fractions and formula in real estate

the recordation tax stamp on deeds is $0.70 for each whole $100 of sales price plus $0.70 for any additional part of $100 remaining. This property is charged $825.30. What is the purchase price?

(0.7 / $100 = 0.007), then divide this by the charge on the property ($825.30 / 0.007) = $117.900). The home sold for somewhere between 117,801 and 117,900.

1 square foot = ____ square inches

144

1 mile is equal too ____ rods

320

1 chain is equal to ___ rod(s)

4

1 acre = _____ square feet

43,560 square feet

A salesperson has a 60-40 split with her broker, she gets %40. Her last sale was 50 acres that sold for $900 per acre. The commission on the vacant land was %10. What was the broker's commission after the split?

50 acres x $900 = $45,000 $45,000 x 10% (.10) = $4,500 $4,500 x 60% (.60) = $2,700 = brokers commission

1 square yard = ____ square feet

9

Closing costs were $5,000 and the brokerage fee was 5%. The sellers new was $170,750. What was the sales price?

First, 100% (base percentage) minus 5% brokerage fee = 95% $170,750 + $5000 = $175.750 175,750 / 0.95 = $185,000

a part of a whole whose denominator is always greater than its numerator

a proper fraction (example: 3/4)

A commercial building has a net income of $96,000. Assuming a cap rate of 11%, what is the value of the proeprty?

part divided rate = total $96,000 divided by 0.11 cap rate = 872,727 property value

term for occurring each year

annual

term for occurring twice a year or semiannually

biannual

term for occurring every two years

biennial

A homeowner had an appraisal on his/her house for $41,500. The seller originally bought the house for $35,275, along with additional costs and fees. The seller said he/she had gained $6225 in equity. What percentage of increase did the home owner gain?

rate = part divided by total 6,225 divided by 41,500 = 15%

An annual depreciation of $12,500 on a building costing $450,000 is an annual percentage of _____.

rate = part divided by total $12,500 / $450,000 = 0.02777 (2.78%)

property purchased 10 years ago cost $100,000, of which $65,000 was the cost of building a house. The land has appreciated at 5% of ots original value per year for the 10 year period and th ehouse has an economic life od 40 years. What is the propertys current value using the straight line method?

$100,000 - $65,000 = $35,000 $35,000 x 0.05 = $1750(appreciation) $1750 x 10 years = $17,500 $17,500 / $35,000 = $52,500 and value $65,000 / 40 years = $1,625 x 10 = $16,250 (depreciation) $65,000 - $16,250 + $52,500 = $101,250 current value

An earnest money deposit of $7000 is deposited into escrow towards the purchase of a home for 139,900. The bank will lend 80% of the sales price. How much ore will the buyer have to put into escrow as a down payment?

$139,900 sales price x 0.80 = $111,920 loan from bank $139,900 - $111,920 = $27,980 $27,980 - $7,000 = $20,980 remaining down payment

borrowing $20,000 at 10% simple interest for 2.5 years will require a payback of _____.

$20,000 x 0.10 = $2000 $2000 x 2.5 years = $5000 $20,000 + $5,000 = $25,000 payback

A building accounts for 80% of the value of a property. It is 8 years old and is depreciated over 27.5 years. If the original cost of the property was $200,000, what is the annual amount of depreciation.

$200,000 x 0.80 = $160,000 %160,000 divided by 27.5= $5,818.18

Land depreciated in value. If a $35,000 lot appreciated 2% of its original value per year for 7 years, what would be the current value of the lot?

$35,000 x 2% (.02) = $700 $700 x 7 years = $4,900 $35,000 + $4,900 = $39,900 = current value after appreciation

Mr. Buyer's monthly payment of principal and interest amounts to $264.60. His annual property tax is $780 and he pays an installment each month on a three year insurance policy that cost him a total of $594. What is the total monthly payment required of Mr. Buyer?

