quiz bank math questions
A seller sold his home and agreed to a June 16, 20XX, closing date. The last day for which interest was paid on the $105,500 remaining balance of the 8%, 30-year conventional mortgage was April 30, 20XX. If the total monthly mortgage payment was $774.14, what amount of prorated mortgage interest would appear on the closing statement as a debit to the seller? (Use the 365-day method of proration and charge the day of closing to the buyer.)
The answer is $1,063.52. Seller owes 31 days in May + 15 days in June = 46 days; $105,500 mortgage balance × .08 = $8,440 ÷ 365 = $23.12 interest per day; $23.12 × 46 days = $1,063.52 debit.
An investor is considering the purchase of an office building. The building has four rentable offices. The operating expenses are $30,000 per year. The investor has $150,000 to invest that she wants to receive a 20% return. What monthly rent must she charge per office to get the desired return?
The answer is $1,250. $150,000 investor funds × .20 return = $30,000 income needed; $30,000 + $30,000 operating expenses = $60,000 total needed; $60,000 ÷ 12 months = $5,000 per month needed; $5,000 ÷ 4 units = $1,250 monthly rent per unit.
A home has been assessed by the county property appraiser at $116,000. The property is homesteaded. The city, county, and school board district each charge 10 mills for a total millage rate of 30 mills. How much is saved by the homestead exemption?
The answer is $1,250. $25,000 × .030 mills = $750 savings; $25,000 × .020 mills = $500 savings; $750 + $500 = $1,250 total savings.
A lot is 180' × 225'. The city is assessing all lot owners on the street based on $24 per foot for paving. The city has agreed to pay 30% of the paving cost. What is the paving assessment for this lot?
The answer is $1,512. 180 ft. × $24 per foot = $4,320 total paving cost; 180 ft. × .70 = $3,024 total private share; $3,024 ÷ 2 = $1,512 owner's side of street.
The county property appraiser has assigned an assessed value of $117,500. The property is homesteaded. The county charges the following millage rates: city 10 mills, county 10 mills, and school district 6 mills. Calculate the property taxes.
The answer is $1,905. $117,500 assessed value - $50,000 homestead exemption = $67,500 taxable value; $ 67,500 × .026 mills = $1,755 taxes due; $25,000 additional exemption × .006 school board mills = $150 additional taxes due; $1,755 + $150 = $1,905 total taxes due.
An ARM loan was written for $100,000 at an initial interest rate of 8% for 30 years with first-year principal and interest payments of $734 per month. The loan agreement provides for a 15% increase in monthly payment amounts at the end of each year during the first three years. If the allowed increases are made, how much will the annual mortgage expense amount be for the third year (rounded down to the nearest cent)?
The answer is $11,648.58. $734 P&I year 1 × 1.15 = $844.10 P&I year 2; $844.10 × 1.15 = $970.715 × 12 months = $11,648.58 annual mortgage expense year 3.
The seller wants to net $100,000. If the broker wants to earn 6% commission, and the seller's closing costs are estimated at $5,000 (not including commission), for what price must the property sell?
The answer is $111,702. $100,000 net to seller + closing costs = $105,000; 100% - commission rate = .94; $105,000 ÷ .94 = $111,702.13 (round to $111,702) sale price.
The documentary stamp tax charged for a property is $825.30. Calculate the purchase price.
The answer is $117,900. $825.30 doc stamps ÷ $.70 = $1,179; $1,179 × $100 increments = $117,900 purchase price.
The broker agreed to pay his sales associate 45% of the total commission. The property sold for $320,000, and the commission rate was 7%. The property was sold "in house." What was the broker's share of the commission?
The answer is $12,320. $22,400 total commission; 100% - .45 sales associate split = .55 broker's split; $22,400 × .55 = $12,320 broker's commission.
An office that measures 20' × 40' rents for $840 per month. The annual rent per square foot is
The answer is $12.60. $840 monthly rent × 12 months = $10,080 annual rent; $10,080 ÷ 800 sq. ft. = $12.60 per sq. ft.
A buyer paid a state intangible tax of $248 on a $155,000 home. What was the mortgage loan amount, and how much was the state documentary stamp tax on the note?
