Real Estate Math

Those two figures look like the same number and are not. Seven percent of 80 scored items is 5.6 questions. Pearson VUE's seven lettered sub-areas are worth one item each, so seven. The gap is about one question, which is not worth planning around, but it is worth knowing that the two documents are measuring in different units rather than agreeing.

Note the direction of the broker change. On PSI's outline the math area gets smaller for brokers, from 7% to 6%. On Pearson VUE's it gets larger, from 7 items to 8, with the extra item going to property valuation, and the broker outline adds gross rent multiplier and gross income multiplier to that sub-area. A broker candidate studying a salesperson cheat sheet is missing exactly those two.

Pearson VUE also publishes a cognitive level for every area. Math for salespeople is "4 APPLICATION, 3 ANALYSIS" and, uniquely, carries no knowledge items at all. Every other content area on that outline includes some recall. So on a Pearson VUE exam there is no such thing as a math question that asks you to name a formula. You will be asked to use one.

what is on the real estate exam has all eleven areas and what each is worth, and how many questions are on the real estate exam has the question count and time limit for your state.

Reproduced from the current candidate documents, sub-topic headings as published. PSI's area is numbered XI; Pearson VUE's is numbered VIII. Neither list is long, which is itself worth noticing: the examinable surface of real estate math is smaller than any commercial cheat sheet implies.

PSI, area XI: Real Estate Calculations

9 sub-topics. Not one of them is commission, area, acreage, appreciation or a rent multiplier.

Pearson VUE, area VIII: Real Estate Math Calculations

Seven lettered sub-areas, one scored item each. That is an unusually generous piece of publishing: it tells you the exam will ask you exactly one area question, exactly one commission question, exactly one investment question, and so on.

Check PSI real estate exam or Pearson VUE real estate exam to find out which of these applies to you before you spend an evening on the wrong list.

This is the table that changes what you revise. Every row below is a formula the prep industry prints on a real estate math cheat sheet. Every row is either missing from one provider's math area or filed in a completely different content area, where it is still examinable but counts against a different budget.

Read the first three rows together. Commission, area and acreage are top billing for a Pearson VUE candidate and are not named at all for a PSI candidate. Qualifying ratios are the reverse case: everybody teaches them as math, and neither provider puts them in the math area. They belong to financing.

None of this means a PSI candidate can skip commission arithmetic. PSI's A.1, seller's net proceeds, cannot be answered without it, and commission also turns up under practice of real estate as a services-and-fees topic. It means the question is likely to arrive wearing different clothes.

Three pieces of vocabulary are everywhere in real estate prep and in none of the provider documents. Not in PSI's content outline, not in Pearson VUE's, not in the candidate handbooks read for this page. They are teaching aids invented by the prep industry, and that is not a criticism of them.

• "The nine formulas." No provider publishes a numbered formula list. The likely origin is a coincidence: PSI happens to break its calculations area into exactly 9 sub-topics. Those are topics, not formulas, and several of them need more than one formula.
• The T-bar. A drawing that helps you keep a product and its two factors straight. Genuinely useful. Not exam vocabulary, and no item will refer to it.
• IRV.Income, Rate, Value. The relationship is completely real and both outlines name it: PSI at B.2, "Rate of return/Capitalization rate", and Pearson VUE at VIII.B.2 and VIII.B.3. Only the three-letter mnemonic is a prep invention.

If you learned the T-bar and it works for you, keep using it. It is a good tool. The point of saying this out loud is narrower: when a prep site tells you the exam "tests the nine formulas", it is describing its own syllabus, not the provider's, and you cannot check it against any published document. The two outlines above you can check, and the links at the foot of this page go straight to them.

The same caution applies to the widely taught 28/36 qualifying ratio. We could not find a federal regulator, a provider handbook or a published selling guide that states it, so it does not appear on our real estate math cheat sheet.

Taken from the 105math questions in our bank, which is the math area's exact share of a 1,500-question set built to the published weights. Each one carries the outline reference so you can see which provider would ask it.

1. A home listed at $450,000 sells for 4% below list. The listing agent’s brokerage keeps half of a 5.5% commission. What does the listing brokerage receive?

   Answer: $11,880. Sale price is $450,000 × 0.96 = $432,000. Commission is $432,000 × 0.055 = $23,760; half is $11,880. Using the list price instead of the sale price gives $12,375.

