Chapter 16 Flashcards by derek hall

A mortgage contract with a face value of $175,000 requires monthly payments of $1,103.21 over a 20-year amortization period. However, the mortgage broker advances only $171,000 after deducting a commission of $2,500, legal fees of $1,000, and an appraisal fee of $500. Calculate the cost of funds advanced for the borrower, expressed as an effective annual rate (j1).

(1) 4.730370%
(2) 4.777233%
(3) 3.972254%
(4) 4.834288%

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A mortgage loan with a face value of $150,000 is arranged through a mortgage broker. A commission of
$4,000, appraisal fees of $450, as well as survey and legal fees totalling $700 will be deducted from the face value before the funds are advanced to the borrower. Calculate the cost of funds advanced to the borrower, expressed as an effective annual interest rate (j1), if the loan is written at 6.75% per annum, compounded semi-annually, with monthly payments over a 20-year amortization period and a 5-year term?

(1) 7.803344%
(2) 7.537423%
(3) 9.581225%
(4) 8.540452%

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A mortgage for $200,000 is written at 6% per annum, compounded semi-annually. The mortgage calls for monthly payments rounded up to the next higher dollar, a 5-year term, and a 20-year amortization. The mortgage contract permits the borrower to prepay the full amount of the loan at any time subject to the payment of a three months’ interest penalty. At the time of prepayment, the current comparable interest rate is 4% per annum, compounded semi-annually.

If the borrower wishes to prepay this loan at the end of the first year (with the 12th payment), calculate the amount of the three months’ interest penalty.

(1) $969.01
(2) $15,504.15
(3) $5,687.99
(4) $2,883.28

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An offer of $235,000 is accepted, comprised of a cash down payment of $85,000 subject to a vendor- supplied mortgage of $150,000 at 4% per annum, compounded semi-annually. The loan has an amortization period of 25 years, a term of 5 years, and calls for monthly payments rounded up to the next higher dollar. Market rates of interest for equivalent mortgages are currently 9% per annum, compounded semi-annually.

The market value of the offer is:

(1) $180,413.23
(2) $122,426.97
(3) $235,000.00
(4) $207,246.79

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If the mortgage is sold to an investor for $225,000 immediately after the loan is initiated, the investor will earn the following nominal interest rate, with semi-annual compounding:

(1) 4.083034%
(2) 4.162285%
(3) 4.018729%
(4) 4.124712%

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Prepayment in a mortgage refers to:

(1) the right of lenders to demand full repayment of the outstanding principal if the payments fall into arrears.
(2) the right of the borrower to pay off all (or some) of the outstanding balance during the term of the mortgage.
(3) the lender’s right to demand full payment of the outstanding balance at the end of the term of a partially amortized mortgage.
(4) the payment of a finder’s fee to a mortgage broker (as compensation for arranging a mortgage loan) which is made prior to the advancing of mortgage funds.

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A mortgage contract with a face value of $170,000 requires monthly payments of $1,117.12 over a 20-year period. However, the mortgage broker advances only $166,000 after deducting a commission of $2,500, legal fees of $1,000, and an appraisal fee of $500. Calculate the cost of funds advanced for the borrower, expressed as an effective annual rate (j1).

(1) 6.078157%
(2) 5.234236%
(3) 5.291647%
(4) 5.361651%

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An offer of $235,000 is accepted, comprised of a cash down payment of $55,000 and a vendor-supplied loan of $180,000 at 4% per annum, compounded semi-annually. The loan has an amortization period of 25 years, a term of 5 years, and calls for monthly payments rounded up to the next higher dollar. Market rates of interest for equivalent mortgages are currently 9% per annum, compounded semi-annually.

The market value of the offer is:

(1) $146,960.00
(2) $235,000.00
(3) $201,690.44
(4) $192,158.00

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A local mortgage broker has arranged a mortgage in the amount of $240,000. The borrower has agreed to pay a brokerage fee of $5,000 which is to be added to the loan amount, giving a face value of $245,000 for the loan.

