Chapter 1

Question 1

Brokerage

Answer 1

the business of bringing people together in a real estate transaction

Question 2

Sponsoring broker

Answer 2

hire all licensees who conduct brokerage services on behalf of the sponsoring broker

Question 3

Managing broker

Answer 3

nay or may not be the owner, must be designated to supervise the licensees and run the office

Question 4

Leasing agents

Answer 4

bring together tenants and prospective rental properties

Question 5

Appraisal

Answer 5

the process of estimating a property’s market value based on established methods and the appraiser’s professional judgement.
In Illinois, appraiser should be licensed.

Question 6

Property management

Answer 6

a person or company fired to maintain and manage property on behalf of it’s owner.
In Illinois, should be licensed.

Question 7

Financing

Answer 7

Most transactions are financed by means of mortgage loans or trust deed loans secured by the property.

Question 8

Subdivision

Answer 8

the splitting of a single property into smaller parcels

Question 9

Development

Answer 9

involves the construction of improvement on the land
Off site improvements: water lines, storm sewers made on public lands
Onsite improvements: roads and infrastructure or new buildings., which increase the value of the properties within the development

Question 10

Home inspection

Answer 10

a profession that allows practitioners to combine their interest in real estate with their professional skills and training in the construction trades.
They conduct a thorough visual survey of a property’s structure, systems, and site conditions and prepare an analytical report that is valuable to both sellers and buyers.
In Illinois, should be licensed.

Question 11

Real estate counselor

Answer 11

helps clients choose among the various alternatives involved in purchasing, using or investing in property, and furnish clients with the information needed to make informed decisions.

Question 12

Auctioning

Answer 12

buying or selling real estate at auction uses an open and competitive bidding process to transfer property.

Question 13

REALTOR or REALTOR-ASSOCIATE

Answer 13

Must be a member of The National Association of Realtors (NAR)

Question 14

Classification of real estate

Answer 14

1. residential: properties for single-family or multifamily housing
2. commercial: business property such as office space, shopping centers, parking facilities,
3. industrial: warehouses, factories
4. agricultural: farms, timberland, orchards, ranches
5. special purpose: churches, schools, cemeteries, and government-held lands

Question 15

Markets

Answer 15

places where goods can be bought and sold and provide a setting in which supply and demand can establish market value, making it advantageous for buyers ans sellers to trad.

Question 16

Supply vs Demand affects price

Answer 16

Supply ( + ), Demand ( = ) = Price ( - )
Supply ( = ), Demand ( + ) = Price ( + )
High demands = High price
oversupply will result in a lower price
When supply is low, a high demand many not e met because of the the lengthy processes of development and construction.
natural disasters or sudden changes in financial markets, unemployment, and foreclosures will affect the stable market.
tax incentives

Question 17

Uniqueness of real estate

Answer 17

no matter how similar two parcels of real estate may appear, they are never exactly alike. (unique location, look different inside the property)

Question 18

Immobility of real estate

Answer 18

property cannot be relocated to satisfy demand where supply is low, nor do buyers necessarily make relocation decisions based on greater housing supply in a certain locale.
Each geographic area has different types of real estate and different conditions that drive prices.
labor force, construction and material costs, government controls and financial policies will affect supply and demand

Question 19

Real estate markets

Answer 19

are local markets

Question 20

Factors affect Supply

Answer 20

1. labor force and construction costs: a shortage of skilled labor or building materials, increase of cost of materials
2. Government controls and financial policies: monetary policy, interest rates, The Federal Reserve Board keep the rates at a level that will keep the market moving without leading to inflation.
3. Local government’s land use controls, building codes, and zoning ordinance

Question 21

Factors affect Demand

Answer 21

1. Population
2. Demographics: the study and description of population. Family size, the ration of adults to children, the ages of children, the number of retires, family income, lifestyle, and the growing number of single parent and empty-nester homesholds….
3. Employment and wage levels