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 A typical __ table shows various rates of interest and length of loans (called terms). amortization Annual income on a property = __ rate x cost of the property capitalization ___ splits can occur if one broker puts the property on MLS, yet another broker sells it. 50/50 is the most common split. commission When real property is transferred county recorder collects a documentary __ tax. transfer Documentary transfer tax is computed as, 1/3: \$1.10 per \$__of value transferred, or \$__ per \$500 value transferred. \$1,000 \$0.55 Documentary transfer tax is computed as, 2/3: When the terms of the sale are all cash or a new loan, the documentary transfer tax is paid on the __ sales price. entire Documentary transfer tax is computed as, 3/3: When the buyer assumes the seller’s existing loan, the tax is computed only on the __ amount. The transfer tax can be paid by the buyer or the seller, but custom usually has the __ pay the tax. equity; seller __ is the charge for the use of money expressed as dollars. Interest __ is the act of making an equitable distribution of expenses in escrow at the close of the sale. Proration There are four basic steps in proration: 1. Determine whether the amount should be a credit or a __ to the seller or the buyer. 2. Determine the number of days to be prorated. 3. Tabulate the cost per day. 4. __ the number of days by the cost per day. debit; Multiply For simplicity in determining prorations, assume there are __ days in a month and __ days in a year. 30 360 ALWAYS break it down to a daily cost, then multiply by the no. of days. Made = __ x__ - or - Income = Rate x __ Paid x Rate Investment When you are given monthly figures, convert them to __ figures. annual A \$5,000 note for a loan from a private lender is to be paid off in 12 months. The borrower is to pay the \$5,000 plus 8 percent interest on the due date. An investor purchases the note today at a discount rate of 10 percent. What is the investor’s rate of return on the amount invested? Made = 0.08x5000 + 0.10x5000 = 900 Paid = 4500 Rate = 900/4500 = 20% __ is the amount of money borrowed. Principal I = P x R x T Interest = Principal x Rate x Time A fully __ loan is one in which the loan will be paid off at the end of the term if all the monthly payments are made. amortized When solving math problems, ALWAYS ALWAYS re-read the fine details!! Just do it Got it wrong: for transfer tax problems involving assumed loans, you MUST use __ (price - loan)!! equity! Interest paid on your first house payment = rate x __ amount / 12 loan