The answer is $124,000 loan amount; $434.00 documentary stamp taxes on the note. $248 ÷ .002 rate = $124,000 loan amount; $124,000 note ÷ $100 increments = 1,240 taxable increments; 1,240 × $.35 = $434.00 documentary stamp taxes on note.
A single-family residence is available for listing. A comparable home recently sold for $140,000. Compared with the subject property, the comparable has a superior location ($12,500), is smaller ($8,000), and is three years older ($5,000). What is the subject property's value based solely on the information given?
The answer is $140,500. $140,000 sale price - $12,500 location + $8,000 size + $5,000 age = $140,500 adjusted sale price.
Closing date is July 8. The buyer is assuming the seller's mortgage loan that has a principal balance of $217,500 at 3.5% interest. The day of closing is charged to the buyer. What is the proration and how is it entered on the Closing Disclosure?
The answer is $145.99 debit seller; $145.99 credit buyer. $217,500 mortgage loan × .035 = $7,612.50 annual interest; $7,612.50 ÷ 365 = $20.856164 daily rate of interest; $20.856164 × 7 days = $145.99 debit seller; $145.99 credit buyer.
A landlord owns a 1,800-square-foot rental house that she rents for $.70 per square foot per month. If the GRM (monthly) for that property is 120, what is the market value of the property?
The answer is $151,200. 1,800 sq. ft. × $0.70 = $1,260 monthly rent; $1,260 rent × 120 GRM = $151,200 market value.
An apartment building has eight units, each of which rents for $475 per month. A vacancy rate of 10% persists year after year. Total operating expenses average $1,875 per month. If a capitalization rate of 12% is appropriate, what is the market value of the property?
The answer is $154,500. $475 rent × 8 units × 12 months = $45,600 PGI; $45,600 × .10 = $4,560 vacancy loss; $45,600 - $4,560 = $41,040 EGI; $41,040 EGI - $22,500($1,875 × 12 months = $22,500 operating expense) = $18,540 NOI; $18,540 NOI ÷ .12 cap rate = $154,500 market value.
What is the net operating income for a property that produces a potential gross income of $26,750, has fixed operating expenses of $8,350, has a mortgage payment of $11,100, and has a reserve for replacements of $450?
The answer is $17,950. $26,750 PGI - ($8,350 fixed expense + $450 reserves); $26,750 PGI - $8,800 operating expense = $17,950 NOI.
What is the net operating income of a building if the operating expenses are $8,350, the effective gross income is $26,750, and the mortgage payment is $11,100?
The answer is $18,400. $26,750 EGI - $8,350 operating expense = $18,400 NOI.
An investor, who owns an eight-unit apartment building, spent $2,400 on improvements. How much should the monthly rent on each apartment be increased if this expense is to be recovered by the owner in just one year?
The answer is $25. $2,400 ÷ 8 apartments ÷ 12 months = $25 rent increase.
An investor owns a business property with a value of $1,500,000. The market capitalization rate is 8%. Operating expenses total 30% of potential gross income. The investment is leveraged with a $1,250,000 mortgage. What is the investor's equity?
The answer is $250,000. $1,500,000 value - $1,250,000 mortgage = $250,000 equity.
A homesteaded property is located in Jacksonville, Florida, in Duval County. The city tax rate is 8.1 mills, the county tax rate is 8.9 mills, and the school district tax rate is 5 mills. The homeowner is a blind widow and has qualified for homestead exemption. The home has been assessed at $199,000. What MUST the homeowner pay in property taxes?
The answer is $3,381. $199,000 assessed value ‒ $25,000 base homestead exemption ‒ $500 survivor exemption ‒ $500 blind exemption = $173,000 taxable value for school taxes; $199,000 assessed value ‒ $50,000 base homestead exemption ‒ $500 survivor exemption ‒ $500 blind exemption = $148,000 taxable value for city and county taxes; $173,000 taxable value × .005 = $865 school taxes; 8.1 mills city + 8.9 mills county = 17 mills = .017; $148,000 taxable value × .017 = $2,516 city and county taxes; $865 + $2,516 = $3,381 total taxes due.
If two brokers split the 7% commission 50/50 on a property that sold for $98,400, how much did each receive?
The answer is $3,444 .$98,400 × .07 = $6,888 total commission; $6,888 ÷ 2 = $3,444 each broker's share.