The mortgage bears interest at a contract rate of 8% per annum, compounded quarterly. The mortgage has a term and amortization period of 25 years. The loan is to be repaid using monthly payments. The equivalent periodic interest rate, expressed as a rate per month on the funds advanced is:

(1) 0.682361%
(2) 0.821546%
(3) 0.752513%
(4) 0.514235%

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A loan contract was written for a face value of $50,000 at j2 = 10.75% with a 20-year amortization and a 5-year term. Payments were to be made monthly in the amount of $499.76 and the outstanding balance at the end of the term was $45,167.50. A brokerage fee of $2,000 was deducted from the face value, so the funds actually advanced to the borrower were $48,000. What is the effective annual rate of interest on the funds advanced?

(1) 12.257094%
(2) 11.038905%
(3) 11.618034%
(4) 10.516863%

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Mary Smith has offered to purchase a house from a seller who is willing to provide partial financing. Her offer is a $75,000 down payment plus a mortgage of $125,000 at 4% per annum, compounded semi- annually. The loan is to be fully amortized with monthly payments of $755.31 over 20 years. If the market rate for similar mortgage loans is 7.5% per annum, compounded semi-annually, what is the market value of this offer, rounded to the nearest dollar?

(1) $169,579
(2) $108,618
(3) $94,579
(4) $183,618

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Steve Johnson purchased a home two years ago, at which time he arranged for a mortgage in the amount of
$175,000 amortized over 20 years with a 5-year term and monthly payments. The interest rate on the mortgage was 7% per annum, compounded monthly, calling for monthly payments of $1,356.78 and an outstanding balance of $150,948.60 due at the end of the 5-year term.

Steve has just received an offer on his house from Linda. Linda’s offer consists of $45,000 cash and assumption of the existing mortgage for the remainder of the term. If current market rates for 3-year term mortgages are 5% per annum, compounded monthly, what is the market value of Linda’s offer?

(1) $220,233.07
(2) $254,367.37
(3) $237,989.28
(4) $243,966.11

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Bill Black purchased a home two years ago, at which time he arranged for a mortgage in the amount of
$350,000 amortized over 20 years with a 5-year term and monthly payments. The interest rate on the mortgage was 6% per annum, compounded semi-annually. calling for monthly payments of $2,493 and an outstanding balance of $296,762.89 due at the end of the 5-year term.

Bill has just received an offer on his house from Mark. Mark’s offer consists of $50,000 cash and assumption of the existing mortgage for the remainder of the term. If current market rates for 3-year term mortgages are 3.5% per annum, compounded semi-annually, what is the market value of Mark’s offer?

(1) $352,537.42
(2) $449,911.72
(3) $399,223.72
(4) $402,537.42

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A mortgage loan with a face value of $100,000 is arranged through a mortgage broker. A commission of
$3,500, appraisal fees of $450, as well as survey and legal fees totalling $600 will be deducted from the face value before the funds are advanced to the borrower. Calculate the cost of funds advanced to the borrower, expressed as an effective annual interest rate (j1), if the loan is written at 7.75% per annum, compounded semi-annually, with monthly payments over a 20-year amortization period and term?

(1) 8.952059%
(2) 8.571434%
(3) 8.252225%
(4) 9.439884%

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As a marketing incentive to speed up the sale of newly completed but unsold condominiums, a developer agrees to provide the purchasers with first mortgages with a contract rate that is lower than the market rate of interest. Under these circumstances, it can be said that this is an offer involving:

(1) below-market rate financing.
(2) market rate financing.
(3) above-market rate financing.
(4) interest only financing.

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Susan Jones has offered to purchase a house from a vendor who is willing to provide partial financing. Her offer is a $75,000 down payment plus a mortgage of $125,000 at 4% per annum, compounded semi- annually. The loan is to be fully amortized with monthly payments over 20 years. What is the market value of this offer if the market rate for similar mortgage loans is 6.5% per annum, compounded semi-annually?

(1) $113,009.30
(2) $188,009.30
(3) $101,994.94
(4) $176,999.94

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A mortgage broker is arranging a partially amortized mortgage loan with a face value of $350,000. The loan contract is to be written at 6% per annum, compounded monthly. The repayment of the loan is to take place with monthly payments over an amortization period 15 years and a 5-year term. The borrower is to receive
$336,000 as a result of a broker’s commission of $10,000, a survey fee of $2,500, an appraisal fee of $500, and legal fees of $1,000, all of which are to be deducted from the face value. Calculate the cost of funds advanced to the borrower, expressed as an effective annual interest rate (j1).

