{"id":231,"date":"2006-08-21T20:31:25","date_gmt":"2006-08-22T03:31:25","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=231"},"modified":"2006-08-21T20:39:41","modified_gmt":"2006-08-22T03:39:41","slug":"the-math-of-real-estate-sales","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/231\/the-math-of-real-estate-sales\/","title":{"rendered":"The Math of Real Estate Sales . . ."},"content":{"rendered":"

I wrote this when I first got my real estate license, five-and-a-half years ago. I still get mail about it from freaked-out pre-licensing students.<\/p>\n

The Math of Real Estate Sales…<\/b><\/p>\n

I got my real estate license in May of 2001. It took a lot of time to study for it, a lot of work. I spent months agonizing about the license exam, particularly the math part of the test.<\/p>\n

This turned out to be unnecessary for the test. And it has turned out to be much more than necessary for the real-life job of being a real estate agent.<\/p>\n

Consider this math problem, which was one of dozens I tackled prior to taking the test:<\/p>\n

Dave and Sandy buy a four-plex apartment building as an investment. The purchase price is $385,000, of which $78,000 is attributable to the land. For tax purposes, they take a straight-line depreciation on the building over 27-1\/2 years. Of course, the property actually appreciates<\/i> in value by four percent a year. Assuming they make no property-improvements, when they sell the property seven years later, what are the tax consequences?<\/p>\n

I can do that problem. It’s just straight plug-and-chug calculator math. To actually come up with an answer would take a while, and I’d want to check my numbers three times — at least. But this is a doable problem, and people have to solve this kind of problem every day.<\/p>\n

What’s ironic is this: After doing dozens of math problems this complex, this<\/i> is the math problem I got on the Arizona State real estate license examination:<\/p>\n

Starting at the northwest corner of Section 3, proceed in a southwesterly direction to the northeast corner of Section 8. From there proceed east 2 miles to the northeast corner of Section 10. Procced from there in a northwesterly direction to the point of origin. What is the total acreage of the parcel described?<\/p>\n

That sounds complicated, but it’s actully very simple. What we have is half of Section 4 plus half of Section 3. There are 640 acres in a section, so the pink half of Section 4 is 320 acres. The blue half of Section 3 Read more<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

I wrote this when I first got my real estate license, five-and-a-half years ago. I still get mail about it from freaked-out pre-licensing students. The Math of Real Estate Sales… I got my real estate license in May of 2001. It took a lot of time to study for it, a lot of work. I […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[6,5],"tags":[],"class_list":{"0":"post-231","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-marketing","7":"category-real-estate","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1093,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1093\/lucky-number-13-james-hsu-a-math-god-for-our-pantheon\/","url_meta":{"origin":231,"position":0},"title":"Lucky number 13: James Hsu, a math god for our pantheon","author":"Greg Swann","date":"March 1, 2007","format":false,"excerpt":"Today we are adding contributor number 13, James Hsu: James Hsu is a Realtor and Real Estate Investor working in suburban Seattle. From math to computer science to medicine to web development, James may be the whole Realtor 2.0 package personified. These capsule biographies are cruel in their brevity, so\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":504,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/504\/linking-my-way-out-of-the-trials-of-tabulation\/","url_meta":{"origin":231,"position":1},"title":"Linking my way out of the trials of tabulation . . .","author":"Greg Swann","date":"October 3, 2006","format":false,"excerpt":"Sellsius\u00b0 wrote this morning about tabbed browsing, but they have no idea. I live my normal life with over 100 tabs open at any time, and right now I have many more than that. I'm going to do a bunch of links, because I want to close tabs I've been\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15824,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/15824\/zerohedge-heres-the-simply-math-there-will-be-no-housing-bottom-until-the-9-million-excess-homes-clear\/","url_meta":{"origin":231,"position":2},"title":"ZeroHedge: “Here’s the simply math: there will be no housing bottom until the 9 million excess homes clear.”","author":"Greg Swann","date":"April 4, 2012","format":false,"excerpt":"Read it and weep. Bet wrong and weep harder.","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14590,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14590\/more-thrilling-real-estate-math-from-the-national-association-of-realtors-how-much-did-first-time-home-buyers-benefit-from-their-8000-tax-funded-subsidy-can-you-count-to-negative-15000\/","url_meta":{"origin":231,"position":3},"title":"More thrilling real estate math from the National Association of Realtors: How much did first-time home-buyers benefit from their $8,000 tax-funded subsidy? Can you count to negative $15,000?","author":"Greg Swann","date":"May 11, 2011","format":false,"excerpt":"You read that right. On average, recipients of the $8,000 federal housing subsidy lost $15,000 on the homes they purchased using the subsidy as their incentive. From SmartMoney.com:The government's recent $8,000 cash incentive for first-time home buyers has proved even more costly for recipients than for taxpayers, according to data\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17506,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17506\/overnight-news-people-who-write-well-but-do-math-poorly-working-with-people-who-do-both-poorly-could-not-conceive-of-people-who-write-poorly-but-do-math-very-well-thats-how-they-got\/","url_meta":{"origin":231,"position":4},"title":"Overnight News: People who write well but do math poorly, working with people who do both poorly, could not conceive of people who write poorly but do math very well. 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