Florida Real Estate Sales Associate — All Questions

A property has a net operating income of $60,000. Using a 7.5 percent capitalization rate, what is its estimated value?

• a.$750,000
• b.$450,000
• c.$800,000✓
• d.$4,500,000

Value equals NOI divided by the cap rate: $60,000 / 0.075 = $800,000.

A property sells for $450,000 and produces annual gross rent of $37,500. What is the gross rent multiplier (annual)?

• a.10
• b.0.083
• c.12✓
• d.15

The annual GRM equals price divided by annual gross rent: $450,000 / $37,500 = 12.

An appraiser uses a monthly gross rent multiplier of 110. If a property rents for $2,500 per month, what is its indicated value?

• a.$275,000✓
• b.$2,750,000
• c.$225,000
• d.$250,000

Value equals the monthly GRM times monthly rent: 110 x $2,500 = $275,000.

An investor buys a property for $220,000 and later sells it for $253,000. What is the percentage of profit based on cost?

• a.85 percent
• b.12 percent
• c.15 percent✓
• d.13 percent

Profit is $253,000 - $220,000 = $33,000. Dividing by the $220,000 cost gives 0.15, or 15 percent.

A home sold for $189,000, which was a 10 percent loss from what the owner originally paid. What was the original purchase price?

• a.$189,000
• b.$170,100
• c.$207,900
• d.$210,000✓

A 10 percent loss means the sale equals 90 percent of cost: $189,000 / 0.90 = $210,000.

An investor buys a home for $160,000, spends $40,000 on renovations, and sells for $240,000. What is the percentage of profit on total cost?

• a.20 percent✓
• b.50 percent
• c.33 percent
• d.25 percent

Total cost (basis) is $160,000 + $40,000 = $200,000, and profit is $240,000 - $200,000 = $40,000. Dividing $40,000 by $200,000 gives 20 percent.

A property worth $300,000 appreciates 5 percent per year, compounded, for 2 years. What is its value after 2 years?

• a.$315,000
• b.$330,750✓
• c.$330,000
• d.$347,288

Compounding: $300,000 x 1.05 x 1.05 = $300,000 x 1.1025 = $330,750.

A Florida home is assessed at $280,000 with combined exemptions of $50,000. The millage rate is 22 mills. What is the annual property tax?

• a.$5,060✓
• b.$5,600
• c.$6,160
• d.$4,600

Taxable value is $280,000 - $50,000 = $230,000. At 22 mills ($22 per $1,000), tax = 230 x $22 = $5,060.

A property with a taxable value of $210,000 owes $4,200 in annual property tax. What is the millage rate?

• a.0.02 mills
• b.200 mills
• c.20 mills✓
• d.2 mills

The rate equals tax divided by value: $4,200 / $210,000 = 0.02, which is $20 per $1,000, or 20 mills.

Annual property taxes are $5,475, paid in arrears. Using Florida's 365-day proration, the seller owned the property for the first 90 days of a non-leap year. What is the seller's share owed to the buyer at closing?

• a.$1,335
• b.$1,350✓
• c.$1,365
• d.$4,125

The daily rate is $5,475 / 365 = $15. For 90 days the seller owes 90 x $15 = $1,350, credited to the buyer.

Monthly rent of $1,800 was collected by the seller for June. The sale closes June 16 and the buyer owns the day of closing. Using a 30-day month, how much rent is credited to the buyer?

• a.$900✓
• b.$1,080
• c.$960
• d.$840

The buyer owns June 16 through 30, which is 15 days. The daily rent is $1,800 / 30 = $60, so 15 x $60 = $900 is credited to the buyer.