.

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%

How many square feet in 3 acres?

Take one acre 43,560 s ft times 3 = 130,680

A $75,000 mortgage loan requires a discount of $1,875 to be paid by the seller. How many points is this equivalent to? a. 2 b. 2.5 c. 4.5 d. 5

b

A 40-acre tract was sold for $2,200 per acre. The seller realized a 14.5 percent profit from the sale. What was the original cost of the tract? a. $75,240.00 b. $76,855.90 c. $100,760.00 d. $102,923.98

b

If a residence is valued at $87,500 and its assessment ratio is 50 percent of market value, what are the annual taxes if the tax rate of $7.80 per $100 of assessed valuation? a. $3,187.75 b. $3,412.50 c. $5,608.96 d. $6,825.00

b

The commission of the sale of a house is $4,410. Thirty percent goes to the broker who listed the property. Of the remainder, the broker whose salesperson completed the transaction gets 45 percent, and the salesperson receives the balance. How much does the salesperson who made the sale receive? a. $1,389 b. $1,697 c. $1,728 d. $2,425

b

The effective gross income from an office building property is $73,500 and the annual operating expenses total $52,300. If the owner expects to receive an 11 percent return on his investment, what is the value of the property? a. $125,800 b. $192,727 c. $475,454 d. $668,181

b

Property purchased 5 years ago was assessed for tax purposes at 50 percent of market value. At that time, the tax rate was $4.90 per $100 of assessed valuation. Today, the taxes have increased by $637. How much has the market value of the property increased assuming straight line appreciation? a. $3,121.30 b. $6,242.60 c. $13,000.00 d. $26,000.00

d

The current taxes are $1743.25 and have not been paid. If the sale is to be closed on August 12, what is the tax proration that will be charged to the seller based on a 360-day year? a. $1104.05 b. $1220.26 c. $668.26 d. $1074.99

d

What is the cost of constructing a fence 6 feet 6 inches high around a lot measuring 90'x175', if the cost of erecting the fence is $1.25 per linear foot and the cost of material is $.825 per square foot of fence? a. $2,083.56 b. $2,053.75 c. $1,752.31 d. $3,504.63

d

A person bought a parcel of land measuring 110 yards by 220 yards. How many acres are in this parcel?

5 acres

Attila bought a parcel of land measuring 110 yards by 220 yards. How many acres are in this parcel?

5 acres

How long will it take $6,000 to earn $2,400 at 8% interest?

5 years

A board foot is exactly:

all of the above, 2" x 6" x 12"., 3" x 4" x 12"., 12" x 12" x 1".

A deposit receipt states, "Buyer to assume existing first trust deed of $9,600 at 5-1/2% paid per quarter paid March 31, June 30, September 30, and December 31." If Mr. Taylor closes escrow on June 30, how much interest will Mr. Taylor owe?

none

Inventory in a store costs $8,500 net. It was sold for 25% profit. However, 15% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year?

none of the above, $1,955, $920, $345

How many acres are in one section?

640

Converted to a decimal, 2/3% becomes:

.67.

In order to earn $65.00 per month from an investment that yields a 5% return, you must invest:

$15,600.

How many square miles does a section contain?

1

The reciprocal of 8% is:

12.5.

A board foot is exactly:

2" x 8" x 9".

How many acres are in a lot that measures 750' x 1,320'?

23

How many acres are in a lot that measures 660' x 1,320'?

20

How many acres in one section?

640

How many board feet of lumber can be obtained from a piece 8" x 12" x 12"?

8

Jim bought a second trust deed and note that had a face amount of $1,800 on which he was allowed a 20% discount. If he received payments of $120 per month, including 8% interest, for 1 year, what was his percentage of return on his investment?

No return was received on the investment

An appraiser estimated the replacement cost new of a building at $560,000. The building has an estimated economic life of 40 years and an estimated remaining life of 30 years. What is the current value of the building? a. $140,000 b. $392,000 c. $420,000 d. $560,000

c

A lease provides that the tenants pays $760 minimum rent per month plus 4 percent of the gross sales in excess of $150,000 per year. If the tenant paid a total rent of $20,520 last year, what was the gross sales volume? a. $150,000 b. $285,000 c. $435,000 d. $513,000

c

A parcel of vacant land has an assessed valuation of $274,550. If the assessment is 85 percent of market value, what is the market value? a. $315,732.50 b. $320,000.00 c. $323,000.00 d. $1,830,333.33

c

A real estate licensee leased a building for 10 years at an annual rent of $48,000. She will receive a commission of 7.5 percent for the first 5 years, 5 percent for the next three years, and 3.5 percent for the final years. What will her income be from this commission over the life of the lease? a. $18,000 b. $25,200 c. $28,560 d. $30,000

c

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:

decrease The taxes decreased since the mill levy reduction was a greater percent than the assessment increase.

Mr. White sold an apartment building for $139,000. This was 20% more than what he paid for it. His original cost was approximately:

$115,833.

Harry sold two parcels of land for $9,430, which was 15% more than their cost four years ago. While Harry owned the parcels, he paid taxes each year at a rate of $8.00 per $100 on an assessed value of 25% of the purchase price. Assuming an annual loss of 5% imputed interest on Harry's original investment as an expense, how much did Harry lose on the transaction?

$1,066

An owner of a home listed it at a price which would leave him $16,800 after the broker received a 6% commission. If the broker sold the property at the listed price, how much commission would he receive?

$1,072.

An owner of a home listed it at a price which would leave him $18,800 after the broker had received a 6% commission. If the broker sold the property at the listed price, how much commission would he receive?

$1,200

A home sold for $16,950. This included a profit of 9%. The original cost of the home was approximately:

$15,500.

An individual sold his property for $40,000 and realized a 10% profit over what he paid for it. His profit was:

$3,637.

A property is valued at $35,000 and is insured for $30,000 at a rate of 15 cents per $100. The premium for a 3-year policy is 2-1/2 times the premium for 1 year. For a 3-year policy, the monthly cost will be:

$3.13.

The cost to pave a driveway that is 450 feet by 16 feet, at $7.25 per square yard is:

$5,800.

A man paid $9,500 for the stock in trade of a retail business. He sold it for 25% more than he paid for it. If he lost 15% of the gross sale price because of credit risks, the net profit on his original investment would be:

$593.75.

Steve paid $5.50 per square foot to purchase a rectangular parcel of land containing 30,000 square feet. The land was 150 feet deep, what was the cost per front foot?

$825

What is the salesman's 45% of a 6% commission on a $31,000 sale?

$837.00

John wants a loan to finance the purchase of a house. The bank requires an 80% LTV. The purchase price of the house is $122,500. What is the maximum loan amount Brown could get?

$98,000

If the subject property has built in appliances valued at $1,500 and a comparable property does not, the sales price of the comparable is adjusted by:

+$1,500.

A $7,000 loan is sold to an investor for $6,500. It is a straight note, due and payable at the end of one year. It bears a 9% interest rate. What percentage return on the principal dollar invested will be made by the investor?

17.38%

A man purchases a $5,000 straight note for $4,500. Interest rate on the note is 6%. What was his percentage of profit made on his investment if the note is paid off in one year?

17.8%

If a person borrowed $10,000 on a straight note and paid $50 interest every 90 days, what would be the interest rate?

2%

A triangular-shaped lot has a road frontage (base) of 80 feet and a depth of 120 feet. What is the area of the lot?

4,800 square feet

1,320 feet by 1,320 feet contains:

40 acres.

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

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?

First calculate the total commission $154,000X .06 = $9,240 then divide by 2 for his share = $4,620

If I = PRT, what does P represent?

P = I divided by R x T

If an investment valued at $350,000 returns 12 percent annually, then what is the amount of income produced by this investment?

The value multiplied by the return to equal the income. $350,000 x 12% = $42,000

Which of the following formulas is used to calculate the cubic footage of an attic with a gable roof?

Width x length divided by 2 x height = cubic feet

A developer is planning a building that will contain 103,000 square feet. Construction costs are estimated to be $62.00 per square foot. Ninety-five percent financing is available for the structure. How much money must the developer put up to complete the project? a. $319,300 b. $638,600 c. $5,747,400 d. $6,066,700

a

A small office building sold for $949,000 and the broker received a commission of $54,990. What was the broker's commission rate? a. 5.8 percent b. 6.2 percent c. 7 percent d. 11.3 percent

a

Which of the following is an acre?

all of the above, 43,560 square feet, 100 ft. x 435.6 feet, 33 ft. x 1,320 feet

Which of the following is equivalent to an acre?

all of the above, 43,560 square feet, 100 ft. x 435.6 feet, 50 ft. x 871.2 feet

Which of the following dimensions is equivalent to an acre?

all of the above, 43,560 square feet, 180' x 242', 1/640 of a section

In 1982, a family purchased their house for $26,500. They made no major improvements during the time they owned the property. Recently, they sold the property for $62,275. What was their percentage of gross profit? a. 42.6 percent b. 58.2 percent c. 135 percent d. 235 percent

c

A building is valued at $100,000 using a capitalization rate of 8%. If an investor demands a capitalization rate of 10%, the value of the building will a. increase by 20%. b. increase by less than 20%. c. decrease less than $10,000. d. decrease more than $10,000.

d

A buyer offers $26,280 for a 20 percent interest in a commercial property. What is the total value of the property? a. $31,536 b. $32,850 c. $105,120 d. $131,400

d

Two appraisers, one using a capitalization rate of 10% and the other one 8%, both agree that the net income of a building was $11,200. The higher capitalization rate made the price of the building:

lower by 20%.

