Numerous Encounters: How Does Math Work in Real Estate?


Real estate is a broad industry that engages with properties as well as investment management. It is composed of agents who facilitate, manage, and deal with the client’s concerns regarding properties. After finishing these tasks, only then will the agents get their commission from the transaction.

It may sound so easy, but being a real estate agent is a hard job, and it even requires a license to practice this craft. Part of it is the numerous but necessary computations involved in real estate dealings. These mathematical calculations are vital in real estate to maintain the livelihood of its agents and essential to protect the interests of the clients.

Value assessment

Assessing the value of a property is the basic math in real estate. The computation of the cost is based on the type of property, its size, location, and condition. Agents need to use certain documents, pay a visit to the property, and make a thorough inquiry on the latest pricing in the market to arrive at an accurate valuation of the property. After assessing the value of the property, it will be presented to the client and see if it will match the selling or buying price. Only then can the broker proceed to another set of calculations.

Repair costs

There are times when clients are dissatisfied with the assessed value of their property, especially if their assets are up for selling. Some brokers provide property owners ways to increase the worth of their possession like those We Buy Houses Fort Lauderdale offers. The standard solution presented to clients to reach the target selling price is to make some repairs to the property. The repair costs will then be compared to the market value to see the practicability of the improvements. Some clients choose not to carry out repairs since it will cause a delay in the selling of the property.

Taxes due

Computing property taxes is the most tedious calculation in real estate. Aside from being mandatory, there can be additional charges if the fees owed are not paid on time. Although an assessor can quickly provide the amount of tax due, agents still have the task to give clients this information along with other computations. Property taxes depend on the tax rate in the area multiplied by the assessed value of the property. The assessed value is the reasonable market value based on the current local real estate market setup. Paying taxes is crucial, or your client may end up losing his or her property.

Commission of agents

An essential computation done by real estate brokers is the amount they will be receiving from closed deals. Since they do not get regular compensation in a brokerage, they need to reach a certain number of transactions to earn and sustain their living. The commission comes from a percentage of the property amount or in the consultancy fees paid by clients. The more clients they assist, the more commission they will get.

Math is part of everyday life. If you want to be good at it, you must learn how to use it, especially if it is about dealing with properties.

Robert Killin

The author Robert Killin