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Struggling with real estate math? Here is the one formula you need to replace your lengthy formula sheet.
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🕒 Chapters:
0:00 Introduction
0:25 What Is the T-Chart Formula?
2:08 How Does the T-Chart Formula Work?
3:06 5 Practice Questions
8:30 Outro
Link to real estate flashcards: https://realestatelicensewizard.com/real-estate-terms/
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0:00
you guys asked we heard you and answered
0:03
today we will be covering drum roll
0:06
plays real estate math but instead of
0:09
just covering math questions we pulled
0:12
the ultimate trick out of our hat the
0:14
one formula that will help you get
0:17
through the real estate exam what is it
0:20
how does it work is it even real let's
0:24
get to it what is the formula in some
0:27
Corners it is called the P chart While
0:30
others refer to it as the T formula
0:33
whatever name you choose to go with the
0:35
T chart will revolutionize the way you
0:37
approach real estate math it is called
0:40
the the- chart because well it is shaped
0:42
like a t and this allows enough room for
0:46
three variables let me explain most of
0:48
the math questions that you will
0:50
encounter in the real estate exam will
0:52
have three parts two parts known and one
0:55
part that is unknown the unknown part is
0:58
what you will be solving for
1:00
for example a real estate agent closes
1:03
on a house valued at
1:05
$400,000 the listing agreement stats
1:08
that the seller will pay 6% to both the
1:11
listing agent and the buyer's agent what
1:14
total does the seller pay we have one
1:17
the total price of the house and two the
1:20
commission rate these two variables are
1:23
known and then we have one unknown which
1:26
is the total amount paid out by the
1:28
seller we will talk about the answer
1:30
later on in this video just like the
1:32
number of variables the chart has three
1:35
math operations what are the
1:38
mathematical operations the very things
1:41
you learned in elementary addition
1:44
subtraction multiplication and division
1:47
on the t- chart we use two division
1:49
signs and one multiplication sign if you
1:53
have a rate and the part you will have
1:55
to divide to get the total the same
1:58
applies when you have a total and a part
2:00
calculating the rate but if you have a
2:03
total and a rate calculating a part you
2:06
will multiply how does it work the
2:09
teacher uses the simple method of
2:11
substitution you know those players in
2:14
football that are waiting on the side
2:15
called substitutes waiting to jump in
2:18
should anything happen to the players on
2:20
the field yep that method now let's go
2:23
back to the commission example above we
2:26
have a total the house price of $400,000
2:30
and the rate of 6 percentage commission
2:33
so what we are going to do is substitute
2:36
into the T chart basically replacing the
2:39
elements on the chart with these values
2:42
remember to always divide the six by 100
2:45
since we are working with the percentage
2:47
then calculate
2:49
400,000 multiplied
2:51
0.06 so the final answer is
2:55
$224,000 because we are calculating the
2:58
total amount the seller has to pay not
3:01
the individual amounts each agent or
3:03
broker takes home five practice
3:06
questions let's try a few questions to
3:09
test out this formula question number
3:11
one a house sells for
3:14
$330,000 in Albany New York the
3:17
commission check is handed to the broker
3:19
which is $
3:22
17,32 what was the percentage the broker
3:25
received for this transaction 5% 5.25 %
3:31
550% or
3:34
5.75% we're going to bring out our chart
3:37
the first thing I want you to do is
3:39
break down the question we have
3:42
$330,000 which is the total and $
3:47
7,325 which is a part that means the
3:51
$330,000 goes on the left and the
3:56
$1,325 on the top meaning we are soling
3:59
for the percentage we divide
4:04
17,32 by 330,000 and get
4:10
0.525 then multiply that by 100 to get a
4:13
percentage which means our answer is
4:17
5.25 so the correct answer is
4:21
two off to the next question if a bank
4:24
makes a 90% loan on a house valued at
4:27
88,500
4:29
$100 how much cash is required at
4:32
closing in the form of a Down deposit if
4:35
the buyer has already paid $4,000 in
4:38
earnest money
4:40
$88,500 goes on the left because it is
4:43
our total then we move the 90% to the
4:47
right because it is the rate but we
4:48
cannot work with it as a percentage so
4:51
we turn it into a decimal which gives us
4:54
0.9 according to the Chart if you have a
4:57
total and a rate you multiply then we
5:00
have
5:01
88,500
5:03
multiplied
5:05
0.9 which equals to
5:09
79,00 so we subtract
5:14
79,00 from
5:16
88,500 to get
5:20
8,850 but the question states that the
5:23
seller has already paid
5:25
$4,000
5:28
8,850 - 4,000 = to
5:35
4,850 so the correct answer is for
5:40
$4,850 question number three what is the
5:44
interest rate on
5:46
$150,000 loan that requires an annual
5:49
interest payment of
5:52
$6,500 interest rate means percentage we
5:55
will answer this one exactly like we did
5:57
in the first question 100 $150,000 goes
6:01
to the left and the
6:05
$6,500 you guessed that to the top we
6:08
divide and then multiply by 100 and we
6:11
get
6:13
4.33% don't forget that we always divide
6:17
the part by the total not the total by
6:19
the part so the correct answer is two
6:24
4.33% question number four a property's
6:27
market value is 2
6:30
$50,000 the assessment rate for the
6:32
house is 15% with 27.50 Ms find the
6:37
annual property taxes okay so we have
6:40
the total value and the percentage we
6:42
already know that we are going to
6:44
multiply because it is a total and a
6:46
rate let's first convert to a decimal
6:49
which equals 0.15 0.15 multiplied by
6:54
250,000 equals to
6:58
37,500 but we are not yet done the
7:01
question wants us to calculate the
7:03
annual property taxes and we already
7:05
know that we have
7:07
27.50 MS and Ms means a th000 so we will
7:12
divide
7:14
2750 by 1,000 which is
7:19
0.0275 if you need a refresher on the
7:21
mill rate check out the flash cards on
7:23
our website I will leave a link in the
7:26
description multiply
7:28
37,500 00 by
7:31
0.0275 to give us
7:35
13125 so the correct answer is the first
7:39
one question number five a house was
7:42
sold for
7:44
$450,000 which was 2% less than the
7:46
original cost of the house what was the
7:49
original cost of the house round to the
7:51
nearest send we are still using the t-
7:53
chart
7:55
450,000 on the left and the 0.0 to the
7:59
right can you guys guess why the 450,000
8:03
doesn't go to the top as a part but is
8:05
instead the total leave your answers in
8:08
the comments I'd love to read those
8:11
450,000 multiplied 0.02 equals to
8:16
9,000 we know that the house was sold
8:18
for
8:19
$9,000 less than the original which
8:22
means the original price was
8:26
$459,000 making option three the correct
8:29
answer
8:30
there is your weapon to tackle the math
8:32
portion of the real estate exam and
8:34
remember get some sleep don't freak out
8:37
you've got this and if you want more
8:39
tips on how to beat exam pressure then
8:42
check out this video please like And
8:44
subscribe if you haven't already and see
8:46
you in our next video
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