Florida Real Estate Sales Associate — All Questions

A home sells for $400,000 with a total commission rate of 6 percent. What is the total commission?

• a.$18,000
• b.$2,400
• c.$40,000
• d.$24,000✓

Total commission equals sale price times commission rate: $400,000 x 0.06 = $24,000. Percentages are converted to decimals before multiplying. This total would then be split among the brokerages and agents involved.

A property sells for $250,000 with a 6 percent commission. If the listing and selling brokerages split the commission equally, how much does each brokerage receive?

• a.$12,500
• b.$7,500✓
• c.$3,750
• d.$15,000

First find the total commission: $250,000 x 0.06 = $15,000. An equal split gives each brokerage $15,000 / 2 = $7,500. Individual agents would then split their brokerage's share per their own agreements.

A buyer makes a 20 percent down payment on a $350,000 home. How much is the down payment?

• a.$35,000
• b.$7,000
• c.$70,000✓
• d.$280,000

The down payment equals the price times the down payment percentage: $350,000 x 0.20 = $70,000. The remaining $280,000 would typically be financed. Converting 20 percent to 0.20 is the key step.

A lender requires a loan-to-value (LTV) ratio of 80 percent on a home appraised at $300,000. What is the maximum loan amount?

• a.$240,000✓
• b.$375,000
• c.$24,000
• d.$60,000

The maximum loan equals value times the LTV ratio: $300,000 x 0.80 = $240,000. The borrower would need to cover the remaining $60,000 as a down payment. LTV compares the loan amount to the property's value.

Annual property taxes are $3,600. Using a 360-day year, what is the daily proration amount?

• a.$1.00
• b.$30.00
• c.$10.00✓
• d.$100.00

Using a 360-day year, divide annual taxes by 360: $3,600 / 360 = $10.00 per day. Prorations allocate expenses like taxes between buyer and seller at closing. Many closings use a 360-day (banker's) year for simplicity.

A parcel of land measures 200 feet by 300 feet. What is its area in square feet?

• a.1,000 square feet
• b.6,000 square feet
• c.60,000 square feet✓
• d.500 square feet

Area of a rectangle equals length times width: 200 ft x 300 ft = 60,000 square feet. Area calculations are common in real estate for lots and buildings. To convert to acres, you would divide by 43,560.

One acre equals 43,560 square feet. How many acres is a lot containing 87,120 square feet?

• a.2 acres✓
• b.4 acres
• c.0.5 acre
• d.1 acre

Divide total square feet by 43,560: 87,120 / 43,560 = 2 acres. Memorizing that one acre is 43,560 square feet is essential for land math. This conversion appears frequently on real estate exams.

A home's value increased from $200,000 to $250,000. What is the percentage of increase?

• a.50 percent
• b.25 percent✓
• c.20 percent
• d.5 percent

Percentage increase equals the change divided by the original value: ($250,000 - $200,000) / $200,000 = $50,000 / $200,000 = 0.25, or 25 percent. Always divide by the original (starting) amount. The result shows growth relative to the starting value.

An investment property generates $30,000 in net operating income and is valued using an 8 percent capitalization rate. What is its indicated value?

• a.$37,500
• b.$240,000
• c.$375,000✓
• d.$2,400,000

In the income approach, value equals net operating income divided by the cap rate: $30,000 / 0.08 = $375,000. A lower cap rate produces a higher value for the same income. This formula is central to valuing income property.

A seller wants to net $188,000 after paying a 6 percent commission on the sale price. What must the sale price be (rounded)?

• a.$211,000
• b.$199,280
• c.$188,000
• d.$200,000✓

The seller keeps 94 percent of the price after a 6 percent commission, so price = $188,000 / 0.94 = $200,000. You divide the net amount by (100% minus the commission rate). Dividing rather than adding 6 percent avoids a common error.

A mortgage loan of $150,000 has an annual interest rate of 6 percent. How much interest accrues in the first month (simple interest)?

• a.$9,000
• b.$75
• c.$1,500
• d.$750✓

Annual interest is $150,000 x 0.06 = $9,000; one month is $9,000 / 12 = $750. Early in an amortized loan, most of each payment goes toward interest. Monthly interest is the annual interest divided by 12.

A buyer pays 2 discount points on a $180,000 loan. How much do the points cost?

