A seller has a home with market value of $750,000. The seller wants to net $700,000 after paying a 6% commission. Can the seller achieve this by listing at $750,000?
Why Yes — $750,000 minus the 6% commission ($45,000) leaves $705,000, which meets and exceeds the $700,000 target Is Correct
Answer A: Yes — $750,000 minus the 6% commission ($45,000) leaves $705,000, which meets and exceeds the $700,000 target
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
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Key Terms to Know
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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
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