Real Estate Calculations
The handful of formulas that cover almost every math question on the exam — commission, LTV, proration, and cap rate.
Real estate math looks intimidating until you realize the exam recycles the same handful of formulas in different dollar amounts. Learn the formulas, not the specific numbers.
Commission
Splits come next: divide the total between listing side and buyer's side (often 50/50, but the exam will tell you if it isn't), then divide each side's cut between the broker and the agent.
Loan-to-value and down payment
LTV and down-payment percentage are complements of each other, not the same number — an 80% LTV loan has a 20% down payment, not an 80% one. The exam plants this mix-up constantly.
Proration
Proration splits a recurring cost (property tax, HOA dues) between buyer and seller based on who owned the property on each day of the billing period.
The trickiest part is never the math — it's figuring out exactly which days belong to which party. Always check whether the closing day itself belongs to the buyer or the seller before you count.
Net to seller (working backward)
When a seller wants to know what price nets them a specific amount after commission, don't just add the commission rate back — divide:
Capitalization rate (income property)
On every formula here, the fastest way to avoid a wrong answer isn't memorizing more formulas — it's writing down which number the question actually gives you, and which one it's asking for, before you start calculating.
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