• a.$1,800
• b.$360
• c.$3,600✓
• d.$36,000

Each point equals one percent of the loan amount, so 2 points on $180,000 = $180,000 x 0.02 = $3,600. Points are prepaid interest paid to lower the loan's interest rate. They are calculated on the loan amount, not the purchase price.

Annual property taxes of $2,400 are paid in arrears. At a closing on July 1, using a 360-day year, how much does the seller owe for the 6 months already elapsed?

• a.$600
• b.$2,400
• c.$400
• d.$1,200✓

The seller owes taxes for the portion of the year they owned the property. Six months is half the year: $2,400 x 6/12 = $1,200. In arrears means taxes are paid after the period, so the seller credits the buyer for their share.

A rectangular building is 40 feet wide and 80 feet long. At a construction cost of $120 per square foot, what is the total cost?

• a.$384,000✓
• b.$96,000
• c.$3,840
• d.$38,400

First find the area: 40 ft x 80 ft = 3,200 square feet. Then multiply by cost per square foot: 3,200 x $120 = $384,000. Cost-per-square-foot calculations are common in the cost approach and construction estimates.

An agent receives a 3 percent share of a $500,000 sale, then keeps 70 percent after a 30 percent brokerage split. What is the agent's take-home amount?

• a.$7,000
• b.$15,000
• c.$4,500
• d.$10,500✓

The agent's gross share is $500,000 x 0.03 = $15,000. Keeping 70 percent after the split gives $15,000 x 0.70 = $10,500. Commission splits are applied in sequence: first compute the share, then apply the split.

A property assessed at $250,000 is taxed at a millage rate of 20 mills. What is the annual tax?

• a.$5,000✓
• b.$500
• c.$50,000
• d.$2,500

One mill equals $1 per $1,000 of assessed value, so 20 mills is $20 per $1,000. Tax equals $250,000 / 1,000 x 20 = $5,000. Millage rates are a common way local governments express property tax rates.

A triangular lot has a base of 300 feet and a height of 200 feet. What is its area?

• a.45,000 square feet
• b.30,000 square feet✓
• c.60,000 square feet
• d.15,000 square feet

The area of a triangle is one-half the base times the height: 0.5 x 300 x 200 = 30,000 square feet. Forgetting the one-half factor would incorrectly give 60,000.

A room measures 15 feet by 12 feet. How many square yards of carpet are needed to cover the floor?

• a.15 square yards
• b.20 square yards✓
• c.60 square yards
• d.540 square yards

The floor is 15 x 12 = 180 square feet. Because one square yard equals 9 square feet, 180 / 9 = 20 square yards.

A floor of 40 square yards is carpeted at $18 per square yard. What is the total carpet cost?

• a.$360
• b.$720✓
• c.$3,240
• d.$6,480

Multiply the number of square yards by the price per square yard: 40 x $18 = $720. Using square feet instead of yards is a common error.

An investor buys 6 acres of land at $28,000 per acre. What is the total price?

• a.$18,000
• b.$140,000
• c.$1,680,000
• d.$168,000✓

Total price equals acreage times price per acre: 6 x $28,000 = $168,000. Careful decimal placement avoids the off-by-ten errors.

A 3.5-acre parcel sells for $210,000. What is the price per acre?

• a.$52,500
• b.$735,000
• c.$60,000✓
• d.$6,000

Divide the total price by the number of acres: $210,000 / 3.5 = $60,000 per acre.

A waterfront lot with 90 feet of frontage sells for $270,000. What is the price per front foot?

• a.$30,000
• b.$3,000✓
• c.$300
• d.$2,700

Price per front foot equals total price divided by the number of front feet: $270,000 / 90 = $3,000.

A parcel contains 130,680 square feet. How many acres is that? (1 acre = 43,560 sq ft)

• a.4 acres
• b.1.5 acres
• c.2 acres
• d.3 acres✓

Divide total square feet by 43,560: 130,680 / 43,560 = 3 acres. Memorizing 43,560 square feet per acre is essential.

A rectangular tract contains 217,800 square feet. How many acres does it contain?

• a.6 acres
• b.10 acres
• c.4 acres
• d.5 acres✓

Divide square footage by 43,560: 217,800 / 43,560 = 5 acres.

A property sells for $525,000 with a total commission of 6 percent. What is the total commission?

