Mississippi Real Estate License Law and National License Math

A house is sold for $105,500 and the commission rate is 6 percent. If the commission is split 60/40 between the selling broker and the listing broker, respectively, and each broker splits his share of the commission evenly with his salesperson, how much will the listing salesperson receive from this sale?

$1,266

An apartment's rent is scheduled to increase by 4.4%. If the current rent is $1,255, what will the new rent amount be?

$1,310

If a corporate building has nine office suites that rents for $14,800 per month each, but suffers from a 14% vacancy rate and annual expenses of $21,100, what is the NOI of the building (round to the nearest $100)?

$1,353,500

Assuming the FHA qualifies borrowers based on a 31% debt ratio, if a borrower's monthly gross income is $4,400, what monthly payment for housing expenses can this person afford based on this ratio?

$1,364

A $140,000 property sells at a 5% commission with a 50-50 co-brokerage split and a 60% agent split with the employing broker. How much would the employing broker receive in this transaction (assuming an agent was involved)?

$1,400

If a house sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for $38,600, how much money would be paid in discount points if the lender charged four points?

$1,544

Christine has monthly loan payments of $1,857. Her loan is for $300,000 @ 6.3% interest. How much of her first payment goes towards interest?

$1,575

A loan applicant has an annual gross income of $76,000. How much will a lender allow the applicant to pay for monthly housing expense to qualify for a loan if the lender uses an income ratio of 30%?

$1,900

If the roof a property cost $14,000 and its economic life is 18 years, what would its value be after four years using a straight-line method of depreciation?

$10,889

The minimum requirements of errors and omissions insurance are ____ per claim, ____ deductible per claim for damages, and ____ deductible per claim for defense costs.

$100,000 per claim; $2,500 deductible for damages; $1,000 deductible for defense.

A strip mall generates $215,000 in effective rental income and $3,000 in other income. The same mall has $102,000 in operating expenses and $15,000 as reserves. What is the net operating income of the strip mall?

$101,000

A home sells for $125,000 in United County. The agent's commission is 7.4%, and the mortgage balance is $98,000. The seller has $5,900 in other closing costs. If the seller pays all of these expenses, what will she net at closing?

$11,850

An office building has NOI of $110,000, interest expense of $47,000 and annual depreciation of $16,000. Assuming a 28% tax bracket, what is its income tax liability?

$13,160

A home seller wants to net $15,000. If he has agreed to pay a 5% commission, the loan payoff is $94,000 and closing costs are $16,000, what must the minimum listing price be? Round to the nearest $100.

$131,600

If a borrower's monthly interest payment on an interest-only loan at an annual interest rate of 7.3% is $877, how much was the loan amount (rounded to the nearest hundred)?

$144,200

An FHA-insured loan in the amount of $57,500 at a 6 ½% interest rate for 30 years was closed on March 17. The first monthly payment is not due until May 1. If the interest is paid monthly in arrears, how much pre-paid interest does the buyer owe at closing? (Use a 360-day year)

$145.32

A borrower obtains a 30-year $210,000 amortized loan at a 6% interest rate. If his monthly payment is $1199.10, how much is applied to the principal balance in the first month?

$149.10

Land sells for $9,000 an acre. What will 750,000 SF of land sell for? Round to the nearest thousand.

$155,000

Assuming that the listing broker and the seller broker in a transaction split their commission equally, what was the sales price of the property if the commission rate was 6 ½ percent the listing broker received $5,187?

$159,600

The subject property does not have a pool or a screen porch. A comparable that sold for $205,000 has a $1,000 screen porch, one more $2,500 half-bathroom, and a $6,000 pool. Assuming all else is equal, what is the adjusted value of the comparable?

$195,500

The owner of a $200,000 property decided to buy a new $15,000 roof (which added no value to the property). The economic life of the roof is 12 years. Assuming the straight-line method of depreciation, what is the depreciated value of the property (attributable to the roof) after 2 years?

$197,500

The taxes on a property were $4,800. The closing took place on June 15th. What is the seller's share of the taxes? Use the 30-day/12 month method to derive your answer and assume the seller owns on the day of closing.

$2,200

A tax rate on a building with a $530,000 taxable value is 4.5 mills per thousand dollars of assessed valuation. What is the annual tax liability?

