New Jersey Real Estate for Salespersons and Brokers By Marcia Darvin Spada Thomson/South-Western Copyright 2006 Chapter 22 Real Estate Math

Chapter 22 Real Estate Math

Chapter 22 Real Estate Math Chapter 22 Key Terms Acre Commission Front foot Gross income Net operating income Point Principal Rate/tax rate Chapter 22 Real Estate Math

Chapter 22 Real Estate Math Commission Problems Sales price x Percentage of commission = Commission If a salesperson lists and sells a property for $200,000 and receives 60% of the 7% commission paid to the employing broker, how much does the salesperson receive? $200,000 x 0.07 = $14,000 0.60 x $14,000 = $8,400 Chapter 22 Real Estate Math

Principal and Interest Problems Loan balance x rate of interest = annual interest A mortgage balance is currently $43,627.14 and the amount of interest applied to the loan this month is $309. What is the annual interest rate? $309 x 12 mos = $3,708 annual interest 3,708 ÷ $43,627.14 = .0849929 = 8.5% rounded Chapter 22 Real Estate Math

Chapter 22 Real Estate Math Area Calculations Rectangle area= length x width Square area = side x side Triangle area = (.05 x base) x height Acre = 43,560 sq ft A rectangular acre of land has a width of 165 feet. What is the depth of the property? 43,560 ÷ 165 = 264 feet Chapter 22 Real Estate Math

Chapter 22 Real Estate Math Prorations at Closing A sale is closed August 23, with the real estate taxes of $600 per year unpaid. What is the entry on the closing statement? $600 ÷ 12 =$50 per month $50 x 7 mos = $350 $50 ÷ 31 days =$1.6129032 per day $1.6129032 x 23 days = $37.096773 =$37 rounded $350 + $37 = $387 debit to seller Chapter 22 Real Estate Math

Ad Valorem Property Taxes Assessed value x tax rate =annual taxes If the assessed value of a property is $136,000 and the annual tax paid is $1,700, what is the tax rate per $100 of assessed value? $1,700 ÷ $136,000 = 0.0125 = $1.25 Chapter 22 Real Estate Math

Real Estate Investment-IRV Formula I = Income R = Rate V = Value or Sales Price I ÷ R = V R x V + I I ÷ V = R I R V Chapter 22 Real Estate Math

Profit/Loss on Sale of Real Estate $50,500 - $46,000 = $4,500 $4,500 ÷ $50,500 = 8.91%, 9% rounded Investment x percent of profit = dollars in profit Investment x percent of loss =dollars lost Jaycee purchases land in 2001 for $35,000. She plants trees in 2004 costing $15,500. In 2006, she sells the land for $46, 000. What is her percentage of loss? Chapter 22 Real Estate Math