Delaware Real Estate Exam Math: Formulas and Practice Problems

Math questions on the Delaware real estate exam cover a predictable set of formulas. The Delaware transfer tax calculation is unique to the state and will likely appear. Here are the key formulas and worked examples.

Delaware Transfer Tax

Formula: Transfer Tax = Purchase Price × Tax Rate

Delaware's transfer tax is 4% total (2% state + 2% county), typically split 50/50 between buyer and seller.

Example: A home sells for $325,000. How much does the buyer pay in transfer tax?

Total transfer tax: $325,000 × 0.04 = $13,000
Buyer's share (50%): $13,000 × 0.50 = $6,500
Seller's share (50%): $6,500

Example 2: What is the total transfer tax on a $450,000 sale?

- $450,000 × 0.04 = $18,000 total

Commission Calculations

Formula: Commission = Sale Price × Commission Rate

Example: A property sells for $280,000 with a 6% commission split equally between listing and buyer's broker. The listing salesperson earns 55% of the listing broker's share. How much does the salesperson earn?

Total commission: $280,000 × 0.06 = $16,800
Listing broker's share: $16,800 ÷ 2 = $8,400
Salesperson's share: $8,400 × 0.55 = $4,620

Loan-to-Value Ratio

Formula: LTV = Loan Amount ÷ Purchase Price

Example: A buyer purchases a $275,000 home and makes a 20% down payment. What is the LTV?

Down payment: $275,000 × 0.20 = $55,000
Loan amount: $275,000 − $55,000 = $220,000
LTV: $220,000 ÷ $275,000 = 80%

Proration

Example: Closing is October 1. The seller has prepaid annual property taxes of $4,380. How much does the seller receive as a credit for prepaid taxes? (Use a 365-day year)

Days remaining after Oct 1 through Dec 31 = 92 days
Daily tax rate: $4,380 ÷ 365 = $12.00/day
Seller credit: $12.00 × 92 = $1,104

Capitalization Rate

Formula: Value = NOI ÷ Cap Rate

Example: An income property has a Net Operating Income of $56,000 and the market cap rate is 8%. What is its estimated value?

- Value: $56,000 ÷ 0.08 = $700,000

Gross Rent Multiplier

Formula: GRM = Price ÷ Gross Annual Rent

Example: A property sells for $360,000 and generates $30,000 in annual gross rent. What is the GRM?

- GRM: $360,000 ÷ $30,000 = 12

Points

Formula: 1 point = 1% of the loan amount

Example: A buyer takes out a $250,000 mortgage and pays 1.5 discount points. How much are the points?

- $250,000 × 0.015 = $3,750

Percentage of Gain/Loss

Formula: % Change = (New − Old) ÷ Old × 100

Example: A property was purchased for $200,000 and sold for $230,000. What is the percentage gain?

$230,000 − $200,000 = $30,000
$30,000 ÷ $200,000 = 0.15 = 15%

Study Tips for Delaware Math

The Delaware transfer tax is the state-specific math question most likely to appear — know it cold
Practice proration with both 360-day and 365-day methods
Write the formulas at the start of your scratch paper before beginning the exam

For more Delaware math practice, visit [CARealestate.com/states/delaware](https://carealestate.com/states/delaware).