REMI School of Real Estate

EXAM PREP STUDY GUIDE

Hawaii:

1. In Hawaii the statutory usury ceiling on a conventional loan is : there is no

ceiling
2. What is Usury: Illegal Interest
3. In Hawaii the statutory usury ceiling on loans by individuals who are not seller
is:12%
4. Unclaimed real estate escheats to the state after how long: 15 years
5. What is the recission period for the sale of land under the ULSPA: 7 days
6. What is the recission period for the sale of a new condominium: 30 days
7. What is the recission period for the re-sale of a condominium: none
8. What is the age of majority in Hawaii: 18 years of age
9. How long is the prescriptive period for adverse possession: 2 years
10. Which of the following is not a cure for adverse possession: D
a. Prescriptive easement
b. Suit for quiet title
c. Quit claim deed
d. Easement by necessity
11. If the rent of an apartment is $1,000 per month, what is the maximum security
deposit plus pet deposit that may be charged: $1,000
12. How long is the right of redemption in Hawaii for a mortgage foreclosure: zero
13. How long is the right of redemption in Hawaii for real estate tax foreclosure: 1 yr
14. Where are land court and regular system deeds recorded: Bureau
15. To be eligible for recordation a document must be : Acknowledged
16. To raise rent on a MTM tenancy a landlord must give how many days notice: 45
17. To notify a tenant to move out of a MTM tenancy a landlord must give how many
days notice: 45
18. What is the conveyance tax on a $350,000 sale: it is 1% or $350.
19. Who pays the conveyance tax in Hawaii: seller
20. After how many years of non payment of real estate taxes may the county
foreclose the property: 3
21. Conveyance tax is based on which value: the sale price
22. A 35 year old person who is the owner occupancy of a primary residence may
receive how much of a homeowners exemption: $40,000
23. Refer to question #21: how much is the exemption for a person 66: It is $100,000
a. Under 55 $40,000 = 1
b. 55-59 $60,000 = 1.5
c. 60-64 $80,000 = 2
d. 65-69 $100,000 = 2.5
e. 70+ $120,000 = 3
24. How often does the county adjust the assessment of real estate: annually
25. An aggrieved person has the right to: $25,000 from recovery fund
a. It is maximum of $25,000 per incident or $50,000 per agent
26. What is the statute of limitations on a claim against a licensee: 2 years

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27. What is the minimum balance of the recovery fund prior to an assessment to all
agents: $350,000
28. What is a disadvantage of land court: original ( first time ) is slow and expensive
29. What form of ownership is not recognized in Hawaii: community property
30. What type of state is Hawaii: Lien Theory
31. What three documents are common in Land Court: Transfer Certificate of Title,
Lien Letter and Deed
32. If a payment is made from recovery fund: licensee license is suspended
33. The surviving spouse of the decedent, who is married sixteen years is entitled to:
50% of decedents estate.
34. The vendor of an agreement of sale has what title: legal or beneficial
35. The vendee of an agreement of sale has what title: equitable
36. Which party holds title during the term of an agreement of sale: vendor
37. In Hawaii curtesy & dower are recognized for properties occupied prior to: 7/1/77
38. Time share is : real property
39. Time share is : the sale of an interval of time
40. Right to Use timeshare is a less than freehold estate
41. Time Share Ownership ( “TSO” ) is a freehold estate
42. Unless a buyer clearly specifies tenancy what is presumed: Tenant in Common
43. What special form of joint tenancy does Hawaii recognize: Tenants in the Entirety
44. When is potential time share buyer entitled to a prize: prior to sales presentation
45. Real Estate commissions are : negotiable
46. When advertising real estate properties: include brokerage company name
47. When must earnest money be deposited: the next business day
48. A person who feels they have been discriminated against in Hawaii may complain
to : Hawaii Civil Rights Commission
49. A licensee who changes her/his address must notify the REC within: 10 days
50. A licensee may only accept commissions from : their employing broker
51. Before a salesperson may begin to sell after leaving any agency, the salesperson
must : complete proper form, proper fee, and receive sign off of former broker
52. Can a broker offer an opinion of title: no
53. If you fail to complete 10 hours of continuing education by the end of an even
numbered year what will happen to your license: automatically inactive
54. Under PASH: (1) a complete stranger may walk across your unimproved land and
(2) native Hawaiians have access to undeveloped land for religious ceremonies
55. How many members are on the real estate commission: 9
56. Who appoints real estate commission members: Governor
57. What is the boundary between private property and state property at the shoreline:
high water mark or vegetation line
58. How long must a brokerage company maintain records: 3 years
59. A plain language addendum is required for a price less than: $25,000
60. Real Estate License Law is administered by whom: real estate commission
61. Who must complete the real property disclosure statement: seller
62. Besides the owner/seller, who may sign the deed: attorney in fact
63. In Hawaii mineral rights are usually owned by: State of Hawaii
64. Which agency conducts investigations of License Law violations: Regulated
Industries Complaint Office

