Real estate math

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By Roberto A. Capili

Real Estate Updates

Sunday, February 3, 2013


ONE of the most feared and dreaded school and college subjects is mathematics, real estate course topics not exempted. One of the topics discussed in real estate seminars for real estate brokers and practitioners is real estate computation problems and part of the syllabus for the coming real estate brokers licensure examination in March 2013 is the subject on real estate math.

Many people, students in general, dread mathematics subjects. Many of them have the so-called “phobia” (or fear) when it comes to the study of math. Yet in real estate, the study and application of mathematical principles to practical and real situations is a must. One can just imagine how a real estate service practitioner or real estate broker will not have the ability to compute for his or her commission or professional fee.

With the proper knowledge gained in college courses involving math subjects, virtually every real estate transactions involve numbers and professionals are directly involved with it. It is therefore expected that everyone in the real estate business should be proficient with numbers. To survive in real estate, one must become comfortable and proficient with a variety of mathematical calculations. As a real estate professional, it is a must to know how to compute for commissions, taxes, expenses, income and many other figures that are part of many real estate transactions.

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Common real estate math problems and problem-solving computations include Decimals, Fractions and Percentages, Unit, Sales and Net Prices, Installment Sales and Purchases, Property Values by Appreciation and Depreciation, Commissions and Interest, Mortgage and Financing including problems related to Appraisal and Real Estate Investments and many others.

Math problem-solving tips

In starting off with the “Tips in Solving Math Problems,” it is appropriate to open up in mentioning common experience among students of mathematics: math “phobia” or anxiety. Many people are intimidated by the anticipated difficulties in working math problems, coming to the point of becoming a victim of “stress.” Anxiety about one’s ability to perform mathematical calculations is very common and understandable. Yet as I have mentioned earlier, how can you expect a real estate practitioner to be able to compute for his or her commission or professional fee if he or she does not have the basic know-how in real estate math computations?

In an article written by Dr. William L. Boyd and Elizabeth Cox entitled “Mastering Math Anxiety,” they offer several ideas:

1. Math Anxiety (or Phobia) is not an indication of inability. It may be more an indication of excessive concern over possible embarrassment in front of our peers, ours instructors, our clients or our customers.

2. Aptitude in math is not necessarily something we are born with. Our aptitude may reflect our attitude rather than our genes. The old saying, “If you think you can or if you think you can’t, your right,” certainly applies in this situation. Through practice, patience and study, we can build our skills and our confidence.

3. Self-image can affect our performance in many areas, including math. Make a determined effort to develop your competency in math. If others expect you to fail, don’t fall to the level of their expectations! Rather, rise to the level of your potential through a little extra effort.

4. Learn to congratulate yourself on your success. When you arrive at a correct solution, make a point of giving yourself the credit for the success.

5. With a lot of patience, concentration, effort and diligence in going through the “nitty gritty” of math hand-outs and materials given, we are confident that students will develop confidence and will become more comfortable with the calculations needed in many real estate transactions that will be encountered.

Many problem-solving computations in real estate can be solved with the right frame of mind, of confidence and proficiency in locating for a practical and logical solutions coupled with the proper methods and applications of the principles involved. And experience will eventually count a lot too. Have a nice and wonderful problem-solving time with real estate!

Published in the Sun.Star Baguio newspaper on February 04, 2013.

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