A homeowner originally purchased a new home for $249,000. During the period of ownership, the homeowners spent $21,000 in capital improvements. The homeowners sold the home 15 years later for $325,000. The homeowners paid a brokerage fee of 6% of the sale price and paid out-of-pocket closing costs totaling $3,500. What is the homeowners' capital gain from the sale?
The answer is $32,000. $325,000 × .06 = $19,500 broker commission; $325,000 - $19,500 - $3,500 closing costs = $302,000 amount realized from sale $249,000 purchase price + $21,000 capital improvements = $270,000 adjusted basis; $302,000 - $270,000 = $32,000 capital gain.
The loan-to-value ratio offered by a local financial institution is 75%. If a buyer wishes to acquire a lot selling for $129,500, the buyer will need to make a down payment of
The answer is $32,375. $129,500 sale price × .25 = $32,375 down payment.
If a parcel described as the S½ of the SW¼ of Section 21 sold for $4,000 per acre, its sale price was
The answer is $320,000. 640 acres per section ÷ 4 ÷ 2 = 80 acres; 80 acres × $4,000 per acre = $320,000 sale price.
An appraiser has assigned the following weights to three adjusted sale prices: Comparable 1: $334,500―45% weight Comparable 2: $327,500―35% weight Comparable 3: $317,900―20% weight What is the reconciled estimated market value of the subject property?
The answer is $328,730. $334,500 × .45 = $150,525; $327,500 × .35 = $114,625 $317,900 × .20 = $63,580; $150,525 + $114,625 + $63,580 = $328,730.
Based on the following, what is the estimated market value of a lot 100' × 110' in the Cove Hill Subdivision? Comparable Sales Data Sale 1: lot 100' × 120' adjacent to subject lot, sold one week ago for $36,720 Sale 2: lot 100' × 100' located four blocks away, sold three months ago for $29,800 Sale 3: lot 110' × 110' located on same street, four lots removed, sold two weeks ago for $36,800 Sale 4: lot 90' × 110' across the street, sold one month ago for $29,700
The answer is $33,220. Sale 1: $36,720 ÷ (100' × 120' = 12,000 sq. ft.) = $3.06 per sq. ft.; Sale 2: $29,800 ÷ (100' × 100' = 10,000 sq. ft.) = $2.98 per sq. ft.; Sale 3: $36,800 ÷ (110' × 110' = 12,100 sq. ft.) = $3.04 per sq. ft.; Sale 4: $29,700 ÷ (90' × 110' = 9,900 sq. ft.) = $3 per sq. ft.; $3.06 + $2.98 + $3.04 + $3 = $12.08 ÷ 4 = $3.02 average; 100' × 110' = 11,000 sq. ft. × $3.02 = $33,220 market value.
If a home that sold for $80,000 had sold for its asking price of $85,000, and the sale commission was 7%, how much additional commission would have been paid in excess of the actual commission?
The answer is $350. $85,000 - $80,000 = excess sale price; $5,000 × .07 rate = $350 excess commission
A lender quotes a mortgage loan of $325,000 at 5% interest. The monthly payment is $1,744.67. How much of the second monthly payment will apply to the principal reduction?
The answer is $392.13. $325,000 unpaid balance × .05 rate = $16,250 interest ÷ 12 months = $1,354.17 first month's interest; $1,744.67 monthly payment ‒ $1,354.17 interest = $390.50 payment on principal in month one; $325,000 ‒ $390.50 principal paid first month = $324,609.50 new principal balance; $324,609.50 unpaid balance × .05 rate = $16,230.475 interest ÷ 12 months = $1,352.54 second month's interest; $1,744.67 monthly payment - $1,352.54 interest = $392.13 payment on principal in month two.
A buyer applied for a 30-year, fixed-rate $105,000 mortgage. The lender will grant the loan if the buyer pays interest at the rate of 4.5%, plus three points and a 1% loan origination fee. What are the total loan charges if the buyer decides to take the loan offer?
The answer is $4,200. $105,000 mortgage × .03 points = $3,150 cost of points; $105,000 mortgage × .01 = $1,050 loan origination fee; $3,150 + $1,050 = $4,200 total loan charges.