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65. If the broker is absent for more than 30 days, the licensees licenses must be placed
on what status: inactive status
66. How does a corporation take title to property: severalty
67. How does a partnership take title to real property: as a partnership
68. Can you be fined $500 and spend three months in jail for license law violation:
yes, you can be fined up to $1,000 and spend up to one year in jail.
69. In Hawaii is an attorney in fact, operating under a power of attorney exempt from
having a real estate license: yes, they act on behalf of principal for the principal
70. License renewal occurs how often: by 12/31/ of each even numbered year
71. What is penalty for engaging in real estate practice without a license: $5,000 fine
72. May a broker collect a commission from both the buyer and seller: yes, if it is
mutually agreed to in writing by both principals
73. The broker knew the roof leaks and decides to only tell a buyer if he/she asks.
Must the broker disclose if no one asks: yes, it is a material fact
74. When do you disclose agency: upon the first serious occasion demonstrating an
interest in the property, or, before any offers are prepared
75. What is exempt from Uniform Sales Practices Act: sales to professionals in the
industry, sales of less than 20 lots, sales to less than 10 persons
76. What is the latest a Sellers Real Property Disclosure Statement must be presented
to the buyer: 10 days from date of acceptance.
77. Condominium Public Reports expire when: after 13 months
78. A Hula Mae Borrower may be subject to a profit recapture is he/she sells prior to :
the end of the 9th year of ownership
79. A Hula Mae Buyer must be : primary owner occupant, US Resident, Hawaii
resident, not have a prior Hula Mae loan and an income less than $74,000
80. Who is eligible for an ERS loan: a primary residence buyer who: is an employee
or retiree of the State or County, and monthly income must be 3 ½ times the
mortgage payment
81. Hawaii discrimination laws add what to the seven Federally protected classes: (1)
HIV/Aids and Service Animals
82. How many days does a landlord have to return a security deposit: 14 days
83. How many days notice does a landlord have to give to raise rent on MTM: 45
days
84. When does a licensee renew his or her license: by end of each even numbered
year.
85. What must a licensee do to renew at the end of each even numbered year: take ten
hours of CE courses, pay fees and submit renewal form by deadline
86. If you are newly licensed in the even numbered year, are you required to take CE
in that year in order to renew: no
87. If you are newly licensed in an odd numbered year, are you required to take CE
the next year (an even numbered year) to renew: yes
88. Within how many days must you notify the director of taxation of a bulk sale: 10
89. Is the buyer or the seller ultimately responsible for capital gains taxes if you fail
to withhold under the terms of HARPTA: buyer
90. How much is withheld for HARPTA: 5% of sale price
91. How much is withheld for FIRPTA: 10% of the sale price
92. How much would be withheld if you have a seller that is neither a US Citizen nor
a Hawaii resident: 15%

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 93. Name the four land divisions set forth by the department of land use:
a. Rural
b. Agricultural
c. Urban
d. Conservation
94. Which of the land use divisions is controlled jointly by the County and State:
Agricultural and Rural
95. Which of the land use divisions is controlled by the County: Urban
96. Name the five types of real estate:
a. Residential
b. Apartment
c. Commercial
d. Agricultural
e. Special Purpose
97. What is the name for the private ownership of land: allodial
98. What was the name given to the great division of land and distribution: Great
Mahele
99. What is the name of the land division which includes all those elements to sustain
life: Ahupua’a
100. What lien has a higher priority (a) real estate tax lien, (b) mechanics lien,
(c) mortgage lien: (a) real estate tax lien
101. What is the third number ( in this case “5” ) in the tax map key sequence:
Section
a. 1-4-5-016-004-0000 Division-Zone-Section-Plat-Parcel (Condo Number)
b. DZ SPP (Division-Zone-Section-Plat-Parcel (condo number)
102. Who can operate an escrow account for closing: a title company, an
attorney, a lender or a broker involved in the transaction

