math quiz
A seller agrees to pay a listing broker a 7% commission on the first $100,000 of the sale price plus 5% commission on any portion over $100,000. If the listing broker was paid a $39,500 commission, what was the sale price of the property?
Commission earned on first $100,000: $7,000 ($100,000 X .07) $39,500 gross commission less $7,000 = $32,500 commission on remainder. $32,500 / .05 = $650,000. $650,000 excess + $100,000 base = $750,000. The correct answer is: $750,000.
A salesperson pays the broker a desk fee of $600 income per month and earns a commission of 1.5% for each side (buyer or seller) of a transaction which the salesperson represents. If the salesperson has a goal of netting $9,000 per month, the salesperson would have to have "sides" totaling _____ to achieve this objective.
Since the salesperson must pay a $600 desk fee, the salesperson must gross $9,600 to meet his monthly goal. To answer this question, divide the goal by the commission rate earned to arrive at the total sides necessary. $9,600 divided by 0.015 = $640,000. The correct answer is: $640,000.
A salesperson sells property, listed by another broker, for $84,500. If the listing broker is to receive 50% of the 6% commission, how much will the salesperson receive if he earns 40% of his broker's share?
Solution: $84,500 (sales price) X 6% = $5,070 total commission. $5,070 X 50%= $2,535 to selling broker. $2,535 X 40% = $1,014 to salesperson. The correct answer is: $1,014
Annual taxes on a home are $2,800. The home is sold with a closing date of April 10th. The property taxes are based on a fiscal year from July 1 through the following June 30th. They are paid in one installment which is due on January 1st. Assume actual days, 365-day years and that the seller is responsible for the closing date. What will be the tax proration at settlement?
The seller will have paid the taxes for the year on January 1st. The buyer will pay the seller for the taxes from April 11th (the day after the settlement date) through June 30th. The daily rate is $7.6712 ($2,800 divided by 365). There would be a total of 81 days of taxes paid by the buyer. (April 30 - 10 = 20 days + 31 days for May and 30 days for June). 81 days times $7.6712 = $621.37 which the buyer will pay to the seller. The correct answer is: Buyer pays the seller $621.37.
The real estate taxes for the calendar year are $1,290 and have been paid. The property sells and closing takes place on June 10. When the taxes are prorated, which of the following is the correct settlement sheet entry?
$1,290 annual taxes / 360 days (30 day months) = $3.58 per day. The seller is entitled to a credit from closing to the end of the year. June 10 to June 30 = 21 days. July to December= 6 months x 30 days = 180 days + 21 days = 201 days. $3.58 x 201 days = $719.58 credit to seller. The correct answer is: $719.58 credit to the seller
A salesperson sells a property for $600,000. The property was listed by another broker. If the listing broker gets 50% of the 7% gross commission, what will the salesperson receive if her share is 40% of her broker's commission?
$600,000 sales price X .07 = $42,000 gross commission. $42,000 X .50 = $21,000 to each broker. $21,000 X .40 = $8,400 share for the salesperson. The correct answer is: $8,400.
If the seller of a house agrees to pay the broker a 6% commission on the first $10,000 and 3.5% commission for all money received over that amount, what was the sale price of the house if the broker collected $946.50 in commissions?
Commission earned on 1st: $10,000 = $600.00 ($10,000 X .06). Total commission: $946.50 - 600 = $346.50 commission on remainder. $346.50 / .035 = $9,900 + $10,000 = $19,900 sale price. The correct answer is: $19,900
Annual taxes on a home are $1,800. The home is sold with a closing date of August 21st. Property taxes are based on a calendar year but are paid in one installment on July 1st. Assuming a 30-day month, 360-day year, and the buyer paying for settlement date, what would be the proration at settlement?
