Real Estate Math
A Maine agent sells a waterfront home for $895,000. The commission is 5% split 50/50. After the broker-agent 60/40 split, the listing agent earns:
A$8,950✓ Correct
B$13,425
C$17,900
D$22,375
Explanation
Total commission = $895,000 × 5% = $44,750. Listing side = $44,750 × 50% = $22,375.
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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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