(1) 7.296801%
(2) 9.942096%
(3) 8.407884%
(4) 7.163572%

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Given that all other factors are identical, the longer the term of the contract on a bonused, partially amortized mortgage (where the bonus is paid by the borrower):

(1) the lower the effective interest rate paid by the borrower.
(2) the higher the effective interest rate paid by the borrower.
(3) the higher the required monthly payment.
(4) the higher the outstanding balance at the term’s end.

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Sam and Sally recently negotiated a second mortgage in the amount of $25,000 at an interest rate of 9% per annum, compounded semi-annually. The loan is to be amortized over 20 years by monthly payments.

As a result of a $3,000 brokerage fee, assume that only $22,000 of the loan’s $25,000 face value is advanced to Sam and Sally. The effective annual rate of interest charged on the funds advanced will be:

(1) less than the effective annual equivalent of the contract interest rate.
(2) equal to the effective annual equivalent of the contract interest rate.
(3) greater than the effective annual equivalent of the contract interest rate.
(4) impossible to determine with the information provided.

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A borrower has proposals from four lenders to advance funds of $122,000 as a mortgage loan. Payments on each loan will be made annually.

  A 	   B 	   C 	   D  Face Value	125,500	125,000	124,000	123,000 Amortization Period	8 yrs	5 yrs	7 yrs	6 yrs Rate: j2 =	6.6%	6.5%	6.75%	7%

Based on effective annual interest rates on funds actually advanced, which alternative should the borrower choose?

(1) A
(2) B
(3) C
(4) D

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An appraiser has located a comparable where the sale price was $350,000, comprised of $185,000 cash and a $165,000 vendor take-back mortgage written at 4% per annum, compounded semi-annually, with monthly payments rounded to the next higher dollar, a 25-year amortization, and a 4-year term. Assuming that the market rate for similar financing is 6% per annum, compounded semi-annually, what should the appraiser regard as the sale price of the house? (Round answer to the nearest $100).

(1) $154,000
(2) $ 339,000
(3) $ 350,000
(4) $ 165,000

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A mortgage for $300,000 is written at 6.5% per annum, compounded monthly. The mortgage calls for monthly payments rounded to the next higher dollar, a 5-year term, and a 25-year amortization. The mortgage contract permits the borrower to prepay the full amount of the loan at any time subject to the payment of an interest rate differential penalty. At the time of prepayment, the current comparable interest rate is 4.5% per annum, compounded monthly.

If the borrower wishes to prepay this loan at the end of the second year (with the 24th payment), calculate the amount of the interest rate differential penalty.

(1) $1,448.76
(2) $17,385.12
(3) $14,708.47
(4) $23,180.16

Given that all other factors are identical, the shorter the term of the contract on a bonused, partially amortized mortgage (where the bonus is paid by the borrower):

A mortgage is arranged on the following terms:

Mortgage Face Value $170,000
Funds Advanced $163,500
Interest Rate j2 = 6.5%
Amortization Period 20 years
Term 20 years
Payments monthly, rounded up to the next higher dollar Calculate the rate of interest paid on funds advanced, expressed as an effective annual rate.
(1) 7.904213%
(2) 7.135321%
(3) 8.196945%
(4) 6.952145%

A purchaser has just agreed to a below-market vendor-supplied mortgage with a developer. The $384,000 mortgage is set at an interest rate of j2=1.95%, with monthly payments over a 30-year amortization and a 3-year term. If the developer sells the 3-year term loan immediately to a mortgage investor for $350,000, what is the mortgage investor’s yield, expressed as an effective annual rate (j1)? (1) 5.152415% (2) 5.695532% (3) 4.958129% (4) 5.385054%

An offer of $235,000 is accepted, comprised of a cash down payment of $85,000 and a vendor-supplied mortgage loan of $150,000 at 5% per annum, compounded semi-annually. The loan has an amortization period of 25 years, a term of 5 years, and calls for monthly payments rounded up to the next higher dollar. Market rates of interest for equivalent mortgages are currently 8% per annum, compounded semi-annually. The market value of the mortgage is: (1) $132,849.12 (2) $199,309.00 (3) $235,000.00 (4) $217,849.12

A developer is offering a mortgage loan of $102,000 at 5% per annum, compounded semi-annually, on each of 16 units in a condominium development. The mortgages have monthly payments, 5-year terms, and 20- year amortization periods. Each unit is priced at $130,000 and the units have been selling over the past seven months. Even with a recent decrease in interest rates (currently at j2 = 4%), the property has attracted the attention of a buyer who has made a full price offer, and applied for the developer's financing on one of the condominium units. The market value of the offer is: (1) $134,191.60 (2) $132,975.00 (3) $130,000.00 (4) $106,191.60

The Annual Percentage Rate (APR) is: (1) a requirement under the Federal Interest Act. (2) also known as the stated interest rate. (3) the borrower’s contractual interest rate plus any non-interest finance charges. (4) an interest rate that must be expressed with semi-annual compounding.

