Real Estate Math Questions (March 2023) 50

Judy is considering buying a lakefront property. She learns that a property there just sold for $550,0000, and had frontage on the lake totaling 550 feet. About how much did the property sell per front foot? $50 per front foot $1,000 per front foot $1,250 per front foot $1,500 per front foot

$1,000 per front foot For all cost/price per square foot/acre/front foot problems when converting measurements to a cost or value per unit, divide the cost/value by the unit of measurement. In real estate, front foot or the frontage is a property measurement of the front footage of a parcel of property adjoining the street or water. When a lot is described, the front feet are always given first. So in this case you have to do the following: 550,000/550 = 1,000. Meaning the price is $1,000 per front foot.

A property's market value is $250,000. The assessment rate for the house is 15% with 27.50 mills. Find the annual property taxes. $1,031.25 $1,540.75 $2,394.50 $10,312.50

$1,031.25 In this problem we have to find the annual property taxes. First off we have to find the assessed value. In order to do that we have to take the market value which is $250,000 and then multiply it by the assessment rate which is 15%. So $250,000 x .15 = $37,500. The next step is to utilize mills. The mill rate is the amount of tax payable per dollar of the assessed value of a property. So we have to multiply the assessed value by the mill rate which is $37,500 x .02750 = $1,031.25. So the annual property taxes on the property is $1,031.25

Jean buys a property and closes on March 1st. The seller prepaid the properties semi-annual taxes of $1,800. How much does Jean owe the seller in real estate taxes? $300.00 $600.00 $1,200.00 $1,800.00

$1,200.00 The first thing you want to look for is any terms specifying when, terms like annual, monthly, quarterly. Notice that the seller prepaid the taxes for the semi annually. Meaning we won't be including all of the months of the year. The only ones that matter are within that half. The first thing we do is divide $1800 by 6 to find the monthly tax payments. $1800 / 6 = $300. So $300 is the sellers monthly real estate tax. Jean closed in March. Which means the Jean owes the seller for the months of March, April, May, and June. Which is a total of 4 months. So from there all we do is multiply $300 by 4 which equals = $1,200. Jean owes the seller $1,200.

What is the price per square front foot for a 100' wide x 125' long lot that sold for $125,000? $125 per front foot $1,000 per front foot $1,250 per front foot $1,500 per front foot

$1,250 per front foot For all cost/price per square foot/acre/front foot problems when converting measurements to a cost or value per unit, divide the cost/value by the unit of measurement. In real estate, front foot or the frontage is a property measurement of the front footage of a parcel of property adjoining the street or water. When a lot is described, the front feet are always given first. So in this case you have to do the following: 125,000/100 = 1,250. Meaning the price is $1,250 per front foot.

What is the price per square front foot for a 50' wide x 100' long lot that sold for $75,000? $125 per front foot $1,000 per front foot $1,250 per front foot $1,500 per front foot

$1,500 per front foot For all cost/price per square foot/acre/front foot problems when converting measurements to a cost or value per unit, divide the cost/value by the unit of measurement. In real estate, front foot or the frontage is a property measurement of the front footage of a parcel of property adjoining the street or water. When a lot is described, the front feet are always given first. So in this case you have to do the following: 75,000/50 = 1,500. Meaning the price is $1,500 per front foot.

Utilizing the 28/36 rule, if Marty's gross income is $5,500 a month, he would need to spend less than ______ in housing costs a month to qualify for most loans. $1,200.00 $1,540.00 $1,996.00 $5,500.00

$1,540.00 The answer is $1540. According to the 28/36 rule, he would need to spend less than $1540 in housing costs a month to qualify for most loans. In 28/36 problems you multiply by .28 or .36. If its housing costs, then you multiple by .28, meaning in this problem we need to multiply by .28. So $5,500 x .28 = $1540.

A property's market value is $400,000. The assessment rate for the house is 25% with 22.75 mills and a $30,000 property tax deduction. Find the annual property taxes. $1,432.75 $1,592.50 $1,872.70 $1,995.75

$1,592.50 In this problem we have to find the annual property taxes. First off we have to find the assessed value. In order to do that we have to take the market value which is $400,000 and then multiply it by the assessment rate which is 25%. So $400,000 x .25 = $100,000. Now that we the assessed value we must subtract the deductions. So $100,000 - $30,000 = $70,000. The next step is to utilize mills. The mill rate is the amount of tax payable per dollar of the assessed value of a property. So we have to multiply the assessed value by the mill rate which is $70,000 x .02275 = $1,592.50 So the annual property taxes on the property is $1,592.50.

