How to answer SPECIAL ASSESSMENT & ROAD PAVING questions — real estate exam prep
My name is Sean Guthrie and I am a licensed real estate agent, a former financial advisor, a business owner, and more. I help people learn about real estate, finance, investing, and business.
This post and the accompanying video are for real estate professionals, people who are preparing for real estate licensing exams, and for anyone who wants to learn something new.
This post and video will do 3 things:
1) Teach you how to get the right answer on your state exam when you get a special assessment road paving question
2) Give you a helpful hint — NEVER NEGLECT NEIGHBORS
3) Walk you through 3 sample questions, each one progressively more difficult
Sometimes governments do special project like paving roads, and the part of the cost that property owners have to pay is called a special assessment.
The exact method in the real world may be slightly different sometimes, but for exam purposes, there is a very specific way to do these problems.
Real estate licensing exams in states like Florida do not have diagrams or pictures, so you really need to pay close attention to what the question is asking you when you read it.
Before we do jump to the word-only questions, let’s do take a look at a diagram to see what these questions questions are all about.
The length of the road is an important part in these questions since you actually don’t need to know the square footage. You’ll see information like “The homeowner’s property is 100 feet by 200 feet. The first number is the frontage, and that’s the number you’re going to use.
When a government is paving a road, the government is going to pay for part of the road and they’re going to charge the property owner for the leftover cost. If the government is paying 75%, then there’s 25% that will be billed to the property owner through a special assessment.
NEVER NEGLECT NEIGHBORS
You usually never want to assume any information if it’s not on the state exam, HOWEVER, this is one of the things you are expected to assume. Every single study guide, book, and source of material I’ve ever seen on this topic flat out tells you to assume there is a neighbor across the street unless told otherwise.
Remember to NEVER NEGLECT NEIGHBORS, in other words, don’t forget to divide by 2 at the end, even if the question doesn’t tell you explicitly that there’s a neighbor. In the world of exam questions, there’s always a neighbor across the street that is also going to be assessed half the cost, that’s why you divide by 2.
By putting this all together, the way to solve these questions is to:
-Take the frontage and multiply it by the cost per unit
-Multiply that result by the property owner’s portion of the cost
-Divide by 2
SAMPLE QUESTIONS
1. A lot has 100 feet of frontage. The government is assessing all owners on the street $20 per foot to pave the street. The government is paying for 40% of the paving cost. There is a neighbor across the street. How much is the owner’s paving special assessment for this lot.
2. Bruce Wayne’s lot is 300 feet by 150 feet. The county is assessing owners $30 a foot to pave the road and has agreed to pay 45% of the paving cost. What is Bruce’s paving assessment?
A) $4,050
B) $4,950
C) $2,025
D) $2,475
*DISCLAIMER: THIS NEXT QUESTION IS A LITTLE BIT ABOVE AND BEYOND EXAM FORMAT AND MEANT TO REALLY HELP YOU NAIL THE CONCEPTS DOWN — SO I ENCOURAGE YOU WORK THIS ONE THROUGH
3. Tony Stark inherited a lot that is 200 feet long from front to back, extends 500 feet along the street. The city has a bid to pave the street for $45 a foot but the actual cost will be $50 a foot. How much will Tony’s special assessment be if the city pays 32.9%? Tony has publicly stated that he’s not paying anything toward the road paving.
A) $0.00
B) $16,775.00
C) $8,387.50
D) $6,710.00
E) $3,355.00
F) $8,225.00
ANSWERS
1)
100 feet x $20 = $2,000
60% = .6
$2,000 x .6 = $1,200
$1,200 / 2 = $600
2)
300 ft x $30 =$9,000
55% = .55
.55 x $9,000 = $4,950
$4,950 / 2 = $2,475
3)
500 ft x $50 = $25,000
100% -32.9% = 67.1%
67.1% = .671
$25,000 x .671 = $16,775
$16,775 / 2 = $8,387.50
Now you know a little more about road paving special assessments, you have the reminder to NEVER NEGLECT NEIGHBORS by dividing by two at the end, and you’ll be able to get some points on your exam.
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