National / General cheat sheet
Real Estate Math Texas Real Estate Exam Cheat Sheet
The math area uses property measurements, valuation, commissions, financing, settlement, investment, and property-management scenarios. The setup matters more than fast arithmetic.
Write the relationship, label the units, convert the percentage to a decimal, and only then calculate. Use the day-count and closing-day convention stated in the question.
What Pearson tests
- Square footage, acreage, CMA adjustments, NOI, cap rate, equity, and listing price
- Commission, LTV, interest, points, down payment, PITI, buyer cost, and seller net
- Prorations, debits and credits, return, appreciation, depreciation, and property-management calculations
Three traps to catch
- Pearson says to memorize 43,560 square feet per acre and 5,280 feet per mile.
- Cap rate uses NOI. GRM uses gross rent. Mixing net and gross figures produces the wrong answer.
- A proration question supplies the required 360-day or 365-day convention and who owns the closing day.
Essential vocabulary
Real Estate Math terms to know
- Loan-to-value ratio
- Loan amount divided by the lender's stated value, expressed as a percentage.
- Proration
- Allocation of an expense or income item between parties for their periods of ownership.
- Capitalization rate
- NOI divided by value, or the market rate used to convert NOI into value.
- Gross rent multiplier
- Sale price divided by gross rent for the stated rental period.
- Ad valorem tax
- A tax based on value.
- Mill
- One-thousandth of a dollar, equal to $1 of tax per $1,000 of value.
- Debit
- An amount charged to a party on a settlement statement.
- Credit
- An amount entered in a party's favor on a settlement statement.
Check your recall
Can you answer these without notes?
1What is the value formula using NOI and cap rate?
Value equals NOI divided by the capitalization rate.
2How many square feet are in an acre?
43,560.
3Should you assume a 360-day year for every proration?
No. Use the convention stated in the question.
Use the sheet, then retrieve
Test the rules while they are still fresh.
Read the full lesson when a definition is fuzzy. Then answer the topic questions without looking back at this sheet.
Primary sources
This is exam-prep education, not legal, tax, or transaction advice. Confirm the current law, form, and official exam materials before relying on a rule in practice.