X Closing is February 10 and taxes for the prior year were not paid for $1,854, this is shown on the settlement sheet as:

$1,854 debit to the seller, credit to the broker Taxes for the prior year would be a debit to the seller and a credit to the broker. The previous years taxes are the seller's problem. Debit the seller for $1854. The broker receives the funds as a Credit. (remember - the "broker" is a proxy for the title company closing agent who controls the escrow account). The broker (closing agent) will then write a check from the escrow account and send it to the governement to pay the past due tax bill.

X Mrs. Smith received a notice from her lender that last year her total interest paid was $6,090 on her $58,000 mortgage. Mrs. Smith wants to verify that she is not paying more interest than the mortgage agreement states. What interest is she paying?

$6,090 / $58,000 = 10.5% On most real estate loans, the interest rate is expressed on an annual basis. That is - if someone is paying a 5% interest rate, that is the percentage to be assessed against the loan balance for the year. In this problem, Mrs. Smith paid $6,090 on her $58,000 mortgage. By dividing $6,090 by $58,000, we were able to determine that she paid an annual interest rate of 10.5%.

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

X 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 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.

35000 Generally a payment factor comes from a Morgage Factor Table also called an Amoritization Table. It give you the amount of monthly payment for each $1,000 of the loan amount for a given interest and term. 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.

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?

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%

Formula for calculating cap rate

Total Gross Income - Annual Operating Expenses = Net Operating Income / Value of Building = Cap Rate. Note that mortgage payments are not a part of expenses. Cap Rates are often used to value a building such as in the income approach to appraisals. The value of a building is not effected by the financing used to purchase the building. If an investor is buying a building for cash and another using a loan the value of the building is the same. The operating costs are the same for both. A close cousin to cap rate that does take financing into account is Return On Investment or ROI. ROI takes all the costs of a specific investor to determine how much profit they will receive each year. Profit is clearly impacted by the financing costs.

Susan had two lots which she sold for $10,000, which was 20% over their original cost four years ago. While she owned the lots, she paid property taxes each year at a rate of $8.00 per $100 of an assessed value of 25% of their purchase price. She suffered an annual loss of 6% imputed interest on her original investment as an expense. How much did she gain or lose in this transaction?

$1,000 loss

Mary bought a piece of land which was 3/4 of an acre. It was 110 feet deep and she paid $1,750 for the land. She owned the adjoining land which was 2/3 the size of the land she purchased and had the same depth. Both parcels were rectangular. She then decided to divide the land into lots which were 82 feet wide. The lots were sold for $600 each. The total money she received represented a 25% profit over the cost of the two original parcels. What was the price of the 2/3 acre piece of land?

$1,130

A man paid $9,300 for the stock in trade of a retail business. He sold it for 33-1/3% more than he paid for it. If he lost 15% of the gross sale price because of credit risks, the net profit on his original investment would be:

$1,240.

If a property sold for $17,000, with a first trust deed assumed at $14,400, deducting commission of 6% and costs at $235, how much would the seller receive from escrow?

$1,345

Frank purchased a home for $80,000. He financed the purchase with a 90% conventional fixed-rate loan. The loan fee charged by the lender was 2%. The private mortgage insurance company charged a .50% first-year premium and a .75% renewal premium. What was the loan fee? The first-year premium? The monthly renewal premium?

$1,440; $360; $45

An investor wants to purchase a 60-unit apartment building that has an annual net income of $180,000. How much would he be willing to pay for the building if he uses a 12% capitalization rate?

$1,500,000

Inventory in a store costs $8,500 net. It was sold for 20% profit. However, 10% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year?

$1,530

A salesperson has a 60/40 split with the broker. If the commission for the sales is 6% to be split between the brokers, what is the salesperson's 40% commission on a $132,000 sale?

$1,584.00

Ken purchased a property for $16,380. If he wants to sell it without a loss for a price which would include a 9% commission, the value of the property would have to appreciate:

$1,620.

A $5,000 investment at 10% interest compounded annually earns how much in three years?

$1,655

A property sold for $19,000 with borrrower assuming a $15,500 first mortgage. Deducting commission of 8% and costs at $260, how much would the seller receive at closing?

$1,720

Jim made an agreement to sell his house on December 1, 2005. Escrow closed January 1, 2006 and the taxes for the fiscal year of 2005-06 were unpaid. His property was assessed at $175,000, and the tax rate was 2% of assessed value. The amount of taxes with which he would be debited in escrow would be:

$1,750.02.

If a salesman sold a parcel with 800 front feet at $100 a front foot, and he was to receive 40% of his broker's 6% commission, he would receive:

$1,920.

If a salesperson sold a parcel with 800 front feet at $100 a front foot, and he was to receive 40% of his broker's 6% commission, he would receive:

$1,920.

Inventory in a store cost $9,200 net. It was sold for 25% profit. However, 15% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year?

$1,955

Inventory in a store cost $9,200 net. It was sold for 25% profit; however, 15% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year?

$1,955

A loan was made for $14,000 at an interest rate of 6% per year for a 20-year period. The total interest that would be paid over the entire loan period if the monthly payment for this fully amortized loan is $7.17 per $1,000, would be approximately:

$10,000.

Bob bought a parcel of raw land and subdivided it into four separate lots. Five years later, he sold each lot for $50,000. The adjusted basis for each lot was $25,000. Bob's long-term capital gain on these transactions is:

$100,000.

An offer said, "Seller to take back a second mortgage securing the note for $12,400, payable at $200.00 or more per month, including interest at 9% per annum from May 15, 1989." If the first payment date on the second mortgage is June 15, 1989, how much of the regular payment will go to principal reduction?

$107

Assume it would cost $12,500 to reproduce an improvement today. Assume the land is valued at $1,000 today. Assume the improvement is actually 12 years old. The depreciation rate is 1-1/2%. Using the above facts, what is the depreciated value today?

$11,250

It would cost $12,500 to reproduce an improvement today. The land is valued at $1,000. The improvement is 12 years old. The depreciation rate is 1-1/2%. Using the above facts, what is the depreciated value today?

$11,250

Jay is the beneficiary on a trust deed. The annual interest rate is 8%. If in 5 years he has received $4,500 in interest, what is the principal amount of the loan?

$11,250

A real estate speculator purchased a property for $10,000. He paid $1,000 down and executed a non-interest bearing note for $9,000 in favor of the seller. Before the end of the first year and before he had made any principal payments, he sold the property for double what he paid for it. Each $1.00 of his investment is now worth:

$11.00.

Several years ago, Mr. Moss bought property for $10,000, paying $1,000 in cash with the seller taking back a trust deed for the balance of the purchase price. Before any payments had been made on the trust deed note, he sold the property several months later for $20,000. His invested dollar in these circumstances is worth:

$11.00.

Several years ago, Mr. Mossman bought property for $10,000, paying $1,000 in cash with the seller taking back a trust deed for the balance of the purchase price. Before any payments had been made on the trust deed note, he sold the property several months later for $20,000. His invested dollar in these circumstances is worth:

$11.00.

An apartment's financial statement disclosed the following: Gross income = $20,000; vacancy factor = 9%; operating expenses = $5,000; payments to amortize the existing 1st and 2nd deeds of trust = $300 monthly. Using a 12% capitalization rate, what is the value of the property?

$110,000

If the closing is March 15, and last years taxes of $1127 were not paid; how is this shown on the settlement sheet?

$1127 debit to the seller, credit to the broker

Ned just sold his house for 9% less than he paid for it. The selling price was $105,900. What was the original purchase price?

$116,374

There was fire insurance on a building valued at $12,000. The cost of the policy was $166.40 for a three-year period. The policy became effective on March 1, 1992. On November 16, 1992, the owner sold the building and canceled the policy. What was the value of the unused portion of the policy?

$127.13

Assume it would cost $16,500 to reproduce an improvement today. The land is valued at $2,000 today. Assuming the improvement is actually 12 years old and the depreciation rate is 2-1/2%, what is the depreciated value today?

$13,550

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? $161.69 credit to the seller, debit to the buyer $13.31 credit to the buyer, debit to the seller $161.69 credit to the buyer, debit to the seller $13.31 credit to the seller, debit to the buyer

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

A deposit receipt states, "Buyer to assume existing first trust deed of $8,000 at 6 1/2% paid per quarter." If the interest payment was due on March 15th, how much would Mr. Pink pay?

$130.00

Frank just sold his house for 6% more than he paid for it. The selling price was $140,450. What was the original purchase price?

$132,500

A single-family residence has an estimated value by the sales comparison approach of $142,000. Its value by the cost approach is $139,500 and by the income capitalization approach, $125,000. Which value will probably be your final estimate of value?