The seller will have paid the full tax bill on July 1st. The buyer owes the seller for the taxes from the settlement date (August 21) through December 30. (We are using 30 day months.) September through December would be 4 months, times 30 would be 120 days. There are 10 days to be paid for August, for a total of 130 days. The daily tax rate is $1,800 divided by 360 days, a result of $5 per day. 130 days times $5 is $650. The correct answer is: Buyer pays the seller $650
The taxes on a house are $1,260 per year. The taxes are due on January 1 and are paid by the owner. What refund would the owner be entitled to if he sold the house and the taxes were prorated as of September 15? (Assume 30-day months, 360-day years and the buyer pays for settlement date.)
$1,260 divided by 360 = $3.50 daily rate. Days in September = 16 (30 -14). October-December = 90 (3 months X 30 days). Total days: = 106. 106 days X $3.50 = $371.00. The correct answer is: $371.00
If a salesperson is paid a salary of $200 and earns a 3% commission on all sales, how many dollars' worth of real estate would he have to sell in a month to make $750?
$750 desired income - $200 salary = $550 earned in commissions. $550 / .03 = $18,333. The correct answer is: $18,333
Annual taxes of $2,160 have been paid. The property sells and closes on August 15. What is the settlement sheet entry to prorate the taxes?
Annual taxes have been paid, therefore the seller gets a credit. $2,160 annual taxes / 360 days = $6.00 per day. Aug 15 to Aug 30 = 16 days + 120 days (4 months) = 136 days. $6.00 x 136 days = $816 credit to the seller. The correct answer is: $816 Buyer Debit $816 Seller Credit
Annual taxes on a home are $3,200. The home is sold with a closing date of November 15th. The property taxes are based on a fiscal year from July 1 through the following June 30th. They are paid in one installment which is due on January 1st. Assume actual days, 365-day years and that the seller is responsible for the closing date. What will be the tax proration at settlement?
The buyer will pay the full tax bill on January 1st. The seller must pay the buyer for the taxes from July 1 through November 15, a period of 138 days (31 for July + 31 for August + 30 for September + 31 for October and 15 days of November). The daily rate is $8.7671 ($3,200 divided by 365 days). 138 times $8.7671 is $1,209.86 which the seller must pay the buyer. The correct answer is: Seller pays the buyer $1,209.86.
Annual taxes on a home are $2,400. The home is sold with a closing date of March 18th. Property taxes are based on a calendar year but are paid in one installment on July 1st. Assuming a 30-day month, 360-day year, and the buyer paying for settlement date, what would be the proration at settlement?
The buyer will have to pay the full tax bill on July 1st. The seller will therefore owe the buyer for the taxes from January 1 through March 17th (the day before settlement, since the buyer pays for settlement date). This would be 77 days (30 + 30 + 17). The daily rate would be $2,400 divided by 360 days, for a figure of $6.6667. 77 days X $6.6667 is $513.33 which the seller would pay the buyer. (If your answer was just a few cents off, the difference is a rounding error, just pick the closest choice.) The correct answer is: Seller pays the buyer $513.33.
Annual taxes on a home are $1,200. The home is sold with a closing date of May 22. The property taxes are based on a calendar year with one installment due July 1. Assume 30-day months, 360-day years and the buyer pays for the closing date. What would be the proration of these taxes?
The buyer will pay the full tax bill on July 1st. The seller must pay the buyer for the period from January through May 21, a total of 141 days (4 months X 30 days plus 21 more days for May). The daily tax comes to $3.3333 ($1,200 divided by 360). 141 times $3.3333 = $470 which the seller must pay to the buyer. The correct answer is: Seller pays buyer $470.
Annual taxes on a home are $2,100. The home is sold with a closing date of September 10. The property taxes are based on a calendar year with one installment due July 1. Assume 30-day months, 360-day years and the buyer pays for the closing date. What would be the proration of these taxes?
The seller will have paid the taxes for the full year on July 1. The buyer will have to pay the seller for the period from September 10 through December, a total of 111 days (21 days for September plus 90 for October through December). The daily rate is $5.8333. 111 times $5.8333 = $647.46 which the buyer must pay the seller. (The 4 cent difference with the correct answer is caused by a rounding error - pick the closest choice. The correct answer is: Buyer pays seller $647.50.