An investor bought half of a quarter-section of land for $160,000. She plans to develop the property into a residential subdivision. Local zoning will require all lots in the community to be not less than 100' × 120' in size, and the engineering firm employed by the investor has informed her that approximately 484,800 square feet of the tract will be required for parks, streets, storm sewers, and other development purposes. The engineering firm has also estimated that total development costs and associated expenses will amount to five times the raw land costs. The investor wants to make a profit of 10% based on total costs. How much must the investor average per lot to accomplish her profit objective?
The answer is $4,224. ½ of a ¼ section = 640 ÷ 4 ÷ 2 = 80 acres; 80 acres × 43,560 sq. ft. per acre = 3,484,800 sq. ft. 3,484,800 - 484,800 = 3,000,000 buildable sq. ft. 3,000,000 ÷ 12,000 sq. foot lots = 250 lots; $160,000 cost × 5 = $800,000 development cost; $160,000 + $800,000 = $960,000 total cost; $960,000 × 1.10 = $1,056,000 ÷ 250 lots = $4,224 average per lot.
A developer sold a lot for $36,000. This represented a loss of 10%. What was the cost of the lot?
The answer is $40,000. 100% cost - 10% loss = selling price; 90% = $36,000; $36,000 sale price ÷ .90 = $40,000 cost.
A buyer is purchasing a home from the seller for $190,000. The buyer gets a first mortgage loan with a loan-to-value ratio of 60%. The seller takes back a purchase money mortgage for 43% of the balance. How much money does the buyer need for a down payment?
The answer is $43,320. $190,000 purchase price × .60 LTV = $114,000 loan amount; $190,000 - $114,000 = $76,000 buyer responsibility; $76,000 × .43 = $32,680 purchase money mortgage; $114,000 + $32,680 = $146,680 amount financed; $190,000 - $146,680 = $43,320 down payment
A 10-year-old structure has an effective age of eight years. Total economic life is estimated to be 55 years. Reproduction cost new of the structure is $300,000. What is the accrued depreciation for this structure?
The answer is $43,500. 8 years effective age ÷ 55 years economic life = .145; .145 × $300,000 = $43,500 accrued depreciation.
A married couple purchased a home for $287,500, made a down payment of 25%, and secured a new conventional mortgage loan for the balance. Calculate the intangible taxes due.
The answer is $431.25. $287,500 × .75 LTV ratio = $215,625 mortgage loan; $215,625 × .002 rate = $431.25 intangible tax.
An apartment building has 10 apartments that rent for $220 per month and six apartments that rent for $185 per month. The building also has four apartments that rent for $35 per week. What is the annual gross rental income?
The answer is $47,000. $220 rent × 10 units = $2,200 × 12 months = $26,400 income; $185 rent × 6 units = $1,110 × 12 months = $13,320 income; $35 × 4 units = $140 × 52 weeks = $7,280 income; $26,400 + $13,320 + $7,280 = $47,000 gross rental income.
A landlord leases 12 apartments in Crow Hollow for a total net monthly rental of $4,800. If this figure represents a 12% annual return on her investment, what was the original cost of this property?
The answer is $480,000. $4,800 monthly net × 12 months = $57,600 annual NOI; $57,600 NOI ÷ .12 rate = $480,000 original cost.
A buyer has made an earnest money deposit of $10,150 on a house selling for $94,500. A local lender has agreed to lend 85% of the selling price at 4.5% interest for 30 years. If the buyer's closing costs amount to $1,575, how much more cash must the buyer produce at closing?
The answer is $5,600. $94,500 × .15 = $14,175 down payment; $14,175 + $1,575 closing costs = $15,750; $15,750 total buyer costs - $10,150 earnest money = $5,600 cash at closing.
A licensee has been asked to determine the current market value of a six-year-old building with a reproduction cost of $480,000. When new, the economic life of the structure was estimated to be 40 years. If the site value is known to be $100,000, what is the current market value of the entire property?
The answer is $508,000. $480,000 reproduction cost ÷ 40 years = $12,000 annual depreciation; $12,000 annual depreciation × 6 years = $72,000 accrued; $480,000 - $72,000 depreciation + $100,000 site value = $508,000 market value.
An investor owns a five-unit apartment building. Over a period of time, the investor has found that his expenses to operate the apartment building have averaged 55% of the gross income. If one apartment rents for $920 per month, another for $940 per month, and the remaining three apartments rent for $900 per month each, what are the annual gross and net incomes for the investor's apartment building?