$142,000

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?

$142,500 x 127% = $180,975

X 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 = $10,650/1$147,000 = .072 or 7.2%

A man paid $210,000 for some income units. His tax bill showed the assessments to be as follows: Land $15,120, improvements $35,280. In arriving at a figure to be used for depreciation for income tax purposes, he used his assessment figures as a basis. Which of the following most nearly reflects the depreciable amount?

$147,000

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?

$15,000 + 2% of $100,000 = $17,000

A homeowner paid 4 points for a bank loan. The bank sold the loan to an insurance company at a 3 1/2 point discount and received a check for $14,475. The original amount of the loan was:

$15,000.

Ms. Prendergast purchased a house in a run-down condition and spent an amount equal to 10% of the purchase to fix it up and bring it to its present value. The house is now worth $16,500. The cost of the house is equal to the existing loan of the property. The amount of the loan is:

$15,000.

A property sold for $16,950. This included a profit of 9%. The original cost of the property was approximately:

$15,500.

A homeowner paid 4 points for a bank loan. The bank sold the loan to an insurance company at 5-1/2 point discount and received a check for $15,000. The original amount of the loan was:

$15,873.02.

If an income property is valued at $250,000 using a 6% capitalization rate, how much would an investor pay for the property if he demanded a 10% capitalization rate?

$150,000

A property had improvements totaling $200,000; annual net income before recapture of depreciation of $40,000; and economic life of improvements equal to 40 years. Applying the land residual technique using straight line depreciation and an interest rate of 10% results in:

$150,000.

Ms. Pat purchased a house in a run-down condition and spent an amount equal to 10% of the purchase to fix it up and bring it to its present value. The house is now worth $165,000. The cost of the house is equal to the existing loan of the property. The amount of the loan is:

$150,000.

A house comparable to the subject property sold recently for $160,000 and is very similar to the subject, except that the comparable has an extra bathroom, valued at $5,000. What is the adjusted value of the comparable?

$155,000

Bill sold a parcel of land for $15,600, which was 25% more than he paid for it. The parcel was described as the S 1/2 of the NE 1/4 of Section 9. The price he paid per acre was:

$156.

Lot "A" is 3/4 of an acre. Lot "B" is 2/3 of the size of lot "A". The owner of these lots paid $14,000 for lot "B." He subdivided these two lots into as many parcels as possible, all measuring 110' by 82.5' each. He sold each parcel for $7,500. His total selling price gave him a 50% profit on his original investment. What was the purchase price of lot "A?"

$16,000

Mr. Smith sells his home. It is free of all encumbrances. The broker will receive a 6% commission and Mr. Smith's total escrow charges are $215.30. Mr. Smith received a check at the close of escrow for $15,290. The selling price was approximately:

$16,495.

Mrs. Adams owned an income property with an adjusted cost basis of $160,000 and a fair market value of $240,000. She exchanged the property for another income property which had a fair market value of $230,000. Both properties had no loans against them and no adjustment was made for the differences in value. For federal income tax purposes, the new property will have a basis for Mrs. Adams of:

$160,000.

A lot sold for $18,950. This included a profit of 7%. The original cost of the home was approximately?

$17,700

Tom obtains an interest-only purchase money loan for $60,000. The interest rate is 9.5% and the term is 30 years. How much interest will Tom have paid at the end of the 30-year term?

$171,000

In order to be able to earn $90.00 per month from an investment that yields a 6% return, how much should you invest?

$18,000

Ted borrowed $40,000 from a bank to purchase a lot. He paid 4 points to get the loan. The loan contained a 4% prepayment penalty. His monthly payment was $160.00, including interest at 8% per year. Five years later, John sold this real estate and paid-off the loan. If the loan had an average loan balance of $38,500 during the five years Ted owned the property, what was the bank's gross profit on this loan?

$18,600.

A property is sold for $125,000. If the lender charges a 2% loan fee for an 80% loan, what is the amount of the fee?

$2,000

Broker John and Broker Jay agreed to divide a 4 1/2% commission equally on the sale of a home, which sold for $180,000. Sue, the listing salesperson, works for Broker John on a 50-50 commission split. Sue would receive approximately how much commission as a result of the sale?

$2,025

If a salesman is to receive 25% of his brokers 6% commission, how much would he receive on a parcel with 900 front feet that sold for $150 a front foot?

$2,025

Mr. Jones, an owner of a packaging firm, purchased a new machine in 2008 and paid $5,500. It was estimated at the time of the purchase to have a total economic life of 10 years and a salvage value of $550. Using the straight line method of depreciation, the book value at the end of 7 years would be:

$2,035.

Mr. Bingham pays $15,240 for a lot. It costs 12% to sell his lot. Before he could sell it at a profit how much would it have to appreciate?

$2,078

Dick purchased a home for $118,600 and arranges to finance the purchase with a 90% loan. The terms of the loan are 10.75% annual interest, a 2% loan fee, and a three point discount. What is the amount of the loan fee and the discount?

$2,135; $3,202

A man signed a note for $2,400, with 10% prepaid interest, to be paid from the loan proceeds in escrow. Which of the following amounts did he actually receive?

$2,160

A man bought a property for $15,840. If he wants to sell it without a loss, for a price which would include a 12% commission, the value of the property would have to appreciate:

$2,160.

X 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?

$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

Mary sold her house to Bob and escrow closed on November 10. The property taxes for the year ($3,500) have been paid. Using 30-day months and a 360-day year in the calculations, approximately how much does Bob owe to Mary for property taxes?

$2,235

Jerry spends 25% of her gross monthly income on her apartment rent of $600. What is her gross monthly income?

$2,400

A home owner sold his house for $23,000. This selling price represented a 15% profit over what he had originally paid for the house. What was the original price of the home?

$20,000

A home owner sold his lot for $23,000. This selling price represented a 15% profit over what he had originally paid for it. What was the original price of the lot?

$20,000

Jay sold his lot for $25,000. This selling price represented a 25% profit over what he had originally paid for it. What was the original price of the lot?

$20,000

A man has an investment in a 30-unit rental property which was adjacent to a freeway. Because of its proximity to the freeway, the owner lost $250 per month in rent. If the capitalization rate were set at 15%, the loss in value to the property was:

$20,000.

A person has an investment in a 20-unit apartment building that is adjacent to a freeway. Because of its proximity to the freeway, the owner lost $200 per month rent. If the capitalization rate were set at 12%, the loss in value to the property was:

$20,000.

Mr. Bill pays $152,400 for a home. If it costs 12% to sell his home before he could sell it at a profit, how much would it have to appreciate?

$20,780

X 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; $22,000 - $2,400 = $19,600 / .025 = $784,000 + $150,000 = $934,000

Brad bought a parcel of land and subdivided it into four separate lots. Five years later, he sold each lot for $75,000. The adjusted basis for each lot was $25,000. Brad's capital gain on these transactions is:

$200,000.

Sam paid $310,000 for an income property. His tax bill showed the assessments to be as follows: Land $20,120, improvements $37,200. In arriving at a figure to be used for depreciation for income tax purposes, he used his assessment figures as a basis. Which of the following most nearly reflects the depreciable amount?

$201,500

An investor paid $18,900 for a lot that had an area of 22,500 sq. ft. and was 160 ft. deep. The lot was sold and a 35% profit was made after paying a 10% brokers commission. At what price per front foot did the lot sell?

$202

How much money would have to be invested at 8% interest to provide an income of $140.00 per month?

$21,000

Bob owns a home, which is free and clear. He recently purchased a new home. The contract to purchase the new home however, has a contingency that Bob's current home be sold within 60 days and that Bob net $19,500 from the sale after all expenses have been deducted. Bob employs broker Jones to assist him in the sale of the property. The broker is to receive a 6% commission and there will be an escrow fee of $300. How much must the home in Irvine sell for in order to net Bob $19,500?

$21,063

A house is to be sold in probate. The bid submitted to court for confirmation is $200,000. The first minimum overbid would be:

$210,500.

An apartment building is valued at $275,000 using a 7% capitalization rate. How much would an investor pay for the property if she demanded a 9% capitalization rate?

$213,889

Fred owns an apartment building with 40,000 square feet of floor space and wants to carpet 50% of the area. If the carpet costs $10.00 per square yard, the total cost of carpeting was most nearly:

$22,000.

Mr. Stewart has an investment in a 20-unit apartment building which is adjacent to a freeway. Because of its proximity to the freeway, the owner lost $150 per month rent. If the capitalization rate were set at 8%, what would be the loss in value to the property?

$22,500

Which of the following loans will require a balloon payment?

$22,500 with interest at 14.25% per year payable at $320 a month for 10 years; the total interest is $19,827.60

Lynn sold a home for $27,000. She made a 15% profit. What did the home cost?

$23,478

Assume a second trust deed has a face amount of $4,000, payable $65 a month plus 7.2% interest per year. What would be the amount of the interest due on the first monthly payment?

$24

The net income of an apartment building went down $200 per month when a freeway was built nearby. If investors demand a 10% capitalization rate for this area, how much has the building lost in value?