   Named at Pearson VUE VIII.C, Commission/compensation, worth one whole item. PSI does not name commission in its calculations area at all.

2. A seller pays off a $196,400 mortgage, a 6% commission on a $415,000 sale, and $3,100 in other costs. The seller’s net proceeds are:

   Answer: $190,600. Commission is $415,000 × 0.06 = $24,900. $415,000 − $196,400 − $24,900 − $3,100 = $190,600. Omitting the mortgage payoff gives $387,000, and omitting the commission gives $215,500.

   Named at PSI XI.A.1, Seller’s net proceeds. Pearson VUE VIII.E.3, Net to the seller. One of the few things both outlines name in the same words.

3. A lot is 90 feet wide and contains 0.25 acres. How deep is it, to the nearest foot?

   Answer: 121 feet. 0.25 × 43,560 = 10,890 square feet. 10,890 ÷ 90 = 121 feet. Dividing the full acre figure by 90 gives 484 and forgets the quarter.

   Named at Pearson VUE VIII.A.2, Acreage total. PSI files land measurement outside the calculations area entirely.

4. A buyer pays 3 points on a $265,000 loan. The cost of the points is:

   Answer: $7,950. One point is 1% of the loan amount, so 3 points = $265,000 × 0.03 = $7,950. Points are always calculated on the loan, never the sale price.

   Named at PSI XI.B.4, Discount points and loan origination fees. Pearson VUE VIII.D.4.

5. Taxes of $5,475 for the year are unpaid. Closing is 10 March. Using a 365-day year and charging the seller through the day before closing, the seller owes:

   Answer: $1,020. $5,475 ÷ 365 = $15 per day. January 31 + February 28 + 9 days of March = 68 days. 68 × $15 = $1,020 debited to the seller.

   Named at PSI XI.A.3, Real property tax and other prorations. Pearson VUE VIII.E.5, Prorated items. Note that the question states both the day count and who owns the closing day, which is exactly what Pearson VUE publishes that its proration items will do.

6. A building generates $96,000 in NOI. An investor requires a 9% return. The most she should pay is:

   Answer: $1,066,667. Value = NOI ÷ required rate = $96,000 ÷ 0.09 = $1,066,667. Multiplying by 9% gives $8,640 and inverts the relationship.

   Named at PSI XI.B.2, Rate of return/Capitalization rate. Pearson VUE VIII.B.2 and VIII.B.3, Net Operating Income and Capitalization rate.

7. A state charges a transfer tax of $0.55 per $500 of sale price, rounded up to the next full $500. On a $362,300 sale the tax is:

   Answer: $398.75. $362,300 rounds up to $362,500. $362,500 ÷ $500 = 725 units; 725 × $0.55 = $398.75. Failing to round up gives $398.53.

   Named at PSI XI.A.4, Real property transfer fees. Pearson VUE VIII.E.7, Transfer tax and recording fee.

The other 98 are on Real estate math (calculations) practice questions, timed and scored, with an explanation on every answer. real estate exam simulator mixes them back into a full-length run at the real proportion, which is the only way to find out whether math is actually your weak area or just the one that feels worst.

This section is our analysis of the arithmetic, not a statement from either provider. The outlines say which topics are examinable. They do not publish the traps. What follows comes from writing 105 items against those topics.

Budget it at its weight. On a 40-hour plan that is about 3 hours, and if you are spending more than that on math you are taking the time from contracts, which is worth nearly three times as much.

1. Find out who runs your state's exam, then study that provider's list above. This is fifteen minutes that saves several hours.
2. Memorize the two conversions that are genuinely not supplied at the test center: 43,560 square feet per acre and 5,280 feet per mile. Pearson VUE says so in writing. Our real estate math cheat sheet separates those from the constants everyone teaches but no provider requires.
3. Do problems rather than read formulas. There are no recall-only math items on the Pearson VUE outline, so reading a formula list trains a skill the exam does not test.
4. Settle the calculator question before test day, because it is set by your state and not by your provider. See can you use a calculator on the real estate exam.
5. Then stop. Math is 7 points of 100. Getting every math question right and losing contracts is a fail.

real estate exam questions covers question technique across all eleven areas, real estate exam cheat sheet is the non-math one-pager, and real estate exam vocabulary covers the terms that appear inside math stems, which is where a surprising number of math marks are actually lost.