Jane is considering buying a lakefront property. She learns that a property there just sold for $700,000, and had frontage on the lake totaling 400 feet. About how much did the property sell per front foot? $1,500 per front foot $1,750 per front foot $2,500 per front foot $2,750 per front foot

$1,750 per front foot For all cost/price per square foot/acre/front foot problems when converting measurements to a cost or value per unit, divide the cost/value by the unit of measurement. In real estate, front foot or the frontage is a property measurement of the front footage of a parcel of property adjoining the street or water. When a lot is described, the front feet are always given first. So in this case you have to do the following: 700,000/400 = 1,750. Meaning the price is $1,750 per front foot.

James buys a property and closes on June 1st. The seller prepaid the properties annual taxes of $3,000 for the year. How much does James owe the seller in real estate taxes? $250.00 $750.00 $1,750.00 $3,000.00

$1,750.00 This is a standard proration problem. The first thing you want to look for is any terms specifying when, terms like annual, monthly, quarterly. Because the seller paid for the full year (annual) and sold the property, the buyer (James) will then owe the seller the remaining months of taxes. The first thing we do is divide $3000 by 12 to find the monthly tax payments. $3000 / 12 = $250. So $250 is the sellers monthly real estate tax. From there we look at what month closing occurs in. James closed in June. Which means the James owes the seller for the months of June, July, August, September, October, November, and December. Which is a total of 7 months. So from there all we do is multiply $250 by 7 which equals = $1,750. James owes the seller $1,750.

If a bank makes a 85% loan on a house valued at $120,000, how much cash is required at closing in the form of a down deposit if the buyer has already paid $8,000 in earnest money? $8,000.00 $8,450.00 $10,000.00 $18,000.00

$10,000.00 For starters, we have to identify what each number is in the problem. Our property value is $120,000, the bank loan or LTV is for 85%, and lastly the earnest deposit is for $8,000. With these numbers we can calculate how much is due at closing. First take 100% value - 85% LTV = 15%. Which means there is a 15% down payment. From there we have to take our property value and multiply it by our percentage. So in our case: $120,000 x 15% = $18,000. $18,000 is our total down deposit, but wait! The buyer already paid $8,000 in earnest money so you have to subtract that to find exactly how much is due at closing. So that looks like this: $18,000 - $8,000 = $10,000. Which means $10,000 is due at closing.

Timothy agrees to list his property on the condition that he will receive at least $100,000 after paying a 5% broker's commission and paying $2,500 in closing costs. At what price must the property sell for (round to nearest dollar if needed)? $100,000.00 $105,263.00 $107,895.00 $110,192.00

$107,895.00 This is a net listing. A net listing is when an owner sets a minimum amount that he or she wants to receive from the sale of the property and lets the broker keep the difference. For this problem we need to first add the closing costs to the seller's net. So $100,000 + $2,500 = $102,500. From there we have to take the sales price and subtract it by the commission percentage. So 100% sales price - 5% commission = 95%. From there do the following: $102,500 / 95% = $107,894.73 or $107,895 when rounded to the nearest dollar. That $107,895, is the price the property must sell for under the numbers and conditions given.

An agent lists a seller's house for 5% commission. The final sales price for the home is $255,000. How much commission did the seller actually pay? $5,000.00 $5,750.00 $7,750.00 $12,750.00

$12,750.00 Remember in terms of commission it is included in the sales price not in addition to. So for this problem its simply $255,000 x .05 = $12,750.

A home you listed sells for $465,000. In the transaction your broker receives 6% of the sales price and you receive 55% of their check. How much commission do you receive in this transaction? $12,555.00 $15,345.00 $25,385.00 $27,900.00

$15,345.00 First things first we have to find out how much commission the broker receives total. In order to do that we take the selling price and multiply it by the commission percentage. So in this case $465,000 x .06 = $27,900. That $27,900 is what your broker receives total. From there you receive 55% of that. So take $27,900 x .55 = $15,345. So in this transaction you receive a $15,345 commission.