An appraiser has located a comparable where the sale price was $220,000, comprised of $105,000 cash and a $115,000 vendor take-back mortgage written at 3.5% per annum, compounded semi-annually, with monthly payments sufficient to fully amortize the loan over 20 years. Assuming that the market rate for similar financing is 5% per annum, compounded semi-annually, what should the appraiser regard as the sale price of the house? (Round answer to the nearest $100). (1) $101,300 (2) $220,000 (3) $206,300 (4) $192,000

An investor wants to decide whether to buy a mortgage written for $100,000 at j12 = 3.5% which calls for monthly payments, a 20-year amortization, and a 5-year term. If the investor can earn j12 = 6% in other investments, at what price should the mortgage be purchased? (1) $80,951.26 (2) $110,669.93 (3) $90,143.73 (4) $89,602.21

Bona Fide Brokerage Ltd. arranges a mortgage with a face value of $55,000 for Gina Griffiths. Gina is obliged to make monthly payments at j2 = 12% for 15 years in order to fully amortize the loan. The broker deducts legal costs of $450 and a brokerage fee of $1,500 from the face value of the mortgage. Calculate the monthly payment. (1) $649.89 (2) $567.55 (3) $632.17 (4) $626.85

A mortgage broker has helped you set up a mortgage loan. The loan is for $350,000 at an interest rate of j12 = 4.75% and a 20-year amortization. The loan calls for monthly payments of $2,262 over a 2-year term with $327,975.95 owing at the end of 2 years. If the lender pays the broker a fee of 2% of the funds advanced, what is the yield to lender, expressed as an effective annual rate (j1)? (1) 3.742599% (2) 6.002862% (3) 4.749999% (4) 5.251251%

Jim Dickson is interested in purchasing Josephine Topanga's condominium for the listed price of $250,000. Jim proposes to pay $80,000 in cash and he wants Josephine to take back a mortgage for the balance. The rate on the suggested mortgage is j2 = 5% and the loan is to be fully amortized with monthly payments over 20 years. The market rate for similar mortgages is j2 = 8%. What is the market value of Jim's offer, rounded to the nearest $10? (1) $214,860 (2) $146,060 (3) $226,060 (4) $139,860

A mortgage broker initiates a mortgage in the amount of $100,000 at j2 = 5%, with an amortization period of 20 years, a term of 5 years, and monthly payments. The broker deducts a brokerage fee of $2,500 in addition to appraisal and legal fees totalling $750. Calculate the cost of funds advanced to the borrower, expressed as an effective annual rate (j1). (1) 6.404727% (2) 6.361028% (3) 5.512096% (4) 5.912962%

Three years ago Jim bought a house at which time he arranged a mortgage for $120,000. The loan was written at a rate of 6.75% per annum compounded semi-annually, calling for monthly payments of $822.06 and an outstanding balance of $108,904.49 due at the end of the 5-year term. Jim has just received an offer from Alice to buy his house. Alice's offer consists of $25,000 cash and assumption of the existing financing for the remainder of the term. If current lending rates for 2-year term mortgages are 8.75% per annum, compounded semi-annually, what is the market value of Alice's offer? (1) $97,335.06 (2) $109,829.02 (3) $122,335.06 (4) $134,829.02

A local mortgage broker arranged a mortgage in the amount of $210,000. The borrower has agreed to pay a brokerage fee in the amount of $7,200 which is to be added to the loan amount, giving a face value of $217,200 for the loan. The mortgage bears interest at a contract rate of 6.5% per annum, compounded semi- annually. The mortgage has an amortization period and term of 20 years and calls for monthly payments. If the mortgage is to be sold to an investor for $225,000 immediately after the loan is initiated, the investor will earn the following nominal interest rate, with semi-annual compounding: (1) 7.061529% (2) 6.047054% (3) 7.135586% (4) 6.842788%

