TX REAL ESTATE EXAM PREP-MATH PROBLEMS Flashcards

TX REAL ESTATE EXAM PREP-MATH PROBLEMS Flashcards

COST BASIS:When there is an existing assessment lien

against a property and the buyer assumes that lien, the cost basis of the property is then the original cost, plus the amount of the lien. If Juan and Rosa bought a home for $240,000, and assumed an existing assessment lien in the amount of $2,000, what is their cost basis?The cost basis of a property is the purchase price plus any liens and capital improvements.$240,000 + $2,000=

$242,000

The total commission a brokerage firm was paid was $33,500. The firm was paid 7% on the first $200,000, 6% on the next $200,000 and 5% on the remainder. What was the sales price of the property?

$550,000Sales Price Calculation:$200,000 x 7% =

$14,000. $200,000 x 6% = $12,000.$14,000 + $12,000 =

$26,000. $33,500 - $26,000 = $7,500.$7,500 ÷ 5% =

$150,000.$200,000 + $200,000 + $150,000 = $550,000

A real estate investor purchased a property for $15,000. He paid $5,000 down and executed a non-interest bearing note for $10,000 in favor of the seller. Before the end of the first year and before he had made any principal payments, he sold the property for double what he paid for it. Each $1.00 of his investment is now worth?The owner's equity is based upon the difference in value and loan amount. $30,000 - $10,000 = $20,000. $20,000 / $5,000 = $4.His $5,000 investment is now worth $20,000 or $4 for each $1 invested.Ben sold two parcels of land for $9,775 which was 15% higher than their cost four years ago. While Ben owned the parcels, he paid taxes each year at a rate of $7.00 per $100 on an assessed value of 30% of the purchase price.Assuming an annual loss of 4% imputed interest on Ben's original investment as an expense, how much did Ben lose on the transaction?$9,775 divided by 115% (1.15) = $8,500 original cost.$8,500 x 30% (.30) = $2,550 assessed value.$2,550 divided by 100 = 25.5. 25.5 x $7.00 = $178.50annual property taxes.$178.50 x 4 = $714 taxes.$8,500 + $714 + $1,360 ($8,500 x 4% x 4 years) =$10,574 total cost.$10,574 - $9,775 = $799 loss.

ORIGINAL LOAN AMOUNT:A lender charged the borrower

• points for making a loan. The lender then sold the loan

immediately to an investor at a discount of 4-1/2 percent and received $35,800. What was the original loan amount?$35,800 divided by 95.5% = $37,486.91.-round up---= $37,487 Loan Amount Sue agreed to buy a home for $310,000 and she deposited $15,000 as a down payment. A bank has agreed to loan her 80% of the appraised value which is $295,000. The settlement costs are to be charged to the buyer and amount to 5% of the purchase price. How much additional money must the buyer deposit?Answer-$74,500$295,000 x 80% = $236,000 loan amount.$310,000 - $236,000 = $74,000 total down payment. $310,000 x 5% = $15,500 settlement costs.$74,000 + $15,500 = $89,500 total down payment & settlement costs.$89,500 - $15,000(already in escrow) =

$74,500.

When Branham brought his property he had a 20% down payment and secured a 30 year loan at 7% interest. If his first month's interest was $787.50, how much did he pay for the property?

$168,750Calculation:$787.50 x 12 = $9,450. $9,450 ÷ 7%

= $135,000.$135,000 ÷ 80% = $168,750

Mr. Kent received a straight loan on which he paid only the interest at 4-1/2%, all due and payable in one year. His monthly interest payment was $22.50. What was the amount of the loan?Answer-$6,000$22.50 x 12 = $270$270 divided by .045 =

$6,000.

INTEREST:Tom obtains an interest-only purchase money

loan for $60,000. The interest rate is 9.5% and the term is 30 years. How much interest will Tom have paid at the end of the 30-year term?$60,000 x 9.5% = $5,700 interest per year.$5,700 x 30 years =$171,000 total interest.If the subject property has built in appliances valued at $1,500 and a comparable property does not, the sales

price of the comparable is adjusted by:

Add $1,500 to make the price of the comparable equivalent to the price of the subject property.Frank purchased a home for $80,000. He financed the purchase with a 90% conventional fixed-rate loan. The loan fee charged by the lender was 2%. The private mortgage insurance company charged a .50% first-year premium and a .75% renewal premium. What was the loan fee? The first-year premium? The monthly renewal premium?Loan fee = $80,000 x 90% x 2% = $1,440.First year premium = $80,000 x 90% x .5% = $360. Monthly renewal = $80,000 x 90% x .75% divided by 12 = $45.A house is to be sold in probate. The first bid submitted is $92,000. If the court asks for additional bids and you wish to raise the first bid of $92,000, your second bid must be at

least:

Answer-$97,100Calculation:The second bid must exceed

the first bid by 10% on the first $10,000 and 5% of the remainder.| $10,000 x .10 = $1,000;| $82,000 x .05 =

$4100;|$92,000 + $1,000 + $4100 = $97,100.

COMMISSION:An owner of a home listed it at a price

which would leave him $16,800 after the broker received a 6% commission. If the broker sold the property at the listed price, how much commission would he receive?Answer-$1,072$16,800 divided by 94% = $17,872$17,872- $16,800 = $1,072 commission.

