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# Real Estate Math

### Math formulas and practice questions

Question | Answer |
---|---|

How many square feet in an acre | 43, 560 |

To determine a rectangles square footage | Multiply the length of one side by the length of the other side |

To convert square footage to acreage | Divide the number of square feet by 43, 560 |

To convert acreage to square feet | Multiply the number of acres by 43, 560 |

If you are given the dimension only (300x200) the first number is considered to be | Front footage |

A parcel of land measures 400x400 (sq.) how many acres are contained in this parcel? | 400x400 = 160,000 square feet 160,000 sq ft / 43, 560 = 3.6731 Acres |

A parcel of land is 7.5 acres. How many square feet are in the parcel? | 43, 560 X 7.5 = 326, 700 sq. ft. |

To calculate a sales commission: | X the selling price by the commission rate |

To calculate a commission split between broker and sales associate: | X the total sales commission by the appropriate percentage that either the broker or sales associate is entitled to receive. |

To calculate the appropriate selling price so that the seller will receive a certain amount to money after paying closing costs and the sales commission | Selling price= Sellers net + Closing cost divided by / 100% - Commission rate |

Broker Gary sold a home for $375, 000 with an agreed upon commission of 7.5% of the sales price. How much is the sales commission? | $375,000 X 7.5% =$28,125 |

Broker Bob has agreed to pay salesperson Jo 2/3 all commissions warned as a result of Jo's efforts. If Rafael sells a property for $600,000 with an agreed upon commission of 6% how much is Jo's share of the commission | $600,000 X 6% = $36,000 $36,000 / 3 = $12,000 |

Seller Aaron wants to Net $ 259,000, agrees to commissions as follows: 5% - first $100,000 6% - next $100,000 7% - anything over $200,000 If the sales price is $335, 300 what is the brokers commision | $100,000 X 5%= $5,000 $100,000 X 6%= $6,000 $135,300 X 7%= $9,471 $5,000+$6000+$9471= $20,471 |

Cost Depreciation Approach | Step one: Reproduction Cost / Economic Life X Effective Age = Total Depreciation / (means divided by) Step two: Reproduction cost - Total Depreciation (and step 1) + Land value = Depreciated Value of the Property |

If a building is valued at $300,000, it has an economic life of 20 years and effective age of 4 years, what is the value of the property if the lot is worth $40,000 | Step 1: $300,000 / 20 X 4= $60,000 Step 2: $300,000 - $60,000 +$40,000 = $280,000 |

Income Capitalization Approach | I / R x V |

If net operating income is $40,000 and the capitalization rate is 10% what is the value of the property? | $40,000 / 10% = $40,000 |

Gross Rent Multiplier Approach | V / R x M |

If the value of a property is $720,000 and the annual rental income is $60,000, how much is the gross income multiplier? | $720,000 / $60,000 = 12 Value/ Annual Rental Income = Multiplier (V / R =M) |

Discount points | One point is calculated as 1% of the loan |

Loan amount $90,000 annual interest rate of 7%. If the lender charges 4 discount points what is the cost to the buyer? | $90,000 X 4%= $36,000 |

Amortization | I / P x R x T I= Amount of Interest paid in dollars P=Principal balance of a loan R=Rate of Interest T= Time length of the loan in terms of years |

Amortization steps | 1. Loan amount x Annual interest rate = Annual interest / by 12= monthly interest amount 2.Deduct Monthly interest from total monthly payment amount 3. Principal balance of loan - principal portion of payment = New loan balance |

$80,000 loan for 30years, interest rate of 8%. Monthly principal and interest payments of $587.01. What is the principal balance after the first payment | $80,000 X .08=$6,400 /12 = $533.33 - 587.01= $54.03 $80,000-53.68 = $79, 946. 32 ( Balance after 1st payment) |

Transfer tax | $1.00 per thousand (seller) |

GA Residential Mortgage tax | $10.00 Any loan subject to GA Residential Mortgage Act (buyer) |

Intangible tax | $3.00 per thousand Due 90 days from the date of the instrument (buyer) |