## The Real Estate Math Behind Buying Versus Renting

The Wall Street Journal recently published an article indicating that vacancy rates have dropped to 4.7% across the nation, resulting in increases in rents. As a real estate agent, you may have renters that question whether or not it is cheaper for them to rent or to buy. While there are many factors to consider … Read more

## Three Tips to Answering Multiple Choice Real Estate Math Questions

On the computer-based real estate licensing exam, you will be asked to answer multiple-choice real estate math questions. While practicing real estate math questions is an important part of preparing for the real estate licensing exam, you will also need to know strategies to answer multiple choice questions. This will help you answer questions faster … Read more

## How to Calculate Appreciation

Recently, CNN published an article on where home prices are rising fastest.  If you are studying for the real estate licensing exam, one of the real estate math questions you may encounter is how to calculate the estimated appreciation (or depreciation) on real estate.  In your local market, it’s important to keep track of the appreciation … Read more

## How to Read a Loan Amortization Factor Table

A common real estate math problem you may encounter on your real estate licensing exam will be to calculate a buyer’s monthly mortgage payment based on the amount and terms of the loan.  While calculating the exact monthly mortgage payment is a very complex math problem (i.e., leave it to your buyer’s lender to do … Read more

## Calculating Proration

On the real estate licensing exam, you may encounter a proration question.  Prorations occur because not every expense or income can be distributed at closing.  For example, the seller may have already gotten a full month’s rent from a tenant before the closing.  Or the buyer might have to pay real estate taxes at the … Read more

## Real Estate Math Concept Explained – Debt to Income Ratios

Debt to Income (DTI) ratios is an important real estate math concept that you will need to know for your real estate licensing exam.  When your buyers are getting a loan, one of the major factors to qualifying for a loan will be their debt to income ratios (DTI).  Here’s what you need to know: … Read more

## Real Estate Math Problem – Calculating Points

When your buyer is getting a loan, their lender will ask them whether or not they want to pay points at closing.  A point is an upfront payment of interest on the loan.  In return for paying points upfront, the lender will offer your buyer a lower interest rate.  For example, a lender could offer … Read more

## Real Estate Math Problem – Proration on HUD-1

One of the most confusing types of real estate math problem you will encounter is determining what portion of expenses the seller and buyer owes. While most of these calculations are taken care of by the settlement company, it is a good idea for any real estate agent to know how it is calculated. Most … Read more

## Calculating Absorption Rate

Absorption rate is a key real estate math number that you’ll often hear. In this post, we will discuss what the absorption rate means and and the real estate math behind its calculation. What Absorption Rate Means The absorption rate is a measure of how long it would take for a location to sell all … Read more