Ch.1 The Real Estate Business Flashcards by Sergio Guerrero

A property holder who does not reside on the property and who usually relies on a property manager to supervise the investment.

Absentee Owner

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Property zoned as such, consisting of more than ten acres.

Agricultural

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The process of developing and communicating an opinion of a property’s value as of a certain date.

Appraisal

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Real estate licensees who engage in the sale, purchase, or lease of business.

Business brokers

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The real estate activity dealing in the sale, purchase, or lease of business.

Business opportunity brokerage

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An informal estimate of market value performed by a real estate licensee for the seller to assist in arriving at an appropriate listing price, or if working with the buyer, an informal estimate of market value to assist the buyer in arriving at an appropriate offering price.

Comparative market analysis (CMA)

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Professionals who analyze existing or potential real estate problems and recommend a course of action.

Counselors

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An offer of land for some public use

Dedication

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Provision placed in deeds to control future uses of property.

Deed restrictions

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A selected or limited geographical district to which a sales associate devotes special attention and study; to farm an area or neighborhood.

Farm area

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Is what a sales associate does for buyers and sellers after the sale. Is important to all aspects of the sales in real estate because it results in a good reputation, future referrals, and word-of-mouth advertising.

Follow-up

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An arrangement among members of a real estate board or exchange that allows each member broker to share listings with other members so that greater exposure is obtained and a greater chance of sale will result.

MLS

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The leasing, marketing, managing and overall maintenance of property for others.

Property management

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A part of the real estate business that is concerned with bringing together buyers and sellers and owners and renters and completing a real estate transaction.

Real estate brokerage

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A commercial activity in which the sale, purchase, leasing, rental, exchange, or management of real property is conducted by qualified and licensed parties acting either for themselves or for others for compensation.

Real estate business

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A real estate broker who is a member of a local board of REALTORS and is affiliated with the state
association (Florida Association of REALTORS) and the National Association of REALTORS ( not synonymous with “real estate agent”).

REALTOR

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Defined as real estate of four or fewer residential units, vacant land zoned for four or fewer residential units, or agricultural property of ten or fewer acres.

Residential

Conditions placed by developers that affect how the land can be used in an entire subdivision.

Restrictive covenants

A plan of tract of land subdivided into lots and showing required or planned amenities.

Subdivision plat map

Uniform Standards of Professional Appraisal Practice - is a set of guidelines (standards of practice) to follow when providing appraisal services.

USPAP

Today a real estate licensee is paid to handle other people’s properties because the licensee is a professional who provides specialized service and expertise in at least five areas.

Details of property transfer.
Knowledge of market conditions.
Knowledge of how to market real estate or businesses.
Knowledge of how to analyze buyer’s needs.
Knowledge of the laws that pertain to real estate.

Real estate sales associates involved in sales and leasing often specialize in any of the five major sales specialties.

Residential
Commercial
Industrial
Agricultural 
Businesses
BRICA - Acronym

Involves dividing larger parcels of land into lots, constructing roads and other off-site improvements, and then constructing buildings on the developed lots.

Development and Construction

Building “on speculation” involves purchasing one or more lots
and constructing a home/s without a buyer in advance.

Speculative homes

A custom builder constructs homes under contract with a buyer, often using building plans provided by architects or buyers.

Custom homes

Type of speculative building. A new subdivision will typically feature several model homes. Buyers select a floor plan from the models and a lot on which to build in the new subdivision.

Tract homes

The role of government

The real estate business is regulated or influenced by the federal, state, and local governments.

1. ) Developer Bob acquires a tract of land that he divides into 25 homes sites. Prior to marketing the homes sites, Bob must obtain the subdivision plat to the a. Department of Housing and Urban Development. b. Local government planning agency. c. Florida Real Estate Commission. d. Local building code enforcement.

2. ) The term follow-up refers to a. returning calls in a timely manner. b. completing instructions given by one’s broker. c. following through on listing calls made to “for sale by owners.” d. what a sales associate does for buyers and sellers after a sale.

3. ) Even though certain exceptions apply, an active real estate licensee is legally entitled to appraise real property for compensation concerning a non federally related transaction a. as long as she doesn’t represent herself as a state-certified or licensed appraiser, and complies with USPAP. b. only if the appraisal is referred to as a comparative market analysis. c. provided that compensation is based on commission agreed on before the appraisal work is done. d. provided a licensed or certified appraiser sings the appraisal report.

4. ) The field of property management has experienced growth and specialization primarily because of a. the deregulation of the real estate industry. b. the increase in the number of licensees specializing in property management. c. the increase in the number of absentee owners. d. higher construction costs that have caused an increase in the number of renters.

5. ) Appraising is considered to be a. an art. b. a science. c. a precise determination of value. d. purely mathematical with no room for personal judgement.

6. ) Appraisers are paid a fee because a. to accept compensation based on the appraised value is a conflict of interest. b. custom dictates the method of compensation. c. the fee would be too high if it were based on a percentage of property value. d. only brokers and sales associates are paid commission for their services.

7. ) When a developer makes lots available for custom building in a newly developed subdivision, the overall purpose of restrictive covenants is to ensure that cutome-built homes will a. not conflict with local zoning ordinances. b. not exceed the minimum square footage requirements. c. conform to standard building codes. d. not decrease the value of neighboring properties.

8. ) The real estate activity that is devoted to leasing, managing, marketing and overall maintenance of property for others is referred to as a. commercial sales. b. property management. c. counseling. d. rental agents.

9. ) Which type of construction involves building to a buyer’s specifications. a. Tract homes. b. Spec homes. c. Custom homes. d. Model homes.

10. ) The term dedication as it applies to the development and construction refers to a. a gift of land by the owner to the local government for a public use. b. the builder’s careful attention to construction details. c. recording subdivision plat map in the public records. d. preparing raw land for site improvements.

11. ) Sales associate Harry recently began working at All Action Realty. All Action is not a member of the local association of REALTORS. Can Harry join the association? a. Yes, Harry can join any association of REALTORS as an independent member. b. No, Harry can not join the association unless All Action Realty joins the association. c. Yes, Harry may join the association. However, Harry cannot use the MLS. d. Yes, Harry can join the association, but he will be charged a nonmember office surcharge.

12. ) Residential real estate is defined in Chapter 475,F.S., as a. property zoned agricultural land of more than ten acres. b. five or more residential units. c. vacant land zoned for four or fewer residential units. d. all of the real estate described above.

13. ) The real estate profession requires a. skill and experience in real estate values, specialized service, and expertise. b. only the ability to list property. c. expertise in all types of real estate. d. that licensees also act as mortgage brokers from time to time.

14. ) Selecting a limited geographical area in which a real estate professional develops special expertise is referred to as a. farming. b. follow-up. c. subdividing. d. dedicating land.

15. ) Broker Mike charges a prospective seller $50 for a comparative market analysis (CMA). Which statement applies? a. Brokers are not permitted to charge for CMA’s. b. This is permissible, provided Mike does not represent the CMA as an appraisal. c. Broker Mike must be a state-certified or licensed appraiser to do this. d. The CMA must be signed by a state-certified or licensed appraiser.