Texas real estate exam math formulas, made visual.

Multiply by the rate agreed in the problem. The 6% example is hypothetical; commissions are negotiable, not fixed by law.

Find the brokerage's side of the commission first, then apply the agent's split. Use total commission only when the question says that brokerage receives the entire commission.

When you know the commission earned and the rate, divide to find the original sale price.

The Texas exam specifies whether to divide by a 360-day or 365-day year in each proration question. Use exactly what the question states.

Multiply the daily rate by the number of days owned in the proration period. The question tells you whether the day of closing belongs to the buyer or the seller.

Divide annual NOI by the stated value or sale price. This income-to-value ratio excludes financing and resale proceeds; it is not the investor's total return.

Divide net operating income by the cap rate to estimate value using the income approach.

Match the rent period to the multiplier. This example uses annual gross rent, so 8.33 is an annual GRM. A monthly GRM cannot be applied to annual rent.

Use the assessed value after any applicable value limitation. The $140,000 residence homestead exemption applies to school-district tax. Each taxing unit may have different exemptions.

The $1.00 school rate is a hypothetical question input. Calculate each taxing unit separately when exemptions differ. One mill means $1 per $1,000 of taxable value.

Effective gross income begins with potential gross income, subtracts vacancy and collection loss, then adds other income such as laundry or parking. Use the figures and period supplied by the question.

NOI is income after operating expenses, before debt service, income taxes and depreciation. A capital improvement is not a routine operating expense. Keep it separate from NOI.

This is vacancy by unit count. Use it as a lost-rent percentage only if rents are equal or the problem directs you to do so. Unequal rents can produce a different income loss.

The share of units occupied. Occupancy plus vacancy equals 100% when both use the same inventory and date.

A per-square-foot rent lets you compare differently sized spaces. Match the period the question uses, monthly or annual.

Multiply length by width to calculate rectangular area.

There are 43,560 square feet in one acre (memorize this; it is not provided at the test center).

Divide the total price by the square footage to determine price per square foot.

For simple interest on an unchanged principal, use years with an annual rate: six months is 0.5 year. This does not calculate an amortizing loan's total interest.

Use the outstanding loan balance, not the original sale price. In an amortization problem, the interest portion is calculated before the principal reduction.

Use this formula for a percentage fee on the loan amount. A flat fee or another stated base needs its own calculation.

One discount point equals 1% of the loan amount. CFPB describes discount points as an upfront closing fee exchanged for a lower rate; the amount of rate reduction varies by lender, loan, and market.

An amortized payment contains interest and principal. Subtract that month's interest from the principal-and-interest payment to find how much reduces the loan balance.

Prepayment terms vary. Use this relationship only when the question supplies a percentage penalty and the balance to which it applies.

Use the value basis specified in the question. Fannie Mae purchase-loan calculations generally use the lower of price and appraisal; refinance calculations use appraised value.

The buyer's down payment is the part of the purchase price not financed. If the appraisal is below the purchase price, the lender may base the maximum loan on the lower value, leaving an additional appraisal gap for the buyer to fund.

Subtract all stated payoffs and selling costs, including commission and seller-paid adjustments. Seller net is cash proceeds, not the taxable gain.

Work backward from the seller's target. Add the payoff and fixed costs, then divide by the percentage left after commission and other percentage-based selling costs.

For additional cash due at closing, subtract the earnest-money deposit already paid and credited, plus stated seller or lender credits. Count each paid item or credit once.

Use the tax unit and rate supplied by the question. Texas has no statewide real estate transfer tax, but Pearson's National/General outline still includes transfer-tax calculations.

Recording charges vary by jurisdiction. Use the number of pages or instruments and the fee basis given in the question.

Base PITI combines monthly principal and interest, property taxes, and insurance. Convert annual taxes and insurance to monthly amounts first. Add mortgage insurance, HOA dues, or other housing costs only when the question includes them.

Divide the stated monthly housing expense by gross monthly income. Include any HOA dues or mortgage insurance the problem assigns; 28% here is a result, not a universal lending limit.

Includes the housing payment plus other recurring monthly debt.

Equity is the owner's value position before selling costs. It is not the same as profit.

Appreciation measures value increase. Debt does not change the appreciation calculation.

For a simple exam value-loss problem, depreciation is the decrease from the original value to the current value. Use any tax-depreciation method only when the question supplies it.

This simplified exam relationship compares the stated annual return with cash invested. Confirm the numerator and period in the question because broader investment analysis may define return differently.

This simplified property-level profit ignores financing and tax. Include the full acquisition cost, not just the down payment. Do not also subtract the mortgage payoff.

Start with the supplied basis, add qualifying improvements and subtract depreciation allowed or allowable. Actual basis can have other adjustments; use the facts in the problem.

In a simple cash sale, amount realized is sale price minus selling expenses, before mortgage payoff. This gain is not automatically taxable: exclusions and other tax rules require more facts.

Add when the comparable is inferior to the subject. You adjust the comparable toward the subject.

Subtract when the comparable is superior to the subject. The subject stays fixed.