Three years ago Larry bought a house at which time he arranged a mortgage for $240,000. The loan was written at a rate of 5.75% per annum compounded semi-annually, calling for monthly payments of $1,500.06 and an outstanding balance of $214,837.74 due at the end of the 5-year term. Larry has just received an offer from Mary to buy his house. Mary's offer consists of $50,000 cash and assumption of the existing financing for the remainder of the term. If current lending rates for 2-year term mortgages are 8% per annum, compounded semi-annually, what is the market value of Mary's offer? (1) $238,005.91 (2) $266,854.92 (3) $290,000.00 (4) $219,345.07

A mortgage broker will advance $97,000 to a borrower who has agreed to pay a bonus of $2,200. As a consequence, the face value of the loan will be $99,200. The loan will be amortized over 25 years with monthly payments at j2 = 6%. Calculate the monthly payment required to amortize the loan. (1) $620.62 (2) $634.69 (3) $690.83 (4) $650.74

A mortgage for $225,000 is written at 6.5% per annum, compounded semi-annually. The mortgage calls for monthly payments, a 5-year term, and a 20-year amortization. The mortgage contract permits the borrower to prepay the full amount of the loan at any time subject to the payment of a penalty, which is the greater of a three months' interest penalty or the interest rate differential. Payments are rounded up to the next higher dollar. At the time of prepayment, the current comparable interest rate is 3.5% per annum, compounded semi-annually. If the borrower wishes to prepay this loan at the end of the first year (with the 12th payment), calculate the amount of the payout penalty. (1) $3,515.66 (2) $14,062.64 (3) $5,687.99 (4) $26,148.25

Alex Dupuis wants to purchase Joe Benardo's property. Alex would like to pay $35,000 in cash and take over the existing mortgage which has 233 monthly payments of $900 remaining on the mortgage loan. The interest rate on the original mortgage is j2 = 9%, but the current market rate is j2 = 6%. What is the market value of the offer? (1) $100,000.00 (2) $123,690.70 (3) $145,223.67 (4) $159,410.89

A mortgage for $350,000 is written at 6% per annum, compounded monthly. The mortgage calls for monthly payments, a 5-year term, and a 25-year amortization. The mortgage contract permits the borrower to prepay the full amount of the loan at any time subject to the payment of a penalty, which is the greater of a three months' interest penalty or the interest rate differential. Payments are rounded up to the next higher dollar. At the time of prepayment, the current comparable interest rate is 4% per annum, compounded monthly. If the borrower wishes to prepay this loan at the end of the first year (with the 12th payment), calculate the amount of the payout penalty. (1) $5,624.87 (2) $5,156.37 (3) $27,500.66 (4) $34,621.75

A developer is offering a mortgage loan of $102,000 at 9.25% per annum, compounded semi-annually, on each of 16 units in a condominium development. The mortgages have monthly payments, 5-year terms, and 20-year amortization periods. Each unit is priced at $132,000 and the units have been selling over the past seven months. Even with a recent decrease in interest rates (currently at j2 = 8%), the property has attracted the attention of a buyer who has made a full price offer, and applied for the developer's financing on one of the condominium units. The market value of the offer, rounded to the nearest dollar is: (1) $136,835 (2) $115,224 (3) $130,000 (4) $106,300

A local mortgage broker arranged a mortgage in the amount of $210,000. The borrower has agreed to pay a brokerage fee in the amount of $7,200 which is to be added to the loan amount, giving a face value of $217,200 for the loan. The mortgage bears interest at a contract rate of 11.5% per annum, compounded monthly. The mortgage has an amortization period and term of 20 years and calls for monthly payments. If the mortgage is to be sold to an investor for $220,500 immediately after the loan is initiated, the investor will earn the following nominal interest rate, with semi-annual compounding (j2): (1) 12.713048% (2) 0.938971% (3) 11.267746% (4) 11.535586%

Accurate Appraiser is valuing a townhouse using the direct comparison approach. A house recently sold for $175,000, comprised of $85,000 cash and a $90,000 vendor-supplied mortgage written at 5% per annum, compounded semi-annually, with monthly payments sufficient to amortize the loan over 25 years and with a term of 5 years. At the time that the house sold, the market rate for similar mortgages was 7% per annum, compounded semi-annually. What price should Accurate Appraiser use if this sale is to be used as a comparable? Round your answer to the nearest $10. (1) $175,000 (2) $159,730 (3) $82,630 (4) $167,970

With a portable mortgage: (1) a purchaser takes over responsibility for the remaining contractual terms of an existing mortgage. (2) a borrower can save money when the existing mortgage has a lower interest rate than current market rates. (3) the vendor creates a vendor-supplied mortgage. (4) the portable funds fee (PFF) is always charged.