General Test:
1. What are elements of real property: land, real estate and real property
2. Is an easement appurtenant: yes
3. What is the difference between real estate and real property: bundle of rights
4. What conveys real property: deed
5. What is the difference between a title and a deed: Deed is conveyance instrument
and title is evidence ( not proof ) of ownership
6. What is the highest warranty of ownership: general warranty deed
7. What deed provides no warranties: quit claim deed
8. Name the warranties in a general warranty deed: further assurance; against
encumbrances, quiet enjoyment, seisen, warranty forever
9. What is further assurance: grantor will sign needed documents
10. What is against encumbrances: property will be free from encumbrances
11. What is quiet enjoyment: grantee will be protected from third parties who claim a
superior title
12. What is Seisen: it is ‘deed language’ saying the grantor is the lawful owner.
13. What is warranty forever: will pay for losses if title is not valid as promised
14. What is the difference between Bargain and Sale Deed and Quit Claim Deed: In
bargain and sale deed, the grantor warrants the he/she owns the property ( seized
of the property). In the Quit Claim, there is no warranty of ownership.

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15. What is the granting language of a deed: In one sentence the granting language
indicates what degree of title is being conveyed. For example, I convey and
warrant ( as in the case of a warranty deed) or I release and quitclaim ( in the case
of a quit claim deed ). This is language of conveyance.
16. What is the habendum clause: a clause that defines the extent of ownership. It
begins with ‘to have and to hold”…
17. What is the legal description: survey
18. Name the three types of survey: Government Rectangular Survey; Lot and Block
and Metes and Bounds
19. What Survey is common in Hawaii : Metes and Bounds
20. Which Survey system is not in Hawaii: Government Rectangular Survey
21. If a property is described as the SE1/4 of the NE1/2 or the NE1/4 how many acres
are included: 20 acres Use the denominator shortcut (4X2X4 = 32 and 640/32 is
20 acres.)
22. Which is the seller: Grantor or Grantee ………… Grantor
23. What is the most important requirement of a deed: delivery and acceptance
24. Must a deed be acknowledged: yes
25. What are the valid requirements of a deed: ( Bold are on test )
a. Competent parties
b. Signature of Grantor
c. Acknowledgement
d. Grantor must be identified and confirmed to be Grantor
e. Granting Clause
f. Habendum Clause
g. Delivery and Acceptance
26. What is the Habendum Clause: Clarifies the Granting Clause to explain limits of
ownership ( for instance Time Share Ownership, or other limits on fee absolute )
27. What is the purpose of the Unifom Commercial Code: to regulate personal
property transactions
28. What are the tests for Trade Fixtures: AAA I Adaptation, Agreement,
Annexation, Intent
29. How many acres in a Section: 640
30. How many square miles in a Section: one
31. How many square miles in a Township; 36
32. What are the primary lines running north and south in the USA: Meridians
33. What are the primary lines running east west in the USA: Baselines
34. What are the lines subdividing and running parallel to the Meridians: Range
35. What are the lines subdividing and running parallel to the Baselines: Township
36. What is datum: It is a reference to sea level above or below which all other survey
levels are measured.
37. What is a benchmark: it is a permanently placed US Geological Survey reference
point known by its location and its distance above or below sea level
38. Are all Townships 36 square miles. No, some townships occur at the shoreline or
are effected by the curvature of the earth so correction lines are necessary.

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39. If a Township is 2 tiers north of the baseline and 4 ranges east of the meridian
what is its description: T2N, R4E where it is “two tiers north and four ranges
east”
40. What are the two types of estates in Real Estate: Freehold and Less than Freehold
41. Name the Freehold estates: Fee Simple Absolute, Fee Simple Defeasible, Fee
Simple Determinable and Life Estates
42. Name the two types of Fee Simple Defeasible: Precedent and Subsequent. This is
an estate without a duration, for instance, the estate might terminate if alcohol is
consumed on the property, or if the person never marries
43. Give an example of Fee Simple Determinable: As long as it remains a park
44. What is a devise: will
45. What is a demise: lease
46. Name the types of less than freehold estates
a. Tenancy by Years
b. Tenancy by Periods
47. Give an example of Tenancy by Years: One year lease, Ten Year lease
48. Give an example of a Tenancy by Periods: Month to Month
49. If no lease term is mentioned what is the default Tenancy: Tenancy for Periods
50. If a tenant overstays the term of the lease and should no longer occupy, what is
the name of the tenancy: sufferance
51. What is a life estate: Freehold Estate
a. Name the parties to the Life Estate:
i. Grantor
ii. Life Beneficiary or Life Tenant
iii. Reversionary
iv. Remainderman
v. Pur Autre Vie