• a.$26,250
• b.$31,500✓
• c.$315,000
• d.$3,150

Multiply the sale price by the commission rate: $525,000 x 0.06 = $31,500.

On a $525,000 sale the total 6 percent commission ($31,500) is split 50/50 between the listing and selling brokerages. The listing agent keeps 60 percent of the listing brokerage's share. How much does the listing agent earn?

• a.$6,300
• b.$18,900
• c.$15,750
• d.$9,450✓

The listing brokerage receives half of $31,500, which is $15,750. The agent keeps 60 percent: $15,750 x 0.60 = $9,450.

A sale of $400,000 pays a graduated commission of 8 percent on the first $150,000 and 4 percent on the balance. What is the total commission?

• a.$16,000
• b.$22,000✓
• c.$18,000
• d.$32,000

The first tier is $150,000 x 0.08 = $12,000; the balance is $250,000 x 0.04 = $10,000. Added together the commission is $22,000.

A seller wants to net $235,000 after paying a 6 percent commission and no other costs. What must the sale price be?

• a.$249,100
• b.$251,000
• c.$235,000
• d.$250,000✓

The seller keeps 94 percent of the price, so price = $235,000 / 0.94 = $250,000. Dividing by (100% minus the rate) avoids the common add-back error.

A home sells for $400,000. The seller pays a 6 percent commission, $4,800 in other closing costs, and a $250,000 loan payoff. What are the net proceeds to the seller?

• a.$150,000
• b.$126,000
• c.$121,200✓
• d.$145,200

Commission is $400,000 x 0.06 = $24,000. Net = $400,000 - $24,000 - $4,800 - $250,000 = $121,200.

A Florida deed transfers property for $360,000. At $0.70 per $100 of consideration, what is the documentary stamp tax on the deed?

• a.$3,600
• b.$1,260
• c.$25,200
• d.$2,520✓

Florida deed stamps are $0.70 per $100: $360,000 / 100 = 3,600 units, times $0.70 = $2,520.

A Florida deed shows consideration of $283,450. Documentary stamp tax on deeds is $0.70 per $100 or fraction thereof. What is the deed stamp tax?

• a.$1,984.15
• b.$2,834.50
• c.$1,983.80
• d.$1,984.50✓

The tax rounds up to the next full $100, so $283,450 becomes 2,835 taxable units. At $0.70 each, 2,835 x $0.70 = $1,984.50.

A buyer signs a $250,000 promissory note secured by a Florida mortgage. Documentary stamp tax on notes is $0.35 per $100. What is the note stamp tax?

• a.$875✓
• b.$1,750
• c.$525
• d.$8,750

Note stamps are $0.35 per $100: $250,000 / 100 = 2,500 units, times $0.35 = $875.

A new Florida mortgage of $250,000 is recorded. Florida's intangible tax is 2 mills ($0.002 per $1). What is the intangible tax?

• a.$250
• b.$5,000
• c.$500✓
• d.$50

The intangible tax is $0.002 per dollar of the mortgage: $250,000 x 0.002 = $500.

A $300,000 Florida mortgage is recorded. Documentary stamp tax on the note is $0.35 per $100 and intangible tax is 2 mills. What is the combined tax on the mortgage?

• a.$600
• b.$1,650✓
• c.$1,050
• d.$1,950

Note stamps are 3,000 x $0.35 = $1,050 and intangible tax is $300,000 x 0.002 = $600. Combined, $1,050 + $600 = $1,650.

A buyer finances a Florida purchase with a $320,000 mortgage. Using $0.35 per $100 for note stamps and 2 mills for intangible tax, what is the total tax charged on the mortgage?

• a.$2,800
• b.$640
• c.$1,120
• d.$1,760✓

Note stamps are 3,200 x $0.35 = $1,120 and intangible tax is $320,000 x 0.002 = $640. The total on the mortgage is $1,760.

A lender makes a $255,000 loan on a home valued at $300,000. What is the loan-to-value ratio?

• a.85 percent✓
• b.75 percent
• c.90 percent
• d.80 percent

LTV equals the loan divided by value: $255,000 / $300,000 = 0.85, or 85 percent.

A lender will lend at a 75 percent LTV on a property valued at $340,000. What is the maximum loan amount?