During the listing agreement a commission of 6% is established. The house is sold for $2,800,000. What is the commission? $122,000.00 $144,000.00 $168,000.00 $268,000.00

$168,000.00 The formula for finding commission is pretty simple. Just times whatever percentage you have by the total price of the house. So in this case take $2,800,000 and multiply it by .06 or 6%. Doing the math that gives you $168,000.00

A lot purchased 5 years ago for $100,000 has appreciated a total of 10% since its purchase. How much per year did the property appreciate for? $1,000.00 $2,000.00 $5,000.00 $10,000.00

$2,000.00 100,000 * 1.10 = 110000 (current price) current price minus the original which gives us 10,000 which is the total it appreciated for. Then we have to divide because it's asking us per year. So 10,000 divided by 5 years = 2,000 a year. Meaning the property appreciated 2,000 per year.

A property's market value is $350,000. The assessment rate for the house is 25% with 27.50 mills. Find the annual property taxes. $1,200.00 $2,406.25 $3,679.50 $10,250.00

$2,406.25 In this problem we have to find the annual property taxes. First off we have to find the assessed value. In order to do that we have to take the market value which is $350,000 and then multiply it by the assessment rate which is 25%. So $350,000 x .25 = $87,500. The next step is to utilize mills. The mill rate is the amount of tax payable per dollar of the assessed value of a property. So we have to multiply the assessed value by the mill rate which is $87,500 x .02750 = $2,406.25. So the annual property taxes on the property is $2,406.25.

Lizzie's gross income is $7,050 a month. What is the maximum total household debt she could have to qualify for most loans (utilizing the 28/36 rule)? $1,974.00 $2,538.00 $3,679.00 $6,732.00

$2,538.00 The answer is $2538 . According to the 28/36 rule, she would need to spend less than $2,538 in total household debt a month to qualify for most loans. In 28/36 problems you multiply by .28 or .36. If its total household debt, then you multiple by .36, meaning in this problem we need to multiply by .36. So $7,050 x .36 = $2,538.

Masons gross income is $10,250 a month. To qualify for most loans, what is the maximum monthly house payment Mason can make (using the 28/36 rule)? $1,033.00 $2,870.00 $3,690.00 $10,250.00

$2,870.00 The answer is $2,870. According to the 28/36 rule, he would need to spend less than $2,870 in housing costs a month to qualify for most loans. In 28/36 problems you multiply by .28 or .36. If its housing costs, then you multiple by .28, meaning in this problem we need to multiply by .28. So $10,250 x .28 = $2,870.

The value of a property is $150,000 today. What was the original cost of the property if it has lost 25% of its value over the past ten years? $140,000.00 $200,000.00 $280,000.00 $320,000.00

$200,000.00 To find the original cost first you have to subtract 100% (total cost) by 25% (total depreciation) which gives us 75% (today's value). That means the value of the property is currently worth 75% of what it used to be. Then take today's price of $150,000 and divide it by 75% which gives us $150,000 (our original cost). The value being lost of ten years is irrelevant in this instance, as it's just asking for the original cost. Alternatively, to find your answer, you could divide the value of the property today and divide it by each option to find out which option matches 75% or .75.

You work for a broker that gives you a 50% commission on every sale you make. In a transaction your broker receives a $45,250.50 check. How much do you get in terms of commission? $2,622.53 $4,550.05 $22,625.25 $45,250.50

$22,625.25 To figure this out just multiply your commission percentage by the check received. In this case it would be .5 x 45,250.50 = $22,625.25. So $22,625.25 is what you would receive.

The value of a property is $180,000 today. What was the original cost of the property if it has lost 20% of its value over the past three years? $140,000.00 $200,000.00 $210,000.00 $225,000.00

$225,000.00 To find the original cost first you have to subtract 100% (total cost) by 20% (total depreciation) which gives us 80% (today's value). That means the value of the property is currently worth 80% of what it used to be. Then take today's price of $180,000 and divide it by 80% which gives us $225,000 (our original cost). The value being lost of three years is irrelevant in this instance, as it's just asking for the original cost. Alternatively, to find your answer, you could divide the value of the property today and divide it by each option to find out which option matches 80% or .80.

