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37 Cards in this Set
- Front
- Back
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Convert a percentage to a decimal |
Move the decimal two places to the left or divided by 100 as in 1% = 1 / 100 = 0.01. |
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Convert a decimal to a percentage |
Move the decimal two places to the right, or multiply by 100, as in 0.01 x 100 = 1%. |
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Units of measure |
Feet per yard: 3 feet = one yard Feet per acre: 1 acre =43,560 square feet (or 208.71 feet by 208.71 feet) Feet per mile : 1 mile =5,280 feet Yards per acre: 1 acre = 4,840 square yards Acres per square mile : 1 square mile =640 acres |
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Area |
Length x width = area Area/length = width |
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Volume |
Cubic inch : 16.387064 cm3 Cubic foot: 1,728 in3 Cubic yard : 27ft3 Cubic mile : 5,451,776,000 yd3 = 3,379,200 acre-feet Length x width x height = volume of a cube |
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Nature of property tax calculations |
Property is taxed by local taxing authorities, based on a percentage of the assessed value, for the purpose of raising State operating Revenue. |
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Assessed value |
Value assigned to property by a local government as a basis for determining property taxes. Assessed values are usually a percentage of the market value. |
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Tax rate |
Method of calculating the amount of tax owed to a taxing Authority. Each taxing body arrives at it's tax rate separately. The amount of money needed by each taxing district is divided by the total assessment for all real estate located within the jurisdiction in order to arrive at that districts percentage. |
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Property tax calculations |
Property taxes / assessed value = tax rate Tax rate x assessed value = annual taxes Property tax /tax rate = assessed value |
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Nature of loan-to-value ratios |
Ratio between a mortgage loan amount in the sales price or appraised value of real estate, whichever is lower. Lenders analyze loan-to-value and establish maximum ratios in order to reduce the risk that a borrower will default on his loan. |
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Loan-to-value ratios |
Loan amount /property value = LTV Property value x LTV = loan amount |
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Nature of discount points |
Additional fees paid to the lender by the borrower in order to reduce the interest rate of his mortgage. Discount points are paid in a lump sum at the time of closing. Generally the borrower pays 1% of the loan amount per point and he may reduce his interest rate by 1% by purchasing eight points. |
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Discount points |
Loan amount x number of points = point dollar amount Point dollar amount /loan amount = number of points |
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Nature of equity |
Cash value of property after deducting all debts, including any mortgage indebtedness. |
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Equity |
Down payment + (original loan amount - current loan amount) + appreciation = equity |
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Nature of qualifying buyers |
Licensees May estimate monthly mortgage cost in order to determine the monthly payments for prospective purchasers. A loan repayment Factor, also known as an amortization Factor, can assist in determining the monthly principal and interest payment. Loan repayment factors are usually represented by some dollar amount per thousand. |
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Qualifying buyers |
Loan amount / $1,000 x loan payment factor = monthly principal interest |
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Prorations |
Vaporation is a proportionate distribution of certain expenses between the property buyer and seller at closing, such as homeowners association dues, utilities, taxes, and rents. Borrowers monthly interest on his new loan is also prorated so that he will not be charged on the loan before the day of settlement. |
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Nature of commissions |
Many real estate agents are compensated by a commission, calculated as a percentage of the sales price. The rate of a broker's commission, and any fees he or she may charge, is always negotiable. It would be a violation of antitrust laws for multiple firms to agree upon or fix a commission rate. |
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Commissions |
Sales price x commission rate = commission amount Commission amount /sales price =commission rate |
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Nature of sale proceeds |
Sales proceeds are the amount of money received from selling a home. Net proceeds are the amount of money received from selling a home after deducting expenses, such as commissions and closing costs. |
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Sales proceeds |
Sales price - purchase price - (sale price x commission rate) = profit |
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Total money needed by buyer at closing |
Frequently, a buyer will ask the agent how much the buyer should bring to closing. Purchase price - amount financed + closing costs - deposit already paid = amount needed to bring to closing |
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Nature of transfer taxes |
Fees charged to grantors and grantees by local jurisdictions for the privilege of buying or selling real estate in that jurisdiction. Transfer taxes are generally paid by the seller, grantor, or lessor, and are due when the deed is recorded. Transfer taxes are generally repaid by purchasing a stamp from the local office in charge of recording Deeds. The stamp is affixed to the deed is evidence that the taxes paid in full. Transfer taxes are usually based on the sales price of the property. |
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Transfer tax / conveyance tax / Revenue stamps |
(sales price x state tax) + (sales price x County tax) = total transfer tax |
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Nature of comparative market analysis |
Also referred to as a competitive market analysis. And informal comparison of recently sold properties, used by real estate agents to recommend listings or offering prices. Good comparables should be similar to location, size, age, style, and amenities. |
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Comparative market analysis |
Total comparable sales prices / total number of comparables = average selling price |
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Nature of income properties |
Mini income property problems deal with return on investment, and use net operating income or capitalization rates. |
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Income properties |
Annual gross income - vacancies and credit losses = annual effective gross income Annual effective gross income - annual operating expenses = annual net operating income Annual net operating income / annual rate of return = value Value x annual rate of return = annual net operating income Annual net operating income / value = annual rate of return |
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Nature of depreciation |
The decrease in value of an asset. For appraisal purposes, depreciation refers to a loss and actual property value due to any natural or economic calls. However, for tax purposes, depreciation is an allowable expense deduction that can be taken even if the property in question increases in value. The purpose of the depreciation tax deduction is to allow investors to recover the cost of their investment over a certain period of time. |
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Depreciation |
Cost x annual depreciation rate = annual depreciation Annual depreciation / annual depreciation rate = cost Annual depreciation / cost = annual depreciation rate Annual depreciation rate x number of years = current value as a percent Cost x Current value as a percent = current value Current value / current value as a percent = cost Current value / cost = current value as a percent |
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Capitalization rate |
As previously discussed, the cap rate is the estimated annual percentage of a return on an income-producing property, established by dividing the net operating income with the sales price. The appraiser estimates the sales price using the market data approach with comparable properties. |
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Nature of gross rent multipliers |
Ratio between the sales price of a property and it's gross rental income, used to estimate property value. The gross rent multiplier is also known as gross income multiplier. A gross rent multiplier is a less accurate means of estimating the rate of return than a capitalization rate because the gross rent multiplier realize I must data. |
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Gross rent multipliers |
Sales price / gross rent = gross rent multiplier |
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Down payment / amount to be financed, mortgage calculations |
In order to qualify the buyer for a loan, the lender requires the buyer to have a certain amount of money invested in the property. This amount, the down payment, is the difference between the amount the lender is willing to finance in the purchase price. |
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Interest rates / interest amounts |
Interest is the cost of borrowing money. A borrower's interest rate is stated in a note, and is expressed as an annual rate. |
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Amortization / monthly installment payments |
Monthly payment - months interest = amount paid towards principal Principal balance - amount paid toward principal |
