Chapter 1: Basic Real Estate Concepts

Question 1

(1) One who acts as an intermediary on behalf of others for a fee or commission. (2) One who is licensed to list, lease, buy, exchange, auction, negotiate or sell interest in real estate for others for a fee.

Answer 1

broker

Question 2

The upward and downward fluctuations in business activities generally characterized by four stages: expansion, recession, depression, and revival.

Answer 2

business cycles

Question 3

aka personal property. Personal property: items, called chattels or personalty, that do not fit into the definition of real property; moveable objects. Examples would incluse furniture, clothing, jewelry, money, vehicles, etc.

Answer 3

chattel

Question 4

The amount of goods people are willing and able to buy at a given price; often coupled with supply.

Answer 4

demand

Question 5

The possible use of a property that would produce the greatest net income and thereby develop the highest value.

Answer 5

highest and best use

Question 6

A place where goods can be bought and sold and value established.

Answer 6

market

Question 7

The earth’s surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water.

Answer 7

land

Question 8

A lack of uniformity; dissimilarity; heterogeneity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogeneic.

Answer 8

nonhomogeneity

Question 9

Items, called chattels or personlty, that do not fit into the definition of real property; movable objects. Examples would include furniture, clothing, jewelry, monkey, vehicles, etc.

Answer 9

personal property

Question 10

aka personal property. All property that does not fit the definition or real property.

Answer 10

personalty

Question 11

A real estate licensee who performs real estate activities under the supervision of a licensed real estate broker-in-charge. Must complete postlicensing courses to remove the provisional license status.

Answer 11

provisional broker

Question 12

Land; a portion of the earth’s surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached to it, whether naturally or artificially.

Answer 12

real estate

Question 13

The land plus permanent improvements and the interests, benefits, and rights inherent in real estate ownership.

Answer 13

real property

Question 14

The personal preference of people for one location over another; not necessarily based on objective facts and knowledge.

Answer 14

situs

Question 15

The amount of goods available in the market to be sold at a given price. The term is often coupled with demand.

Answer 15

supply