The answer is $54,720 gross income; $24,624 net income. $920 × 12 months = $11,040; $940 × 12 months = $11,280; $900 × 12 months × 3 apartments = $32,400; $11,040 + $11,280 + $32,400 = $54,720 annual gross income; $54,720 × .55 = $30,096 operating expenses; $54,720 - $30,096 = $24,624 net income.
A married couple sign a contract to purchase a $280,000 home and make an earnest money deposit of $5,000. The seller has agreed to pay a 7% commission to the listing broker. The buyers will receive a credit of $2,734 for the seller's portion of the ad valorem taxes. If the buyers obtain an 80% conventional loan at 5% interest with 3 points to be paid by them, how much will be due from the buyers at closing?
The answer is $54,986. $280,000 × .80 = $224,000 loan amount; $224,000 × .03 = $6,720 points; $280,000 + $6,720 = $286,720 total buyer debits; $224,000 loan + $5,000 earnest money deposit + $2,734 tax credit = $231,734 total buyer credits; $286,720 total debits - $231,734 total credits = $54,986 due at closing. Alternative solution: $280,000 × .80 = $224,000 loan amount; $224,000 × .03 = $6,720 points; $280,000 - $224,000 = $56,000 down payment; $56,000 + $6,720 = $62,720; $62,720 - $5,000 earnest money deposit - $2,734 tax credit = $54,986 due at closing.
A corporation purchased 1,600 acres of a Florida ranch land from a foreign seller for $5,600,000. Current law requires the buyer to withhold from the seller and pay to the IRS approximately
The answer is $560,000. $ 5,600,000 × .10 withholding = $560,000 due IRS.
If a $5,600 sale commission is split 60/40 between the listing broker and the selling broker, and each broker splits his share of the commission 50/50 with respective listing and selling sales associates, how much more will the listing broker earn from the sale than the selling broker?
The answer is $560. $5,600 × .20 = $1,120 overage to the listing broker's office; $1,120 ÷ 2 = $560 the listing broker's overage after split to sales associate.
Monthly mortgage payments of $450 have been paid for 15 years. The original mortgage amount was $45,000. After 15 years, 50% of the loan has been paid. What is the total amount of interest paid to date?
The answer is $58,500. 15 years × 12 payments a year = 180 payments to date: $450 × 180 = $81,000 total paid to date; $45,000 mortgage × .50 paid = $22,500 principal paid; $81,000 - $22,500 = $58,500 interest paid to date.
An office building produces an effective gross income of $96,400. Building operating expenses total $36,600, and the monthly mortgage payment is $2,240. What is the building's net operating income?
The answer is $59,800. $96,400 EGI - $36,600 operating expense = $59,800 NOI.
An appraiser has been asked to appraise a building lot in a quality subdivision. His research efforts reveal that five lots have been sold in the past four months in the same neighborhood as the subject lot. sale # lot size price price per sq ft 1 100' X 130' $5,600 2 104' X 132' $5,800 3 102' x 130' $5,600 4 102' x 130' $5,600 5 100' x 132' $5,400 If the lot being appraised is 110' × 130', what would the total market value be if based on the average price per square foot of the five previous sales, with no adjustments for time or location?
The answer is $6,023. Sale 1: $5,600 ÷ (100' × 130' = 13,000 sq. ft.) = $.431 per sq. ft.; Sale 2: $5,800 ÷ (104' × 132' = 13,728 sq. ft.) = $.422 per sq. ft.; Sale 3: $5,600 ÷ (102' × 130' = 13,260 sq. ft.) = $.422 per sq. ft.; Sale 4: $5,600 ÷ (102' × 130' = 13,260 sq. ft.) = $.422 per sq. ft.; Sale 5: $5,400 ÷ (100' × 132' = 13,200 sq. ft.) = $.409 per sq. ft.; $.431 + $.422 + $.422 + $.422 + $.409 = $2.106 ÷ 5 = $.4212; 110' × 130' = 14,300 sq. ft. × $0.4212 = $6,023 (rounded to the nearest dollar).
A multifamily residential investment property is appraised at $235,000. Land value is 20% of the total appraised value. Calculate the annual depreciation deduction. (Round to the nearest dollar.)
