About This Chapter
Common Real Estate Calculations - Chapter Summary
As you review lessons on common real estate calculations, you'll get a deeper understanding of topics like revenue stamps and transfer fees. Expert instructors also explain loan prepayment penalties and how to calculate home equity. By the end of the chapter, you should be ready to:
- Recall the formula for calculating the loan-to-value ratio
- Discuss the pros and cons of discount points
- Explain how to use home equity as a down payment
- Detail how conveyance tax is calculated
- Relate how commissions are divided between brokers and real estate agents
- Describe how to calculate closing costs
- Recount formulas used by investors to analyze investments
Our educators aim to ensure you comprehend common real estate calculations in a short amount of time. A brief quiz is available for each lesson to test your knowledge of the topics covered. You can also print the lesson quizzes and use them as study worksheets.
1. Loan-to-Value Ratio: Definition & Formula
Understanding the loan-to-value ratio can help your clients understand how banks will evaluate their loan and one factor that will affect their credit rating.
2. Loan Financing Costs: Discount Points, Prepayment Penalties & Fees
Real estate professionals need to know the expenses involved in getting a loan to purchase a home. In this lesson, you will learn about the typical costs, fees, and calculations associated with obtaining a mortgage.
3. How to Calculate Home Equity & Down Payments
Home equity and down payments are two aspects of getting funding for your clients' new home. By understanding these terms, you can help your clients use their funds and maximize their money for their new home.
4. Transfer Fees, Conveyance Tax & Revenue Stamps
Location can affect how much a buyer pays for a property, but it can also affect the fees involved. This lesson will go over transfer fees, conveyance taxes and revenue stamps and explain how they are calculated.
5. How to Calculate Real Estate Commission
In this lesson, we will define real estate commissions. We will then explain how the commission is divided among the real estate agents and their brokers at the conclusion of a real estate transaction.
6. Closing Costs: Calculations & Practice
There is an old wise saying: 'There are two sides to every story'. In real estate, the transaction is the story; one side belongs to the buyer, the other side to the seller. In this lesson, you will learn how both sides complete the story of a transaction.
7. Net Operating Income & Gross Rent Multiplier: Definition & Calculation
Net operating income and gross rent multiplier calculations can help a real estate investor quickly evaluate prospective purchases and measure performance. We will also look at some of the other formulas investors use for their investment analysis.
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Other chapters within the Michigan Real Estate Broker Exam: Study Guide & Practice course
- Property & Land Characteristics
- Air, Mineral & Water Rights in Real Estate
- Liens & Encumbrances in Real Estate
- Types of Property Ownership
- Real Estate Land Use Controls & Regulations
- Property Valuation & Appraisal
- Basic Real Estate Financing Terms & Concepts
- Types of Real Estate Loans
- Lending & Underwriting Processes
- Agency Relationships & Agreements
- Disclosures of Property Conditions
- Real Estate Sales Contracts
- Leasing & Property Management
- Real Estate Title Transfers
- Real Estate Practices
- Michigan Licensing & Statutory Requirements
- Michigan Real Estate Laws
- Michigan Real Estate Broker Exam Flashcards