Real Estate Math on the NJ PSI Exam: The Calculations You Need to Know

The short answer: Real Estate Calculations is 7% of the general content outline on the NJ salesperson exam. PSI lists nine specific skills: seller's net proceeds, buyer's funds needed at closing, prorations, transfer fees, PITI payment estimates, equity, rate of return/cap rate, loan-to-value, and discount points/origination fees (PSI candidate bulletin). It's mostly percentages and division. Learn the handful of formulas below and practice until they're automatic.

This page goes topic by topic with a simple example for each. For the whole exam (format, scheduling, test day), start with our complete guide to the NJ PSI exam. For the full licensing path, see how to get a real estate license in New Jersey.

All numbers in the examples are made up for practice. They aren't typical NJ prices, rates or commissions.

How much math is on the NJ real estate exam?

The salesperson exam has 110 questions (110 points), you need 70% (77 correct) to pass, and you get 4 hours (PSI candidate bulletin). Math is one of eleven general topic areas, weighted at 7%. That's smaller than Contracts (19%) or Agency (13%). But math questions are the ones you can get right every time once you know the method, so they're worth the practice.

Can you use a calculator, and what do you write on?

Check this with PSI before test day, because PSI's own documents don't agree:

  • The current candidate bulletin lists "handheld calculators" among prohibited electronic devices (PSI candidate bulletin).
  • An undated PSI program sheet for New Jersey says non-programmable, silent calculators are allowed (PSI NJ program sheet).

What the bulletin does say clearly: at a PSI test center you're given a piece of scratch paper and a pencil, which you return at check-out. For remote online exams, scratch paper isn't allowed (PSI candidate bulletin). If you plan to test from home, practice doing problems without writing them down. Confirm the current calculator rule with PSI at test-takers.psiexams.com/njre.

What are the core formulas?

Almost every problem is a version of one relationship: part = rate × whole.

  • Commission = sale price × commission rate
  • Loan amount = value × LTV
  • Points cost = loan amount × (number of points × 1%)
  • Net operating income = value × cap rate

If you know two of the three, you can solve for the third: rate = part ÷ whole and whole = part ÷ rate.

How do you calculate a seller's net proceeds?

Start with the sale price and subtract everything the seller pays out.

Seller's net = sale price − commission − mortgage payoff − seller's other costs and credits

Example: A home sells for $350,000. The listing agreement provides a 4.5% commission. The seller owes $180,000 on the mortgage and has $6,500 in other closing costs.

  • Commission: $350,000 × 0.045 = $15,750
  • Net: $350,000 − $15,750 − $180,000 − $6,500 = $147,750

A common variation asks what price the seller needs to net a certain amount. Then you divide: required price = (desired net + costs that aren't percentages) ÷ (1 − commission rate).

How do you figure the buyer's funds needed at closing?

Buyer's cash = down payment + buyer's closing costs + prepaid items − deposits already paid − credits

Example: Price $300,000 with a 90% loan, so the down payment is $30,000. Closing costs are $9,000 and the buyer already put down a $10,000 deposit.

  • Cash at closing: $30,000 + $9,000 − $10,000 = $29,000

Don't forget the deposit. It's already been paid, so it's a credit to the buyer, not an extra cost.

How do prorations work?

Prorating splits an expense (like property taxes) between buyer and seller based on who owned the property for which days.

  1. Find the daily rate: annual amount ÷ days in the year (or ÷ 360 if the question says to use a banker's year).
  2. Count the days that belong to the party who owes.
  3. Multiply.

Example: Annual taxes are $9,125, using a 365-day year, so $25 a day. The seller owned the home for 120 days of the tax period, and the taxes haven't been paid yet. The seller owes the buyer 120 × $25 = $3,000 (a credit to the buyer, a debit to the seller).

Read each problem carefully. It will say whether the seller owns the closing day, whether taxes were paid in advance or in arrears, and which year length to use. Follow what the question says.

How do you calculate transfer fees?

PSI lists "real property transfer fees" as a math skill (PSI candidate bulletin), and the New Jersey section of the outline names the Realty Transfer Fee and the real estate transfer tax among the state laws covered. On a practice problem, apply the rate or schedule the question gives you to the sale price:

Fee = sale price × rate (or the sum of each tier × its rate, if the schedule is tiered)

For a real transaction, use the current schedule from the NJ Division of Taxation. Don't rely on numbers you memorized.

How do you estimate PITI?

PITI stands for Principal, Interest, Taxes and Insurance, the full monthly housing payment.

PITI = monthly principal and interest + (annual taxes ÷ 12) + (annual insurance ÷ 12)

Example: A loan payment factor gives monthly principal and interest of $1,850. Annual taxes are $8,400 and annual insurance is $1,200.

  • $1,850 + $700 + $100 = $2,650 per month

If a question gives a payment factor "per $1,000 borrowed," divide the loan amount by 1,000 and multiply by the factor to get principal and interest.

What about equity, LTV, points and cap rate?

These are the "general concepts" PSI lists (PSI candidate bulletin):

  • Equity = market value − debt owed. $400,000 home with a $250,000 loan → $150,000 in equity.
  • Loan-to-value (LTV) = loan ÷ value. $270,000 loan on a $300,000 home → 90% LTV.
  • Discount points: one point = 1% of the loan amount, not the price. Two points on a $270,000 loan = $5,400. An origination fee stated as a percent works the same way.
  • Cap rate = net operating income ÷ value. A building with $42,000 NOI valued at $600,000 → 7%. Rearranged: value = NOI ÷ cap rate.

The classic trap is points: if you multiply by the sale price instead of the loan amount, you'll get the wrong answer.

How should you practice?

  • Write the formula before the numbers. It stops most setup mistakes.
  • Estimate first. If 2 points on a $270,000 loan comes out to $54,000, you know you slipped a decimal.
  • Drill without writing if you're testing remotely, since you won't have scratch paper.
  • Mix math into your regular study instead of saving it for the end. When you're ready to plan your timeline, see how long it takes to get a NJ real estate license.

You'll learn these calculations in the 75-hour pre-licensing course, and Business Elementary teaches it live on Zoom: see the 75-hour course.

Sources

Last reviewed: October 26, 2026

Frequently Asked Questions

What percentage of the NJ real estate exam is math?

Real Estate Calculations is 7% of the salesperson exam's general content outline (PSI candidate bulletin).

Can I bring a calculator to the NJ real estate exam?

PSI's documents conflict: the current bulletin lists handheld calculators as prohibited, while an older program sheet allows silent, non-programmable ones. Confirm with PSI before your exam (PSI candidate bulletin; PSI NJ program sheet).

Do I get scratch paper?

At a test center, yes: one sheet and a pencil, returned at check-out. Remote exams don't allow scratch paper (PSI candidate bulletin).

Are discount points based on the price or the loan?

On the loan amount. One point equals 1% of the loan.

Which math topics does PSI list?

Seller's net proceeds, buyer funds needed at closing, prorations, transfer fees, PITI, equity, rate of return/cap rate, loan-to-value, and discount points/origination fees (PSI candidate bulletin).