Real estate mathematics tests whether you can identify the correct calculation base, apply percentages and unit conversions, and distinguish between sale price, listing price, annual and periodic figures. Typical DLD-style questions cover commissions, service charges, area, rental income, yields, mortgage ratios, DLD fees and transaction calculations.
These skills also matter in daily brokerage work because clients rely on clear, accurate estimates of costs, proceeds and property metrics. In our 30-question training simulation, this topic usually accounts for about 5 questions. The official DLD exam format is not publicly published; this estimate is based on the experience of our brokers.
Areas, Prices and Service Charges
Use one unit throughout a calculation. A rectangle’s area equals length multiplied by width.
- 1 m² = 10.764 ft²; exam questions may use 10.76.
- ft² = m² × 10.764; m² = ft² ÷ 10.764.
- To convert a price per m² into a price per ft², divide by 10.764.
- Land price = length × width × rate per unit of area.
- For service charge questions, chargeable area = unit area + 25% of balcony area.
- Annual service charge = chargeable area × rate per ft²; quarterly charge = annual charge ÷ 4; monthly charge = annual charge ÷ 12.
Commission, Splits and Seller Proceeds
Commission must be calculated from the price stated in the agreement. If the question does not specify otherwise, calculate it from the sale price.
- Commission = price × rate.
- Commission rate = commission ÷ price.
- Invoice including VAT = price × rate × 1.05.
- If a property is sold at a discount, sale price = listing price × (1 − discount).
- For an a:b commission split, a share = total commission × a ÷ (a + b).
- For a 60/40 or 70/30 split, each share equals total commission × that percentage.
- Net proceeds = price × (1 − commission rate).
- Required sale price for a target net amount = Net ÷ (1 − rate).
Income, Rent, Value and Price Changes
Check the period requested before calculating: a year has 12 months and 52 weeks. Percentages in these calculations are simple unless the question states otherwise.
- Monthly income = annual income ÷ 12.
- Gross yield = annual rent ÷ price.
- Net yield = (rent − expenses) ÷ price.
- GRM = price ÷ annual rent.
- Cap rate = NOI ÷ value; value = NOI ÷ cap rate.
- NOI is income minus operating expenses, excluding mortgage payments.
- Commercial percentage rent = area × base rate + percentage × (turnover − threshold).
- After a fall of d, original price = current price ÷ (1 − d).
- After growth of d, original price = current price ÷ (1 + d).
DLD Fees, LTV and Key Transaction Calculations
- DLD = 4% of the price. In practice, for an assignment the Trustee Office calculates DLD from the higher of Sale Price and Original Price (practice, not a statutory rule).
- Under ECR 30/2013, DLD is split 2% + 2% between buyer and seller unless agreed otherwise; in an exam question, follow the stated condition.
- Loan = price × LTV; down payment = price × (1 − LTV).
- One discount point equals 1% of the loan, not 1% of the property price.
- For a seller with an existing mortgage: seller proceeds = Sale Price − outstanding bank debt − seller commission.
- Mortgage registration is 0.25% of the loan plus fixed fees.
Sample questions with explanations
Questions are paraphrased in the style of the exam; they are not official DLD questions.
1. A unit has an internal area of 1,500 ft² and a 200 ft² balcony. The balcony is counted at 25% for service-charge purposes, and the rate is AED 15 per ft². What is the annual service charge?
- AED 5,812.50
- AED 25,500
- AED 23,250
- AED 6,375
Show answer and explanation
Answer: C) AED 23,250. Chargeable area = 1,500 + (200 × 25%) = 1,550 ft². Annual service charge = 1,550 × AED 15 = AED 23,250.
2. A property was sold for AED 3,200,000 and the broker was paid AED 128,000. What commission rate was charged on the sale price?
- 2%
- 3.5%
- 4%
- 4.5%
Show answer and explanation
Answer: C) 4%. Commission rate = commission ÷ sale price = 128,000 ÷ 3,200,000 = 0.04, or 4%.
3. A flat measures 150 m². Using the stated conversion convention, what is its approximate area in square feet?
- 13.94 ft²
- 1,500 ft²
- 1,614 ft²
- 1,600 ft²
Show answer and explanation
Answer: C) 1,614 ft². Convert square metres to square feet: 150 × 10.76 = 1,614 ft².
4. A mall charges a mobile-store operator AED 100 per ft² annually plus 4.5% of annual sales above AED 400,000. The shop measures 60 ft by 120 ft and annual sales are AED 2,000,000. What is the total rent for three years if sales remain the same?
- AED 2,430,000
- AED 231,000
- AED 2,376,000
- AED 2,214,000
Show answer and explanation
Answer: C) AED 2,376,000. Area = 60 × 120 = 7,200 ft², so base annual rent is AED 720,000. Percentage rent is 4.5% × (2,000,000 − 400,000) = AED 72,000; annual rent is AED 792,000 and three years total AED 2,376,000.
5. A property sells for AED 2,750,000 and the broker receives AED 68,750. What percentage commission is this?
- 2%
- 3%
- 3.5%
- 2.5%
Show answer and explanation
Answer: D) 2.5%. Commission rate = 68,750 ÷ 2,750,000 = 0.025, which is 2.5%.
6. A balcony is 16 m². The suite service-charge rate is AED 8 per ft², while the balcony is charged at 25% of that rate. What service charge applies to the balcony?
