Tackling Real Estate Math Questions

Math: A ‘Make or Break’ Issue for Some

Don’t get tripped up on the first course leading to RECO salesperson registration. Math is a deciding factor for some as to whether they pass or fail the Real Estate as a Professional Career (REPC) exam. Favourite testing topics include commission calculations, statistical analysis (means, medians and modes), real estate market indicators, basic math skills, metric/imperial conversions, area measurements and mortgage math (GDS, TDS and interest calculations), capitalization, taxation and closing adjustments. 

Twenty-eight percent (170) of the multiple choice questions in Passit’s REPC study guide help fine tune needed math skills, emphasizing areas to review and providing feedback on progress. There’s also a math primer that covers decimal, fraction and percentage fundamentals. Don’t lose valuable marks by incorrectly converting fractions into decimals, failing to differentiate between a parallelogram and a trapazoid, or confusing the gross debt service ratio with the total debt service ratio.

Here’s a classic example. Capitalization rates are used to estimate value. If the cap rate is 10.5% and the net operating income is $100,000, some students mistakenly multiply the two to arrive at value (i.e., 10.5 x $100,000 = $950,000). The correct answer: divide net operating income by the cap rate (converted to a decimal); $100,000 ÷ .105 =  $952,381 (usually rounded to $952,400). Take control of math on your way to a new career.