$24,000

A property sold for $110,000. Buyer Tom financed 90%. Approximately how much will the monthly PMI increase his payment if the renewal rate is .30%?

$24.75

When there is an existing assessment lien against a property and the buyer assumes that lien, the cost basis of the property is then the original cost plus the amount of the lien. If Juan and Rosa bought a home for $240,000 and assumed an existing assessment lien in the amount of $2,000, what is their cost basis?

$242,000

When there is an existing assessment lien against a property and the buyer assumes that lien, the cost basis of the property is then the original cost, plus the amount of the lien. If Juan and Rosa bought a home for $240,000, and assumed an existing assessment lien in the amount of $2,000, what is their cost basis?

$242,000

Broker Bob leased a commercial property for 30 years at a rent of $26,000 per year. His commission was 9% of the first year rent, 7% of the rent for years 2 through 5, 4% of the rent for years 6 through 10, and 2% of the rent for years 11 through 30. Assuming all the commission is paid to him as per this schedule, what is the total commission he will receive?

$25,220

Lot "X" is an acre. Lot "Z" is 2/3 of the size of lot "X." Lot Z was purchased for $16,000. The two lots were divided into as many parcels as possible, all measuring 110' by 82.5' each. Each parcel was sold for $6,500. The total selling price was 25% profit on the original investment. What was the purchase price of lot "X?"

$25,600

Ed spends 24% of his gross monthly income on his house payment of $732. What is his gross monthly income?

$3,050

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%

An individual sold his property for $35,200 and realized a 10% profit over what he paid for it. His profit was:

$3,200.

An income property has a net income of $40,000. How much value would be lost if the current capitalization rate in the area changed from 5% to 8%?

$300,000

If a property with a $2,400 gross monthly income sold at an annual GRM (gross rent multiplier) of 10.72, what did the property sell for?

$308,736

Billy divided an acre of land into four lots. He then sold the lots for $10,000 each. If his cost basis on each lot was $2,000, what was his total gain on the sale of the lots?

$32,000

An income property has a value of $400,000 and returns a net of 8% to its owner. What would the value of this property be to a new purchaser who wished to receive an 10% return on his money?

$320,000

A property is valued at $260,000 using a capitalization rate of 10%. What would the value of the same property be using a capitalization rate of 8%?

$325,000

A lender charged the borrower 2 points for making a loan. The lender then sold the loan immediately to an investor at a discount of 4-1/2 percent and received $35,800. What was the original loan amount?

$37,487

A building valued at $245,000 contains four apartments that are rented for $370 each month. The owner estimates that net operating income is 65% of gross rentals. What is the capitalization rate?

$370 rent x 4 units = $1480 per month income $1480 x 12 months = $17,760 gross income $17,760 x .65 = $11,540 net operating income (I) divided by (V) = rate $11,540 / $245000 = 4.7 %

X A building valued at $245,000 contains four apartments that are rented for $370 each month. The owner estimates that net operating income is 65% of gross rentals. What is the capitalization rate?

$370 rent x 4 units = $1480 per month income $1480 x 12 months = $17,760 gross income $17,760 x .65 = $11,540 net operating income (I) divided by (V) = rate $11,540 / $245000 = 4.7 %

A property was sold on these terms: Selling price $35,000, $10,000 cash down payment, buyer to deposit proceeds of an $15,000 loan secured by a first trust deed and note, buyer to execute a note in favor of the seller for $10,000 secured by a second deed of trust. What amount of revenue stamps must be purchased prior to the recording of the deed?

$38.50

The seller of a home has paid the annual property taxes of $2,360; escrow will close on May 1. If the buyer and seller agree to prorate the property taxes as of the sale date, the buyer's portion of the taxes would be most nearly:

$393.34.

A real estate investor purchased a property for $15,000. He paid $5,000 down and executed a non-interest bearing note for $10,000 in favor of the seller. Before the end of the first year and before he had made any principal payments, he sold the property for double what he paid for it. Each $1.00 of his investment is now worth?

$4.00

Jim purchased a home for $85,000, with a $25,000 down payment and financed the balance with a $60,000 straight note. He then sold the property for double the purchase price, paying no principal or interest payments on the loan during his ownership. Each dollar invested is now worth?

$4.40

A driveway measures 25' x 35'. How much would it cost to replace the driveway if a concrete slab 4" thick cost $15.00 a cubic yard and the cost of labor is $300.00 over and above the cost of the concrete?

$465

Property "A" has a monthly gross income of $300. Property "B" has a monthly gross income of $700. Using a monthly gross multiplier of 120 and calculating the difference in value between the two properties, the result would be:

$48,000.

Property "A" has a monthly gross income of $500. Property "B" has a monthly gross income of $900. Using a monthly gross multiplier of 120 and calculating the difference in value between the two properties, the result would be:

$48,000.

A small income property generates a monthly gross income of $600. Over the last five years it has been vacant for three months. The annual expenses are $2,000. If an appraiser applied a 10% capitalization rate to this property, what would be the value?

$48,400

A buyer paid $7,000 in earnest money and acquired a mortgage of 65% of the $48,500 sales price. How much cash did the buyer have to bring to closing?

$48,500 X .65 (amount of loan) = $31,525.00. $48,500 - $31,525.00 (amount of loan) = $16,975 - $7,000.00 (earnest money) = $9,975.00

Bob took a listing providing for a 6% commission on the sales price of $210,000. Sue made an offer at the listed price, but did not complete the transaction. The seller declared a forfeiture of the 5% deposit. A provision in the purchase agreement provides that the broker will receive half of the buyer's deposit in the event of the buyer's default. Under these circumstances, the broker is entitled to:

$5,250.

Mr. Johnson bought a house for $64,500. He later sold the house and broke even, after paying 8% of the selling price in commission, and closing costs. How much had the lot increased in value?

$5,609

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?

$5,950 (Income Earned) /$ 85,000 (Value) = 7% (Rate)

Mr. Johnson purchased a home for $79,000 with a $19,000 cash down payment and a $60,000 loan. This loan was interest free and required no payments of principal for five years. One year later he sold the home for double its purchase price. Each dollar of his original cash investment now equals:

$5.16.

Cindy purchased a lot for $40,000. She has been asked to build an apartment house with a projected income of $20,000 per year. Her accountant estimates all expenses, including proper management, repairs, etc., to be $12,000 per year. Cindy wants a 10% return on her investment. Which of the following is nearest to the amount she can afford to pay for the erection of the building?

$50,000

Ted purchased a building for $250,000. The terms of purchase were $175,000 cash, and a purchase money deed of trust for the balance. If the land is valued at $50,000 what is the adjusted cost basis of the property after it is fully depreciated?

$50,000, the value of the land.

The entire stock of a retail store was sold for $8,400 to Sam Jones. Mr. Jones then sold the stock for 25% more than he paid for it, but due to some debts he lost 15% of the selling price. The net profit on Mr. Jones' investment was:

$525.

A building has 150,000 square feet of floor space. If the owner wants 80% of the floor space covered with carpeting at a cost of $4.00 per square yard, his approximate cost would be:

$53,333.

An apartment has an annual income of $53,500. If you must have a 14% rate of return, what is the maximum you can pay for the apartment building?

$53,500 / .14 = $382,143

A 20-unit apartment building is valued at $800,000 based on a 10% capitalization rate. If the rent for each unit increased $20 per month, what would the value of the same building be based on a capitalization rate of 16%?

$530,000

A buyer assumed a note secured by a deed of trust. The balance of the note was $9,000 with an annual interest rate of 7 1/2% payable quarterly. The interest on the note was to be prorated upon possession of the property. If the interest on the note had been paid to March 15, and he took possession February 15, he would owe how much prorated interest?

$56.25

**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: $49 debit to the seller $59 debit to the seller $59 credit to the seller $49 credit to seller

$59 credit to the seller 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 buyer assumed a note secured by a deed of trust. The balance of the note was $11,000 with an annual interest rate of 6-1/2% payable quarterly. The interest on the note was to be prorated upon possession of the property. If the interest on the note had been paid to March 15, and he took possession February 15, he would owe how much prorated interest?

$59.58

Mr. Brown listed his home with broker Green for $150,000 with a commission rate of 6%. Broker Green brought an offer at 15% less than the listed price, Mr. Brown said he would accept the offer if the broker reduced his commission by 16 2/3%. If they all agreed to these terms, what amount of commission would broker Green receive?

$6,375

An apartment was purchased for $175,000. The terms of purchase were $125,000 cash, and a purchase money deed of trust for the balance. The land was valued at $60,000. What would the adjusted cost basis of the property be after it is fully depreciated?

$60,000, the value of the land

Mr. Johnson listed his home with Broker Smith for $165,000 with a commission rate of 6%. Broker Smith brought an offer at 10% less than the listed price. Mr. Johnson said he would accept the offer if the broker reduced his commission by 16-2/3%. If they all agreed to these terms, what amount of commission would Broker Smith receive?

$7,425

Craig purchased a home for $82,500. He got a first trust deed from a bank for 80% of the purchase price and put up a cash deposit of $1,800. In a separate transaction, he sold a $9,600 trust deed for a 30% discount and applied the proceeds to the purchase price. If the seller will carry a second trust deed for the balance of the purchase price, what will be the amount of the second trust deed carried by the owner?