• a.$453,333
• b.$255,000✓
• c.$272,000
• d.$85,000

Maximum loan equals value times LTV: $340,000 x 0.75 = $255,000.

A buyer purchases a $420,000 home with an 80 percent loan. How large is the required down payment?

• a.$8,400
• b.$336,000
• c.$84,000✓
• d.$42,000

An 80 percent loan means a 20 percent down payment: $420,000 x 0.20 = $84,000.

A home is priced at $305,000 but appraises for $295,000. The lender uses a 90 percent LTV on the lower of price or appraised value. How much cash (excluding closing costs) must the buyer bring to close?

• a.$44,500
• b.$30,500
• c.$39,500✓
• d.$61,000

The loan is 90 percent of the lower $295,000 value: $265,500. Cash needed is $305,000 - $265,500 = $39,500.

A borrower pays 2.5 discount points on a $280,000 loan. What is the cost of the points?

• a.$5,600
• b.$7,000✓
• c.$70,000
• d.$700

One point is one percent of the loan, so 2.5 points equal 0.025 x $280,000 = $7,000.

A borrower pays 3 discount points to lower the rate on a $200,000 loan. How much do the points cost?

• a.$9,000
• b.$6,000✓
• c.$2,000
• d.$600

Three points equal 3 percent of the loan amount: $200,000 x 0.03 = $6,000. Points are figured on the loan, not the sale price.

A lender uses a 28 percent front-end (housing) qualifying ratio. If a borrower's gross monthly income is $7,200, what is the maximum monthly PITI payment?

• a.$2,592
• b.$1,296
• c.$2,016✓
• d.$20,160

The maximum housing payment is 28 percent of gross monthly income: $7,200 x 0.28 = $2,016.

A lender uses a 36 percent back-end ratio. A borrower earns $8,000 per month and has $530 in other monthly debt. What is the maximum allowable monthly housing payment?

• a.$2,350✓
• b.$530
• c.$2,880
• d.$2,470

Total debt cannot exceed 36 percent of $8,000, which is $2,880. Subtracting the $530 of other debt leaves $2,350 for housing.

A loan has monthly principal and interest of $1,400, annual taxes of $3,600, and annual hazard insurance of $1,200. What is the monthly PITI payment?

• a.$5,300
• b.$1,800✓
• c.$1,900
• d.$1,700

Monthly taxes are $3,600 / 12 = $300 and monthly insurance is $1,200 / 12 = $100. PITI = $1,400 + $300 + $100 = $1,800.

A $180,000 loan carries a 5.5 percent annual interest rate. Using simple interest, how much interest accrues in one month?

• a.$9,900
• b.$825✓
• c.$750
• d.$412.50

Annual interest is $180,000 x 0.055 = $9,900. One month is $9,900 / 12 = $825.

A $250,000 loan at 6 percent annual interest has a monthly payment of $1,600. After the first payment, what is the new principal balance?

• a.$249,650✓
• b.$248,750
• c.$249,350
• d.$250,350

First-month interest is $250,000 x 0.06 / 12 = $1,250, so $1,600 - $1,250 = $350 reduces principal. The balance becomes $250,000 - $350 = $249,650.

A borrower takes a $20,000 loan at 7.5 percent simple interest for 6 months. How much interest is owed?

• a.$1,050
• b.$1,500
• c.$375
• d.$750✓

Simple interest equals principal x rate x time: $20,000 x 0.075 x 0.5 = $750.

An income property has a net operating income of $60,000 and a market value of $750,000. What is the capitalization rate?

• a.8 percent✓
• b.10 percent
• c.12.5 percent
• d.6 percent

The cap rate equals NOI divided by value: $60,000 / $750,000 = 0.08, or 8 percent.

A property produces $63,000 of net operating income and is valued using a 9 percent cap rate. What is its indicated value?

• a.$567,000
• b.$770,000
• c.$630,000
• d.$700,000✓

Value equals NOI divided by the cap rate: $63,000 / 0.09 = $700,000.

A rental has gross potential income of $100,000, a 5 percent vacancy loss, and operating expenses of $35,000. What is the net operating income?

• a.$65,000
• b.$60,000✓
• c.$95,000
• d.$55,000

Effective gross income is $100,000 minus 5 percent vacancy ($5,000), or $95,000. Subtracting $35,000 in expenses gives NOI of $60,000.

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.