A purchase contract requires earnest money equal to 2.5% of the purchase price. If the price is $330,000, what is the earnest money deposit?
Correct Answer
D) $8,250
Multiply the price by the stated percentage: $330,000 × 2.5% = $8,250.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In real estate, property value can be estimated by dividing the Net Operating Income (NOI) by the Capitalization Rate (Cap Rate).
Proration is the process of dividing expenses or income between the buyer and seller at the closing of a real estate transaction. This ensures each party pays or receives only their fair share based on the period of ownership.
Proration calculations divide shared expenses such as property taxes, insurance, HOA dues, and rent between buyer and seller at closing based on the number of days each party owns the property.
More Real Estate Math Questions
A Texas agent earns a 6% commission on a $350,000 sale. The listing broker takes 60% of the commission. How much does the listing broker receive?
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- → Gross income $60,000, expenses $22,000. NOI:
- → A house sold for $275,000 which was 9% less than the original cost. What was the original cost?
- → Annual property taxes are $2,400, paid in arrears. Closing is August 1 (using a 360-day year, 30-day months). The closing day belongs to the buyer. How much does the seller owe the buyer at closing?
- → A seller closes on a property for $500,000. The commission is 6%, other seller closing costs are $4,500, and the existing mortgage payoff is $150,000. What are the seller's net proceeds before any tax effects?
- → A seller wants to net $250,000 after paying a 6% commission and has no other closing costs to consider. What sale price is needed?
- → A property sells for $220,000 and generates monthly rent of $1,600. What is the Gross Rent Multiplier (GRM)?
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- → An investor is valuing a small rental property listed at $600,000 that produces gross monthly rent of $2,900. What is the gross rent multiplier (GRM) on a monthly rent basis?
- → An investor is valuing a small rental property listed at $720,000 that produces gross monthly rent of $3,400. What is the gross rent multiplier (GRM) on a monthly rent basis?
- → 175 ft × 200 ft lot:
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