Real Estate MathIntermediateAlabama Exam

A seller wants to net $155,000 after paying a 5% commission and $2,500 in closing costs. What must the property sell for?

Q: A seller wants to net $155,000 after paying a 5% commission and $2,500 in closing costs. What must the property sell for?

Net = Price × 0.95 − $2,500 = $155,000. Price × 0.95 = $157,500. Price = $157,500 ÷ 0.95 ≈ $165,789, closest to $167,500.

A$157,500

B$163,500

C$167,500Correct

D$162,000

Why $167,500 Is Correct

Answer C: $167,500

Net = Price × 0.95 − $2,500 = $155,000.

Exam Tip: Real Estate Math

Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.

Key Real Estate Math Terms in This Question

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

People Also Study

Key Terms to Know

Closing Costs

Fees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.

Amortization

The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.

Loan-to-Value Ratio (LTV)

The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.

Math Concepts

Commission Calculation Closing Costs

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Real Estate Finance Guide

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