Free Practice Exam

Real Estate Math Practice Exam

This exam contains 15 questions that cover 7 major topic areas:

• Appraisal
• Appreciation
• Commission
• Geometry
• Mortgages
• Proration
• Taxes

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Question 1

How much total interest is paid on a $150,000 loan amortized over 15 years at 8% interest, using a factor of 9.56?

	$1434 Hint: Getting close. This is only the monthly mortgage payment
	$258,120 Hint: Almost. This is the total amount of the loan. We're only looking for the interest.
	$150,000
	$108,120

Question 1 Explanation:Calculate Mortgage Payment = 150 x 9.56 = $1434
Calculate total cost of loan = $1434 x 15 years x 12 months/year = $258,120
Subtract principal amount = $258,120 - $150,000 = $108,120

This is a Mortgage question.

Question 2

Gina wants to replace the carpet in her bedroom. The size of her bedroom is 12 foot by 10 foot and the cost to replace carpet is $3.00 / sf. How much will it cost Gina to replace the carpet?

	$120 Hint: This is the area, but we need the cost.
	$360
	$500
	$40

Question 2 Explanation:Calculate total sf = Area = Length x Width = 10 feet x 12 feet = 120 sf
Calculate Cost = 120 sf x $3/sf = $360

This is a Geometry question.

Question 3

An agent seller a property for $650,000 and makes a commission of 6%, which is split 70/30 with his broker. How much does the agent receive?

	$27,300
	$39,000 Hint: Not quite. What about the split?
	$65,000
	$11,700 Hint: Not quite. The agent gets 70% and the broker gets 30%.

Question 3 Explanation:Calculate total commission = $650,000 x .06 = $39,000
Calculate agent percentage = $39,000 x .7 = $27,300

This is a Commission question.

Question 4

Dan bought his home 10 years ago for $175,000. He sold his home last month for $275,00. What is the annual rate of appreciation?

	100%
	57% Hint: This is the total appreciation. We're looking for the annual appreciation.
	5.7%
	157%

Question 4 Explanation:Total Appreciation = $275,000 - $175,000 = $100,000
Total % Appreciation = Total Appreciation / Original Amount = $100,000 / $175,000 = .57
Annual appreciation = .57 / 10 years = .057 = 5.7%

This is an Appreciation question.

Question 5

Sally buys a $375,000 house in Ludoun County. The state recordation tax is $0.25 per $100. The county tax is 1/3 of the state tax. How much recordation tax will Sally pay?

	$1000
	$1250
	$937.50 Hint: This is only part of the answer
	$312.50 Hint: This is only part of the answer

Question 5 Explanation:Calculate state recordation tax = $375,000 x .25 / 100 = $937.50
State tax = 1/3 * $937.50 = $312.50
Total Tax = $1250

This is a Taxes question.

Question 6

How many 5,000sf lots can a developer create from a 10-acre piece of land?

	435,600 lots
	43,560 lots
	87 lots
	187 lots

Question 6 Explanation:Covert acres to sf = 10 acres x 43560 sf / acre = 435,600 sf.
Divide by 5,000 sf to find number of lots = 87 lots

This is a Geometry question.

Question 7

An agent seller a property for $415,000 and receives a commission of $22,825. What was her commission rate?

	5.5%
	18%
	55%
	180%

Question 7 Explanation:Commission rate = Commission Received / Sales Price = 0.055 = 5.5%

This is a Commission question.

Question 8

A 5-year old 2,100 sf house that has a replacement cost of $65/sf. The land is valued at $125,000 and the depreciation rate is 2% per year. What is the value of the property using the cost approach?

	$136,500 Hint: This is only the replacement cost.
	$2,740
	$13,650 Hint: Close, but not quite.
	$247,850

Question 8 Explanation:Replacement cost = 65 x 2100 = $136,500.
Annual Depreciation = $136,500 x .02 = $2730
Depreciation over 5 years = $13,650

Value = Replacement Cost + Land Value = Depreciation = $247,850

This is an Appraisal question.

Question 9

Tom sells his house for $475,000 in Loudoun County. The grantor tax is $0.50 per $500. What is the grantor tax?

	$2,375
	$475
	$4,750
	$500

Question 9 Explanation:Calculate Grantor Tax = $475,000 x .5 /500 = $475

This is a Taxes question.

Question 10

How much is the PI payment on a 7.25%, $200,000 mortgage, amortized over 30 years using the amortization factor of 6.82?

	$200
	$1,324
	$1,234
	$662

Question 10 Explanation:Calculate payment = Mortgage Factor x Loan Amount in Thousands = 6.62 x 200 = $1,324

This is a Mortgage question.

Question 11

Karen is considering buying a 8-unit apartment building. The NOI is $85000. If she wants a 15% return on her investment, what is the maximum price she should offer?

	$56,667
	$1,275
	$127,500
	$566,667

Question 11 Explanation:Value = NOI / Cap rate = $8,500 / .15 = $56,667

This is an Appraisal question.

Question 12

Ken bought a condo 3 years ago for $250,000. If the area depreciated at 5% per year, what is the value of his house today?

	$12,500 Hint: Not quite. This is the annual depreciation.
	$37,500 Hint: Not quite. This is the total depreciation.
	$212,500
	$237,500

Question 12 Explanation:Calculate annual depreciation = $250,000 x .05 = $12,500.
Calculate total depreciation = $12,500 x 3 years = $37,500.
Calculate value = $250,000 - $37,500 = $212,500.

This is an Appreciation question.

Question 13

Marsha buys a property and closes on August 1. The seller pre-paid the annual real estate taxes of $5000 in advance. How much will Marsha owe the seller in real estate taxes at closing?

	$2916.69 Hint: Not quite. How many months is Martha responsible for?
	$945.20
	$2083.33
	$416.67 Hint: You're on the right track, but this isn't the answer.

Question 13 Explanation:Calculate monthly tax = $5000 / 12 = $416.67
Marsha is responsible for 5 months, so she owes the seller = $416.67 x 5 = $2083.33

This is a Proration question.

Question 14

Ben sold his townhome on March 12. The property is subject to an HOA fee of $355 per month, which Ben prepaid for the month of March. How much does the buyer owe Ben in HOA fees? (Assume a 30-day month)

	$11.33 Hint: Almost. This is the daily rate.
	$203.94
	$177.50
	$355

Question 14 Explanation:Calculate daily rate = $355 / 30 = $11.33 / day

The buyer owes (30-12 = 18 days) = $11.33 x 18 = $203.94

This is a Proration question.

Question 15

A broker receives a commission check for $9000. If her commission rate is 6%, what was the sales price of the home?

	$540 Hint: The sales prices is greater than the commission.
	$150,000
	$540,000
	$200,000

Question 15 Explanation:Sales price = Commission Received / Commission Rate = $150,000

This is a Commission question.

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