Gina buys a property in a suburb of Houston. The seller prepaid the properties quarterly taxes of $750. How much does Gina owe the seller in real estate taxes if she closes on March 1st? $187.50 $190.50 $250.00 $750.00

$250.00 The first thing you want to look for is any terms specifying when, terms like annual, monthly, quarterly. Notice that the seller prepaid the taxes for the quarter. Meaning we won't be including all of the months of the year. The only ones that matter are within the quarter. Since that's the case the seller paid for January February and March 1st - the 31st. So we divide $750 by 3 to find the monthly payment. Which is $250.00. Since the only month Gina has to pay for is march. That's our answer. Gina owes $250.00.

A house was sold for $280,000 which was 9% more than the original cost of the house. What was the original cost of the house? (Round to the nearest cent) $256,880.73 $266,980.55 $273,320.25 $275,250.57

$256,880.73 In order to find the original cost of the house we have to look at things from a different perspective. $280,000 is 100% of the current price. Add 9% to that and it gives us 109%. From there convert that into a decimal which is 1.09 and then divide the selling price with that number (Since we are looking for a smaller number). So 280,000/1.09 which equals $256,880.73. $256,880.73 was the original cost of the house.

If Amanda's gross income is $8,550 a month, she would need to spend less than ______ in total household debt a month to qualify for most loans (utilizing the 28/36 rule). $861.00 $1,555.00 $2,394.00 $3,078.00

$3,078.00 The answer is $3078 . According to the 28/36 rule, she would need to spend less than $3078 in total household debt a month to qualify for most loans. In 28/36 problems you multiply by .28 or .36. If its total household debt, then you multiple by .36, meaning in this problem we need to multiply by .36. So $8,550 x .36 = $3078 .

A property's market value is $800,000. The assessment rate for the house is 25% with 22.75 mills and a $50,000 property tax deduction. Find the annual property taxes. $1,974.50 $2,679.50 $3,412.50 $6,732.40

$3,412.50 In this problem we have to find the annual property taxes. First off we have to find the assessed value. In order to do that we have to take the market value which is $800,000 and then multiply it by the assessment rate which is 25%. So $800,000 x .25 = $200,000. Now that we the assessed value we must subtract the deductions. So $200,000 - $50,000 = $150,000. The next step is to utilize mills. The mill rate is the amount of tax payable per dollar of the assessed value of a property. So we have to multiply the assessed value by the mill rate which is $150,000 x .02275 = $3,412.50 So the annual property taxes on the property is $3,412.50.

A house was sold for $355,000 which was 8% more than the original cost of the house. What was the original cost of the house? (Round to the nearest cent) $312,293.00 $323,223.50 $328,703.70 $355,000.00

$328,703.70 In order to find the original cost of the house we have to look at things from a different perspective. $355,000 is 100% of the current price. Add 8% to that and it gives us 108%. From there convert that into a decimal which is 1.08 and then divide the selling price with that number (Since we are looking for a smaller number). So 355,000/1.08 which equals $328,703.70. $328,703.70 was the original cost of the house.

An agent lists a seller's house for 6% commission. The final sales price for the home is $555,000. How much commission did the seller actually pay? $33,000.00 $33,300.00 $37,300.00 $39,300.00

$33,300.00 Remember in terms of commission it is included in the sales price not in addition to. So for this problem its simply $555,000 x .06 = $33,300.

If a bank makes a 90% loan on a house valued at $88,500, how much cash is required at closing in the form of a down deposit if the buyer has already paid $4,000 in earnest money? $4,000.00 $4,850.00 $8,450.00 $8,850.00

$4,850.00 For starters, we have to identify what each number is in the problem. Our property value is $88,500, the bank loan or LTV is for 90%, and lastly the earnest deposit is for $4,000. With these numbers we can calculate how much is due at closing. First take 100% value - 90% LTV = 10%. Which means there is a 10% down payment. From there we have to take our property value and multiply it by our percentage. So in our case: $88,500 x 10% = $8,850. $8,850 is our total down deposit, but wait! The buyer already paid $4,000 in earnest money so you have to subtract that to find exactly how much is due at closing. So that looks like this: $8,850 - $4,000 = $4,850. Which means $4,850 is due at closing.

