Chapter 1: Basic Real Estate Concepts

Question 1

broker

Answer 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.

Question 2

business cycles

Answer 2

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

Question 3

demand vs supply

Answer 3

Demand is the amount of goods people are willing and able to buy at a given price. Supply is the amount of goods available in the market to be sold at a given price.

Question 4

hereditaments

Answer 4

Any interests in real estate capable of being inherited

Question 5

heterogeneity or nonhomogeneity

Answer 5

A lack of uniformity; dissimilarity. Real estate is nonhomogeneic because no two parcels of land are exactly alike.

Question 6

highest and best use

Answer 6

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

Question 7

land, real estate, real property

Answer 7

Land: 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.

Real estate: Same as land but also includes all things permanently attached whether naturally or artificially (improvements).

Real property: the land, permanent improvements, and the interests, benefits, and rights inherent in real estate ownership (bundle of rights)

Question 8

market

Answer 8

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

Question 9

non provisional broker vs provisional broker

Answer 9

A North Carolina real estate licensee that has completed the 90-hour post licensing education to remove the provisional license status; also called a full broker.

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

Question 10

chattel or personal property or personalty

Answer 10

Items that do not fit into the definition of real property; movable objects. Examples include furniture, jewelry, clothing, vehicles, money, etc.

Question 11

situs

Answer 11

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

“Location, Location, Location!”

Question 12

tenements

Answer 12

Any structures attached to the land. Permanent improvements that make land real estate.