Chapter 1: Introduction to Real Estate Flashcards
What economic factors affect the real estate market as well as other goods and services?
Supply and demand.
Pricing.
Costs incurred in bringing the properties to market.
Value aspects of desire, usefulness, scarcity and ability to pay.
How are properties affected by the local economy?
If the economy picks up, sales increase. If it slows, sales decrease.
List the 6 kinds of property in the real estate market.
Industrial, commercial, agricultural, special purpose, recreational, investment.
Jim has decided that he will learn all he can about the new subdivisions at the west end of town. Jim has decided to specialize in what area of real estate?
Geography
Many brokers and salespersons choose to specialize in different areas of real estate. Some of these specialization areas include:
Type of property.
Clients - Rather than deal with all types of clients, some agents decide to represent sellers and landlords exclusively or buyers and tenants exclusively.
Geography.
Business type - A broker or agent could choose to focus exclusively on one type of business client, for example, hospital clients or fast food restaurants.
From whom may a salesperson receive compensation for performed activities?
ONLY from the employing broker.
What is the major difference between an employee and an independent contractor?
The issue of control - A broker can control the what and the how of an employee. A broker can control the what, but not the how of an independent contractor.
What kinds of insurance do brokers normally require of their employees?
High limits of automobile insurance with the broker named as an insured.
What should a licensee’s written employment agreement contain?
Each person’s responsibilities to the other.
The broker’s supervision.
The licensee’s duties.
The licensee’s compensation program.
What do you need to remember about making phone calls to potential clients?
Check into and follow the National Do Not Call guidelines.
Broker Alice has hired several independent contractors in her firm. Which of the these activities does she have control over?
What the licensees wear.
What percent of commission the licensees can charge.
How much time the licensees must spend in the office.
Whether or not the licensees attend staff meetings.
What percent of commission the licensees can charge.
Which of these statements is true?
Salesperson Harry can solicit his own listings.
Salesperson Julie can receive her commission from the cooperating broker in her latest transaction.
Salespersons must perform all of their activities on behalf of their employing broker.
Broker Tom has only limited responsibility for the actions of his licensees.
Salespersons must perform all of their activities on behalf of their employing broker.
Which of the following circumstances would concern you about working for Broker John?
John offers weekly training seminars.
There are several successful agents at John’s office.
John’s office has a selection of books, CDs and tapes for agent use.
John expects his agents to spend 5 hours a week on unsupervised telephone duty.
John expects his agents to spend 5 hours a week on unsupervised telephone duty.
Alice has decided that she will specialize in selling farm land. Which area of specialization would she fall into?
Geography
Type of property
Business type
Type of client
Type of property
Which of the following is not a “national” real estate trade organization?
NAR
CAR
NAREB
AREAA
CAR
Which of the following statements is not true?
A broker may require licensees to carry high levels of automobile insurance.
It’s a good idea for brokers to carry workers’ compensation coverage.
A broker is not responsible for the acts of independent contractors.
Employee status versus independent contractor status is an IRS issue.
A broker is not responsible for the acts of independent contractors.
A shopping center would be primarily categorized as what type of property?
Residential
Agricultural
Investment
Commercial
Commercial
All of the following are true statements about goals except which one?
Goals should be measurable.
It’s easier to prioritize your tasks if your goals are in writing.
Once you set a goal you should never change it.
Goals must be realistic if you hope to accomplish them.
Once you set a goal you should never change it.
Which of the following is NOT a condition of the safe harbor test?
Person must be properly licensed.
Gross income must be based on production.
Clearly written contractor agreement must exist.
Gross income must be based on hours worked.
Gross income must be based on hours worked.
Safe harbor test: test that determines whether someone is an independent contractor or an employee.
Which of the following would be an example of a licensee specializing in business type?
Jim specializes in clients who want to buy restaurants.
Alice knows everything about the exclusive east side neighborhoods.
Tom specializes in options.
Chris is a buyer’s agent.
Jim specializes in clients who want to buy restaurants.
