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Pre-License Math Review 13 questions on state test 13% of general knowledge questions

Pre-License Math Review 13 questions on state test 13% of general knowledge questions. Calculating physical dimensions Lot & Structure. Lot size 450’ X 484’ = 217,800 sq. ft. Structure size 60 feet X 40 feet = 2,400 square feet. Lot 1 , Block 1, Brown Acres. 484 feet. Spot’s House.

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Pre-License Math Review 13 questions on state test 13% of general knowledge questions

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  1. Pre-License Math Review13 questions on state test13% of general knowledge questions

  2. Calculating physical dimensions Lot & Structure • Lot size 450’ X 484’ • = 217,800 sq. ft. • Structure size • 60 feet X 40 feet • = 2,400 square feet Lot 1 , Block 1, Brown Acres 484 feet Spot’s House 40 feet 60 feet 450 feet – Front Foot Easy street

  3. What is property’s market value? Calculating size Lot is 450’ x 484’ = 217,800 square feet First # is front foot (street) Land in this area sells for about $30,000 per acre What is the market value of this lot? 217,800 / 43,560 = 5 acres x $30,000 = $150,000

  4. What is value of house? Spot’s house is 60’ x 40’ = 2400 square feet Only heated and cooled area above ground is included in living area Comparable homes sell for about $120 per square foot plus land cost 2400 square feet X $120 per sq. ft. = $288,000

  5. House & Land What is the market value for this house and land? 2400 x $120 = $288,000 + $150,000 land = $438,000 Market Value, Price, and Cost are not necessarily related • Except in new construction • Principle of substitution • Principle of conformity

  6. $438,000 Market Value • How much is a 10% commission? • How much is a 5% commission? • Divide the 10% fee in half to $21,900 • Listing broker splits 50/50 with selling broker • Listing agent gets 60/40 split with company • How much was check to agent?

  7. 438,000 X .05 = • $21,900 total commission • 50% to selling broker = $10,950 • Listing broker then splits • 60% to listing agent $10,950 X .6 = $6,570 • 40% to listing brokerage = $4,380

  8. LTV = Loan to Value • New buyer got an 80% LTV mortgage • How much was loan? • VA 100% • Rural 100% • FHA 96.5% • Conventional 80%

  9. $438,000 X .8 = $350,400 conventional loan • Buyer paid origination fee of 1 point • A point is 1 % of loan, not purchase price • How much for fee? • $3,504 • Buyer paid 3 discount points • Increases lender’s yield by 3/8 % • How much for points? • $10,512 • Loan points are based on loan amount • May be added into loan

  10. Interest rate is 6% on $350,400 • How much is payment (amortized loan) of 30 years • Rate chart 30 years @ 6% = Factor of 6 • 350.4 X 6 = $2,102 payment of Principle & Interest • Taxes and Insurance will be on top of P&I • It’s a PITI the payment is so much

  11. $2,102 monthly payment • $350,400 loan X 6% (.06) / 12 = interest first month = • $21,040 annual interest / 12 months = • $1,752 first month interest • $2,102 payment - $1,752 interest = $350 principle • Entire first year’s principle will only be about $4,200 • First year’s interest will be about $21,000 • Second month loan balance • $350,400 - $350 = $350,050 • Second month interest • $350,050 X .06 = 21,003 / 12 = $1,750

  12. Proration • Closing on 21th of month • Use banker’s year of 360 days, 12 months, 30 day month • Unless told to use calendar year • Prepay interest for 10 days, includes day of closing • $350,400 X .06 = $21,024 / 360 = • $58.40 per day X 10 days = $584.00 • Pays interest for balance of month of closing • First payment will be due the 1st day of second month • Will include interest for first month after closing

  13. Decimal to percentage • 0.25 = 25%, Quarter of • 0.90 = 0.9 = 90% • Percentage to decimal • 33% = 0.33 • 10% commission • Multiply sales price by 0.10

