Real Estate MathIntermediateCalifornia Exam

A seller nets $392,000 after paying a 6% commission and $8,000 in closing costs. What was the sale price of the property?

Q: A seller nets $392,000 after paying a 6% commission and $8,000 in closing costs. What was the sale price of the property?

Let SP = sale price. Net = SP − 0.06SP − $8,000 = 0.94SP − $8,000 = $392,000. So 0.94SP = $400,000. SP = $400,000 ÷ 0.94 ≈ $425,532.

A$400,000

B$430,000

C$425,532Correct

D$420,000

Why $425,532 Is Correct

Answer C: $425,532

Let SP = sale price. Net = SP − 0.

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.

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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.

Contingency

A condition in a purchase contract that must be satisfied before the sale can proceed to closing.

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.

Math Concepts

Commission Calculation Closing Costs

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Real Estate Finance Guide

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