1. The Real Estate School
P E N N S Y L V A N I A R E A L E S T A T E E X A M
REAL ESTATE MATH CONCEPTS
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2. TEST TAKING STRATEGIES FOR MATH
▪ If you are challenged with math –
skip all the math questions until the
end
▪ Usually one answer makes no sense
at all
▪ There are 7 questions that deal with
math. Even if you get every math
question wrong – you can still pass
the test
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3. SOLVING REAL ESTATE MATH PROBLEMS
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1. Get rid of the words
2. Label your numbers
3. What are they asking for?
4. Does the answer make
sense?
5. Work backwards
5. PRORATIONS (PAGE 3)
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2. A landlord has collected the June rent from all five tenants in
her apartment building; two at $700 and three at $825. If the
landlord sells her apartment building on June 23rd, how much
rent will she need to credit the buyer at settlement.
Get rid of the words: # Tenants = 5
Rent = $700/mo. and $825/mo.
Sold Date = June 23rd
Buyer Receives = ?
6. PRORATIONS (PAGE 3)
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2. A landlord has collected the June rent from all five tenants in
her apartment building; two at $700 and three at $825. If the
landlord sells her apartment building on June 23rd, how much
rent will she need to credit the buyer at settlement.
2 tenants x $700/mo. =
3 tenants x $825/mo. =
Total rent/mo.
$ 1,400
2,475
$ 3,875
$ 3,875 ÷ 30 days = $ 129.17 Rent/day
$ 129.17 x 7 days = $ 904.17
June 1 June 30
June 23
Landlord Buyer
23 days 7 days
7. PROFIT & LOSS (PAGE 5)
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5. When the sale of the Morgan house was closed, the title
company paid the seller’s miscellaneous closing expenses of
$250 and deducted a real estate brokerage commission of 6.5%
which was $5,200. What was the seller’s net proceeds?
Get rid of the words: Miscellaneous Expenses = $250
Commission = 6.5% or .065
Commission = $5,200
Seller Proceeds = ?
8. PROFIT & LOSS (PAGE 5)
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5. When the sale of the Morgan house was closed, the title
company paid the seller’s miscellaneous closing expenses of
$250 and deducted a real estate brokerage commission of 6.5%
which was $5,200. What was the seller’s net proceeds?
Sales Price x .065 = $5,200
Sales Price = $5,200 ÷ .065
Sales Price = $80,000
Sales Price
Less: Commission
Less: Misc. Exp.
Seller’s Net Proceeds
$ 80,000
- 5,200
- 250
$ 74,550
÷
9. PRINCIPAL & INTEREST (PAGE 8)
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4. What will the quarterly interest payments be on a $16,500 loan
at 8.75% interest for 1 year?
Get rid of the words: Quarterly Interest Payment = ?
Loan Amount = $16,500
Interest Rate = 8.75% or .0875
10. PRINCIPAL & INTEREST (PAGE 8)
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4. What will the quarterly interest payments be on a $16,500 loan
at 8.75% interest for 1 year?
Loan Amount x Interest Rate = Interest Payment/yr.
$16,500 x .0875 = Interest Payment/yr.
$1,443.75 = Interest Payment/yr.
$1,443.75 ÷ 4 quarters = $360.94/Quarter
11. COMMISSION & SELLING PRICE (PAGE 10)
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6. Alice took a listing for her company which sold for $182,500.
Emma, who works for a different company, produced the
purchasers. The brokers have agreed to divide the 7%
commission equally. What amount will Alice receive if she is on
a 55/45 split with her company?
Get rid of the words: Sales Price = $182,500
Commission Rate = 7% or .07
Split Between Companies = 50% or .50
Alice’s Commission Split = 55% or .55
12. COMMISSION & SELLING PRICE (PAGE 10)
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6. Alice took a listing for her company which sold for $182,500.
Emma, who works for a different company, produced the
purchasers. The brokers have agreed to divide the 7%
commission equally. What amount will Alice receive if she is on
a 55/45 split with her company?
Sale Price x Commission Rate = Commission Amount
$182,500 x .07 = Total Commission
Total Commission = $12,775
$12,775 x .50 = Listing Commission
Listing Commission = $6,387.50
$6,387.50 x .55 = Alice’s Commission = $3,513.13