Assuming there are no extra fees, and the broker is representing the buyer and the seller, what was the final sales price of a property if the commission rate was 6% and the broker received $24,000. $1,440.00 $14,400.00 $144,000.00 $400,000.00

$400,000.00 The formula for finding commission is pretty simple. Just times whatever percentage you have by the total price of the house. In this case, they give us the rate and what the broker received so we have to adjust the steps. In order to find the commission, you can take $24,000 and divide it by the percentage which is .06 making your total $400,000. Alternatively, you can take the answers below and multiply each one by .06 and whichever matches the broker's commission is the correct answer.

An agent was to receive a 35% share of a 3% gross commission. The salesperson received $4,500. What did the property sell for? $400,347.42 $428,571.33 $450,542.50 $550,596.88

$428,571.33 The first thing you'll have to do is take the commission of $4,500 and divide it by the 35% share of the commission. So 4,500/.35 which equals 12,857.14 rounding to the nearest hundredth. Which is the total commission received from the sale of the property. From there since, it's asking for what the property sold for all we have to do is take that total commission received and divide it by the 3% gross commission. So 12,857.14/ .03 which equals 428,571.33.

A house was sold for $450,000 which was 2% less than the original cost of the house. What was the original cost of the house? (Round to the nearest cent) $455,200.00 $459,000.00 $460,000.00 $465,500.00

$459,000.00 In order to find the original cost of the house we have to look at things from a different perspective. $450,000 is 100% of the current price. Add 2% to that and it gives us 102%. From there convert that into a decimal which is 1.02 and then multiply the selling price with that number (Since we are looking for a larger number). So 450,000 x 1.02 which equals $459,000.00. $459,000.00 was the original cost of the house.

A property's market value is $500,000. The assessment rate for the house is 25% with 55.75 mills and a $25,000 property tax deduction. Find the monthly property taxes. $243.73 $245.75 $464.58 $5,575.00

$464.58 In this problem we have to find the annual property taxes. First off we have to find the assessed value. In order to do that we have to take the market value which is $500,000 and then multiply it by the assessment rate which is 25%. So $500,000 x .25 = $125,000. Now that we have the assessed value we must subtract the deductions. So $125,000 - $25,000 = $100,000. The next step is to utilize mills. The mill rate is the amount of tax payable per dollar of the assessed value of a property. So we have to multiply the assessed value by the mill rate which is $100,000 x .05575 = $5,575. Which is the annual property taxes. From there we have to divide by 12 to give us the monthly. So $5,575 / 12 = $464.58.

Jon buys a property and closes on March 1st. The seller prepaid the properties annual taxes of $6,000 for the year. How much does Jon owe the seller in real estate taxes? $1,000.00 $3,000.00 $4,000.00 $5,000.00

$5,000.00 This is a standard proration problem. The first thing you want to look for is any terms specifying when, terms like annual, monthly, quarterly. Because the seller paid for the full year (annual) and sold the property, the buyer (Jon) will then owe the seller the remaining months of taxes. The first thing we do is divide $6000 by 12 to find the monthly tax payments. $6000 / 12 = $500. So $500 is the sellers monthly real estate tax. From there we look at what month closing occurs in. Jon closed in March. Which means the Jon owes the seller for the months of March, April, May, June, July, August, September, October, November, and December. Which is a total of 10 months. So from there all we do is multiply $500 by 10 which equals = $5,000. Jon owes the seller $5,000.

An agent is going to receive a 50% share of a 3% gross commission. The property sold for $350,000. How much commission will the agent receive? $5,250.00 $10,500.00 $12,800.00 $15,000.00

$5,250.00 Okay so first things first we have to find the total commission received by the firm. So take 350,000 and multiply it by .03 which equals 10,500. From there we can find what the agent is going to receive by multiplying his share percentage to the total he'll receive. So 10,500 multiplied by .50 which equals 5,250. So the agent would receive $5,250.