$2,385

A sale transaction on rental property closes on December 10th. The landlord received the December rent of $4,400 on December 1. Assuming the closing day is the seller's, and that the 360-day method is used for prorating, how much will the seller owe the buyer?

$2,933

A lender determines that a homebuyer can afford to borrow $160,000 on a mortgage loan. The lender requires an 80% loan-to-value ratio. How much can the borrower pay for a property and still qualify for this loan amount?

$200,000

The subject has $8,000 pool and a $2,000 chimney but no porch. A comparable that sold for $199,000 has a $3,000 porch but no pool or chimney. Assuming all else is equal, what is the adjusted value of the comparable?

$206,000

A property is being appraised by the cost approach. The appraiser estimates that the land is worth $17,000 and the replacement cost of the improvements is $235,000. Total depreciation from all causes is $23,000. What is the indicated value of the property?

$229,000

A property's return on equity ratio is 28% and generates a cash flow of $70,000. How much equity does the owner have (to the nearest hundred)?

$250,000

Ginnie has an interest-only home equity loan at an annual interest rate of 7%. If her monthly payment is $1,458, how much is the loan's principal balance?

$250,000

A homeowner bought a house one year ago for $250,000. Since then, the homeowner has spent $4,000 to pave the driveway and has added a screen porch at a cost of $3,000. Total depreciation has been $6,000. What is the homeowner's adjusted basis?

$251,000

A lender determines that a homebuyer can afford to borrow $220,000 on a mortgage loan. The lender requires an 85% loan-to-value ratio. How much can the borrower pay for a property and still qualify for this loan amount (to the nearest $1,000)?

$259,000

A fine jewelry store leased a space at the mall with a base rent of $1,800 a month, plus 4% of all sales over $200,000. If the gross sales were $325,000, what was the total amount of rent paid by Heinz Fine Jewelry at the end of the year?

$26,600

A building generates $103,000 in effective rental income and $900 in vending machine income. The same complex has $40,700 in operating expenses and $36,000 in debt service payments. What is the pre-tax cash flow of the complex?

$27,200

Chloe wants to net $50,000 on her house. Her closing costs will be $8,000 plus a 7% commission. She owes $200,000 on her loan. What is the minimum contract price that she can accept for her property?

$277,419

Ralph is buying Terry's house. The buyer's loan amount is $105,580. If the buyer has agreed to pay 3 points at closing, how much will he pay for the points?

$3,167

Agent Daisy agrees to a 5% commission to list a home at $330,000. The property is sold through another cooperating brokerage with that firm to receive 50% of the total commission on the $330,000 sale. If Daisy receives 55% of her broker's commission and does not bring the buyer, how much does Daisy's broker receive from the sale?

$3,712.50

A buyer secured a $125,000 loan at 4.5% interest rate. To receive a lower interest rate, the buyer was required to buy down three discount points. How much were the discount points?

$3,750.00

Brendan's property taxes are being calculated for county and school taxes. School taxes are 6 mills and county taxes are 5 mills. How much will Brendan pay in taxes if his property's taxable rate is $350,000?

$3,850

Seller Jones signed an exclusive right to sell listing on her home with Muller Realty for $155,000 at a commission rate of 5% to be paid to broker Muller at closing. As part of the agreement, broker Muller will split the commission equally with any other broker that can bring a buyer for Jones' property. If another broker sold the property, how much will broker Muller receive?

$3,875

Cheryl rents a 1400 sf storefront where her rent is $2.00 a sf. per month. Her lease calls for a 5.5% additional rent for annual sales over $100,000. She made $145,000 last year. What is her annual rent?

$36,075

A home sells for $150,000 and has a mortgage loan balance of $100,000 at closing. If the commission is 5% and other closing costs are $6,000, what is the seller's net?

$36,500

If the monthly rent of a property is $4,000, and the Gross Rent Multiplier (GRM) is 91, what is the value of the property?

$364,000

A property is being appraised using the income capitalization approach. Annually, it has an estimated gross income of $48,000, vacancy and credit losses of $3,600, and operating expenses of $15,000. Using a capitalization rate of 8%, what is the property's value (rounded up to the nearest $1,000)?

