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Real Estate Calculations Practice Questions Preview

This focused set tests Real Estate Calculations at salesperson level. Answer first, then use the rule and explanation to diagnose why each option wins or fails. Answer this 5-question public preview here, then continue the complete experience in Pass Georgia.

Facts checked against the current PSI Candidate Information Bulletin and GREC sources.

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1 / 5Study mode: Real Estate Calculations

A home sells for $340,000 with a 6% total commission split evenly between two brokerages. The listing brokerage receives:

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34% of the real exam is Georgia law. 52 of 152 questions.

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1. A home sells for $340,000 with a 6% total commission split evenly between two brokerages. The listing brokerage receives:Real Estate Calculations. Open choices and explanation.
  1. A.$2,040
  2. B.$5,100
  3. C.$10,200
  4. D.$20,400

Answer C: $10,200

Multiply price by the total rate first: $340,000 x 0.06 = $20,400. Then apply the split, giving half, $10,200, to the listing brokerage. Stopping at the total or splitting again as if paying an agent are the usual traps.

Why each choice works or fails

  • A. Wrong. $2,040 treats 6% as 0.6%.
  • B. Wrong. $5,100 splits the total a second time.
  • C. Correct. Half of $20,400 is $10,200.
  • D. Wrong. $20,400 is the total commission before the split.

Work it through

  1. $340,000 x 0.06 = $20,400 total
  2. $20,400 / 2 = $10,200 to the listing brokerage

Rule to remember: Total commission first, then split. Read which party the question wants.

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2. A home with a $250,000 fair market value is assessed at 40 percent, and the millage rate is 30 mills. What is the annual tax?Real Estate Calculations. Open choices and explanation.
  1. A.$300
  2. B.$3,000
  3. C.$7,500
  4. D.$30,000

Answer B: $3,000

Assessed value is $250,000 x 0.40 = $100,000. A mill is $1 per $1,000, so 30 mills is 0.030. $100,000 x 0.030 = $3,000.

Why each choice works or fails

  • A. Treats 30 mills as 0.0030, one decimal place too far left.
  • B. Correct. $100,000 assessed x 0.030 = $3,000.
  • C. Applies the millage to full market value instead of the 40 percent assessment.
  • D. Treats 30 mills as 0.30, confusing mills with a percentage.

Work it through

  1. $250,000 x 0.40 = $100,000 assessed value
  2. 30 mills = 0.030
  3. $100,000 x 0.030 = $3,000

Rule to remember: Georgia tax: fair market value x 40% = assessed value, then x millage (mills / 1,000).

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3. Paying discount points MOST benefits a borrower who:Real Estate Calculations. Open choices and explanation.
  1. A.Expects to sell or refinance within two years
  2. B.Wants to lower the loan's principal balance
  3. C.Wants the lowest possible cash outlay at closing
  4. D.Keeps the loan long enough to recover the cost

Answer D: Keeps the loan long enough to recover the cost

Points are money paid now for a lower rate over time, so there is a break-even point. A borrower who keeps the loan past it comes out ahead; one who sells or refinances first has simply paid more. Divide the cost of the points by the monthly saving to find that month.

Why each choice works or fails

  • A. Wrong. A short hold rarely recovers the upfront cost.
  • B. Wrong. Points buy a lower interest rate; they do not reduce principal.
  • C. Wrong. Points increase, not reduce, cash needed at closing.
  • D. Correct. Holding past break-even is what makes points worthwhile.

Rule to remember: Points pay off only if the loan is kept past break-even: cost of points divided by monthly saving.

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4. A property has $70,000 in annual gross income and $52,500 in annual NOI, and is valued at $700,000. What is the capitalization rate?Real Estate Calculations. Open choices and explanation.
  1. A.7.5%
  2. B.10.0%
  3. C.13.3%
  4. D.75.0%

Answer A: 7.5%

Cap rate is annual NOI divided by value: $52,500 / $700,000 = 7.5 percent. Gross income is a distractor; expenses come out before capitalizing.

Why each choice works or fails

  • A. Correct. $52,500 / $700,000 = 7.5%.
  • B. Wrong. 10.0% uses gross income instead of NOI.
  • C. Wrong. 13.3 is value divided by NOI, a multiplier.
  • D. Wrong. 75% divides NOI by gross income, an expense-ratio complement, not a cap rate.

Work it through

  1. $52,500 / $700,000 = 0.075
  2. 0.075 = 7.5%

Rule to remember: Cap rate equals annual NOI divided by value.

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5. A property bought for $280,000 is now worth $238,000 with a $260,000 balance. The owner has:Real Estate Calculations. Open choices and explanation.
  1. A.Negative equity of $42,000
  2. B.Negative equity of $22,000
  3. C.Positive equity of $20,000
  4. D.Positive equity of $22,000

Answer B: Negative equity of $22,000

Equity is current value minus debt: $238,000 - $260,000 = -$22,000. The purchase price is extra information. Owing more than the property is worth is called being underwater.

Why each choice works or fails

  • A. $42,000 is the drop in value since purchase, not equity.
  • B. Correct. Debt exceeds current value by $22,000.
  • C. $20,000 uses the purchase price instead of current value.
  • D. The sign is reversed; the owner is underwater.

Work it through

  1. $238,000 - $260,000 = -$22,000

Rule to remember: Equity equals current market value minus current debt; purchase price does not enter the formula.

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What does this assessment cover?

Seller net, buyer funds, prorations, transfer fees, PITI, equity, capitalization rate, LTV, points, and loan origination fees.
Question coverage in this assessment
Official content areaPublished weightQuestions hereComplete lesson
Real Estate Calculations7% of the national portion5Study Calculations

The Georgia-specific distinction

Georgia supplement questions can add Georgia transfer tax, intangible recording tax, the 40% assessment ratio, and closing allocations. This national set emphasizes setup selection and units.

Worked result example

For LTV, divide loan by the value the question directs you to use. For points, multiply the loan by the points rate. Two formulas can use the same facts and require different bases.

Common exam traps

  • Using price instead of loan.
  • Mixing annual and monthly figures.
  • Rounding before the final step.
  • Reversing debit and credit direction.

Ready to move on?

  1. Score the set before opening notes.
  2. Explain the winning rule without repeating the answer choice.
  3. Classify every miss as knowledge, distinction, wording, math setup, or timing.
  4. Repair the weakest official area, then answer a fresh set on another day.
  5. Move on only when the result is stable and guesses are being marked as gaps.

Recommended next lesson

Open the complete lesson hub. Use the result above to choose the first lesson or drill rather than following a generic order.

Assessment integrity

The questions are original and mapped to the current PSI outline. This preview introduces the assessment; the complete version is in Pass Georgia. PSI says practice exams help candidates become familiar with general question types, but they do not replace education and a good practice score does not guarantee an examination outcome. This page reports evidence, not a pass probability.

About this practice set

Facts checked against the current PSI Candidate Information Bulletin and GREC sources.

Are these actual PSI exam questions?

No. Every item is original, written from the current published outline and primary sources. No question is copied, recalled, reconstructed, or represented as a live PSI item.

Does this score predict whether I will pass?

No. One practice result is evidence about this question sample. Use the area breakdown, review guesses as well as misses, and confirm improvement with fresh questions on another day.

What should I do after the result?

Open the explanation for every miss and guess, restate the rule, use the linked repair lesson, then continue with the next lesson: Open the complete lesson hub.

Is the assessment free?

Yes. This 5-question preview has no email gate, account requirement, or card. The complete assessment, saved mastery, spaced review, and adaptive recommendations are in Pass Georgia.