Which of the following statements concerning the Business Practices and Consumer Protection Act (BPCPA) is FALSE? (1) Mortgage lenders and brokers must disclose the Annual Percentage Rate (APR) to the borrower. (2) The Annual Percentage Rate (APR) represents the borrower's contactual interest rate plus any non- interest finance charges. (3) A disclosure statement must be given to a borrower six days prior to the borrower incurring an obligation under a credit agreement, unless the time period is waived by the borrower. (4) In order to provide borrowers with some help in determining the actual cost of borrowing, most provincial governments in Canada have legislated that certain disclosure requirements must be met for specific types of mortgages.

Sara wants to purchase Bart's property. Sara would like to pay $50,000 in cash and take over the existing mortgage which has 233 monthly payments of $1,050 remaining on the mortgage. The interest rate on the original mortgage is j2 = 8%, but the current market rate is j2 = 5.5%. What is the market value of the offer? (1) $244,650.00 (2) $200,903.78 (3) $180,322.00 (4) $150,154.54

Terrence needs to borrow $200,000 to buy a studio apartment, so he can move out of his East Vancouver basement suite. He saw an ad on the bus that said “Bad Credit, No Problem, We Loan to ANYONE!”, so he gave them a call. The potential lender was very friendly and said they could advance a loan of $200,000 with monthly payments of $1,400 over a 1-year term. The lender also gave Terrence a disclosure statement with a lot of fine print he didn’t understand which stated the face value of the loan is $224,000 and the outstanding balance at the end of 1-year loan term is $219,820.63. Calculate the cost of funds advanced (expressed as a j1) for this loan with a 1-year term. (1) 15.832652% (2) 19.019559% (3) 12.521578% (4) 17.115529%

Two years ago, Ernie bought a beautiful lakefront estate for $750,000. Ernie made the purchase with a $250,000 down payment and financed the remainder with a mortgage loan written at a contract rate of j2 = 7.5%, calling for monthly payments of $3,994 and an outstanding balance of $433,709.14 due at the end of the 5-year term. Ernie has made an offer of a $240,000 down payment and assumption of the existing financing for the remainder of the term. If the current market interest rates for 3-year term mortgages is j1 = 10%, what is the market value of Ernie's offer? (1) $690,410.81 (2) $526,899.31 (3) $650,783.33 (4) $685,478.28

A mortgage broker has helped you set up a mortgage loan. The loan is for $250,000 at an interest rate of j12 = 4.5% and a 20-year amortization. The loan calls for monthly payments of $1,582 over a 3-year term with $225,208.61 owing at the end of 3 years. If the lender pays the broker a fee of 2% of the funds advanced, what is the yield to the lender, expressed as an effective annual rate (j1)? (1) 4.485244% (2) 3.228752% (3) 4.749999% (4) 3.825288%

Mr. Dunigan has agreed to sell his prime Vancouver home to his friend Mr. Flutie. Mr. Flutie's offer consists of $55,000 cash and financing the remainder by way of a vendor take-back mortgage. The vendor take-back mortgage would be written for $375,000 at 11.75% per annum, compounded semi-annually, an amortization period of 25 years, a term of 5 years, and monthly payments. Market rates of interest for equivalent mortgages are currently 13% per annum, compounded semi-annually. What will be the market value of Flutie's offer, rounded to the nearest $10? (1) $588,800 (2) $358,850 (3) $413,850 (4) $400,080

as one lowers a discount (or expected yield rate) the present value of a given series of future payments 1. decreases 2. could go up or down depending on the timing of the payments 3. increases 4. remains constant

As a marketing incentive to speed up the sale of newly completed but unsold condominiums, a developer agrees to provide the purchasers with first mortgages written at 8% instead of the market rate of 13% if they pay 45,ooo asking price. under these circumstances the develper would be equally satisfied ( in cash equivalent terms) with an "all cash" offer: 1. less than $45,000 2. more than $45,000 3. equal to $45,000 4. that includes additional bonus in ordr to purchase the unit