New Mexico Real Estate Exam Math Practice

The New Mexico real estate exam includes approximately 10 to 15 math questions across the 130-question PSI exam. Unlike some states, NM has no state transfer tax — so the math focus shifts to commission calculations, proration, capitalization rates, and general real estate formulas.

Commission Calculations

Formula: Commission = Sale Price x Commission Rate

Example: A property sells for $425,000 at a 6% total commission. The buyer's broker receives 45% of the total commission. How much does the buyer's brokerage earn?

Total commission: 425,000 x 0.06 = $25,500 Buyer's broker share: 25,500 x 0.45 = $11,475

Practice Problem: A home sells for $310,000 at 5.5% commission, split 50/50. The listing Associate Broker keeps 70% of the listing side. How much does the listing Associate Broker earn?

Total commission: 310,000 x 0.055 = $17,050 Listing side: 17,050 / 2 = $8,525 Associate Broker share: 8,525 x 0.70 = $5,967.50

Capitalization Rate (Income Approach)

Formula: Cap Rate = Net Operating Income / Value Rearranged: Value = NOI / Cap Rate

Example: A rental property generates $36,000 in annual NOI. The market cap rate is 6%. What is the property's value?

Value = 36,000 / 0.06 = $600,000

Practice Problem: A commercial property is valued at $800,000 with a 7.5% cap rate. What is the annual NOI?

NOI = 800,000 x 0.075 = $60,000

Loan-to-Value and Down Payment

Example: A buyer purchases a home for $295,000 with 15% down. What is the loan amount?

Down payment: 295,000 x 0.15 = $44,250 Loan amount: 295,000 - 44,250 = $250,750

Proration

Example: Annual property taxes are $3,600. Closing occurs on July 1. The seller owes taxes through June 30 (181 days). How much does the seller owe at closing?

Daily rate: 3,600 / 365 = $9.86 Seller owes: 181 x 9.86 = $1,784.66

Area Calculations

Formula: Square footage = Length x Width

Example: A parcel is 200 feet wide and 300 feet deep. What is its area in acres?

200 x 300 = 60,000 sq ft 60,000 / 43,560 = 1.378 acres

Gross Rent Multiplier

Formula: GRM = Sale Price / Gross Annual Rent

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

360,000 / 30,000 = GRM of 12

Key NM Math Facts to Memorize

No state transfer tax in NM — only county recording fees (not a math calculation on the exam)
1 acre = 43,560 sq ft
1 section = 640 acres
1 township = 36 sections
Capitalization rate formula: Value = NOI / Cap Rate
Gross Rent Multiplier: GRM = Sale Price / Gross Annual Rent

For more NM exam resources, visit [CARealestate.com/states/new-mexico](https://carealestate.com/states/new-mexico).

New Mexico Real Estate Exam Math Practice