$368,000

An apartment complex generates $778,000 in effective rental income and $7,000 in other income. The same complex has $378,000 in operating expenses and $12,000 as reserves. What is the net operating income of the complex?

$395,000

A homeowner receives a tax bill that includes an amount for the school district, taxed at $9.00 per $1,000, and the fire protection district, taxed at $3.00 per $1,000. How much does the taxpayer have to pay for these two items if the property's taxable value is $336,000?

$4,032

Seller David requires a 4% deposit on all offers. Buyer Jack wants to offer $115,000 for the property. The property was appraised at $122,000. What must the earnest money deposit be if Jack presents his current offer?

$4,600

Six years ago a commercial property owner paid $490,000 for her complex which included 10 acres of land valued at $100,000. Using a 40-year straight-line depreciation method, what would be the current value of the apartment complex?

$431,500

A home buyer pays $1,800 / month for the interest-only loan on his new house. The loan's interest rate is 6%. If he obtained a 80% loan, what was the purchase price?

$450,000

Debra wants to net $100,000 on her house. Her closing costs will be 15,000 plus a 6% commission. She owes $310,000 on her loan. What is the minimum listing price that Debra can agree to?

$452,127.66

Steve is buying Darryl's house for $360,000. Steve's loan amount is $275,000. He has agreed to pay 2 points at closing. How much will Steve pay for points?

$5,500

A property currently valued at $450,000 is expected to appreciate 8% each year for the next 3 years. What will be its appreciated value at the end of this period?

$566,870

A seller wants to net $55,614 from the sale of her house after paying a 7% commission. Her minimum sales price will have to be?

$59,800

A sale transaction closes on April 15th. The day of closing belongs to the seller. Real estate taxes for the year, not yet billed, are expected to be $2,110. According to the 365-day method, what is the seller's share of the tax bill?

$607

A seller of a property, listed at $200,000, accepted a 90% offer. The home appraised at $185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest. What is the first month's interest?

$637.50

The annual property taxes of $1,700 were paid in arrears by the buyer. If the closing took place on June 4th and the seller was responsible through the day of closing, how did this appear on the settlement sheet if the 360-day method is used?

$727 DS, CB

An apartment complex generates $335,000 in effective rental income and $2,500 in other income. The same complex has $144,000 in operating expenses and $116,000 in debt service payments. What is the pre-tax cash flow of the complex?

$77,500

A property's value is $400,000 and its land value is $75,000. Assuming a depreciation term of 39 years, what is the amount of annual depreciation?

$8,333

If a hotel has an annual Net Operating Income of $812,000 at a 9.35% cap rate, what is its current value (to the nearest thousand)?

$8,684,000

A borrower obtained an 70% loan for $600,000. What was the price of the home (to the nearest thousand)?

$857,000

Two parcels of land priced at $1,500 per acre were purchased. One parcel was 25 acres in size and the other was 1 mile square in size. How much did these two parcels cost together?

$997,500 1 mile = 640 acres 640 + 25 = 665 665 x 1,500 = 997,500

A condominium unit has $30,000 net income and sold for $500,000. What was the rate of return?

0.06

A commercial property sold recently for $620,000. The property had an NOI, or net income, of $45,000. What was the capitalization rate at which this property sold?

0.072

What is 25% converted to a decimal?

0.25

An investor just purchased a rectangular 1-acre retail lot for $250 a frontage foot. If she paid $100,000 total, what was the depth of the lot?

109 feet 100,000 / 250 = 400 1 acre = 43,560 s/f 43,560 / 400 = 109 feet

John bought an odd-shaped lot that was 100 feet deep, but the front footage was 160 feet and the length of the back side of the lot was 80 feet. What is the square footage of his lot?

12,000 SF

How many acres are there in the N ½ of the NE ¼ and the NE ¼ of the SE ¼ of a section?

120 acres

If a square-shaped lot measures 125' on one side, what is the square footage of the lot?

15,625 square feet

All licensees are required to complete ____ hours of continuing education in each licensing period.

16 hours

Jerry recently obtained an 65% loan on his $295,000 home, and he had to pay $4,300 for points. How many points did he pay?

2.2 points

If an investor wants to combine a 3/4 acre parcel with a 1.6 acre parcel, how big will the parcel be, expressed as a decimal?

2.35 acres

If a lot contains 48,000 square feet and is 240' wide, how deep is the lot?

