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

2. Chapter 22 Real Estate Math

3. 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

4. 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

5. Principal and Interest Problems
Loan balance x rate of interest = annual interest
A mortgage balance is currently $43, 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, =
= 8.5% rounded
Chapter 22 Real Estate Math

6. 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

7. 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
$50 ÷ 31 days =$ per day
$ x 23 days = $ =$37 rounded
$350 + $37 = $387 debit to seller
Chapter 22 Real Estate Math

8. 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 =
= $1.25
Chapter 22 Real Estate Math

9. 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

10. 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