$7,980

Several years ago, Mr. Matthews bought property for $12,000, paying $2,000 in cash with the seller taking back a trust deed for the balance of the purchase price. Before any payments had been made on the trust deed note, he sold the property several months later for $24,000. His invested dollar in these circumstances is worth:

$7.00.

X 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?

$708 X 360 payments = $254,880 - $80,000 = $174,880

Ed owns 80 acres of land that is 1/2 mile long by 1/4 mile wide. Ed asks Bill to clear 4 strips of land, each 50 feet wide for access to roads. One strip will run the length of the land and 3 strips will run the width of the land. If Bill charges $100 per acre of cleared land, he will receive approximately:

$740.

You paid a 15% down payment on a tract of undeveloped land. The down payment was $8,250. What was the purchase price

$8,250 / .15 = $55,000

A loan was made for $15,000 at an interest rate of 5% per year for a 20-year period. The total interest that would be paid over the entire loan period if the monthly payment for this fully amortized loan is $6.50 per $1,000, would be approximately:

$8,400.

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

$80,000 x .12 = $9,600

Jane purchased a house for $100,000 with a down payment of 25% of the purchase price. The balance was financed on a 30-year amortized loan with interest at 8% per annum. The lender requires monthly impounds for property taxes of $1,000 per year and casualty insurance costing $788 for a three year policy. Assuming that the first monthly payment on the principal is $217, the total amount the buyer will have to pay the first month will be approximately:

$822.

What is the salesperson's 45% of a 6% commission on a $31,000 sale?

$837.00

Angie sold her house for $84,000, which was 40% more than what she paid for it six years ago. How much did Angie originally pay for the house?

$84,000 / 140% ( the original price 100% plus the 40% increase) = $60,000

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?

$850 / 365 = $2.3288 tax per day x 165 sellers owned days = $384.25

A buyer assumed a note secured by a deed of trust. The balance of the note was $11,000 with an annual interest rate of 9-1/2% payable quarterly. The interest on the note was to be prorated upon possession of the property. If the interest on the note had been paid to March 15, and he took possession February 15, he would owe how much prorated interest?

$87.08

Assume that the original value of a property was $122,500, with the land valued at $24,500. If the economic life of the improvement was estimated to be 40 years using the straight line approach, what was the book value of the property after 14 years?

$88,200

A person has a lot that he purchased for $20,000. He has been asked to build an apartment house with a projected income of $18,000 per year. His accountant estimates all expenses, including proper management, repairs, etc., to be $10,000 per year. The man wants an 8% return on his investment. Which of the following is nearest to the amount he can afford to pay for the erection of the building?

$90,000

A buyer purchased a home for $125,000 putting up a good down payment of 20% of the purchase price, and financing the balance on a 25-year amortized loan with interest at 8.25% per annum. The bank requires monthly impounds for property taxes of $750 per year and casualty insurance costing $945 for a three year policy. Assuming that the first monthly payment on the principal is $155, the total amount the buyer will have to pay the first month will be approximately:

$931.25.

A buyer wants a 8% return on his investment and he is interested in a retail center that produces a net operating income of $75,000 per year, what would the investor be willing to pay for the center?

$937,500

The owner of a house has paid the advance water charge for three months beginning October 1. The owner sold the house, and it closed November 27. How much credit will the owner receive at closing? The total water bill is $95.

$95 / 92 days = $1.0326 X 35 days = $36.14

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?

$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

XX 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 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

If a comparable has landscape lighting valued at $3,000, and the subject property does not, the sales price of the comparable is adjusted by:

-$3,000.

An apartment building is valued at $450,000. The investor interested in purchasing is pleased that it has a cap rate of 12%. How much is the net operating income of the building?

.12 V = $450,000 I = $450,000 x .12 = $54,000

A building valued at $245,000 contains four apartments that are rented for $370 each month. The owner estimates that net operating income is 65% of gross rentals. What is the capitalization rate? 0.035 0.047 0.051 0.113

0.047 $370 rent x 4 units = $1480 per month income $1480 x 12 months = $17,760 gross income $17,760 x .65 = $11,540 net operating income (I) divided by (V) = rate $11,540 / $245000 = 4.7 %

A building sold for $949,000. The total commission was $54,990. What was the rate of commission? 0.079 0.058 0.062 0.065

0.058 $54,990 commission / $949,000 sales price = .057945 or 5.80% commission rate

A broker received a commission for $20,940 for the sale of a $349,000 house. What was the commission rate? 0.06 0.07 0.08 0.09

0.06 44. IRV $20,940 / $349,000 = 6%

If a property's annual net income is $24,000, and it is valued at $300,000, what is the capitalization rate? 0.08 0.105 0.125 0.15

0.08 $24,000 (Net Income) / $300,000 (Value) = 8% (Rate)

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? 0.08 0.09 0.1 0.11

0.08 $24,000 (Net Income) / $300,000 (Value) = 8% (Rate) 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% The mortgage payment is not applicable when determining the value of a property using the Capitalization Rate. The reason for this is - given two potential buyers for a property, one paying cash and the other getting a loan, the value of the property does not change because they are each using two different methods to pay for it. All the other expenses listed in the question are fixed expenses that both parties would need to pay regardless of whether they have a loan or not and therefore have an impact on the value.

Find the annual rate of return percentage on an $88,000 investment if the weekly gross income is $225 and monthly expense is $370 0.072 0.085 0.0825 0.0775

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 %

A borrower interest for one month was $412.50 and the loans balance was $60,000. What is the borrower's interest rate? 0.075 0.0775 0.0825 0.0875

0.0825 Calculate the annual interest by multiplying the monthly interest $412.50 X 12 = $4,950 divide this $60,000 = .0825 or 8.25%

A lender has agreed to loan $55,000 with monthly interest payments of $424. What interest rate has the lender agreed to? 0.08625 0.103 0.11 0.0925

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

X 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?

0.12 $4,000 X 4 = $16,000 (annual gross income) - ($350 X 12 = $4,200 (annual maintenance expense) + $1,750 (annual taxes) = $5,950 (annual operating expenses)) = $10,050 ((Net Operating Income) / $83,750 (Value of Building) = 12% Capitalization Rate

A plant occupying 200,000 square feet is located on a site containing 600,000 square feet. The ratio of the total ground floor area of a building to the total land area of the lot is called structural density. The structural density of this property is: 0.3 0.33 0.4 0.12

0.33 The ratio of the ground floor area of the plant (200,000 sq. ft.) to the total land area. (600,000 sq. ft.) equals the structural density (33%). This term is used for industrial applications whereby a trypical density is 1:3.

1/4 mile by 1/4 mile is equivalent to:

1/16 of a section.

A parcel of land 1/4 mile by 1/4 mile is equivalent to:

1/16 of a section.

The principal balance on a loan is currently $58,500. The scheduled monthly payment on the loan, including principal and interest, is $550. All of the payment goes toward interest, except for $46. What is the interest rate?

10.34%

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.

George is planning to build a warehouse 50 feet wide by 200 feet long. The walls will be 10 feet high and the building will have a flat roof. How many cubic feet of space will George have when the warehouse is completed?

100,000 cubic feet

A rectangular parcel of land has an area of 540 square yards. It has a 45-foot frontage. How deep is the lot?

108 feet

The regular monthly payment on a loan, including principal and interest, was $560. All of the payment went toward interest, except for $45. The principal balance on the loan during that month was $55,500. What was the interest rate?

11.14%

A parcel of land, rectangular in shape, has an area of 560 square yards. It has a 45-foot frontage. How deep is the lot?

112 feet

A rectangular lot is 45 feet wide at the street and contains 620 square yards. How deep is the lot?

124 ft.

A lending institution will allow its borrowers to spend 28% of their income on their month mortgage. If the annual family income is $57,000 what is the maximum monthly payment allowable? 1330 390 1789 1596

1330 Divide the total income $57,000 by 12 to get the monthly income = $4,750 and multiply this times 28%to determine the mortgage payment $1,330

John buys a piece of property as an investment for $15,000. John's capital investment is $5,000. He pays 5% interest on a loan of $10,000, and the property appreciates 8%. After one year the property is sold. What percent of profit did he realize on his initial invested capital?

14%

Steve purchased a note worth $6,000 for $5,500. Interest rate on the note is 5%. What was his percentage of profit made on his investment if the note is paid off in one year?

14.5%

***The new owner of a house needs fire insurance coverage for $ 98,000. The annual premium rate is $0.22 per $ 100 for the amount insured. The insurance company agreed to make the cost of the policy 2 1/2 times the annual rate if he purchased a three-year policy. How much would the insurance portion of his monthly PITI payments be to pay for the policy? 8.23 14.97 6.58 5.64

14.97 $98.000 / 100 = 980 X $.22 =$215.60 X 2.5 years = $539 / 36 months = $14.97

A man owns a lot with 15,400 square feet. It has a depth of 140 feet. He buys two more lots that are adjacent to his lot, both with a depth of 140 feet. Together, the two new lots contain 4,200 square feet. What is the total front footage of all the lots combined?

