Math Flashcards
(52 cards)
Debit
Debit is an amount of money that a person will owe.
Credit
A credit is an amount of money that a person will receive, or that has already been paid, like earnest money.
Prorations
Prorations are settled between the buyer and seller in proration to the amount of time they all the property in the billing cycle. They will be a debit for one party and a credit for another for the same amount.
What is a bankers calendar?
360 days a year / 30 days a month unless told otherwise.
What is an actual calendar?
365 days / actual days in the month
〰30 days in September, April, June & November … all the rest have 31 except February, which has 28
Commission splits
Use the T formula
Commission $ --------------------------------------------------- Sales Price x Commission Rate
Sellers Net:
How to figure it out
- Add expenses and subtract refunds from desired net amount
- Subtract the rate from 100% first, then use the t-method
- also called “sellers dollars after commission”
PART (net before commission) ----------------------------------------------- SALE PRICE x. 100% - commission =
Prorations:
Do you debit and credit the same amount for prorations?
Yes - i’ll prorations will be debited and credited the same amount.
Use a bankers calendar, which is 30 days a month, 360 days in a year unless it specifically states actual days.
Actual days referred to the actual number of days in a month and 365 days in a year.
Seller owns the home the day of closing.
- Be careful deciding which calendar to use…(bankers or actual)
- Who owes whom
- What are the timeframes
TAX MATH
Mills = 1/1000 of a dollar
Mileage rate = mills x .01 move decimal three spaces to the left i.e.; 7 mills =.007
Use millage rate in place of tax rate\unit
Formulas:
Value x Assessment Rate x Equalization Factor (if any) x (tax rate/unit ➗100) = Taxes
Value x Assessment Rate x Equalization Factor (if any) x Millage Rate = Taxes
Financing Math
Loan amount X interest rate = interest
Interest paid ➗ loan amount = interest rate
Interest paid ➗ interest rate = Loan amount
PART
(Annual Interest)
-------------------------------
WHOLE. x. Interest Rate
(Loan Amt). (%)Interest Due on Loan
INTEREST $ (Part)
_______________________
Loan Amt x Interest Rate
Loan Fees
(the lesser of sale price or appraised value) x LTX = loan amount
Loan amount x number of points = dollar amount
Loan balance x penalty rate = prepayment penalty
LTV = Loan-to-Value: the loan amount as a percentage of the value of the property (sale price or appraised value, whichever is less).
Points (pts): - up front interest. Also know as a discount points
1 point (pt) = 1% of the loan amount
Origination Fees - include processing fees, points, underwriting fees, closing costs, etc.
Prepayment penalty: - a percentage of the loan amount that is charged should the loan be paid in full prior to the maturity date.
Valuation Math
The Income Approach is used for valuation of income-producing such as apartments, office buildings and shopping centers. It assumes that the income generated by a property determines the property’s value.
Capitalization Rate (Cap Rate) - the potential rate of return on an owners investment
Net Operating Income (NOI) = annual income - annual expense
NOI = annual income - annual expenses
NOI / market value = Cap Rate
NOI / Cap Rate = Value
Value x Cap Rate = NOI
Net Operating Income \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Market Value x Cap Rate (%)
Linear Measurements: a linear measurement is a line measurement, used perhaps to measure the lenght of a fence or to measure frontage on the lake or road.
12 inches = 1 foot
3 feet = 1 yard
5280 feet = 1 mile
A perimeter is the distance around something. It is the total of the lengths of all sides.
Frontage (front door) - typically the first number given in a lot measurment. Ex. 75 ft. x 50 ft.
Area Measurements: Real Estate is often measured in square feet or acreage.
1 acre = 43,560 sq. ft
1 mile = 5,280 feet
1 section = 1 square mile = 640 acres
1 sq. yard = 9 sq. ft
Formulas for Area Measurements
Area of Rectangle = length x width
Area of Triangle = 1/2 base x height
or length x width x .5 = Triangle
How many inches are in a foot?
12 inches = 1 foot
How many feet are in 1 yard?
3 feet = 1 yard
How may feet are in a mile?
5,280 feet = 1 mile
How many sq feet are in 1 acre?
43,560 sq. feet = 1 acre
1 mile is how many feet?
1 mile = 5,280 feet
1 section equals how many square miles?
1 section = 1 sq. mile = 640 acres
How many square miles = 640 acres?
1 square mile = 640 acres
1 section = 1 square mile = 640 acres
know this
