Real Estate Calculations
This topic reviews commission, proration, area, and financing math commonly tested on the exam.
Commission and Percentage Math
Commission equals sale price times rate, then split among brokerages and agents; an agent's share is a percentage of the brokerage's commission. Proration allocates taxes, interest, and rent between buyer and seller by days of ownership. Convert percentages to decimals before multiplying, and read carefully to see whose share a question asks for.
Area, Value, and Loan Math
Rectangular area is length times width; an acre is 43,560 square feet. Investment value uses capitalization (NOI divided by cap rate) and gross rent multipliers. Loan math covers simple interest (principal times rate times time), discount points (one point equals one percent of the loan), and loan-to-value ratios.