The answer is $6,836. $235,000 × .80 = $188,000 depreciable basis; $188,000 ÷ 27.5 years = $6,836.36, or $6,836 rounded annual depreciation deduction.
The scheduled date for closing a duplex is June 15. Rent collected on the first of each month is $600 per unit. Day of closing belongs to the buyer. How will the proration be entered on the closing statement?
The answer is $640 debit seller; $640 credit buyer. $600 × 2 units = $1,200 monthly rent; $1,200 ÷ 30 days = $40 per day; $40 × 16 days belong to buyer = $640; Entered on closing statement; $640 debit seller; $640 credit buyer.
A condo is assessed at $49,800. The homeowner qualifies for the surviving spouse homestead tax exemption. The property is homesteaded. The millage rate is 28.6 mills. What are the property taxes owed on this property?
The answer is $694.98. $25,000 base exemption + $500 surviving spouse exemption = $25,500 total exemption; $49,800 - $25,500 = $24,300 taxable value; $24,300 × .0286 = $694.98 taxes due.
What is the cost per acre of a tract of land that sold for $1,306,800 and is described as follows? Beginning at a point on the North side of State Highway 50, exactly 200 feet West of the corner formed by the intersection of the West side of Dillard Street and the North side of State Highway 50; running thence due West 4,000 feet; thence due North 2,000 feet; thence due East 4,000 feet; thence directly to the point of beginning.
The answer is $7,116 per acre. 4,000 ft. × 2,000 ft. = 8,000,000 sq. ft.; 8,000,000 sq. ft. ÷ 43,560 = 183.65 acres; $1,306,800 sale price ÷ 183.65 acres = $7,115.71 per acre, or approx. $7,116.
A house cost $89,500 to build. When new, the building was estimated to have a 50-year useful life. Using straight-line depreciation, what is the accumulated depreciation after four years?
The answer is $7,160. $89,500 cost ÷ 50-year useful life = $1,790 annual depreciation; $1,790 × 4 years = $7,160 accumulated depreciation.
What did a new home cost if the state documentary stamp tax on the deed was $546?
The answer is $78,000. $546 doc stamps ÷ $.70 rate × 100 increments = $78,000 sale price
If a capitalization rate of 10.5% is used, what is the market value of an investment property assuming a net income of $8,424?
The answer is $80,228.57. $8,424 net income ÷ .105 rate = $80,228.57 value.
The sellers are asking $144,000 for their 1,800-square-foot home. The asking price per square foot is
The answer is $80. $144,000 ÷ 1,800 sq. ft. = $80 per sq. ft.
A sales associate measured the exterior of a home and found it to be 40' × 60'. Disregarding other factors, what is the cost per square foot if the house sold for $202,080?
The answer is $84.20. 40' × 60' = 2,400 sq. ft.; $202,080 sale price ÷ 2,400 sq. ft. = $84.20 cost per sq. ft.
A building was sold for $90,000. The buyer paid 10% cash and obtained a loan for the balance. The lending institution charged a 1% loan origination fee. The total cash used by the buyer for this purchase was
The answer is $9,810. $90,000 × .10 = $9,000 down payment; $90,000 - $9,000 down payment = $81,000 loan; $81,000 loan × .01 = $810 loan origination fee; $9,000 + $810 = $9,810 total cash.
A lot is 73 feet wide and 120 feet deep. What fraction of an acre is this lot?
The answer is 1/5. 73 × 120 = 8,760 sq. ft.; 8,760 ÷ 43,560 = .20 or 1/5. (20/100= 2/10= 1/5)
Examination of documentary stamps on recently recorded deeds provided the following sale prices. Data obtained from property managers produced the income figures. Use the information given to determine the correct overall capitalization rate for the comparable apartment properties. (Round all decimals to three numbers before final rounding to two places.) Comparable properties NOI Sale prices ______________________________________________________________________________ Apt. project 1 $39,400 $345,000 Apt project 2 $45,680 $464,000 Apt. project 3 $36,800 $386,000 Apt. project 4 $43,790 $424,000
The answer is 10.25%. Project 1: $39,400 NOI ÷ $345,000 sale price = .114; Project 2: $45,680 NOI ÷ $464,000 sale price = .098; Project 3: $36,800 NOI ÷ $386,000 sale price = .095; Project 4: $43,790 NOI ÷ $424,000 sale price = .103; .114 + .098 + .095 + .103 = .41 ÷ 4 = .1025 = 10.25%.
