Computations and Closing Practice Questions
Real estate computations and closing of transactions is about 6 questions of math on the Florida sales associate exam. No formulas are given on test day. It covers commission, documentary stamp and intangible tax, proration, area, the income approach, loan-to-value, and property tax. Work the questions below, then read every explanation.
Exam prep only
Math questions are not hard arithmetic. They are hard because you have to choose the right formula and the right number before you compute. Set up the formula first, then plug in.
Use The Setup-Before-Solve Rule. Write the formula, identify which number the question gives you, then calculate. Most wrong answers are real results from the wrong setup, such as using the deed rate on a note or forgetting to round.
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Computations and Closing Practice Questions
9 scenario-based questions on computations and closing, scored, each with a full explanation after you answer. Every question is also written out below if you would rather study at your own pace.
Every question explained
Prefer to study at your own pace? Here are all 9 questions. Read each one and pick your answer, then reveal the correct answer, the reasoning, and the trap that catches most candidates.
1. A home sells for 420,000 dollars at a 6 percent total commission. The listing and selling brokerages split the commission equally, and the listing agent receives 60 percent of her brokerage's share. How much does the listing agent earn?
- A.7,560 dollars
- B.12,600 dollars
- C.15,120 dollars
- D.25,200 dollars
Show answer and explanation
Correct answer: A. 7,560 dollars
Why A is correct: Total commission is 420,000 times 0.06, which is 25,200 dollars. The listing brokerage's equal half is 12,600 dollars. The listing agent's 60 percent share is 12,600 times 0.60, which is 7,560 dollars.
Trap: Read what the question asks for. 25,200 is the total, 12,600 is the brokerage's half, and 15,120 would be 60 percent of the whole commission. The agent's share is 7,560.
Source: Real estate math, commission
2. A deed conveys an Orange County property for 352,150 dollars. Documentary stamp tax on a deed is 0.70 dollars per 100, and the consideration rounds up to the next 100. The deed tax is
- A.2,465.05 dollars
- B.2,465.40 dollars
- C.1,232.70 dollars
- D.246.54 dollars
Show answer and explanation
Correct answer: B. 2,465.40 dollars
Why B is correct: Round 352,150 up to the next 100, which is 352,200. Divide by 100 to get 3,522 units. Multiply by 0.70 to get 2,465.40 dollars.
Trap: The unrounded figure 352,150 times 0.007 gives 2,465.05, which skips the round-up rule. Using the note rate of 0.35 gives 1,232.70. The deed answer is 2,465.40.
Source: F.S. 201.02, documentary stamp tax on deeds
3. A buyer signs a promissory note for 280,000 dollars. Documentary stamp tax on a note is 0.35 dollars per 100. The note tax is
- A.1,960 dollars
- B.560 dollars
- C.980 dollars
- D.2,800 dollars
Show answer and explanation
Correct answer: C. 980 dollars
Why C is correct: Divide 280,000 by 100 to get 2,800 units, then multiply by 0.35 to get 980 dollars.
Trap: Using the deed rate of 0.70 gives 1,960, which is double the correct note tax. The note rate is 0.35 per 100.
Source: F.S. 201.08, documentary stamp tax on notes
4. A new mortgage secures 280,000 dollars of debt on Florida real property. The nonrecurring intangible tax is 2 mills, or 0.002. The intangible tax is
- A.980 dollars
- B.560 dollars
- C.1,960 dollars
- D.5,600 dollars
Show answer and explanation
Correct answer: B. 560 dollars
Why B is correct: Multiply the exact loan amount by 0.002: 280,000 times 0.002 equals 560 dollars. The intangible tax uses the exact amount with no rounding to the next 100.
Trap: Do not round for intangible tax, and do not use the 0.35 note rate. The intangible tax is 0.002 times the loan, which is 560.
