Real Estate Exam Cheat Sheet: 50 Must-Know Facts (2026)

This cheat sheet contains the 50 most important facts, formulas, and concepts that appear on real estate exams. Print it out, save it to your phone, or review it the morning of your test. These are the things you absolutely must know.

Property Ownership Essentials

1. Fee Simple Absolute — The highest form of ownership. Owner has complete control and can sell, lease, or will the property.
2. Life Estate — Ownership for the duration of someone's life. Ends when the life tenant dies.
3. Joint Tenancy — Equal ownership with right of survivorship. Requires 4 unities: Time, Title, Interest, Possession (TTIP).
4. Tenancy in Common — Multiple owners with no right of survivorship. Shares can be unequal.
5. Tenancy by the Entirety — Joint ownership for married couples with right of survivorship.
6. Bundle of Rights — Possession, Control, Enjoyment, Exclusion, Disposition (PACED).

Agency Relationships

1. Fiduciary Duties — OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable care.
2. Single Agency — Agent represents only one party (buyer OR seller).
3. Dual Agency — Agent represents both buyer and seller. Requires written consent from both parties.
4. Transaction Broker — Facilitates the transaction without representing either party.
5. Agency Disclosure — Must be provided at first substantive contact in most states.
6. Vicarious Liability — Broker is liable for actions of their agents.

Contracts Must-Know

1. Valid Contract Elements — Offer, Acceptance, Consideration, Legal purpose, Capacity, Consent.
2. Statute of Frauds — Real estate contracts must be in writing to be enforceable.
3. Void Contract — Never legally existed. Cannot be enforced.
4. Voidable Contract — Valid but can be voided by one party (e.g., contracts with minors).
5. Time is of the Essence — Deadlines in the contract are strictly enforced.
6. Specific Performance — Court remedy forcing a party to complete the contract.
7. Liquidated Damages — Pre-agreed amount of damages (often the earnest money).

Financing & Loans

1. Conventional Loan — Not government-backed. Typically requires 20% down to avoid PMI.
2. FHA Loan — Government-insured. Minimum 3.5% down payment.
3. VA Loan — For veterans. No down payment required.
4. USDA Loan — For rural properties. No down payment required.
5. PMI — Private Mortgage Insurance. Required when down payment is less than 20%.
6. LTV Ratio — Loan-to-Value = Loan Amount ÷ Property Value.
7. DTI Ratio — Debt-to-Income = Monthly Debt ÷ Monthly Income.
8. Points — 1 point = 1% of loan amount. Paid upfront to reduce interest rate.

Key Formulas

1. Commission — Sale Price × Commission Rate = Commission
2. Net to Seller — Sale Price - Commission - Closing Costs = Net
3. LTV — Loan Amount ÷ Property Value = LTV%
4. Cap Rate — NOI ÷ Property Value = Cap Rate
5. Property Value (Income) — NOI ÷ Cap Rate = Value
6. GRM — Sale Price ÷ Gross Annual Rent = GRM
7. Property Tax — Assessed Value × Tax Rate = Annual Tax
8. Proration — Annual Amount ÷ 365 (or 360) × Days = Prorated Amount
9. Area — Length × Width = Square Feet
10. Price per SF — Price ÷ Square Feet = Price per SF

Federal Laws

1. Fair Housing Act — Prohibits discrimination based on race, color, religion, national origin, sex, familial status, disability.
2. RESPA — Real Estate Settlement Procedures Act. Regulates closing procedures and disclosures.
3. TILA — Truth in Lending Act. Requires APR disclosure.
4. ECOA — Equal Credit Opportunity Act. Prohibits lending discrimination.
5. CAN-SPAM — Regulates commercial email.
6. Do Not Call Registry — Limits telemarketing calls.
7. CERCLA — Environmental liability for contaminated properties.

Appraisal Methods

1. Sales Comparison — Compare to similar sold properties. Best for residential.
2. Cost Approach — Land value + building cost - depreciation. Best for unique properties.
3. Income Approach — Value based on income potential. Best for investment properties.
4. CMA — Comparative Market Analysis. Done by agents, not appraisers.
5. Appraisal — Official valuation by licensed appraiser.

Title & Closing

1. Abstract of Title — Summary of all recorded documents affecting title.
2. Title Insurance — Protects against title defects.
3. Warranty Deed — Best protection for buyer. Seller warrants clear title.
4. Quitclaim Deed — No warranties. Transfers whatever interest seller has.
5. Recording — Filing deed with county to give public notice.
6. Escrow — Neutral third party holding documents/funds until closing.

Quick Reference Numbers

• Acre = 43,560 square feet
• Section = 640 acres (1 square mile)
• Township = 36 sections
• FHA minimum down = 3.5%
• Conventional PMI threshold = 20% down
• Standard commission = 5-6% (negotiable)
• Homestead exemption = varies by state