200'

If a buyer purchases 25% of a lot in the spring and then purchases 50% more later in the fall, what percentage of the lot is still available for purchase?

25%

A five-sided lot has the following dimensions: side A = 44', side B = 67', side C = 91', side D = 18', and side E = 55'. What is the perimeter of the lot?

275 feet

For how long must a principal broker keep records?

3 years

Stacey owns a lot that has 180 feet of front footage and contains 36,000 square feet. He purchases two identically-sized lots adjacent to each side of his lot. These side lots are each 200 feet deep and each side lot contains 19,000 square feet. What is the total front footage of all three lots?

370

Jamie Spiffup advised her clients they needed to paint their living room before showing the property. The walls of these rooms were all 10' high. The wall lengths were 16', 20', 16', and 20'. If a gallon of paint covers 200 SF, how many whole gallons would the sellers have to buy?

4 16' x 10' = 160 SF 20' x 10' = 200SF 160 + 200 = 360SF 360 SF x 2 = 720 total SF 720 / 200 = 3.6 gallons round up - 4 gallons

If a borrower had an interest rate of 5 1/4 percent and refinanced, lowering the interest rate by 3/8 percent, what is the amount of interest after refinancing?

4 7/8 percent

A home costing $540,000 is worth $588,000 two years later. What is the one-year appreciation rate?

4.4%

If an investor wants to combine a 5/8 acre parcel with a 3.9 acre parcel, how big will the parcel be, expressed as a decimal?

4.525 acres

What is 0.0475 converted to a percentage?

4.75%

A house sells for $237,000. What would Jane's commission rate be as a percent if she received a check for $11,400?

4.8%

A home appreciated 8.2% one year, then 2.4% the next year, then 7.2% the third year. What was the average annual rate of appreciation over the 3-year period?

5.93% (8.2 + 2.4 + 7.2)/3 = 5.933%

If a rectangular house is 50 feet wide and contains 2,500 sq/ft, what is its depth?

50'

A shopping mall grosses $625,000 / month. If the market value of this property is $52,000,000, what is its Gross Income Multiplier (GIM)?

6.9

An apartment building has $105,000 net income and sold for $1,450,000. What was the rate of return?

7.2%

An apartment building that sold for $900,000 had annual gross income of $124,000. What was its Annual Gross Income multiplier?

7.3

If one discount point costs the borrower 1% of the loan amount, and increases the lender's yield by 1/8th of one percent, how many discount points must be purchased to lower the interest rate by 1%?

8

A $150,000 loan has monthly interest-only payments of $1,000. Its annual interest rate is

8 percent.

A town has a tax base of $74,000,000 and a budget of $600,000. What is the tax rate in terms of mills?

8.1 mills

Amy agreed to a contract price of $100,000 for a home and secured a mortgage loan for $80,000. If the appraised value is $110,000, what is the loan to value ratio?

80%

Seller Trevor receives an offer of $181,000 on a property he listed at $193,000. The property has been appraised at $198,000. How much is the offer as a percent of the listing price?

93.8%

An apartment building that sold for $780,000 had a monthly gross income of $8,000. What is its monthly gross rent multiplier?

97.5

A buyer will receive a utilities bill for an estimated $400 at the end of the month. At closing, the seller has used an estimated $100 of the bill. What should appear on the closing statement?

A credit to the buyer for $100 and debit to the seller for $100

Regarding disclosure of the square footage of a property for sale, which is TRUE?

A real estate licensee has no duty to the seller or buyer to conduct an independent investigation of the square footage of a property.

If an item is paid in arrears, use

Seller Days

Is a broker required to tell his client that he is depositing the client's escrow money into an interest-bearing account under the IREBEA program?

If the amount is nominal or will only be held for a short period, a broker need NOT disclose this information.

What is the number one rule of adjusting properties when using the sales comparison approach to value?

Never adjust the subject property

Broker Michael has been a real estate broker for the past ten years but is not a licensed attorney. Can he give legal advice to his real estate clients?

No, only if he was a licensed attorney.

Who is responsible for licensing real estate agents in Mississippi?

The Mississippi Real Estate Commission

During which of the following property transactions are the property disclosure requirements NOT applicable?

Transfer by foreclosure sale