140 feet

parcel of land described as "the NW 1/4 and the SW 1/4 of Section 6, T4N, R8W of the Third Principal Meridian" was sold for $875 per acre. The listing broker will receive a 5% commission on the total sales price. How much will the broker receive? 1750 5040 14000 15040

14000 160 acres + 160 acres = 320 acres x $875 = $280,000 x 5% = $14,000

A house fronts on two roads running at right angles to each other. The house touches one road for 2,660 feet and on the second road for 1,980 feet. Another property line is parallel to the shorter of the two roads and runs for 2,660 feet. The final boundary is a straight line connecting the open ends. How many acres does the property contain?

142

A man obtained a $750 loan at 7.2% interest. He paid $67.50 total interest. The term of the loan was:

15 months.

Mike sold his home and carried back a $35,500 second trust deed. He immediately sold the loan at a discount to an investor and received $30,000. What was the rate of discount?

15.5%.

A farm measures one-half mile by one-half mile. How many acres does the farm contain?

160 acres

A parcel of land described as "the NW 1/4 and the SW 1/4 of Section 6, T4N, R8W of the Third Principal Meridian" was sold for $875 per acre. The listing broker will receive a 5% commission on the total sales price. How much will the broker receive?

160 acres + 160 acres = 320 acres x $875 = $280,000 x 5% = $14,000

A $5,000 loan is sold to an investor for $4,500. It is a straight note, due and payable at the end of one year. It bears a 6% interest rate. What percentage return on the principal dollar invested will be made by the investor?

17.8%

A man purchases a note worth $5,000 for $4,500. Interest rate on the note is 6%. What was his percentage of profit made on his investment if note is paid off in one year?

17.8%

A person purchases a $5,000 straight note for $4,500. Interest rate on the note is 6%. What was the percentage of profit made on the investment if the note is paid off in one year?

17.8%

A house has a market value of $ 110,000. The assessed value is 30% of the market value. If the mill levy is 52 mills, what is the yearly tax on the house? 5720 4004 572 1716

1716 $110,000 X 30% = $33,000 (Assessed value) X .052 = $1,716

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? 167900 172000 168130 176500

172000 First of all here is the formula... $197,800 / 115% = $172,000. Using the IRV method we discuss in the classes.....Since the property soldfor the listing price, the income generated (the top number in the circle)was $197,800, since this represented 15% over the original purchaseprice of the property, the Rate (bottom left side of the circle) is 115%. This is because the Rate and Income Generated are always the same valueonly one is expressed in dollars and the other as a percentage. Since the$197800 represents the original price + 15%, then that number as apercentage would be 115% of the original price. Divide the rate into theincome generated and it will give you the unknown part of the circle Value(bottom right) or $172,000. Remembering these formulas can be tricky,in the classes we teach the IRV method. An equally effective method istaught in the math section (the section with blue edged pages) of theModern book - they call it the t-bar method. Both work justfine.

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? 15000 13500 15400 17400

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? 80000 254880 174880 70000

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.

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. 1965 1637 1786 1690

1786 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

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: 1.875 18.75 4.5 22.5

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? 164025 172205 174310 180975

180975 $142,500 x 127% = $180,975

How many square yards of linoleum would be needed to cover a floor that's 1,700 square feet? Round your answer up to the next full square yard.

189 square yards.

How many square feet are there in a building, rectangular in shape that is 29 feet wide and 69 feet long?

2,001 square feet

A parcel of land 330 feet wide and 330 feet deep contains approximately how many acres?

2-1/2 acres

A 40-acre tract was purchased for $500 per acre and divided into 4 parcels. The parcels sold for $6,000 each. What was the percentage return on the purchase price?

20%

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? 31800 28000 35000 21000

21000 4800sf / 80 = 60 front feet. 60 x 350 = 21,000 A front foot is the front length of a parcel - in this case 60 feet. Front feet are a big deal for commercial properties who rely on walk-in traffic. They want to have as must exposure to the traffic. Also, vacation properties along a lake. Everybody wants as much property as they can facing the lake.

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? 145 ft. 225 ft 290 ft 160 ft

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

The S 1/2 of the SE 1/4 of Section 4, the N 1/2 of the NW 1/4 of Section 8, and the N 1/2 of the NE 1/4 of Section 15 contain how many acres?

240

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? 268.8 247.68 619.2 113.2

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

Bert purchased a property for 20% less than the listed price and later he sold the property for the original listed price. What percentage profit did he make?

25

Bert purchased a property for 20% less than the listed price and later, he sold the property for the original listed price. What percentage profit did he make?

25

A 60-acre tract was purchased for $300 per acre and divided into 3 parcels and sold for $7,500 each. What was the percentage return on the purchase price?

25%

Jim purchased a property for 20% less than the listed price. Later he sold the property for the original listed price. What percentage profit did he make?

25%

Mary sold her house and took back a second trust deed for $5,400. She immediately sold it for $4,050. What was the rate of discount?

25%

***A house is closed on July 16. The taxes of $546 for the current year have been paid, what is the prorated portion that the buyer owes the seller 251.31 252.81 293.19 294.69

252.81 Divide the total taxes $546 by 365 (number of days in the year = $1.4959 per day time the number of days from July 16 through Dec 31 remember that the day of closing goes to the buyer, therefore times 169 = $252.81

John Doe buys a piece of property as an investment for $10,000. John's capital investment is $1,000. He pays 6% interest on a loan of $9,000, and the property appreciates 8%. After one year the property is sold. What percent of profit did he realize on his initial invested capital?

26%

Tom buys a piece of property as an investment for $10,000. Tom's capital investment is $1,000. He pays 6% interest on a loan of $9,000, and the property appreciates 8%. After one year the property is sold. What percent of profit did he realize on his initial invested capital?

26%

One cubic yard of concrete is equal to how many cubic feet of concrete?

27 cubic feet

A lender loans borrower Smith a sum of $1,800 and takes back a note and deed of trust. The note was set up to be fully amortized over a 1-year period, interest at 8% per year, payable at $162 per month. When the note was drawn, it was immediately sold to an investor for a 15% discount. If the loan were fully paid off at the end of the year, what percent return would the investor make on this investment?

27%

How many acres are in the NW 1/4 of the SE 1/4 of Section 10 and the SE 1/4 of Section 3 and the N 1/2 of the NE 1/4 of Section 16?

280

How many acres are in the S 1/4 of the SE 1/4 of Section 10 and the N 1/2 of the NW 1/2 of Section 3 and the N 1/2 of the NE 1/4 of Section 16?

280

The number of linear feet on each side of 2 acres of land that is almost square would be approximately?

295

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. 20 30 40 80

30 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 man purchased income property for $240,000, which was returning 8% per annum on the gross investment. He paid $20,000 down, the balance on a long term straight loan on which he paid interest annually at 6%. Disregarding other expenses, the return on his equity was:

30%

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?

30,000 Take 90% (the value he got for the house when he sold it) and divide $27,000 by that 90%, for a total of $30,000

The quarterly interest is $562.50 and the rate is 7.5% What is the principal amount of the loan? 27000 35000 42000 30000

30000 Calculate the annual interest by taking the quarterly interest $562.50 and multiply by 4 = $2,250 or the annual interest. Now divide this by 7.5 % = $30,000

What percentage profit would an investor make if he purchased two lots for $16,000 each and then divided into three lots and sold them for $14,000 each?

31%

A piece of property contains 44,000 square feet and is 180 feet deep. There are 2 vacant lots on each side of the property that have the same depth and contain 6,000 square feet each. What is the frontage of the combined lots?

311 ft.

The current value of a property is $255,000, and it is assessed at 35% of its current market value. What is the amount of the real estate tax due on the property if the tax rate is $3.50 per $100 of assessed value? 2039.99 2499 1115.63 3123.75

3123.75 255,000 x .35 = 89,250.00, 89,250 x .035 = 3,123.75

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?

323000 To calculate the market value take the assessed value $274,550 and divide by 85 % = $323,000

Steve bought a piece of property for 25% less than the listed price. He later sold it for the listed price. His gain was:

33%.

A person sold his home and took back a second trust deed for $3,740. He immediately sold it for $2,431. What was the rate of discount?

35%

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. $40,200 $35,000 $46,000 $52,500

35,000 The man can qualify for a loan, but only one that the monthly payment including PITI (Principal, Taxes, Interest, Insurance) is not more than 25% of his monthly salary. Generally a payment factor comes from a Morgage Factor Table also called an Amoritization Table. It give you the amount of monthly payment for each $1,000 of the loan amount for a given interest and term. 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.

What is the cost of constructing a fence 6 feet 6 inches high around a lot measuring 90 ft by 175 ft; if the cost of erecting the fence is $1.25 per linear ft and the cost of materials is $.825 per square ft? 1765.75 1895.5 2304.25 3504.5

3504.5 First calculate the # of linear feet 90 + 90 +175 + 175 = 530 linear feet multiply this times $1.25 =the cost of erecting the fence $662.50. Next take 530 x 6.5 the height of the fence = 3,445 sq ft of fencing times $.825 = $2,842 + 662.50 = $3504.50

You have just bought a piece of property that contains 54,000 square feet and is 180 feet deep. There are 2 vacant lots, one on each side of your lot, that have the same depth as your lot and contain 5,400 square feet each. If you bought these lots, your total frontage would be?

