Wisconsin Real Estate License Real Estate Math and Calculations 1 — Questions and Answers
Question 1: A property sells for $320,000. The listing broker earns a 6% commission and splits it equally with the buyer's broker. How much does each broker receive?
- $9,600 (Correct answer)
- $19,200
- $11,520
- $16,000
Correct answer: $9,600
6% of $320,000 = $19,200 total commission; split equally gives each broker $9,600.
Question 2: A buyer makes a 20% down payment on a $275,000 home. What is the loan amount?
- $55,000
- $220,000 (Correct answer)
- $235,000
- $245,000
Correct answer: $220,000
The buyer finances 80% of $275,000: $275,000 × 0.80 = $220,000.
Question 3: A property has a loan balance of $180,000. The bank requires a maximum LTV of 80%. What is the minimum appraised value required?
- $144,000
- $216,000
- $225,000 (Correct answer)
- $240,000
Correct answer: $225,000
Minimum value = loan amount ÷ LTV ratio: $180,000 ÷ 0.80 = $225,000.
Question 4: Annual property taxes are $4,800. The closing occurs on April 1. The seller has not yet paid any taxes for the year. Using a 360-day year, how much does the seller owe the buyer at closing?
- $1,200 (Correct answer)
- $1,600
- $2,400
- $3,600
Correct answer: $1,200
Jan 1 to April 1 = 90 days; daily rate = $4,800 ÷ 360 = $13.33; 90 × $13.33 = $1,200.
Question 5: A home sells for $385,000. In Wisconsin, the real estate transfer fee is $3 per $1,000 of value. What is the total transfer fee?
- $385
- $770
- $1,155 (Correct answer)
- $1,540
Correct answer: $1,155
$385,000 ÷ 1,000 = 385 units × $3 = $1,155 transfer fee.
Question 6: A rectangular lot measures 45 feet by 30 feet. What is the square footage of the lot?
- 150 sq ft
- 750 sq ft
- 1,350 sq ft (Correct answer)
- 1,500 sq ft
Correct answer: 1,350 sq ft
Area = length × width: 45 × 30 = 1,350 square feet.
Question 7: A seller wants to net $250,000 after paying a 6% commission. What must the sale price be?
- $265,000
- $265,957 (Correct answer)
- $266,000
- $275,000
Correct answer: $265,957
Sale price = desired net ÷ (1 − commission rate): $250,000 ÷ 0.94 = $265,957.
Wisconsin Real Estate License Real Estate Math and Calculations 1
A property sells for $320,000.
The listing broker earns a 6% commission and splits it equally with the buyer's broker.
How much does each broker receive?