Source: F.S. 199, nonrecurring intangible tax
5. Annual property taxes are 3,650 dollars, paid in arrears. A sale closes on June 30 of a non-leap year, the seller owns the day of closing, and a 365-day year is used. The seller's share, charged as a debit to the seller, is
- A.1,825 dollars
- B.1,800 dollars
- C.1,810 dollars
- D.1,840 dollars
Show answer and explanation
Correct answer: C. 1,810 dollars
Why C is correct: The daily rate is 3,650 divided by 365, which is 10 dollars per day. From January 1 through June 30 in a non-leap year is 181 days. Multiply 181 by 10 to get 1,810 dollars owed by the seller.
Trap: Half of 3,650 is 1,825, but the period is not exactly half a year. The correct day count from January 1 through June 30 is 181 days, giving 1,810.
Source: Real estate math, proration
6. A rectangular commercial lot measures 150 feet by 200 feet. At 12 dollars per square foot, the lot is worth
- A.4,200 dollars
- B.30,000 dollars
- C.360,000 dollars
- D.43,560 dollars
Show answer and explanation
Correct answer: C. 360,000 dollars
Why C is correct: Area is length times width: 150 times 200 equals 30,000 square feet. Multiply by 12 dollars per square foot to get 360,000 dollars.
Trap: Add the sides and you get 350, which is wrong. Area is length times width, not the perimeter.
Source: Real estate math, area
7. An office building produces net operating income of 84,000 dollars per year, and investors require a 7 percent capitalization rate. Using the income approach, the value is
- A.588,000 dollars
- B.1,000,000 dollars
- C.1,200,000 dollars
- D.5,880 dollars
Show answer and explanation
Correct answer: C. 1,200,000 dollars
Why C is correct: Value equals net operating income divided by the cap rate: 84,000 divided by 0.07 equals 1,200,000 dollars.
Trap: Divide by the cap rate, do not multiply. Multiplying 84,000 by 0.07 gives 5,880, which is not a value.
Source: Real estate math, income approach
8. A property is appraised at 300,000 dollars and has a contract price of 310,000 dollars. The lender makes an 80 percent loan based on the lower of value or price. The maximum loan amount is
- A.248,000 dollars
- B.240,000 dollars
- C.300,000 dollars
- D.60,000 dollars
Show answer and explanation
Correct answer: B. 240,000 dollars
Why B is correct: Lenders use the lower of the appraised value or the sale price. The lower figure is 300,000. Multiply by 0.80 to get a maximum loan of 240,000 dollars.
Trap: Do not use the higher contract price. 310,000 times 0.80 gives 248,000, but the lender uses the lower 300,000 value.
Source: Real estate math, loan-to-value
9. A homesteaded property has an assessed value of 285,000 dollars and qualifies for the full 50,000-dollar homestead exemption. Using a simplified 18-mill rate applied to taxable value, the annual property tax is
- A.5,130 dollars
- B.4,230 dollars
- C.4,275 dollars
- D.235,000 dollars
Show answer and explanation
Correct answer: B. 4,230 dollars
Why B is correct: Subtract the exemption first: 285,000 minus 50,000 equals 235,000 taxable value. Then apply the millage: 235,000 times 18 divided by 1,000 equals 4,230 dollars.
Trap: Subtract the exemption before applying the rate. Skipping it, 285,000 times 0.018, gives 5,130, which is too high.
Source: Real estate math, property tax and millage
9 here, 1,002 in the app
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Get the full question bankFrequently asked questions
Are formulas provided on the Florida real estate exam?
No. The Florida sales associate exam does not provide formulas. You must know the commission, documentary stamp, intangible tax, proration, area, income approach, loan-to-value, and millage formulas and set them up yourself, then solve with the on-screen calculator.
How do you calculate Florida documentary stamp tax?
On a deed, round the consideration up to the next 100, divide by 100, and multiply by 0.70. On a note or mortgage, divide the amount by 100 and multiply by 0.35. The intangible tax on a new mortgage is the exact loan amount times 0.002, with no rounding.
How many math questions are on the Florida exam?
Real estate computations and closing of transactions is about 6 percent of the 100-question Florida sales associate exam, so expect roughly 6 math questions covering commission, taxes, proration, area, value, and loan calculations.