360 feet

An apartment has an annual income of $53,500. If you must have a 14% rate of return, what is the maximum you can pay for the apartment building? 382143 415674 489542 563821

382143 $53,500 / .14 = $382,143

A house valued at $110,000 is assessed at 30% of its value. The school tax is 12 mills, what is the annual tax? 396 360 924 500

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

A corner lot measuring 50' across the front and 150' deep has a front yard set-back of 10' and a 15' set-back on the side street. The total number of buildable square feet is:

4,900.

How many acres are in the following described area: the NW 1/4 of the NE 1/4 of section 5.

40

How many acres are in the following described area? The NW 1/4 of the NE 1/4 of section 5?

40

A road comprising a total of 5 acres runs along the northern boundary of a section. Which is most nearly the width of the road?

40 feet

If an acre of land is divided into 4 lots of equal size and the depth of each lot is 250', the front foot measurement of each lot is closest to which of the following figures:

40.

***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

If an investment valued at $350,000 returns 12 percent annually, then what is the amount of income produced by this investment? 4200 42000 3920 39200

42000 The value multiplied by the return to equal the income. $350,000 x 12% = $42,000

an Acre

43,560 s ft

A parcel of land contains exactly one acre. If the parcel is divided into 4 equally sized lots, rectangular in shape and is 240 feet deep, approximately how wide is each of the 4 lots?

45 feet

Dividing a one acre parcel of land into four equal sized rectangular lots parallel to each other and each measuring 240' in depth would give an approximate width of each lot equal to:

45'.

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? 4680 4620 6550 8090

4620 First calculate the total commission $154,000X .06 = $9,240 then divide by 2 for his share = $4,620

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?

4800sf / 80 = 60 front feet. 60 x 350 = 21,000

Atilla bought a parcel of land measuring 110 yards by 220 yards. How many acres are in this parcel?

5

Bob has a loan for $16,000 with interest to be paid at the rate of $200 quarterly. What is the interest rate on the loan?

5% but less than 6%

John has a loan for $18,000 with interest to be paid at the rate of $225 quarterly. What is the interest rate on the loan?

5% but less than 6%

Jill sold a house and carried back a promissory note for $13,340, secured by a 2nd trust deed. She then sold the note at close of escrow to an investor for $6,670. What was the amount of the discount?

50%

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? 48500 50000 53000 51500

50000 Take the sale price and divide it by 97% (100%-3% depreciation=97%). So, $48,500/97% = $50,000

Property taxes are based on an assessed value of $132,000 and the tax rate is 8.5 mills. The property closes on Jun 14. On a basis of the banker's calendar (360 days in a year, 30 days in a month) the seller owes how much in taxes? 3432 2211 1122 511

511 $132,000 X .0085 = $1,122 / 360 = $3.1166 X 164 = $511.13

An apartment building is valued at $450,000. The investor interested in purchasing is pleased that it has a cap rate of 12%. How much is the net operating income of the building? 48000 54000 64000 72000

54000 I = R x V R = 12% = .12 V = $450,000 I = $450,000 x .12 = $54,000

If you were to divide a one acre parcel of land into four equal sized rectangular lots, parallel to each other and each measuring 200' in depth, what is the approximate width of each lot?

55'

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? 612 587.52 728.42 660.96

587.52 50 X 6 = 300 + (94 X 6 =564) = 864 sq ft X $.68 = $587.52

Which of the following measurements are equivalent to a board foot?

6" x 12" x 2"

Assume Mr. Kelly owns his home and borrowed money to buy it with a loan payable at $114.63 per month. The balance on the loan for the last month was $16,500. $32.13 was applied on his principle on his last payment. What was the interest rate on the note in these circumstances?

6%

Assume Mr. Kelly owns his home but he borrowed money to buy it with a loan payable at $114.63 per month. The balance on the loan for the last month was $16,500. $32.13 was applied on his principle on his last payment. What was the interest rate on the note in these circumstances?

6%

Assume Mr. Willis owns his home but he borrowed money to buy it with a loan payable at $112.44 per month. The balance on the loan for the last month was $16,000. $32.44 was applied on his principle on his last payment. What was the interest rate on the note in these circumstances?

6%

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? 1500 3000 6000 7500

6000 The first thing you have to do is find out the mill rate, to do that divided 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.

XX A broker sells the NW 1/4 of the SE 1/4 of Section 31, T 4N, R5E P.M. for the owner at $ 5225.00 per acre. The commission is 5%. The broker must pay 10% of the commission to the salesman who listed the property. What is the net amount the broker receives in the sale?

640 / (4 x 4) = 40 acres X $5,225 = $209,000 x 5% = $10,450 - $1,045 (10%) = $9,405

A farmer in Colorado owns property, which is legally described as S1/2, NE1/4, SW1/4, of Section 16. How many acres are included in the parcel?

640 acres divided by 4 equals 160 divided by 4 equals 40 divided by 2 acres.

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? 64.8 648 6480 592.75

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

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? 86000 50932 68000 136000

68000 $4760 (Total Commission) / 7% = $68,000. See either IRV method in Math Moments or T-Bar Method in math section of Modern Book.

How many 50-foot by 110-foot lots could be obtained from an acre of land? 6 7 8 9

7 This question involves calculating square footage. Whenever you do math questions like this you need to get all the factors converted to a common measure. 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.

A lot measures 75' x 130' and has a front yard set-back of 10' and a 15' set-back on the side street. The total number of buildable square feet is:

7,475 square feet.

ou 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? 7500 3500 3600 7100

7100 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

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? 906.3 522.16 731.25 628

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

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? 78957 76800 76423 75443

76800 $71,424 / .93 = $76,800

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? 39900 56200 79800 89100

79800 Take $2, 593.50 X 2 = $5,187 and divide that by .065 = $79,800

A board foot of lumber contains 144 cubic inches. How many board feet of lumber can be obtained from a piece 2" x 4" x 12'?

8

How many parcels of land, each measuring 50' by 100', could be created from an acre of land?

8

An apartment building cost $450,000. It brings in a net income of $3,000 per month. The owner is making what percentage of return on the investment?

8%

If a person borrowed $5,000 on a straight note and paid $100 interest every 90 days, what would be the interest rate?

8%

If the assessed valuation of a property is $200,000, with a tax rate of $4.00 per $100, what is the annual tax?

8000 $4.00 per $100 means that the $200,000 must be divided by 100, giving a total of $2,000. That, multiplied by $4.00 gives the total tax of $8,000

An agent was paid $2,500, which was half of the 6% that the broker collected. What was the sale price of the property? 35714 71248 83333 35417

83333 Multiply $2,500 by 2 = $5,000 divide this by 6% = $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?

86250 Explanation 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

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? 7950 5790 8970 795

8970 Take the commission rate of 6% times the selling price of $230,000 = the total company commission of $13,800. Multiple $13,800 times the brokers percentage of 65% = $8,970 broker commision.

A building that has an effective gross income of $65,000 and total operating expenses of $6,500 has a net income ratio of:

90%.

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? 784000 634000 934000 880000

934000 $200 X 12 = $2,400; $22,000 - $2,400 = $19,600 / .025 = $784,000 + $150,000 = $934,000

A broker sells the NW 1/4 of the SE 1/4 of Section 31, T 4N, R5E P.M. for the owner at $ 5225.00 per acre. The commission is 5%. The broker must pay 10% of the commission to the salesman who listed the property. What is the net amount the broker receives in the sale? 20900 10450 9405 1045

9405 640 / (4 x 4) = 40 acres X $5,225 = $209,000 x 5% = $10,450 - $1,045 (10%) = $9,405

A building sold for $157,000 The broker's commisssion was 6% and was divided as follows: 10% to the listing person 50% of the balance to the selling broker. What was the listing booker's commission? 1064 942 1124 964

942 First find the total commission by multiplying the sale price $157,000 X 6% = $9,420 then multiply this by .10 which gives you the listing broker's commission of $942.

Jean owes $80,000 at 12% interest on her home. How much interest will she pay in one year? 8000 9600 10600 15000

9600

A parcel of vacant land 80 feet wide and 200 feet deep was sold for $2000 per front foot. How much money would a broker receive for her 60% share in the 10% commission? 6400 9600 16000 24000

9600 80 x $2000 = $160,000 x 10% = $16,000 x 60% = $9600 A front foot is the front length of a parcel - in this case 80 feet. Front feet are a big deal for commercial properties who rely on walk-in traffic. They want to have as must exposure to the traffic. Also, vacation properties along a lake. Everybody wants as much property as they can facing the lake.