A property's market value is $200,000. The assessment rate for the house is 45% with 65 mills. Find the annual property taxes. $548.00 $548.00 $5,250.50 $5,850.00

$5,850.00 In this problem we have to find the annual property taxes. First off we have to find the assessed value. In order to do that we have to take the market value which is $200,000 and then multiply it by the assessment rate which is 45%. So $200,000 x .45 = $90,000. The next step is to utilize mills. The mill rate is the amount of tax payable per dollar of the assessed value of a property. So we have to multiply the assessed value by the mill rate which is $90,000 x .065 = $5,850 So the annual property taxes on the property is $5,850.

Tina agrees to list her property on the condition that she will receive at least $47,300 after paying a 5% broker's commission and paying $1,150 in closing costs. At what price must the property sell for (round to nearest dollar if needed)? $47,300.00 $48,450.00 $51,000.00 $54,250.00

$51,000.00 This is a net listing. A net listing is when an owner sets a minimum amount that he or she wants to receive from the sale of the property and lets the broker keep the difference. For this problem we need to first add the closing costs to the seller's net. So $47,300 + $1,150 = $48,450. From there we have to take the sales price and subtract it by the commission percentage. So 100% sales price - 5% commission = 95%. From there do the following: $48,450 / 95% = $51,000. That $51,000, is the price the property must sell for under the numbers and conditions given.

A lot purchased 25 years ago for $40,000 has appreciated a total of 45% since its purchase. What is it worth today? $48,000.00 $49,000.00 $58,000.00 $59,000.00

$58,000.00 To find the total appreciation, multiply the original price by the total appreciation percentage (plus 100%). It should look like this: $40,000 x 145% or 1.45= $58,000. The lot is worth $58,000 today.

A lot in a subdivision is being sold for $8.00 per square foot. It is 200 feet wide and 400 feet deep. How much does the lot cost? $60,000.00 $120,000.00 $640,000.00 $920,000.00

$640,000.00 First we need to find the total square footage. To do this multiply the dimensions. So 200 ft x 400 ft which equals 80,000 ft^2. So the lot is 80,000 square feet. From there we just multiply the square feet by the price. So 80,000 x $8 = $64,000. The lot would cost $640,000.00

Newton buys a property and closes on September 1st. The seller prepaid the properties annual taxes of $2,000 for the year. How much does Newton owe the seller in real estate taxes? (Round if necessary to the nearest cent) $166.66 $500.00 $666.68 $1,750.00

$666.68 This is a standard proration problem. The first thing you want to look for is any terms specifying when, terms like annual, monthly, quarterly. Because the seller paid for the full year (annual) and sold the property, the buyer (Newton) will then owe the seller the remaining months of taxes. The first thing we do is divide $2000 by 12 to find the monthly tax payments. $2000 / 12 = $166.67. So $166.67 is the sellers monthly real estate tax. From there we look at what month closing occurs in. Newton closed in September. Which means the Newton owes the seller for the months of September, October, November, and December. Which is a total of 4 months. So from there all we do is multiply $166.67 by 4 which equals = $666.68. Newton owes the seller $666.68.

A property sells for $300,000. You handled the sale and at your firm you get 40% of what your broker receives each sale you make. In this transaction your broker received a check for $18,000. How much commission did you earn in this transaction? $7,200.00 $9,000.00 $18,000.00 $120,000.00

$7,200.00 In this question its pretty straight forward. You can disregard the fact the property sold for $300,000. Its just added information to throw you off. What matters in this problem is what your broker received a check for. In this case it was $18,000. All you have to do to find out what your commission was; is multiply the check by your percentage. So in this case the math would look like this: $18,000 x .4 = $7,200.00

Robin bought her home 5 years ago for $190,000. She sold her home last month for $199,000. How much did the house appreciate? $9,000.00 $199,000.00 $299,000.00 $389,000.00

$9,000.00 No tricks here. The home appreciated $9,000. To find total appreciation do the following: $199,000 - $190,000 = $9,000.

A property's market value is $2,250,000. The assessment rate for the house is 15% with 28.55 mills. Find the annual property taxes. (Round to the nearest cent) $6,533.55 $7,533.55 $9,635.63 $10,250.50

$9,635.63 In this problem we have to find the annual property taxes. First off we have to find the assessed value. In order to do that we have to take the market value which is $2,250,000 and then multiply it by the assessment rate which is 15%. So $2,250,000 x .15 = $337,500. The next step is to utilize mills. The mill rate is the amount of tax payable per dollar of the assessed value of a property. So we have to multiply the assessed value by the mill rate which is $337,500 x .02855 = $9,635.63. So the annual property taxes on the property is $9,635.63.

