About This Chapter
Real Estate Calculations - Chapter Summary
Use this real estate study resource to review and practice real estate calculations. Inside the chapter, you'll find short and straightforward lessons that cover the formulas needed to calculate a variety of real estate costs, including real estate commissions, closing costs, return on equity and more. You'll also learn about transactional deductions and tax rules, as well as rules regarding finder's fees. After completing the lessons in this chapter, you should be able to:
- Calculate and understand the purposes of real estate commissions, closing costs, acreage, rate of return, return on equity (ROE) and mortgage amortization
- Identify referral and finder's fees rules and laws
- Assess deductions, taxable gains, tax rules and tax consequences for real estate transactions
- Understand closings costs in terms of the buyer and the seller
- Perform acreage calculations and conversion
- Work with financial lending formulas
These video and text-based lessons are designed to be short and engaging, which helps you quickly review and remember important real estate calculations. You can practice applying these formulas by taking our lesson quizzes and chapter exams. If you need to review a specific topic, you can quickly find and jump to it using your course Dashboard and video timelines. To make your studying experience flexible and convenient, we've made the chapter material available at any time and accessible using virtually any computer or mobile device.
1. 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.
2. Rules for Referral & Finder's Fees in Real Estate
Finder's fees are common in commercial real estate transactions. In this lesson, you'll learn what a finder's fee is and discover when a licensed salesperson or broker can pay someone a finder's fee and when the law prohibits it.
3. Closing Costs for the Seller & Buyer
In this lesson we will define closing costs and examine the typical costs paid by buyers and sellers as part of a real estate transaction. We will also discuss how costs can be divided or prorated at closing.
4. 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.
5. Tax Consequences & Deductions in Real Estate Transactions
Let's look at the tax consequences of real estate transactions. A real estate sell may have deductible expenses, taxable gains, and possibly an exception for those gains. We will also briefly cover tax rules for foreign investors.
6. How to Calculate Mortgage Amortization
In this lesson, we will briefly discuss what an amortizing loan is and show how to calculate a borrower's monthly payment on a fixed-rate mortgage using the loan information.
7. Financial Calculations Related to Lending
Loan shopping involves a number of financial calculations. In this lesson, we will look at some of the common formulas used when talking about qualifying for and paying down mortgages.
8. How to Calculate & Convert Acreage
Accurate calculation of acreage is an essential skill in describing the physical geography of a plot of land. In this lesson we will look at the formulas for determining the area of a piece of land, and converting that number into different units of meaurement.
9. How to Calculate the Rate of Return: Definition, Formula & Example
In this lesson, we will define the rate of return and explore how it's used in today's business decisions. Using the formula and an example, we'll learn how to calculate the rate of return to determine if a particular business decision is a wise one.
10. How to Calculate the Return on Equity: Definition, Formula & Example
After watching this video lesson, you will learn how the return on equity helps you as a potential investor determine whether a certain company is worth investing in or not. You'll also learn how companies perform this calculation.
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Other chapters within the North Carolina Real Estate Broker License: Study Guide course
- Agency Relationships
- Types of Contracts
- Real Estate Contracts
- Real Property Ownership
- Land Use: Restrictions, Regulations & Government Control
- Finance & Financing in Real Estate
- Government Oversight in Real Estate
- Real Property Measurement & Valuation
- Conveyance of Real Property
- Marketing Regulations in Real Estate
- Property Management & Tenant Rights
- North Carolina Real Estate License Law
- General Real Estate Topics
- North Carolina Real Estate Broker License Flashcards