Real Estate Math
If a listing is taken at a 6.5% commission and the listing office retains 3% while the selling office receives 3.5%, what does each office earn on a $285,000 sale?
AListing: $8,550; Selling: $9,975
BListing: $9,975; Selling: $8,550✓ Correct
CListing: $8,760; Selling: $9,975
DBoth: $9,262.50
Explanation
Total commission = $285,000 × 6.5% = $18,525.
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Key Terms to Know
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
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