Find the annual GRM. A 4-unit building in Detroit Michigan, with an asking price of $300,000 and gross annual rents of $25,000 (Round the nearest hundredth). 12 12.22 20 22.22

12 Gross Rent Multiplier is the ratio of the price of a real estate investment to its annual rental income before accounting for expenses such as property taxes, insurance, and utilities. More specifically its a measure of the value of an investment property that is obtained by dividing the property's sale price by its gross annual rental income. The math looks like this: Gross Rent Multiplier = Property Price / Gross Rental Income. So in our case it would be 300,000/25,000 which equals 12!

Find the annual GRM. A 9-unit building in Cleveland Ohio, with an asking price of $2,000,000 and gross annual rents of $105,000 (Round the nearest hundredth). 5.25 5.26 19 19.05

19.05 Gross Rent Multiplier is the ratio of the price of a real estate investment to its annual rental income before accounting for expenses such as property taxes, insurance, and utilities. More specifically its a measure of the value of an investment property that is obtained by dividing the property's sale price by its gross annual rental income. The math looks like this: Gross Rent Multiplier = Property Price / Gross Rental Income. So in our case it would be 2,000,000/105,000 which equals 19.05!

What is the annual interest rate on a $300,000 loan that requires a monthly interest payment of $500? 2.00% 2.50% 3.00% 3.50%

2.00% Since it's monthly we must multiply $500 by 12. Which gives us $6,000 and our annual interest. From there we divide annual interest by the loan amount. $6,000 annual interest / $300,000 loan = .02 or 2% interest rate. The interest rate on the loan is 2%.

What is the interest rate on a $200,000 loan that requires an annual interest payment of $8,000? 4.00% 4.55% 5.00% 5.55%

4.00% $8,000 annual interest / $200,000 loan = .04 or 4% interest rate. The interest rate on the loan is 4%.

What is the interest rate on a $150,000 loan that requires an annual interest payment of $6,500? 3.33% 4.33% 5.33% 6.33%

4.33% $6,500 annual interest / $150,000 loan = .04333 or 4.33% interest rate. The interest rate on the loan is 4.33%.

Blake bought his home 5 years ago for $115,000. He sold his home last month for $145,000. What is the annual rate of appreciation? 5.20% 6.00% 8.20% 8.79%

5.20% The home appreciated $30,000. To find total appreciation do the following: $145,000 - $115,000 = $30,000. With the total appreciation you must divide that by the original amount. Which will look like this $30,000 / $115,000 = .26. From there you take the .26 and divide it by 5 years which equals .052 or 5.2%. Which means the annual rate of appreciation is 5.2%

A house sells for $330,000 in Albany New York. The commission check is handed to the broker which is $17,325. What was the percentage the broker received for this transaction? 5.00% 5.25% 5.50% 5.75%

5.25% In order to figure this out we can do one of two things. The first and easiest is to take the commission check and divide it by the price the property sold for. So do this: 17,325 / 330,000 = .0525 and remember .0525 is actually 5.25%. So by doing that we can say the broker received a 5.25% commission on this transaction. The second way we could solve for the percentage is take the choices below and multiple them by the price of the property and whichever option matches the check is the correct answer!

Mr. Wilson is looking for a new home. His gross income is $7,000 a month and he has no idea what he can afford as he's just moved across the state. He finds four homes he likes, each varying in price. The first home he likes costs $800 a month. The second, $1,000 a month, the third $2,225 a month, and the fourth $2,500 a month. All of the home costs are total housing costs (PITI). Utilizing the 28/36 rule, which of the following houses would Mr. Wilson most likely be able to afford? The first or second house. The first, second, or third house. The first, second, third, or fourth house. Mr. Wilson cannot afford any of the houses.

The first or second house. Using the 28/36 rule we can take Mr. Wilsons monthly income ($7,000) and multiply it by .28. That gives us $1,960. Knowing this, we can assume he can afford something under $1,960. In our instance that would be the first house ($800 a month) or the second house ($1,000 a month).