Real Estate Calculations
Arithmetic questions are predictable once you separate the categories. Commission: price × rate, then split between brokers, then between broker and salesperson. Loan-to-value: loan ÷ price or value; down payment = price − loan; PMI typically applies above 80% LTV. Points: loan amount × point percentage - a point is 1% of the loan, not of the price. Prorations use actual days in the month or a 365-day year and are split at closing.
Income math
NOI = gross income − vacancy and credit loss − operating expenses (no debt service, no depreciation, no capital improvements). Value = NOI ÷ cap rate. GRM = sale price ÷ gross monthly rent. Equity = value − loan balance. Appreciation compounds: future value = present value × (1 + r)^n.
West Virginia transfer tax
The state real estate transfer tax is $1.10 per $500 of consideration or fraction thereof, generally paid by the grantor, with exemptions for certain family transfers and other statutory categories. The county clerk will not record a deed without the stamp or an exemption certificate.
Property tax
West Virginia assesses real property at 60% of appraised value. Example: $200,000 appraised × 0.60 = $120,000 assessed; at a levy of $25 per $1,000 of assessed value, the tax is $3,000.
Worked example
A $250,000 sale at 6% yields $15,000 in commission. A 60/40 broker split gives the listing broker $9,000, and a listing salesperson on a 50/50 split receives $4,500.
Rule of thumb: identify the base - price, loan amount, or assessed value - before multiplying anything.