GROSS RENT MULTIPLIER:John owns a single family

home which rents for $800 per month. A home across the street rents for $890 per month and recently sold for $78,000. If John applied the same gross rent multiplier to his home as was used on the home across the street, what would be the value of John's home?Answer-$70,112$78,00 (selling price) divided by $890(rent) = 87.640|GRM (gross rent multiplier);|$800 (rent) x 87.640

(GRM) = $70,112.

Mr. Johnson purchased a home for $79,000 with a $19,000 cash down payment and a $60,000 loan. This loan was interest free and required no payments of principal for five years. One year later he sold the home for double its purchase price. Each dollar of his original cash investment

now equals:

Answer-$5.16$79,000 x 2 = $158,000$158,000 - $60,000 = $98,000$98,000 divided by $19,000 = $5.16

PROFIT:Sue sold her property for $27,500 and realized a

7% profit over what she paid for it. Her profit was:

The selling price of $27,500 = cost + 7% or 107% of sales price.$27,500 divided by 107% = $25,700 purchase price.$27,500 - $25,700 = $1,800 profit.Placido has set an asking price of $78,200 for his 9 acres of land. His friend, Luciano, wants to buy a portion of this land measuring 100' by 145.2'. Assuming Luciano pays Placido's asking price on a square foot basis, how much will Luciano pay?

• x 43,560 = 392,040 square feet$78,200 divided by

392,040 square feet =$.20 per/sqft. asking price100' x 145.2' = 14,520 square feet$.20 x 14,520 square feet =

$2,904.

Measurements of a driveway are 24' x 36'. How much would it cost to replace the driveway if a concrete slab 4" thick cost $15.00 a cubic yard to install and the cost of labor amounted to $272.00 over and above the cost of the

concrete?

Answer- $432.00How to Calculate:First, convert the 4" into

1/3 foot. Next, calculate the cubic feet. 24' x 36' x 1/3' = 288 cubic feet. Convert the cubic feet into cubic yards.Remember, there are 27 cubic feet in 1 cubic yard. 288

cubic feet / 27 cubic feet = 10.67 cubic yards. The cost of the concrete is $160 (10.67 cubic yards x $15.00/cubic yard). The labor is $272, so the total cost to replace the driveway is $432.00.

LOAN:Ms. Pat purchased a house in a run-down condition

and spent an amount equal to 10% of the purchase to fix it up and bring it to its present value. The house is now worth $165,000. The cost of the house is equal to the existing

loan of the property. The amount of the loan is:

Answer-$150,000$165,000 = 100% purchase price + 10% fix-up money$165,000 divided by 110% (1.10) = $150,000 Agent Carrie received $937.50 as commission for a referral fee. The listing agent paid 25% of her commission for the referral. The total commission paid was 6%, which was split equally between the listing and selling brokerage firms. If the listing agent was paid 50% of her firm's commission, what was the sale price of the property?

$250,000Property Sale Price Calculation:$937.50 ÷ 25% =

$3,750. $3,750 ÷ 50% = $7,500.$7,500 ÷ 3% = $250,000

A lot that measures 475' x 525' sold for $275,000. What was the cost per front foot?

$578.947Calculation:$275,000 ÷ 475 = $578.947

Mr. Stewart has an investment in a 20-unit apartment building which is adjacent to a freeway. Because of its proximity to the freeway, the owner lost $150 per month rent. If the capitalization rate were set at 8%, what would be the loss in value to the property?

Answer- $22,500Calculation:12 x $150 = $1,800 divided by

8% = $22,500.

Mr. White sold an apartment building for $139,000. This was 20% more than what he paid for it. His original cost

was approximately:

Divide $139,000 by 120% to produce an answer of

$115,833.33.

PROFIT:Inventory in a store costs $8,500 net. It was sold

for 25% profit. However, 15% of the gross profit was lost due to bad credit risks over a period of one year. How much profit did the store owner make that year?Answer-$1,806.25$8,500 x .25 = $2,125 x .15 =

$318.75.$2,125 - $318.75 = $1,806.25.

Which of the following measurements are equivalent to a board foot?Any combination of 144 cubic inches (6 x 12 x 2 = 144).

SALES PRICE:Ned, a salesperson working for Broker

George, received a 45% share of a 8% commission. His share came to $9,000. What was the selling price of the property?$9,000 divided by 45% = $20,000 total commission.$20,000 divided by 8% =$250,000 SALES PRICE Property "A" has a monthly gross income of $500. Property "B" has a monthly gross income of $900. Using a monthly gross multiplier of 120 and calculating the difference in

value between the two properties, the result would be:

Answer-$48,000$500 x 120 = $60,000.$900 x 120 =

$108,000.$108,000 - $60,000 = $48,000.

COST PER FRONT FOOT:Steve paid $5.50 per square

foot to purchase a rectangular parcel of land containing 30,000 square feet. The land was 150 feet deep, what was the cost per front foot?Answer-$82530,000 sqft. divided by 150 foot depth =200 front ft.30,000 sqft. x $5.50 per square foot = $165,000purchase price.$165,000 purchase price divided by 200 front ft.= $825 perfront ft.

INTEREST RATE ON STRAIGHT NOTE:If a person

borrowed $5,000 on a straight note and paid $100 interest