- AED 344.32
- AED 1,377.28
- AED 1,032.96
- AED 32
Show answer and explanation
Answer: A) AED 344.32. The balcony rate is 25% of AED 8, or AED 2 per ft². Area = 16 × 10.76 = 172.16 ft², so the charge is 172.16 × 2 = AED 344.32.
7. Land bought for AED 1,000,000 five years ago has increased in value by 10% in total. Using simple annual growth, how much was the annual appreciation in AED?
- AED 50,000
- AED 10,000
- AED 20,000
- AED 100,000
Show answer and explanation
Answer: C) AED 20,000. Total appreciation is 10% of AED 1,000,000 = AED 100,000. Dividing this simple total growth by five years gives AED 20,000 per year.
8. An apartment was listed at AED 2,000,000 and sold for AED 1,850,000. The agreement provides a 2% commission based on the sale price. How much commission is due?
- AED 74,000
- AED 39,500
- AED 37,000
- AED 40,000
Show answer and explanation
Answer: C) AED 37,000. The stated base is the sale price, not the listing price. AED 1,850,000 × 2% = AED 37,000.
9. The suite service-charge rate is AED 16 per ft², and a balcony is billed at 25% of that rate. What is the charge for an 8 m² balcony?
- AED 344.32
- AED 32
- AED 1,377.28
- AED 1,032.96
Show answer and explanation
Answer: A) AED 344.32. The balcony rate is 25% of AED 16 = AED 4 per ft². Its area is 8 × 10.76 = 86.08 ft², and 86.08 × 4 = AED 344.32.
10. A villa was sold for AED 5,000,000, and the broker received AED 275,000. What commission rate did the broker receive?
- 0.05
- 0.085
- 0.06
- 0.055
Show answer and explanation
Answer: D) 0.055. Commission rate = 275,000 ÷ 5,000,000 = 0.055. In percentage terms, this is 5.5%.
11. A flat is listed for AED 3,500,000 and sells for AED 3,150,000. The agreement sets commission at 5% of the listed price. What is the commission amount?
- AED 167,500
- AED 175,000
- AED 157,500
- AED 87,500
Show answer and explanation
Answer: B) AED 175,000. The agreement uses the listed price as the calculation base. AED 3,500,000 × 5% = AED 175,000.
12. Land A measures 2,350.5 m² and neighbouring Land B measures 1,410.5 m². When combined, what is their total area in square feet using 1 m² = 10.76 ft²?
- 3,760.5 m²
- 3,760 m²
- 40,468.36 ft²
- 40,457.6 ft²
Show answer and explanation
Answer: C) 40,468.36 ft². The combined area is 2,350.5 + 1,410.5 = 3,761 m². Converting it gives 3,761 × 10.76 = 40,468.36 ft².
13. Broker B has a 60/40 split with Broker A, with Broker B taking 60%. They earn a 6% commission on a AED 990,000 villa sale. How much does Broker B receive?
- AED 35,640
- AED 59,400
- AED 17,820
- AED 23,760
Show answer and explanation
Answer: A) AED 35,640. Total commission is AED 990,000 × 6% = AED 59,400. Broker B receives 60%, so AED 59,400 × 60% = AED 35,640.
14. A house sells for AED 880,000 after a 20% reduction from its listing price. The broker earns 6% of the sale price. What is the broker’s commission?
- AED 63,360
- AED 10,560
- AED 52,800
- AED 66,000
Show answer and explanation
Answer: C) AED 52,800. Commission is based on the sale price. AED 880,000 × 6% = AED 52,800.
15. A property sells for AED 2,250,600 through two brokers. Each broker charges 2.5% of the property value. What is the total brokerage fee?
- AED 56,250
- AED 56,265.00
- AED 112,530.00
- AED 112,500
Show answer and explanation
Answer: C) AED 112,530.00. Each broker charges 2.5%, so the combined fee is 5%. AED 2,250,600 × 5% = AED 112,530.00.
Common Real Estate Mathematics Traps
- Calculating commission from the listing price when the agreement says it is based on the sale price, or doing the reverse.
- Using a balcony at 100% of its area instead of applying the 25% rule used in service-charge exam questions.
- Mixing m² and ft², or multiplying rather than dividing when converting a price per m² into a price per ft².
- Giving an annual amount when the question asks for a quarterly or monthly amount.
- Applying percentage rent to total turnover instead of only the turnover above the stated threshold.
- Confusing a broker’s split share with the total commission, or calculating a share when the question asks for the difference between shares.
Practise “Real estate mathematics” in the free exam trainer · Take a mock exam: 30 questions, 60 minutes
FAQ
How do I calculate broker commission in DLD mathematics questions?
Use commission = price × rate. First identify whether the contract refers to the sale price or the listed price; if no base is specified, calculate from the sale price.
How is balcony area treated in service charge questions?
In the exam calculation convention, chargeable area includes 25% of the balcony area. Calculate the annual charge first, then divide by 4 for a quarterly amount or by 12 for a monthly amount.
What conversion should I use from square metres to square feet?
Use 1 m² = 10.764 ft². In exam questions, the factor may be rounded to 10.76, so check the answer options.
How is percentage rent for a retail unit calculated?
Add the base rent to the percentage of turnover above the threshold: area × rate plus percentage × (turnover − threshold). The percentage applies only to the excess over the threshold.
What is the key rule for a property price after a decline?
To find the original price after a decline of d, divide the current price by (1 − d). For example, after an 8% decline, divide by 0.92.
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