Worked proration
Annual property tax is $3,600, unpaid, and the sale closes on 15 April 2026 with the seller owning the closing day.
| Step | 365-day year | 360-day year |
|---|---|---|
| Daily amount | $3,600 ÷ 365 = $9.863 | $3,600 ÷ 360 = $10.00 |
| Seller's days | 31 + 28 + 31 + 15 = 105 | 3 × 30 + 15 = 105 |
| Seller's share | 105 × $9.863 = $1,035.62 | 105 × $10 = $1,050.00 |
| Entry | Seller credits buyer $1,035.62 | Seller credits buyer $1,050.00 |
Formulas to know
- Commission = price × rate. Price = commission ÷ rate.
- Net to seller = price − commission − other costs. Price needed for a net = net ÷ (1 − commission rate).
- LTV = loan ÷ lower of price or appraisal. Down payment = price − loan.
- Proration: annual ÷ days in year × days owned.
Try 3 real estate exam practice questions
An appraiser is preparing a report on a single-family home and selects three comparable sales from the same neighborhood within the past six months. Which valuation method is the appraiser primarily using?
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B. Sales comparison approach The sales comparison approach estimates value by comparing the subject property to recently sold comparable properties. This is the most common approach for residential properties. The cost approach estimates replacement cost, the income approach is used for income-producing properties, and GRM is a variant of the income approach.
A buyer submits an offer on a home with a home-inspection contingency. Before the seller accepts, the buyer learns the seller has already accepted a competing offer. What is the status of the first offer?
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C. It remains a valid, pending offer until revoked or accepted. An offer stays open and valid until the offeree rejects it, revokes it, or it expires. A competing offer does not extinguish the first one; only the seller can revoke or accept. The contingency does not void the offer, and a counteroffer requires affirmative action by the offeree.
A tenant installs a commercial-grade oven in a rented bakery. Upon lease termination, the tenant removes the oven, leaving minor wall damage. How is the oven classified?
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C. A trade fixture removable by the tenant. A trade fixture is personal property installed by a tenant for business purposes and is removable by the tenant at lease termination. It does not become real property despite attachment. Emblements are cultivated crops, and a standard fixture would remain with the property.
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Common questions
Multiply the sale price by the commission rate to get the total. Split that between the listing and selling brokerages (often 50/50), then multiply each side by the agent's split with their broker. $400,000 × 6% = $24,000; half is $12,000; an agent on a 70/30 split keeps $8,400.
Divide the annual tax by the days in the year (365, or 360 with the banker's year) to get a daily amount. Multiply by the days the seller owned the property. If the taxes have not been paid, the seller credits the buyer that amount; if the seller paid the year in advance, the buyer credits the seller for the rest.
It depends on the state and the contract. Many exams follow the rule that the seller owns the day of closing, but some areas give it to the buyer. The calculator lets you choose.
A banker's year of twelve 30-day months. Some exams and local customs use it because it makes the daily amount easy to work out by hand.
Divide the loan amount by the lower of the purchase price or the appraised value. A $320,000 loan on a $400,000 home is an 80% LTV, the usual line above which a conventional loan needs private mortgage insurance.
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Sources, checked 2026-10-29: Commission and proration methods follow the arithmetic used in state licensing exams; the day-of-closing rule and year length vary by state and contract. CFPB, what is a loan-to-value ratio; CFPB, private mortgage insurance. QuizCram is not affiliated with the agencies or standards bodies named here.
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