CSLB General Building (B) — All Questions

A home sells for $350,000 with a total commission of 6%. How much is the total commission in dollars?

• a.$15,000
• b.$18,000
• c.$21,000✓
• d.$24,000

Multiply the sales price by the commission rate: $350,000 x 0.06 = $21,000. This total is then typically split between the listing and buyer's brokerages.

A property sells for $420,000 with a 6% commission. The listing and selling brokerages split it 50/50, and the listing agent keeps 60% of their brokerage's share. How much does the listing agent earn?

• a.$12,600
• b.$7,560✓
• c.$25,200
• d.$15,120

Total commission is $420,000 x 0.06 = $25,200; each brokerage gets half, or $12,600. The listing agent's 60% share is $12,600 x 0.60 = $7,560.

A buyer pays $280,000 for a home and puts 15% down. How much is the down payment?

• a.$42,000✓
• b.$28,000
• c.$56,000
• d.$4,200

Multiply the price by the down payment percentage: $280,000 x 0.15 = $42,000. The remaining $238,000 would be financed.

A lot measures 150 feet by 200 feet. What is its area in square feet?

• a.3,500 sq ft
• b.350 sq ft
• c.35,000 sq ft
• d.30,000 sq ft✓

Area of a rectangle is length times width: 150 x 200 = 30,000 square feet. To convert to acres, divide by 43,560.

One acre contains 43,560 square feet. How many acres are in a parcel of 87,120 square feet?

• a.1 acre
• b.2 acres✓
• c.3 acres
• d.4 acres

Divide the total square footage by 43,560: 87,120 / 43,560 = 2 acres. Memorizing that an acre is 43,560 square feet is essential for land math.

Annual property taxes of $4,800 are paid in arrears. At a closing on July 1 (with the year split evenly into two halves), what is the seller's share for the first half of the year using a 360-day proration?

• a.$1,200
• b.$4,800
• c.$2,400✓
• d.$800

With taxes paid in arrears, the seller owes for the portion of the year they owned the property. From January 1 to July 1 is half the year, so the seller's share is $4,800 x 6/12 = $2,400.

A home appreciates from $250,000 to $300,000. What is the percentage of increase in value?

• a.20%✓
• b.15%
• c.25%
• d.50%

The increase is $300,000 minus $250,000, or $50,000. Divide the increase by the original value: $50,000 / $250,000 = 0.20 or 20%.

A loan of $200,000 carries a 6% annual interest rate. How much is the interest for the FIRST month (simple interest)?

• a.$12,000
• b.$1,000✓
• c.$1,200
• d.$100

Annual interest is $200,000 x 0.06 = $12,000. Divide by 12 months to get the first month's interest: $12,000 / 12 = $1,000.

A property is assessed at $180,000 and the tax rate is $2.50 per $100 of assessed value. What is the annual property tax?

• a.$450
• b.$1,800
• c.$2,500
• d.$4,500✓

Divide the assessed value by 100 to get the number of taxable units: $180,000 / 100 = 1,800. Multiply by the rate: 1,800 x $2.50 = $4,500.

An investor's rental property produces net operating income (NOI) of $24,000 per year. Using a capitalization rate of 8%, what is the indicated value?

• a.$192,000
• b.$1,920,000
• c.$300,000✓
• d.$32,000

The income approach value equals NOI divided by the cap rate: $24,000 / 0.08 = $300,000. A lower cap rate would produce a higher value for the same income.

A seller wants to net $190,000 after paying a 5% commission (and no other costs). What must the sales price be, rounded to the nearest dollar?

• a.$200,000✓
• b.$199,500
• c.$180,500
• d.$209,000

The seller keeps 95% of the price, so price = $190,000 / 0.95 = $200,000. Checking: $200,000 x 5% = $10,000 commission, leaving $190,000.

A rectangular house has exterior dimensions of 40 feet by 50 feet. If construction costs $120 per square foot, what is the estimated construction cost?

• a.$96,000
• b.$240,000✓
• c.$24,000
• d.$2,400,000

The area is 40 x 50 = 2,000 square feet. Multiply by the cost per square foot: 2,000 x $120 = $240,000.

A buyer obtains a loan with an 80% loan-to-value ratio on a $325,000 purchase. How much is the loan amount?

• a.$65,000
• b.$162,500
• c.$32,500
• d.$260,000✓

Multiply the price by the LTV: $325,000 x 0.80 = $260,000. The remaining 20%, or $65,000, would be the down payment.

Monthly rent is $1,500 and the annual gross rent multiplier (GRM) for comparable properties is 12 times ANNUAL rent. What is the indicated property value?

• a.$18,000
• b.$150,000
• c.$216,000✓
• d.$1,800,000

Annual rent is $1,500 x 12 = $18,000. Multiply annual rent by the GRM: $18,000 x 12 = $216,000.