A Delaware property's NOI is $31,500 with a cap rate of 7%. A buyer's required return is 7.5%. By how much will the buyer discount the value below the seller's asking price?
Why $30,000 Is Correct
Answer A: $30,000
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.
People Also Study
Related Delaware Questions
- A Delaware commercial property is listed at $1,200,000 with an annual NOI of $84,000. A buyer wants a 7% cap rate. Is the asking price justified?Real Estate Math
- A Delaware property sells for $295,000. The state and county transfer tax combined rate is 4%. If the buyer and seller split this equally, how much does each pay?Real Estate Math
- External (economic) obsolescence affecting a Delaware property could be caused by:Property Valuation
- The chain of title refers to:Escrow & Title
- The income approach is most appropriate for valuing:Property Valuation
- Depreciation in the cost approach is defined as:Property Valuation
- A Delaware property has an assessed value of $220,000. The county mill rate is 15 mills. What is the annual property tax?Real Estate Math
- A Delaware seller's asking price is $345,000. The property has been on the market 60 days and the seller agrees to reduce the price by 4%. What is the new asking price?Real Estate Math
Key Terms to Know
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →