Flashcards in Chap 14 Deck (12):

1

##
The buyers are purchasing an apartment building. Each of the five apartments rents for $825 per month. The closing is scheduled for July 15, and the rents were collected on July 1. What is the rent proration for this transaction, and to whom will the amount be credited (day of closing belongs to the buyer)?

A)

$2,262.10 credit to buyer

B)

$2,337.50 credit to seller

C)

$2,062.50 credit to seller

D)

$4,125.00 credit to buyer

###
Explanation

The answer is $2,262.10 credit to buyer. The solution is $825 rent × 5 apartments = $4,125 total monthly rent. $4,125 ÷ 31 days × 17 days due buyer = $2,262.097 or $2,262.10 credit to buyer.

2

##
A broker lists a property. A 6% commission is agreed to, and the listing is placed in the MLS. The sale commission is to be split as follows: 45% to the listing broker and 55% to the selling broker. A sales associate who works for a cooperating broker sells the property for $245,000. The sale associate's agreement with her employer calls for a 60% share of all commissions she brings to the company. How much is due to the sales associate?

A)

$4,851

B)

$6,615

C)

$8,820

D)

$3,969

### The answer is $4,851. The solution is $245,000 sale price × .06 rate = $14,700 total sale commission. $14,700 commission × .55 rate = $8,085 commission to selling office. $8,085 × .60 rate = $4,851 selling sales associate's split.

3

##
How are unpaid property taxes entered on the closing disclosure?

A)

Debit to buyer only

B)

Credit to buyer; debit to seller

C)

Debit to seller only

D)

Credit to seller; debit to buyer

###
Explanation

The answer is credit to buyer and debit to seller. Unpaid property taxes will show as a debit to the seller for the number of days in the current year the seller owned the property. An identical amount will show as a credit to the buyer.

4

##
A builder purchases a residential lot for $40,000 and constructs a new house at a cost of $190,000. The builder later sells the property for $184,000. What is the builder's percentage of loss on the sale?

A)

20%

B)

23%

C)

15%

D)

25%

### The answer is 20%. $40,000 + $190,000 = $230,000 cost. $230,000 cost – $184,000 sale price = $46,000 loss. $46,000 loss ÷ $230,000 cost = .20 or 20% loss.

5

##
A warehouse measures 825 feet by 600 feet and rents for $130,000 a month. What is the rent per square foot per month?

A)

$.33

B)

$.26

C)

$2.62

D)

$3.05

### The answer is $.26. The solution is 825 feet × 600 feet = 495,000 square feet. $130,000 rent ÷ 495,000 square feet = .262626 or $.26 per square foot.

6

##
How is the purchase price entered on the closing disclosure?

A)

Credit to seller; debit to buyer

B)

Credit to buyer; debit to seller

C)

Credit to seller only

D)

Debit to buyer only

###
he answer is credit to seller; debit to buyer. The buyer pays the purchase price (charged; debited the purchase price). The seller receives the purchase price (earns; credited the purchase price).

7

##
An investor purchased three 200-foot lots on a lake for $700 per front foot each. The investor then subdivided the lots into six lakefront lots, which he then sold for $91,000 each. What was his percentage of profit on the sales?

A)

30%

B)

25%

C)

20%

D)

35%

### The answer is 30%. The solution is 3 lots × 200 feet = 600 front feet. 600 front feet × $700 per front foot = $420,000 cost of lots. $91,000 lot sale price × 6 lots = $546,000. $546,000 – $420,000 = $126,000 profit. $126,000 profit ÷ $420,000 cost = .30 or 30% profit.

8

##
A man owned 3/8 of a property. He was paid $60,000 as his share of the proceeds from the sale of the property. What was the total selling price of the property?

A)

$180,000

B)

$160,000

C)

$96,000

D)

$120,000

### The answer is $160,000. The solution is part ÷ rate = whole (total sale price). $60,000 part ÷ .375 rate = $160,000 total sale price.

9

##
An investor incurred a 20% loss when she sold a 10-acre parcel (tract A) for $150,000. She also owns a 25-acre parcel (tract B) for which she paid $300,000. How much must the investor sell B for if she wishes not only to recover the loss from A but also to realize a 20% profit on the investment in B?

A)

$360,000

B)

$510,000

C)

$420,500

D)

$397,500

###
Explanation

The answer is $397,500. The solution is tract A: 100% – 20% = 80%. 80% = $150,000 sale price. $150,000 ÷ .80 = $187,500 cost. $187,500 cost – $150,000 sale price = $37,500 loss from tract A. Tract B: $300,000 cost + 20% profit = $300,000 × 1.20 = $360,000 sale price. $360,000 sale price to make a 20% profit + $37,500 loss from A = $397,500 target sale price for B.

10

##
To get a mortgage loan of $98,500, a buyer has agreed to pay all state tax costs incurred by creation of the new mortgage. What is the total cost?

A)

$541.75

B)

$197

C)

$344.75

D)

$689.50

### The answer is $541.75. The solution is $98,500 mortgage ÷ $100 increments = 985 taxable increments. 985 × $.35 = $344.75 doc stamps on mortgage note. $98,500 × $.002 rate = $197 intangible tax. $344.75 + $197 = $541.75.

11

##
A 30.25-acre parcel of land in Citrus County sells for $5,300 per acre. What is the documentary stamp tax on the deed?

A)

$1,124.20

B)

$561.40

C)

$1,113.00

D)

$1,122.80

###
The answer is $1,122.80. The solution is 30.25 acres × $5,300 per acre = $160,325 purchase price. $160,325 ÷ $100 increments = 1,603.25 rounded up to 1,604 increments. 1,604 × $.70 rate = $1,122.80 documentary stamp tax on deed.

12