Three tracts are 2 3/4 acres, 3 5/12 acres, and 4 5/6 acres in size. Together, they represent
The answer is 11 acres. 2 3/4 = 2 9/12; 3 5/12; 4 5/6 = 4 10/12; 2 9/12 + 3 5/12 + 4 10/12 = 9 24/12 = 11 acres.
A rental house produces $875 per month in gross income. The house costs $113,750. What is the monthly gross rent multiplier?
The answer is 130. $113,750 ÷ $875 monthly rent = 130 GRM.
A real estate office sold 180 homes this year. This was 20% more sales than last year. How many homes did the office sell last year?
The answer is 150. 100% + 20% more sales = 180 home sales; 120% = 180; 180 ÷ 1.20 = 150 home sales last year.
Some years ago, a couple built their home for $70,000 on a lot that cost them $30,000. If building costs have doubled and lot prices have increased 300%, how much has their original investment of $100,000 appreciated?
The answer is 160%. $70,000 home × 2 = $140,000 home; $30,000 lot × 300% = $90,000 amount of increase + $30,000 original cost = $120,000; $70,000 + $90,000 = $160,000 profit; $160,000 profit ÷ $100,000 cost = 1.6 or 160%.
A 43,560 square-foot lot is to be subdivided. One-fourth of the lot is made up of a retaining pond, and one-eighth of the lot will be used for a road. How many square feet of usable area are left?
The answer is 27,225 sq. ft. ¼ = 2/8 + 1/8 = 3/8 for pond and road; 8/8 - 3/8 = 5/8 usable area; 5 ÷ 8 = .625; 43,560 sq. ft. × .625 = 27,225 usable sq. ft.
A contractor builds a two-story warehouse measuring 120 feet × 150 feet. Ten percent of the space is allocated to elevators and landings. The contractor plans to store bins of construction material that each measure 10 feet × 12 feet. How many bins will the building accommodate?
The answer is 270. 120' × 150' × 2 stories = 36,000 total sq. ft.; 36,000 × .90 = 32,400 sq. ft. available for bin storage; 10' × 12'= 120 sq. ft. per bin; 32,400 sq. ft. ÷ 120 sq. ft. = 270 bins.
What is the FHA housing expense ratio for a borrower with monthly housing expenses of $696, total monthly gross income of $2,400, and total monthly obligations of $960?
The answer is 29%. $696 monthly housing expenses ÷ $2,400 monthly gross income = .29 FHA housing expense ratio.
The N½ of a standard section contains
The answer is 320 acres. 640 acres per section ÷ 2 = 320 acres.
A buyer purchased a mobile home appraised at $60,000 with closing costs of $2,500. The loan is for $50,000. If the seller paid a $2,500 discount, how many points were charged by the lender?
The answer is 5 points. $2,500 discount ÷ $50,000 loan = .05 or 5 points.
If a building has an estimated economic life of 20 years, the percentage loss of economic life per year is
The answer is 5%. 100% ÷ 20 years = 5% loss per year.
A person borrowed $3,500 for a period of time at a rate of 7.5%. She paid $131.25 for the use of the money. How long did the borrower have the money?
The answer is 6 months. $3,500 amount borrowed × .075 rate = $262.50 for 12 months; $131.25 interest paid (part) ÷ $262.50 (whole) = .5 or ½ year or 6 months.
A commercial property leases for $200,000 per year. Miscellaneous income derived from the property totals $12,000 per year. The property recently sold for $1,395,000. What is the GIM?
The answer is 6.6. $200,000 lease income + $12,000 other income = $212,000 total income $1,395,000 ÷ $212,000 = 6.58 or 6.6 GIM.
The buyers paid a cash down payment of $55,000 and applied for a $145,000 loan. What is the LTV ratio?
The answer is 72.5%. $145,000 loan + $55,000 down payment = $200,000 sale price; $145,000 ÷ $200,000 = .725 or 72.5% LTV.
The sale price on a home is $180,000. The buyer secured a $140,000 loan and paid $3,200 in closing costs and prepaid expenses. What is the loan-to-value ratio? (Round to the nearest whole percentage point.)
