Annual property taxes are $3,600. The closing is on September 30 (day 273 of 365). If taxes are paid in arrears, how much does the seller owe in prorated taxes?
Why $2,400 Is Correct
Answer B: $2,400
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.
People Also Study
Related Alabama Questions
- Annual property taxes in Alabama are $2,400. Closing is on March 31. The seller owes taxes for January 1 through March 31 (90 days). How much does the seller owe at closing?Real Estate Math
- An Alabama property has a market value of $350,000. It is assessed at 10% for tax purposes. The mill rate is 40 mills. What are the annual property taxes?Real Estate Math
- A salesperson earns 55% of the commission paid to their broker. If the broker received $9,750 on a sale, how much does the salesperson earn?Real Estate Math
- A seller accepts an offer of $310,000 on their home. The seller's existing mortgage balance is $195,000. Closing costs are $8,000, and the real estate commission is 6%. How much does the seller net from the sale?Real Estate Math
Key Terms to Know
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AmortizationThe 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
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →