Lesson 6 Real estate

Lesson Six: Taxation, Title Closing, and Leases (ch 15, 16, and 17)

1. The Peter Skeen School District contains real property totaling $800,000,000 in assessed valuation. If the District budget is $3 million, what will be the tax on a property in the district with an assessed valuation of $60,000?

2. The Millers bought their home in the early 1990’s for $81,000 including closing costs. Five years later they made improvements that cost $9,000 and five years after that they made more improvements that cost $6,000. Recently they sold the house; the sales price was $160,000 and the commissions and closing costs totaled $12,000. If they purchase a new home for $200,000 two months later, what is their income tax on the sale of their home?

3. Regarding ad valorem taxes, what does the term “ad valorem” mean?

4. A special improvement district has been established to provide curb, gutter, and sidewalk to the properties in the district. On what basis is the specific amount to be paid by a specific homeowner is this improvement district determined?

5. A buyer agrees to assume an existing 6% mortgage on which $120,000 is still owed; the last monthly payment was made on April 1st and the next payment is due on May 1st. Interest is paid in arrears. Custom is to hold the buyer responsible for interest beginning on the day the buyer takes possession, in this case that is April 13th. What is the prorated amount to be settled for this interest between the buyer and the seller at closing and which parties respectively are charged (or debited) and credited for this amount?

6. Describe two benefits that occur as a result of the Real Estate Settlement Procedures Act.

7. How does an “estate at will” differ from a typical lease?

8. What conditions create a tenancy at sufferance?

9. What is the difference between a gross lease and a triple net lease?

10. What is the difference between an assignment of a lease and subletting?

11. What is the meaning of the term “constructive eviction?”