Jean owes $80,000 at 12% interest on her home. How much interest will she pay in one year? 8000 9600 10600 15000

9600 $80,000 x .12 = $9,600

A buyer paid $7,000 in earnest money and acquired a mortgage of 65% of the $48,500 sales price. How much cash did the buyer have to bring to closing? 9975 16975 24525 41500

9975 $48,500 X .65 (amount of loan) = $31,525.00. $48,500 - $31,525.00 (amount of loan) = $16,975 - $7,000.00 (earnest money) = $9,975.00

The inside of a building measured 25 feet by 35 feet and has 1 foot thick walls. How many square feet of ground does the building cover?

999 square feet

Mr. Buyer is considering purchasing an apartment building. He is given the following information by the agent: listing price, $948,000; gross income $143,000; expenses, $57,200; net income, $85,800. He wants an overall return of at least 8%. His agent should advise him in which of the following ways?

Buy the property, since the capitalization rate is approximately 1% greater than required

Prorate an annual insurance premium for an assumed loan, which was paid in advance on Jan 1 by the sellers. Closing is Oct 5 and the policy amount was $985. Since the buyer is benefiting from the Seller paying the year in advance, the buyer owes money to the seller. How much?

Cost of the annual insurance $985 divided by 365 days = $2.6986 the cost of insurance per day X 88 days remaining on the policy which was paid on Jan 1 = $237.48 which would be a debit to the buyer and a credit to the seller.

X In determining the value of a 20-unit apartment property, the appraiser has established the gross income from rents. After deducting the loss for vacancies and collection losses from this gross income, he would have established the:

Effective gross income is the term used to designate the income remaining after deducting the bad debt/vacancy factor from the potential gross income. From effective gross income, you subtract the building's operating expenses to arrive at net earnings.

X 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

Find the capitalization rate on a business that is worth $430,000 and rents for $1,500 a month.

First multiply the monthly rent $1,500 by 12 = Annual rental income $18,000. Then divide this by the property value $430,000 = the cap rate 4.19%

Two vacant lots sold for a total of $17,940. Five years ago, the owner purchased them for $15,600. During the period of ownership, the following expenses were incurred: 6% annual interest on original cost, $50 annual weed burning for both lots, $10 annual miscellaneous expenses for both lots, and $225 annual real property taxes on each lot. How much did the owner gain or lose on the sale?

He had a $4,890 loss.

An apartment building is valued at $450,000. The investor interested in purchasing is pleased that it has a cap rate of 12%. How much is the net operating income of the building?

I = R x V R = 12% = .12 V = $450,000 I = $450,000 x .12 = $54,000

A subdivider purchased 10 acres for $200,000 with a 10% down payment. The balance was to be in the form of a straight note secured by a deed of trust. The deed of trust contained a release clause providing that, upon each payment of $20,000, one acre would be released free and clear. The subdivider subsequently paid $40,000 on the principal and received a release on two acres of land free and clear. By this transaction, the percentage of his equity in the encumbered property would do which of the following?

Increase

Placido has set an asking price of $78,200 for his 9 acres of land. His friend, Luciano, wants to buy a portion of this land measuring 100' by 145.2'. Assuming Luciano pays Placido's asking price on a square foot basis, how much will Luciano pay?

More than $2,500, but less than $3,000

X A retail space was leased for $1,200 per month; The owner also pays the shopping center 8% of gross income which is $50,000 monthly. How much does the owner pay annually?

Multiply $50,000 by 8% = $4,000 X 12 = $48,000 + ($1,200 X 12 = $14,400) $14,400 = $62,400

Mr. Blue Berry bought his home one year ago for $98,500 properties have appreciated by 5 % the past year. What is the current value of the house

Multiply the purchase value $98,500 X 105% = $103,425

Mr. and Mrs. Garcia purchased a home for $120,000 and secured a new first trust deed and note at that time. Within two months after the purchase, the Garcias recorded a homestead on the home. One year later they had an unsecured judgment lien levied against them for $5,500. Subsequently, they listed the property and sold it for $121,000 at which time the trust deed and note balance was $115,500. Under the circumstances, the holder of the judgment lien would receive which of the following amounts from escrow out of the proceeds of the sale?

Nothing

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

John Johnson owned a parcel of land around his copper mine. He sold the mine and property for $230,000 with the verbal understanding that copper already mined before the date of sale would not be included in the sale. The mined copper is considered by law as:

Personality

John Johnson owned a parcel of land around his copper mine. He sold the mine and property for $230,000 with the verbal understanding that copper already mined before the date of sale would not be included in the sale. The mined copper is considered by law as: realty a fixture personalty sub rosa

Personality Any mineral that has been removed from below the surface is personality.

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?

Take the commission rate of 6% times the selling price of $230,000 = the total company commission of $13,800. Multiple $13,800 times the brokers percentage of 65% = $8,970 broker commision.

Your offer to buy a property for $150,000 is accepted, but unfortunately there is a fire in the kitchen prior to closing. The insurance company estimates about $9,000 to repair and repaint. The repairs will be made in time to meet the closing date.

The Buyer must Proceed If the damage is repaired and the cost of the repairs are less than 10% of the cost of the property, then the buyer cannot terminate the contract. If the repairs exceed 10% then the buyer may terminate the contracT.

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 must pay the difference in cash or lose his earnest money The buyer may not get an FHA loan on this property The buyer may get an FHA loan provided the difference between the appraised price is paid in cash The buyer may get an FHA loan and get a second loan to cover the difference the appraised value and the purchase price.

The buyer may get an FHA loan provided the difference between the appraised price is paid in cash The buyer cannot borrow the money but can pay the difference in cash or s/he can terminate the contract at no penalty.

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.

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

Bill & Sarah applied for a VA loan to purchase a property for $158,000. The property appraised at $157,000. They agreed to pay a 1/2 % loan origination fee. How much will they pay in origination fees?

VA loans are only made on the appraised value so the loan amount would be $157,000 and 1/2% would be 157,000 X .005 = $785

If the annual net income from certain commercial property is $22,000 and the capitalization rate is 8%, what is the value of the property using the income approach? a. $275,000 b. $176,000 c. $200,000 d. $183,000

a

The seller-landlord has collected the September rent from all five tenants: two paying $345 per month each and three paying $425 per month each. Determine the prorated amount to be allowed the buyer when the sale closes on September 19th. a. $720.50 b. $786.00 c. $1,244.50 d. $1,965.00

a

A home valued at $168,500 has just had a 70 percent mortgage loan placed on it. The interest rate is 11.25 percent. The monthly payment is $1,292.22 including principal and interest. What will the principal balance of the mortgage loan be after the next monthly payment is made? a. $117,560.28 b. $117,763.56 c. $117,913.56 d. $117,950.00

b

A house was listed for sale at $84,900. The seller received $71,424 after paying the broker a 7 percent commission. What was the selling price of the property? a. $76,423.68 b. $76,800.00 c. $78,957.00 d. $79,345.79

b

A vacant lot that measures 100 feet wide by 125 feet deep is listed at a price of $250 per front foot. The broker will collect an 8% commission on the sale. If the lot sells for the full asking price, how much is the broker's fee? a. $2,500 b. $2,000 c. $1,500 d. $1,250

b

Assume that the listing and selling brokers split the commission evenly. What is the sales price of a house if the listing broker received $2,593.50 and the total commission rate is 6 1/2 percent? a. $88,400 b. $79,800 c. $76,200 d. $39,900

b

How many acres are there in the property described as follows: the NW 1/4 of the SW 1/4 of the NE 1/4 of Section 16? a. 5 acres b. 10 acres c. 20 acres d. 40 acres

b

If a mortgage lender intends to yield 10 3/8% on a 30 year loan and charges 9 3/4% interest, how many points should the lender charge? a. 8 points b. 5 points c. 1/2 point d. 4 points

b

E pays 2 percent of his total gross sales volume as rent, with a minimum base rental of $1,000 per month. In the past year, his sales totaled $435,000. How much rent did he pay? a. $8,460 b. $8,700 c. $12,000 d. $20,700

c

If the borrower paid $189.06 interest last month on a $27,500 loan, what is the interest rate? a. 7 1/2 % b. 7 3/4 % c. 8 1/4 % d. 8 1/2 %

c

A buyer has deposited 10 percent of the sales price with the broker as earnest money, and the bank has agreed to lend $51,000, which is 80 percent of the sales price. How much additional funding must the buyer provide to complete this transaction? a. $5,100 b. $5,500 c. $6,125 d. $6,375

d

A custom home containing 4,320 square feet was recently constructed on a $145,000 lot. Construction costs were $80.25 per square foot, and other fees and costs totaled $12,785. What was the total cost of the property? a. $145,000 b. $346,680 c. $359,465 d. $504,465

d

A property owner wishes to net $56,500 from the sale of her small building. After paying an advertising allowance of $160 and a 7 percent commission, what must the selling price be, rounded to the nearest dollar? a. $60,455 b. $60,626 c. $60,753 d. $60,925

d

A club house construction cost $513,000. The building is 70 feet long, 50 feet wide and 12 feet high. What was the cost of this building per cubic foot?

none of the above, $6.91, $16.44, $72

How many acres are in the E 1/2 of the NW 1/4 of the SE 1/4 of the NW 1/4 of Section 38?

none of the above, 1-1/4 acres, 2-1/2 acres, 1/2 acre

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