Texas Real Estate Exam Math: Commission, Proration & Financing

The Texas real estate exam includes math questions in both the national and Texas sections. Unlike Florida, there are no documentary stamp taxes — but Texas has its own math scenarios including community property calculations.

Commission Calculations

Example 1: A property sells for $520,000. The listing broker charges 5.5%. The listing side splits 50% with the buyer's broker. The listing agent earns 55% of the listing side. How much does the listing agent earn?

Total commission: $520,000 × 0.055 = $28,600
Listing side: $28,600 ÷ 2 = $14,300
Agent share: $14,300 × 0.55 = $7,865

Example 2: A seller wants to net $380,000 after paying a 6% commission. What must the property sell for? - Net = Sale Price × (1 - 0.06) = Sale Price × 0.94 - Sale Price = $380,000 ÷ 0.94 = $404,255.32

Proration

Texas exams use a 365-day year for proration (unlike Florida's 360-day year). Always note which year the exam specifies.

Property tax proration (Texas property taxes paid in arrears): - Annual taxes: $5,475 | Closing date: June 15 - Daily rate: $5,475 ÷ 365 = $15/day - Days seller owned (Jan 1 to June 15): 31 + 28 + 31 + 30 + 31 + 15 = 166 days - Seller's credit to buyer: 166 × $15 = $2,490

Loan Calculations

Loan-to-Value (LTV): - $400,000 purchase price, 20% down payment - Down payment: $80,000 | Loan: $320,000 - LTV: $320,000 ÷ $400,000 = 80% (no PMI at exactly 80%)

Monthly Payment Estimation (exam may provide amortization factors): - Loan: $300,000 at 7% for 30 years - Using factor of $6.65 per $1,000: $300,000 ÷ 1,000 × $6.65 = $1,995/month

Option Period Math

The Texas option period requires a negotiated option fee paid directly to the seller (not held in escrow). It is earned immediately upon delivery.

Example: Buyer pays $300 option fee for 10-day option period. Buyer terminates on day 7. Who gets the option fee? Answer: The seller keeps the $300 — option fees are non-refundable. The earnest money (held in escrow) is returned to the buyer upon proper termination.

Community Property Math

Texas is one of 9 community property states. Property acquired during marriage is generally community property owned 50/50.

Exam scenario: Married couple divorces. Community property house has a market value of $450,000. Outstanding mortgage: $180,000. Each spouse's interest is: - Equity: $450,000 - $180,000 = $270,000 - Each spouse's share: $270,000 ÷ 2 = $135,000

Capitalization Rate

Example: A commercial property generates $72,000 NOI annually. Similar properties sell at a 7.2% cap rate. What is the property's value? - Value = NOI ÷ Cap Rate = $72,000 ÷ 0.072 = $1,000,000

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