Texas Real Estate Math Practice Questions (Free + Explained)

TL;DR

What Does the Texas Real Estate Math Section Test?

Based on the current Pearson VUE Texas Real Estate Candidate Handbook and exam content outline, Real Estate Math questions appear on both the national and state portions of the Texas real estate licensing exam. On the national exam, there is a dedicated Real Estate Math Calculations category with scored math items — this is not just a skill embedded in other topics. Math also appears within Finance, Closing, and Valuation questions. The Pearson VUE outline tests math both as a standalone category and integrated into scenario-based questions across multiple sections.

Candidates who practice calculation problems consistently outperform those who skip math and hope to compensate with conceptual questions. Our complete study guide explains exactly how to weight math in your overall preparation. Pearson VUE permits a hand-held financial or business calculator that is battery or solar powered and does not contain alpha characters. A standard scientific calculator with alpha keys is not permitted. You do not need to memorize complex formulas, but you must understand what each formula measures, when to apply it, and how to identify the inputs from a word problem.

What Topics Are Tested?

• Commission calculations — the most frequently tested math on the exam. Commission is calculated as a percentage of the sales price. Know how to calculate total commission, broker splits, and agent splits. Example: a 6% commission on a $350,000 sale = $21,000 total. If the listing broker and selling broker split 50/50, each receives $10,500. If an agent receives 60% of the broker's half, the agent earns $6,300.
• Loan-to-value (LTV) ratio — LTV = loan amount ÷ appraised value (or purchase price, whichever is lower). If a buyer purchases a $200,000 home with a $160,000 loan, LTV = 80%. Lenders use LTV to assess risk and determine whether PMI is required (typically when LTV exceeds 80%).
• Proration calculations — used at closing to divide ongoing expenses (taxes, HOA dues, rents) between buyer and seller. The standard approach: determine the daily rate, then multiply by the number of days each party owns the property during the billing period. Exam proration questions will specify whether to use a 360-day or 365-day year, and whether the day of closing belongs to the buyer or seller — do not assume 365 days unless the question states it.
• Gross rent multiplier (GRM) — GRM = sales price ÷ gross rent — GRM and cap rate are also tested in our property valuation practice questions. Gross rent may be expressed as monthly or annual — the key is to use the same basis consistently. If a property sells for $300,000 and generates $30,000 in annual gross rent, GRM = 10. Multiply a comparable GRM by the subject property's gross rent (using the same time basis) to estimate value.
• Capitalization rate (cap rate) — cap rate = net operating income (NOI) ÷ value. NOI = gross income minus operating expenses (not including mortgage payments). If a property generates $24,000 NOI and is valued at $300,000, cap rate = 8%. Rearranged: value = NOI ÷ cap rate.
• Appreciation and depreciation — to find a property's current value after appreciation: original value × (1 + rate). To find original value when current value and appreciation rate are known: current value ÷ (1 + rate). Depreciation for tax purposes uses straight-line depreciation: residential property depreciates over 27.5 years; commercial over 39 years.
• Area calculations — square footage of a rectangular property = length × width. For irregular shapes, divide into rectangles and add areas. Converting between acres and square feet: 1 acre = 43,560 square feet — area calculations often appear alongside property ownership questions about legal descriptions and lot sizes.
• Transfer tax and recording fees — transfer tax calculations appear on the national portion of the exam. Note that Texas does not impose a state real estate transfer tax; the more relevant Texas-specific closing cost is the county deed recording fee. For national exam questions, know how to apply a transfer tax rate per $1,000 of sales price or per $500 increment.

What Are the Common Exam Traps in This Section?

• LTV uses the lower of appraised value or purchase price — if a home is under contract for $220,000 but appraises at $200,000, the lender calculates LTV based on $200,000, not $220,000. This affects the loan amount and whether PMI is required.
• Proration direction — always identify who owes whom. For property taxes paid in arrears, the seller owes the buyer a credit because the seller owned the property during a period for which taxes are not yet paid. For prepaid items (such as a prepaid HOA fee), the buyer owes the seller a credit.
• Cap rate vs GRM — these are related but different tools. GRM uses gross rent (before expenses). Cap rate uses net operating income (after expenses, before debt service). A question that provides operating expenses is signaling that cap rate is relevant.
• Commission splits — read carefully — exam questions often involve multiple splits: total commission, broker split, then agent split. Work through each step in sequence. Misreading which percentage applies at which level is the most common commission calculation error.
• Depreciation basis — tax depreciation applies to the improvement only, not the land. If a property is purchased for $275,000 and the land is valued at $50,000, the depreciable basis is $225,000. Dividing by 27.5 years gives annual depreciation of approximately $8,182.
• Area — don't mix units — all measurements must be in the same unit before calculating area. Convert feet to miles or yards before multiplying if the question mixes units. 1 mile = 5,280 feet; 1 acre = 43,560 square feet.

How Ardelia Structures These Practice Questions

Ardelia's question bank contains 200+ Real Estate Math practice questions covering every calculation type above. Each question includes:

• A complete step-by-step worked solution — not just the answer
• Identification of which formula applies and why
• Common wrong-answer traps explained so you understand where the mistake happens
• Difficulty progression — easier single-step calculations first, then multi-step scenarios that mirror actual exam complexity

The adaptive engine tracks your accuracy separately across calculation types. If you are strong on commission math but consistently missing proration direction, your sessions will route more proration problems until your accuracy improves.

Frequently Asked Questions

Is a calculator allowed on the Texas real estate exam?

Yes. Pearson VUE permits a hand-held financial or business calculator that is battery or solar powered and does not contain alpha characters. A standard scientific calculator with alpha keys is not permitted. Practice with a permitted calculator during your study sessions so you are comfortable with it on exam day.

How do I calculate a proration at closing?

The standard approach has three steps. First, calculate the annual amount for the item being prorated (taxes, HOA dues, rent). Second, divide by the number of days specified in the question (360 or 365 — never assume) to get the daily rate. Third, multiply the daily rate by the number of days each party owns the property during the billing period. The party who owes the other receives a debit; the other party receives a credit. For Texas property taxes paid in arrears, the seller typically owes the buyer a credit at closing.

What is the difference between cap rate and gross rent multiplier?

Both are used to estimate the value of income-producing property, but they use different inputs. The gross rent multiplier (GRM) uses gross rent before any expenses: GRM = sales price ÷ gross rent (monthly or annual, applied consistently). The capitalization rate uses net operating income (NOI) after operating expenses but before debt service: cap rate = NOI ÷ value. When a question provides operating expenses, use cap rate. When only gross rent is given, GRM is the appropriate tool.

How do I find a property's value using the income approach?

The income approach formula is: value = net operating income ÷ cap rate. First, calculate NOI by subtracting operating expenses from gross income (do not include mortgage payments in operating expenses — they are debt service, not an operating expense). Then divide NOI by the market cap rate for comparable properties. Example: a property with $36,000 NOI in a market with a 9% cap rate has an estimated value of $400,000 ($36,000 ÷ 0.09).

Source: Pearson VUE Texas Real Estate Salesperson Candidate Handbook · Texas Real Estate Commission (trec.texas.gov)