How many square feet are in an acre?

43,560 square feet. This is one of the few numbers worth memorizing cold — area questions routinely require converting between square feet and acres, and the conversion either makes the calculation trivial or impossible depending on whether you remember it. The other useful related fact: a square mile is 640 acres, which is occasionally tested in agricultural or large-parcel problems.

What is the cap rate formula?

Cap rate equals net operating income divided by value (or by sale price). Rearranged, value equals NOI divided by cap rate. NOI is gross income minus vacancy and operating expenses — it does not subtract debt service or income taxes. The exam tests the rearrangement direction: given two of the three (value, NOI, cap rate), you should be able to solve for the third without thinking.

Should I use a 360-day or 365-day year for proration?

Use whichever convention the question specifies. If the question is silent, follow the convention taught by your course or implied by the surrounding facts in the problem; do not switch methods mid-calculation. A 360-day banker's year (30 days per month) makes mental math faster; a 365-day calendar year is more precise. Always note the convention at the top of your scratch work to avoid mixing them.

How is commission usually split on an exam question?

If the question gives a traditional split structure, start with the sale price and the total commission rate to get total commission. Then split between listing and buyer brokerages as stated in the problem (often 50/50 in exam-style examples). Then split each brokerage's share between broker and agent according to their stated agreement. Work the calculation in that order to avoid double-counting, and do not assume a standard rate or split unless the question states it.

Texas Real Estate Math — Study Guides & Practice Questions

Texas Real Estate Math

The math module tests whether a license holder can perform the calculations that come up in real Texas transactions — commission splits, prorations, area calculations, loan ratios, and the income-approach formulas used in valuation. The questions are not difficult in isolation, but they are time-pressured and easy to misread. Candidates who lose points here usually lose them to setup errors (using the wrong base, the wrong day count, or the wrong year length) rather than to arithmetic mistakes. Knowing which formula applies and what numbers to plug in is more important than mental-math speed. The single best preparation for this module is repetition: working enough problems that you recognize the question type within the first sentence and immediately know which formula to reach for. Most math questions reuse a small set of setups — once you can pattern-match the setup, the arithmetic is straightforward.

Key Subtopics

Commission calculations — total commission, splits between brokerages, and splits between broker and agent. Most commission questions follow a three-step pattern: compute total commission from price and rate, split between listing and buyer brokerages, then split each brokerage's share with its agent.
Proration — taxes, interest, rent, and HOA dues, using either a 360-day banker's year or a 365-day calendar year. The exam tests both conventions and expects you to use whichever the question specifies.
Area calculations — rectangles, triangles, irregular lots, and acreage (43,560 square feet per acre). Memorize the acre conversion cold — it appears in most area problems and converts the calculation between square feet and acres directly.
Loan-to-value (LTV), debt-to-income (DTI), and discount points. LTV equals loan amount divided by lesser of price or appraised value; DTI compares monthly debt to gross monthly income; one discount point equals 1% of the loan amount. Common exam thresholds: 80% LTV often triggers PMI on conventional loans, and lenders typically look for DTI ratios at or below 43% for qualified mortgages.
Gross rent multiplier (GRM) and gross income multiplier (GIM). GRM is a quick screening ratio (price divided by gross rent) used for small residential income properties; GIM applies the same concept to gross income on larger properties.
Net operating income (NOI) and capitalization rate (cap rate) — value = NOI ÷ cap rate. NOI is gross income minus vacancy and operating expenses, before debt service and income taxes.
Amortization, simple interest, and the difference between APR and the note rate. Simple-interest problems use I = P × r × t; amortization problems usually require recognizing the first month's interest from the loan balance and the rate.
Tax calculations using the assessed value, the mill rate, and homestead exemptions. A mill is one-thousandth, so a mill rate of 25 mills equals $25 of tax per $1,000 of taxable value. The homestead exemption reduces taxable value before the mill rate is applied.

Study This Cluster

Math rewards practice more than reading. Work through the formula articles to make sure your setups are correct, then drill the practice set until the patterns become automatic. The goal is not memorization in the abstract — it is recognizing within the first sentence which formula a question wants. Use the cluster articles to build the formula sheet, then practice under time pressure.

Texas Real Estate Exam Math — the formula sheet and how to recognize question types under time pressure.
Area Calculations — rectangles, triangles, irregular lots, and acreage conversions.
Commission Calculations — total commission, splits, and the most-tested setups.
Proration Explained — tax and interest proration with both day-count conventions.
Commission Splits & Brokerage Compensation — how commission flows through the brokerage.
Math Practice Questions — timed practice with full explanations.

Frequently Asked Questions

How many square feet are in an acre?: 43,560 square feet. This is one of the few numbers worth memorizing cold — area questions routinely require converting between square feet and acres, and the conversion either makes the calculation trivial or impossible depending on whether you remember it. The other useful related fact: a square mile is 640 acres, which is occasionally tested in agricultural or large-parcel problems.
What is the cap rate formula?: Cap rate equals net operating income divided by value (or by sale price). Rearranged, value equals NOI divided by cap rate. NOI is gross income minus vacancy and operating expenses — it does not subtract debt service or income taxes. The exam tests the rearrangement direction: given two of the three (value, NOI, cap rate), you should be able to solve for the third without thinking.
Should I use a 360-day or 365-day year for proration?: Use whichever convention the question specifies. If the question is silent, follow the convention taught by your course or implied by the surrounding facts in the problem; do not switch methods mid-calculation. A 360-day banker's year (30 days per month) makes mental math faster; a 365-day calendar year is more precise. Always note the convention at the top of your scratch work to avoid mixing them.
How is commission usually split on an exam question?: If the question gives a traditional split structure, start with the sale price and the total commission rate to get total commission. Then split between listing and buyer brokerages as stated in the problem (often 50/50 in exam-style examples). Then split each brokerage's share between broker and agent according to their stated agreement. Work the calculation in that order to avoid double-counting, and do not assume a standard rate or split unless the question states it.

Bottom Line

Math is one of the most predictable modules on the Texas exam — the formula list is short, and the same setups appear repeatedly. Candidates who memorize the formulas, practice the setups, and read the question for the day-count convention will outperform candidates who can do arithmetic but freeze at problem setup. The fastest preparation strategy is to identify which formula family each question belongs to before computing anything — once the family is right, the arithmetic is straightforward. For the full module weighting, see the Texas exam blueprint.