Real Estate Math

Real Estate Math: Finance, Closing & Math Real estate math questions account for approximately 10% of the Illinois broker exam (~14 questions), making this one of the highest-yield sections you can prepare for — master the formulas once and you can bank nearly every one of these points. --- ## Why This Section Matters Math questions reward preparation. Unlike many conceptual topics, these problems are purely mechanical: plug in the right numbers, apply the right formula, and you get full credit. A candidate who knows all seven core formulas can realistically score 100% on this section. --- ## Core Formula Categories ### 1. Illinois State Transfer Tax The state charges $0.50 per $500 (or fraction thereof) of the sale price. The seller typically pays this. Formula: `` (Sale Price ÷ 500, round UP to next whole number) × $0.50 ` > Worked Example: Home sells for $237,250. > - $237,250 ÷ 500 = 474.5 → round UP to 475 > - 475 × $0.50 = $237.50 transfer tax > ⚠️ *Always round UP, even if the division is exact — partial units still count as a full unit.* --- ### 2. Property Tax Proration (Taxes in Arrears) Illinois property taxes are paid in arrears, meaning the prior year's taxes are paid the following year. At closing, the seller owes the buyer a credit for the portion of the current year they occupied the property — because the buyer will eventually pay the full-year bill. Formula: ` Annual Tax ÷ 365 × Number of Seller's Days = Seller Credit to Buyer `` | Step | Action | |------|--------| | Find daily rate | Annual tax ÷ 365 | | Count…