The answer is 78%. $140,000 loan ÷ $180,000 sale price =.7778, or 78% LTV.
What is the loan-to-value ratio for a loan amount of $80,000, a property price or value of $100,000, and a net operating income of $18,400?
The answer is 80.0%. $80,000 loan ÷ $100,000 price = .80 or 80% LTV.
A broker paced off a tract by beginning at the extreme northeast corner of a section. The broker proceeded South zero degrees East 891 feet to a cement monument, thence North 90 degrees West 440 feet to a second marker, thence North zero degrees East 891 feet, thence to the point of beginning. How many acres are contained in the parcel?
The answer is 9. Rectangle measures 891 ft. by 440 ft.; 891 × 440 = 392,040 sq. ft.; 392,040 ÷ 43,560 sq. ft. per acre = 9 acres.
A closing date of April 30 is set, with prorations (using the 365-day method) effective at midnight on the day of closing. The property taxes are estimated to be $1,095. On the seller's closing statement would appear a
The answer is debit for $360. 31 + 28 + 31 + 30 = 120 seller unpaid days; (jan-apr days) $1,095 ÷ 365 days per year × 120 days = $360 debit.
A home sold for $108,400. The buyers paid $18,400 down, assumed a recorded mortgage of $72,000, and gave the sellers a new second mortgage in the amount of $18,000. How much will the buyers pay for state taxes resulting from these financial arrangements?
The answer is intangible tax $36; documentary stamp tax $315. $18,000 second mortgage × .002 rate = $36 intangible tax; $18,000 note ÷ $100 increments =180 taxable increments; 180 × $.35 = $63 doc stamps on note; $72,000 ÷ $100 increments = 720 taxable increments; 720 × $.35 = $252; $252 + $63 = $315 doc stamps on note.
Which property has the highest assessed value? A) Market value $81,400; assessed at 60% of value B) Market value $119,600; assessed at 40% of value C) Market value $66,900; assessed at 75% of value D) Market value $49,500; assessed at 100% of value
The answer is market value $66,900; assessed at 75% of value. $66,900 value × 75% = $50,175; $49,500 value × 100% = $49,500; $81,400 value × 60% = $48,840; $119,600 value × 40% = $47,840.
The borrowers have a combined gross monthly income of $2,350. They have applied for an FHA loan that will require monthly housing expenses of $658. They have other credit obligations of $282 per month. Will they meet the established FHA standards/ratios for housing expenses and total obligations?
The answer is yes, they meet the FHA standards for both ratios. FHA allows up to 31% for housing expense ratio (HER); FHA allows up to 43% for total obligations ratio (TOR); HER = $658 monthly housing expense ÷ $2,350 monthly gross income = 28%; $658 monthly housing expense + $282 other credit obligation = $940; TOR = $940 total monthly obligation ÷ $2,350 monthly gross income = 40%.
A sales associate receives a monthly salary of $700, a 3.5% commission on all of her listings that sell, and 2.8% commission on all of her property sales. None of the listings she obtained sold last month, but she did receive a total of $8,050 in salary and commissions. What was the value of the properties she sold?
answer is $262,500. $8,050 income - $700 salary = $7,350 commission $7,350 ÷ .028 rate = $262,500 value properties sold.
A building is valued at $185,000 when NOI is capitalized at a rate of 8%. NOI is 40% of effective gross income. Calculate the effective gross income.
answer is $37,000. $185,000 × .08 cap rate = $14,800 NOI; $14,800 NOI ÷ .40 = $37,000 EGI
A developer purchased five lots each measuring 110' × 150'. The lots cost $325 per front foot. The developer subdivided the lots into eight lots and then sold them for $28,000 each. How much profit did the developer make on the deal?
answer is 25%. 110 front feet × $325 per front foot = $35,750 per lot; $35,750 × 5 lots = $178,750 total cost; 8 lots × $28,000 sale price =$224,000 total received; $224,000 - $178,750 cost = $45,250 made on sale; $45,250 made ÷ $178,750 cost = 25.3 or approximately 25% profit.
A lot that measures 140' by 160' contains what percentage of an acre?
answer is 51.4%. 140 feet × 160 feet = 22,400 square feet; 22,400 ÷ 43,560 square feet per acre = .514 acre; .514 acre × 100% = 51.4%.