  14. Annual – Monthly • Interest rate will be stated in annual terms • Watch for rent or interest to be stated in months • Semi – annual = twice per year

  15. : : : : X X • “T” Formula • ________Results________$10,000 Commission Paid • Base Rate $100,000 Sales Price .10 (or 10%) Commission Rate • Rate is expressed as a decimal • Multiply bottom #s or divide top # by bottom # Base X Rate or Results / Base or Results / Rate • Results / Base = Rate 10,000 / 100,000 = .10 • Results / Rate = Base 10,000 / .10 = 100,000 • Results = Base X Rate 10,000 = 100,000 X .10

  16. What if commission is $6,543? $10,000 Commission Paid : Results : Base Rate $100,000 Purchase Price What is purchase price? X 10% (.10) Commission Rate If commission rate is 4.3% (.043)?

  17. $6,543 : Results : Base Rate X $152,162.79 .043

  18. Commission was $3,000 Property sold for $100,000 What was Rate? : Results : Base Rate X

  19. $3,000 : Results : Base Rate $100,000 X 0.03

  20. If the numbers are in the wrong place, you will know it $100,000 : Results : Base Rate $3,000 X 3333%

  21. Commission was $8,000 Rate was 8% What was price of property? : Results : Base Rate X

  22. $8,000 : Results : Base Rate $100,000 X .08

  23. Seller wants $100,000 net Seller said add commission to price Commission is 10% What is selling price? : Results : Base Rate X

  24. $100,000 : Results : Base Rate $111,111 X 100% - 10% = .90

  25. Discount Points 2 points = 2% of prepaid interest Paid $4,000 in discount points How much is loan? : Results : Base Rate X

  26. $4,000 : Results : Base Rate $200,000 X .02

  27. Seller made $25,000 profit on $100,000 sale What is profit % : Results : Base Rate X

  28. 25,000 : Results : Base Rate X 100,000 – 25,000 .33 or 33%

  29. Investor expects a 10% ROI (return on investment) Monthly net income is $1,000 What will investor pay for property? : Results : Base Rate X

  30. $1,000 X 12 : Results : Base Rate $120,000 X .10

  31. What did an investor pay if they made 10% And, sold the home for $100,000 : Results : Base Rate X

  32. $100,000 : Results : Base Rate $90,909 X 100% + 10% = 1.10

  33. The value of a house is $91,000 today. What was the original cost if it has depreciated 5% per year for the past seven years? : Results : Base Rate X

  34. $91,000 : Results : Base Rate $140,000 X 100% - (5% X 7) = .65

  35. If a home is worth $91,000 today and has appreciated 5% for the past 7 years, what was the original price? : Results : Base Rate X

  36. $91,000 : Results : Base Rate X $67,407 100% + (5% X 7) = 1.35

  37. What did the owner originally pay for their home if they sold it for $98,672, which gave them a 12% profit over the original cost? : Results : Base Rate X

  38. $98,672 : Results : Base Rate X $88,100 100% + 12% = 1.12

  39. If you get a 90% loan on a $88,500 house, how much more money must you put down after your $4,500 earnest money? : Results : Base Rate X

  40. $8,850 : Results : Base Rate $88,500 X .10 $8,850 - $4,500 (Earnest Money) = $4,350 Additional down

  41. What did the owner originally pay for their home if they sold it for $98,672, which gave them a 12% profit over the original cost? : Results : Base Rate X

  42. $98,672 : Results : Base Rate X $88,100 100% + 12% = 1.12

  43. $5000 commission was paid on a $100,000 sale What was the rate? : Results : Base Rate X

  44. $5,000 : Results : Base Rate X .05 $100,000

  45. Seller received $100,000, after paying $5,000 buyer’s closing cost and 5% commission. What was selling price? : Results : Base Rate X

  46. $100,000 + $5,000 = $105,000 : Results : Base Rate X $110,526 100 – 5% = .95

  47. 300 is 3% of what number? : Results : Base Rate X

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