52. If the life beneficiary dies, then to whom does the estate convey: To the Grantor
unless the Grantor has specified a Remainder
53. If A and B and C hold title as Joint Tenants with Right of Survivorship, and B
dies, who owns the estate: A and C as Joint Tenants with Right of Survivorship
54. If A and B and C hold title as Joint Tenants with Right of Survivorship and both
B and C die, then how does A hold title: Severalty
55. If Joint tenants can not decide on a course of action and wish to terminate, what is
the commonly accepted court ordered method of doing so: partition suit
56. Community Property States provide property bought during marriage is owned
equally by each spouse. Property acquired prior to marriage or by gift is separate
property. Is Hawaii a community property state: no
57. May a corporation hold title as a Joint tenant: no
58. An elevator is an example of a : common element
59. An assigned parking space is an example of : limited common element
60. To take title by means of a proprietary lease is an indication you own a :
cooperative
61. Name the four unities of Joint Tenancy: PITT possession, interest, title, time
62. What happens if you break one of the four unities: tenants in common
63. If A and B and C own a condo and C sells her interest to J, what is the tenancy
relationships: A and B are joint tenants and J is a tenant in common

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64. In a cooperative what is evidence of ownership: Shares of stock
65. What form of ownership is restricted to husbands and wives: tenants in the
entireties
66. What is the advantage of tenants in the entireties: protection from creditors
67. Which is not an example of real property: harvestable crops
a. Harvestable crops
b. Oak Tree
c. Garage
d. Fence
68. What is the term for an existing structure which remains in service even though
the zoning of the property has been changed: Grandfather or Non conforming use
69. Name the types of liens: General/Specific; Voluntary/Involuntary and
Equitable/Statutory
70. What is a mortgage lien: specific, voluntary, equitable
71. What is a mechanics lien: specific, involuntary, equitable
72. Name the police powers: PETE police powers, escheat, taxation, and Eminent
domain
73. Eminent Domain is a RIGHT
74. Condemnation is a PROCESS
75. Give examples of Police Powers: Building codes, Health Codes
76. The State uses the rights of Police Powers. Private Developers use what
limitations to accomplish the same objective: CC&R’s covenants, conditions and
restrictions
77. Which of the protected classes provides NO EXEMPTIONS from Fair Housing:
Race
78. Name the ways to terminate a contract, agency, listing agreement
a. Death of Principal
b. Operation of Law
c. Mutual Agreement
d. Breach
e. Performance
f. Expiration
79. What is a Title Search: Research by a title company to determine the chain of title
80. What is the priority date of a mechanics lien: date of commencement of work
81. When must a mechanics lien by filed: within 45 days of completion of work
82. When must collection commence on the mechanics lien: within 90 days
83. The person benefiting from an easement is the : Dominant easement
84. The person giving use of the easement is: Servient Easement
85. Name the types of easements:
a. Gross Easement ( Utility Company, lacks a dominant party )
b. Easement by Necessity ( Landlocked )
c. Easement by Prescription ( Adverse Possession )
d. Easement Appurtenant
86. Is a gross easement appurtenant: No
87. Is an easement by necessity appurtenant: Yes
88. Is an easement by prescription appurtenant: Yes
89. What is the term to describe a condition where your neighbors property has been
placed permanently on your land: encroachment

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90. What is different between a license and easement: a license is for one owner only
and is not appurtenant.