$780/12 months = $65 $594/3 years = $198 per year divided by 12 months = $16.50 $264.60 principal interest and payment + $65 + $16.50 = $346.10

After constructing an $80,000 house on a $35,000 lot, you depreciated it at the rate of 3.636% per year. After seven years, what is the current value of the house?

$80,000 - (($80,000 x 3.63) x 7) = $59,638.40

A six year-old building that is depreciating at the rate of 3.636% per year from its original cost of $463,000 is currently valued at ______.

0.03636 x 6 years = 0.21816 (total percentage rate) $463,000 x 0.21816 = 101,008.08 463,000 - 101,008.08 = 361,991.92 (current value)

1 mill is equal to _____ of 1 cent

0.10

1 section = ____ square mile(s)

1

16 1/2 linear ft is equal to ___ rod

1

5,280 ft is equal to

1 mile

the amount of increase in the property is 34% more than the original value of $84,800. This means you can multiply the original value by ____ to obtain the new value.

1.34 An increase in property value of 34% above the original value of $84,800 means $84,000 x 1.34 = amount of increase

90 degrees equal ____ circle

1/4

1 acre = ___ square chains

10

4 rods is equal to ___ links

100

Mary bought a home for 15% under list price. She sold it one year later at list price. Her percentage profit based on her purchase price was _____.

100% (base percentage) - 15% = 85% (percentage under listing price) 15% divided by 85% = 0.1764 or 17.6% = her profit

if you bought a lot for 20% less than the listed price and it sold for the original listed price, what percentage of profit would you make?

100% (base percentage) - 80% = 20% 20% divided by 80 = 0.25 = 25%

1 hectare is ____ acres

2.471

Depreciation on residential (lived in) property

27.5 years

1 yard is equal to ___ feet

3 ft

1 township = ___ sections

36

after selling a lot that melissa had bought for $37,000, she received a check for a 14% profit on her investment. The broker charged a 5% commission. What did the property sell for?

37,000 x 114% = 42,180 42,180 / 95% (100-5) = 44,400 sales price

depreciation on non-residential (not lived in) property

39 years

if the original cost of the property was $400,000 and the owner wants a net 15% appreciation when he/she sells it, what must the sales price be if the broker gets a 6% commission?

400,000 x 115 = 160,000 460,000 / 94 (100-6) = 489,362 = sales price

A lot was purchased for $50,000. A house costing $160,000 was built on the lot and then sold for $255,000. What was gross profit as a percent of the sales price?

50,000 + 160,000 = 210,000 then part divided by total = rate 210,000 / 255,000 = 0.823 then base percentage - 82.3 = 17.6% gross profit

1 degree equals ___ minutes

60

1 square mile = ____ acres

640

1 link is equal to _____ inches

7.92

the percentage selected for use in the income approach to valuation of improved property

capitalization rate (CAP RATE)

if you make a 25% down payment on a property valued at $135,000, and $75,000 of that is the cost of the new house, what is the depreciation per year if the property has a projected economic life of 30 years?

divide the cost of the house by the number of years of depreciation to arrive at the annual depreciation. $75,000 / 30 = $2,500

the numerator indicates

how many of the equal parts of the whole unit are being counted

one whose numerator is equal to or greater than the denominator

improper fraction (example: 4/3)

The depreciation is on ________ only, not on land.

improvements

Depreciation (appraisal)

measurement of the reduction in value of a property improvement due to its physical deterioration.

to reduce a fraction divide both the ________ by the same largest possible common even divisor.

numerator and denominator. example: 3/12 = (3/3)/(12/3) = 1/4

to change an inproper fraction to a whole number or a mixed number, divide the ______ by the ______.

numerator by the denominator. Example 4/3 = 4 divided by 3 = 1 and 1/3

if the commission for the sale of a vacant lot that sold for $22,000 was $1,980, what was the commission rate?

rate = part/total $1,980/$22,000 = 0.09

when the numerator and the denominator cannot be divided evenly by a common number the fraction is in its _______.

simplest form

depreciation for tax purposes applies to:

structures and improvements or business items

the denominator always indicates

the total number of equal parts in a whole unit