Annual Taxes
(Assessed Value � 100) * Tax Rate
Loan To Value Ratio (LTV)
Loan Amount � Sales Price or Appraised Value (Whichever is less)
Monthly Principle and Interest
Loan Amount/1000 * Mortgage Loan Factor
Annual Interest
Loan Amount or Principal Balance * Interest %
Balance After Payment
Monthly Principal & Interest Payment - Monthly Interest Portion = Monthly Principal Payment
Loan Balance - Monthly Principal Payment = Balance After Payment
Total Interest Over Life of Loan
Monthly Principal and Interest Payment * Total # of Payments in Loan = Total Principal and Interest Paid
Total Principal and Interest Paid - Loan Amount = Total Interest Over Life of Loan
Qualifying a Buyer Without Debt
Gross Monthly Income * Maximum Debt to Income Ratio (28%)
Qualifying a Buyer With Debt
Gross Monthly Income * Maximum Debt to Income Ratio (36%)
Sellers Net
Everything Seller Wants or Needs ($$$) � (100%-Commission Rate)
Rate or Loss of Profit
Original Value * Rate of Profit or Loss = Profit/Loss in $ (Selling Price - Original Value)
Commission
Sales Price * Commission Rate
Sales Comparison Approach
Used when valuing residential homes or land.
3-5 comps are found, adjustments are made to comps.
If subject property is superior, appraiser will subtract from comps.
If subject property is inferior, appraiser will add to comps.
Negative features = add to
Annual Appreciation or Depreciation
Sales Price of Comps before adjustments
Appreciation or Depreciation Rate = Annual Appreciation or Depreciation (� by 12
* the number of months since comp sold.)
Add if appreciation, subtract if depreciation.
Income Capitalization Approach
Used when valuing income producing property, value is determined by Net Operating Income (NOI.)
Potential Gross Income - Vacancy and Collection Losses = Effective Gross Income
Effective Gross Income - Operating Expenses = NOI
IRV
Net Operating Income � Capitalization Rate or Rate of Return = Value
Appraisers Value
Properties have an actual life, economic life, and effective age.
Actual Life: amount of time a property will remain standing.
Econmic Life: the amount of time a property is expected to remain useful/profitable.
Effective Age: age based on the remaining u
Before Tax Cash Flow/Cash Throw Off
Potential Gross Income - Vacancy and Collection Losses = Effective Gross Income
Effective Gross Income - Operating Expenses = NOI
NOI - Debt Service/Mortgage = Before Tax Cash Flow/Cash Throw Off
Square Foot/Acerage
Length (Depth) * Width (Frontage) = Total Square Feet
Total Square Feet � 43560 = Acres