Math questions appear on both the National and State Law portions of the Texas Real Estate Sales Agent Exam. Most students dread them — but the good news is that real estate math is a small set of repeatable formulas. Once you understand how each one works, you can solve any variation the exam throws at you.
This page gives you every formula you need for the TREC exam, organized clearly with examples — plus a free interactive calculator that shows you the step-by-step solution for each calculation type. Use it to practice, check your work, and build the muscle memory that carries you through exam day.
A basic calculator is allowed during the Texas Real Estate Sales Agent Exam. What you need to know is which formula to use and in what order to apply it — not mental arithmetic. Practice the process, not just the answer.
Free Texas Real Estate Math Calculator
Select a calculation type below, enter your numbers, and hit Calculate. Each result shows you the full formula and step-by-step solution — exactly how you would work it on the TREC exam.
Texas Real Estate Math Calculator
Select a formula type, enter your numbers, and see the full step-by-step solution.
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Start Free Practice Quiz →Texas Real Estate Math Formulas Cheat Sheet
These are the formulas that appear most often on the TREC Sales Agent Exam. Memorize the structure of each one — not just the answer — so you can apply it to any variation on exam day.
| Formula | Calculation | Notes |
|---|---|---|
| Total Commission | Sale Price × Commission Rate | Always multiply first, then split |
| Agent Commission | Total Commission × Agent Split % | Split is between agent and broker |
| Loan Amount | Sale Price × (1 − Down Payment %) | Or: Sale Price − Down Payment $ |
| Down Payment $ | Sale Price × Down Payment % | LTV + Down Payment % = 100% |
| LTV Ratio | Loan Amount ÷ Appraised Value | Use lower of sale price or appraisal |
| Annual Tax | (Assessed Value − Exemption) × Tax Rate | Homestead exemption reduces taxable value |
| Daily Proration Rate | Annual Amount ÷ 365 (or 360) | Texas exams typically use 365 |
| Seller Proration Days | Days seller owned property in closing year | Closing day belongs to buyer |
| Seller Net Proceeds | Sale Price − Loan Balance − Commission − Closing Costs | Also called "net to seller" |
| Appreciation Value | Original Value × (1 + Rate) ^ Years | Compounded annually |
| Depreciation Value | Original Value × (1 − Rate) ^ Years | Used for tax purposes on investment property |
| Discount Points | 1 point = 1% of loan amount | Each point typically lowers rate by 0.125% |
On the TREC exam, property taxes are almost always paid in arrears — meaning the seller owes the buyer for the portion of the year the seller owned the property. The closing day itself belongs to the buyer. Always count from January 1 through the day before closing for the seller's share.
Commission Calculations
Commission questions are the most common math problems on the Texas exam. The core formula is simple: Sale Price × Commission Rate = Total Commission. From there, you split it between the listing and selling brokerages, then between each broker and their agent.
Example
A home sells for $350,000. The total commission is 6%. The listing brokerage and selling brokerage each receive 50%. The listing agent keeps 60% of their brokerage's share. How much does the listing agent earn?
- Total commission: $350,000 × 0.06 = $21,000
- Listing brokerage share: $21,000 × 0.50 = $10,500
- Listing agent share: $10,500 × 0.60 = $6,300
Always work through commission splits in order — total first, then brokerage split, then agent split. The exam will give you the numbers in a different order to trip you up. Slow down and follow the formula step by step.
Proration Calculations
Prorations divide an annual expense — usually property taxes or rent — between the buyer and seller at closing based on how many days each party owns the property. The Texas exam most commonly tests tax prorations paid in arrears, meaning the seller owes the buyer for the portion of the year the seller owned the property before closing.
Example
Annual property taxes are $4,800. Closing is on March 15. How much does the seller owe the buyer at closing? (Using 365-day method)
- Daily rate: $4,800 ÷ 365 = $13.15/day
- Seller owned Jan 1 – Mar 14 = 73 days (closing day belongs to buyer)
- Seller's proration: $13.15 × 73 = $960.27
Loan-to-Value (LTV) and Down Payment
LTV is the ratio of the loan amount to the property's appraised value or purchase price — whichever is lower. Lenders use it to assess risk. The higher the LTV, the more risk the lender takes on. Conventional loans with LTV above 80% typically require private mortgage insurance (PMI).
Example
A buyer purchases a home for $400,000 and puts 20% down. What is the loan amount and LTV?
- Down payment: $400,000 × 0.20 = $80,000
- Loan amount: $400,000 − $80,000 = $320,000
- LTV: $320,000 ÷ $400,000 = 80%
Property Tax Calculations
Property tax questions on the TREC exam typically involve applying a millage rate or percentage to an assessed value, sometimes after subtracting an exemption. In Texas, the homestead exemption reduces the taxable value of a primary residence.
Example
A home has an assessed value of $350,000. The tax rate is 2.1%. The homestead exemption is $40,000. What is the annual tax bill?
- Taxable value: $350,000 − $40,000 = $310,000
- Annual tax: $310,000 × 0.021 = $6,510
Seller Net Proceeds
The seller net proceeds — sometimes called "net to seller" — is what the seller walks away with after paying off their loan, the agent commission, and any other closing costs. It is one of the most practical calculations in real estate and shows up regularly on the exam.
Example
A home sells for $400,000. The seller's loan balance is $220,000. Commission is 6%. Closing costs are $5,000. What are the seller's net proceeds?
- Commission: $400,000 × 0.06 = $24,000
- Net proceeds: $400,000 − $220,000 − $24,000 − $5,000 = $151,000
Put Your Math Skills to the Test
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Practice Free Now →Tips for Passing the Texas Real Estate Math Section
- Know the formula before the numbers. Every math question on the TREC exam is a variation of one of the formulas above. If you know which formula to apply, the arithmetic is straightforward.
- Write it out on your scratch paper. You get scratch paper at the Pearson VUE testing center. Use it every time. Writing the formula first slows you down just enough to avoid careless errors.
- Double-check your decimal placement. Commission rate questions often trip students up by mixing up 6 and 0.06. Always convert percentages to decimals before multiplying.
- Practice until the process feels automatic. Use the calculator on this page to run through different scenarios until you can identify the formula from the question without hesitating.
- Do not skip the math section. Many students skip math questions and come back — and then run out of time. The math questions are manageable if you have practiced. Getting them all right gives you a strong cushion on the rest of the exam.
The math section of the TREC exam is a small portion of the total questions — but students who master it consistently outperform those who skip it. Use this page, run through the calculator with different numbers, and come back whenever you need a refresher before exam day.
For more study strategies, see our guide on the best way to memorize for the Texas real estate exam, or explore the full breakdown of what is on the Texas real estate exam.