Commission & Splits
Stopping at total commission when the question asks for the associate's share.
Multiply the sale price by the commission rate to find the total commission earned on the transaction.
The agent's share is calculated by multiplying the total commission by their split percentage with the brokerage.
When you know the commission earned and the rate, divide to find the original sale price.
Proration
Getting the credit direction backward when taxes are paid in arrears.
Divide the annual expense by 365 days to find the daily rate for proration at closing.
Multiply the daily rate by the number of days the seller owned the property in the proration period.
Cap Rate & GRM
Using gross rent for cap rate or NOI for GRM. The exam separates gross from net.
The cap rate measures the rate of return on a real estate investment based on net operating income.
Divide net operating income by the cap rate to estimate property value using the income approach.
GRM provides a quick comparison tool for income-producing properties. Lower GRM may indicate better value.
Documentary Stamp Tax
Using $0.70 on a mortgage or forgetting the Miami-Dade deed exception.
Florida documentary stamp tax on deeds is $0.70 per $100 of the sale price in most counties. Round up to the next $100 unit before multiplying.
Documentary stamp tax on mortgages and notes is $0.35 per $100 of the loan amount in Florida. Round up to the next $100 unit before multiplying.
Florida charges an intangible tax of 2 mills ($0.002) per dollar on new mortgages.
Property Tax & Millage
Applying the millage rate before subtracting the exemption.
Subtract the applicable exemption before applying the millage rate. The exam often tests this order.
A mill is $1 of tax per $1,000 of taxable value. Convert mills by dividing by 1,000.
Area & Volume
Comparing price per acre to price per square foot before converting units.
Multiply length by width to calculate rectangular area.
There are 43,560 square feet in one acre.
Divide the total price by the square footage to determine the price per square foot.
Loan-to-Value (LTV)
Using asking price instead of appraised value or sale price, whichever is lower.
LTV measures how much of the property value is financed. Higher LTV means more risk for lenders.
The down payment is the difference between the property value and the loan amount.
Seller Net & Required Price
Using equity as seller net or forgetting that commission rises as required price rises.
Seller net is what remains after the loan payoff, commission, documentary stamps, and seller closing costs are subtracted.
Required price problems work backward. Remember that commission and some seller costs increase as the price increases.
Mortgage Qualifying Ratios
Mixing monthly and annual numbers or leaving taxes and insurance out of PITI.
The front-end ratio compares housing payment to gross monthly income.
The back-end ratio includes the housing payment plus other recurring monthly debt.
Profit, Loss & Equity
Treating appreciation, equity, and profit as the same number.
Equity is the owner's value position before selling costs. It is not the same as profit.
Appreciation measures value increase. Debt does not change the appreciation calculation.
When value falls below purchase price, the decrease is market depreciation for exam math context.
Comparable Sales Adjustments
Adjusting the subject instead of the comparable, or reversing add and subtract.
Add when the comparable is inferior to the subject. You are adjusting the comparable toward the subject.
Subtract when the comparable is superior to the subject. The subject stays fixed.
Pair this reference with the 19-topic study guide and the calculator hub. For the full teaching version, use the math formulas guide.