91. What is the annual taxes on a $250,000 property if the mil rate is $3.00:
a. First Step: $250,000 / 1,000 is 250 tax units
b. Second Step: Each tax unit is $3.00
c. Answer: Annual taxes are $750.00
92. What is the annual taxes on a $250,000 property if the mil rate is $3.00 and the
equalization factor is 1.25 :
a. First Step: $250,000 / 1,000 is 250 tax units
b. Second Step: Each tax unit is $3.00
c. Step Three: Taxes are $750.00
d. Step Four: Multiply taxes times the Equalization Rate
e. Answer: $750.00 X 1.25 = $937.50
93. Joe and Anne occupy their primary residence for eight years, since 1998 when
they bought it for $250,000. In 2005 they sell it for $750,000. How much of the
sale is taxable. : None, the first $500,000 ( $250,000 per sppuse) is not taxed
when the couple has occupied the house as their primary residence for two of the
last five years.
94. If the Gross rent was $50,000 and the gross rent multiplier is 6, what is the value
of the property: $300,000
95. If the cap rate is 6% and the net operating income is $24,000, what is the value of
the property: $400,000
96. If the Value of the building is $400,000 and the income is $24,000 what is the cap
rate: 6%
97. If the seller wants to net $30,000 and expects $1,200 in closing costs and 6%
commission, what is the price at which he must sell the property: $33,191.49
98. What is the use of a 1031 exchange: to defer the taxes otherwise due on a sale
99. Does the basis of an estate ‘step-up’ to market value at the time of death: yes
100. Who pays conveyance tax: Grantor/Seller
101. What is dedication: Voluntary transfer of real property go a government
102. On agreement of sale “A/S”when is the conveyance tax paid: original date of
A/S
103. What is the purpose of title insurance: marketable title
102. Name the requirements of a valid deed:
Delivery and Acceptance
Legal Description
Competent Parties
Known Grantor
Acknowledgement
103. If the Gross rent was $50,000 and the gross rent multiplier is 6, what is the value
of the property: $300,000
104.If the cap rate is 6% and the net operating income is $24,000, what is the value of
the property: $400,000
105. Name three types of deeds
a. General Warranty
b. Special Warranty

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 c. Bargain and Sale
d. Quit Claim
106.If an appraiser determines a comparable is inferior to the subject the appraiser
will add or subtract an adjustment: add
107.What is the first principal of appraising: highest and best use
108.What is the principal of progression: the lowest priced house in the subdivision
will rise to the value of the highest priced homes in the same subdivision
109.What is the principal of regression: junk homes will drag down good homes.
110.What are the three types of appraisal:
a. Market
b. Income
c. Cost
111. What is the most appropriate appraisal method for a new subdivision: Cost
112.What is the most appropriate appraisal method for a commercial property:
Income
113.If the road change outside the home introduces noise to the home and the value
changes, this is an example of what time of depreciation: external
114.If the floorplan is not able to be changed and the value of the home is affected,
then what is the type of depreciation: functional
115.If a functional depreciation problem costs too much to solve, it is called:
incurable.
116.Name the factors which affect Supply
a. Labor Force
b. Construction and Materials Costs
c. Government Controls and Policies
117.Name the factors which affect Demand
a. Populations
b. Demographics
c. Government Controls
118.Which of the following factors affects supply: interest rates
a. Population
b. Demographics
c. Employment levels
d. Interest Rates
119.A characteristic of real estate that makes it valuable is: indestructible
120.Define personal property: Personalty, all that which is not real property
121.Give four economic characteristics of real estate
a. Scarcity
b. Improvements
c. Permanence of Investment
d. Area Preference or Location
122.Give three physical characteristics of real estate
a. Immobile
b. Indestructable
c. Unique
123. Name the real property rights ( bundle of rights )
a. Disposition
b. Use

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 c. Exclusion
d. Control
e. Enjoyment.

124.Which of the following is a government agency

a. Ginnie Mae
b. Fannie Mae
c. Freddie Mac
d. Which buys VA, FHA and Conventional mortgages Fannie Mae
125.Is an appraisal an average of values: No it is either an estimate or a reconcilement
126.What is the method by which the appraiser determines value: reconcilement
127.What is depreciation if the building basis is $200,000, the land cost was $100,000
and depreciation is 2%: $4,000 ( improvements X 2% = $4,000 )
128.Where would you look to determine adverse possession: State Statutes
129.What is the weakness of the GRM method: Unusual expenses are not considered
130.What is the first step of the appraiser: define the problem
131.Does the appraiser used closed sales or active listed properties: closed sales
132.Can a real estate agent perform an appraisal: no
133.A real estate contract in escrow is a good example of: executory contract
134.A contract that lacks an essential element is considered: Void
135.A contract with a minor is considered: Voidable
136.Which listing provides the agent the best protection earning a commission:
Exclusive Right to Sell
137.Which listing type requires an agent to be most aware of procuring cause: open
listing
138.Which listing type allows an owner to sell the property and not pay a commission
even though the owner signed a listing: exclusive agency
139.Does a dual agency have to be mutually disclosed, in writing and executed by
both principals: Yes
140.Fair Housing: You are required to negotiate in a reasonable manner
141.What is steering: directing the buyer to a neighborhood based on sterotype
142.What is blockbusting: directing a seller to sell based on panic
143.What is Redlining: where a lender or insurance company decides not to do
business is one particular area
144.If a mortgage is paid in full which clause do you look to for release of the
mortgage: defesance clause
145.If a grantee breaches the mortgage terms what clause might a lender cite in the
demand for payment: Due on Sale or Acceleration Clause
146.When a trigger term is given, what must be presented in an ad: APR
147.What is RESPA: Real Estate Settlement and Procedures Act protects the
consumer against unscrupulous lenders and practices
a. No kickbacks
b. Limits on Impounds ( Taxes and Insurance )
c. Right to Review Settlement Costs prior to Closing
148.What are the primary duties of the property manager
a. Optimize Income
b. Protect the Asset From Wasting Away
149.Name trigger terms of the Truth in Lending:

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 a. Down Payment
b. Interest Rate
c. Number of Payments
150.What type of loan includes personal property and real property: Package
Mortgage
151.What type of loan includes more than one property as security: Blanket Mortgage
152.Fannie Mae is an example of: Secondary Market
153.Savings and Loans, Banks, Mortgage Brokers are examples of: Primary Lenders
154.Name three types of leases:
a. Gross Lease ( Most Common Residential Lease; Landlord pays expenses)
b. Net Lease ( Common in commercial leases, Where tenant pays expenses)
c. Per Cent Lease ( Common in retail leases where a per cent of gross sales is
paid)
d. Sale Leaseback ( The Owner sells the property and leases it from the buyer)
155.Which loan is insured and which is guaranteed
a. VA is guaranteed
b. FHA is insured
156.Describe an ARM:
a. Index
b. Cap
c. Starter or Introductory Rate
d. Lifetime Cap
e. Margin
f. Adjustment Period
157.What is hypothecate: Borrower retains possession while bank holds an interest
158.Explain the relationship between a note, mortgage and title
a. The note is a promise to pay, the mortgage is the bridge and the title is
evidence of ownership. If there is a failure to pay the note or a breach of
the note, the lender can use the mortgage to foreclose the title
159.Name four Anti Trust Items
a. Price Fixing
b. Market Allocation
c. Group Boycotting
d. Tie In Arrangements
160.Name types of Listings
a. Open Agency ( For Sale By Owner )
b. Net Listing ( Keep all above a certain price, risky for conflict of interest)
c. Exclusive Agency ( Owner can sell himself and not pay a commission)
d. Exclusive Right to Sell ( Protect the real estate agent)
161.Name the four types of Agents
a. Special ( Most Realtors )
b. General ( Example: Property Managers )
c. Universal ( Example: Does everything including contract, buy and sell )
d. Designated ( The entire agency is not responsible for the client, only a
specified agent is responsible for the client )
162.What are the fiducicary duties:
a. Care
b. Obedience

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 c. Loyalty
d. Accounting
e. Disclosure
Math
Commission Type:
6% commission on $400,000 sale where the cooperating broker gets 45%
6% X $400,000 X 45% =
.06 X $400,000 X .45 = 10,800
Interest Type:
What is the interest on a $10,000 straight loan at 5%
5% of $10,000
.05 X $10,000 = $10,800
Area
What is the area of a parcel that is 200 feet deep and 75 feet across
Width X Length
75 X 200 15,000sq ft
Appraisal:
What is the value if the gross income is $12,000 and the gross rent multiplier is 6
GRM X Gross Income
6 X $12,000 = $72,000
Appraisal:
What is the value if the cap rate is 7% and the Gross Income is $24,000,
and Operating Expense is $5,000
Gross Income
Less: Operating Expense
Net Operating Income
Net Operating Income / Cap Rate
$19,000 / .07 = $271,428.57
Net to Seller
Seller wants to net $25,000 after paying a commission of 6% and expenses of
$1,000
Add Targeted Net to the Expense and Divide by 100% less Commission
$25,000 + $1,000 / 100% - 6% =
$25,000 + $1,000 = $26,000 / .94 = $27,659.57
Cost per Front Foot
The lot is 75foot across and 300 feet deep. The price is $1,000 per front foot.
Find Front Foot. IN this case, front foot is 75feet.
$1,000 X $75 = $75,000
Appreciation:
A home is worth $65,000. It was bought four years ago. Appreciation has been
5% per year. What was the original purchase price.
To arrive at original, divided by 1+appreciation once for each year
$65,000 / 1.05 / 1.05 / 1.05 / 1.05 = $55,562.27

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