Chapter 1 - Introduction to the Real Estate Business

Question 1

The business of bringing people together in a real estate transaction is called…

Answer 1

Brokerage

Question 2

A person or company licensed to buy, sell, exchange, or lease real property for others and to charge a fee for these services is called a…

Answer 2

Broker

Question 3

A licensed real estate _____________is employed by or associated with the broker to perform brokerage activities on behalf of or for the broker, and may also be referred to as a…

Answer 3

SALESPERSON…. or SALES ASSOCIATE or ASSOCIATE LICENSEE.

Question 4

A person who has satisfied the requirements of a licensing agency (received a license), as authorized by state legislation is a…

Answer 4

REAL ESTATE LICENSEE

Question 5

The process of developing an OPINION of a property’s market value, based on established methods and the appraiser’s professional judgement is called…

Answer 5

An APPRAISAL

Question 6

MAI stands for…

Answer 6

MEMBER OF APPRAISAL INSTITUTE

Question 7

A person or company hired to maintain and manage property on behalf of the property owner is called a…

Answer 7

PROPERTY MANAGER

Question 8

The business of providing the funds that make real estate transactions possible is called…

Answer 8

FINANCING

Question 9

__________is the dividing of a single property into smaller parcels.

Answer 9

SUBDIVISION

Question 10

________involves the construction of improvements that benefit the land. These improvements may be either on-site or off-site.

Answer 10

DEVELOPMENT

Question 11

__________is a profession that combines a practitioner’s interest in real estate with skills and training in the construction trades.

Answer 11

HOME INSPECTION

Question 12

Providing clients with competent independent advice based on sound professional judgment is called…

Answer 12

COUNSELING

Question 13

Real estate education is available to both…

Answer 13

PRACTITIONERS and CONSUMERS

Question 14

Many other professionals are involved in real estate including…

Answer 14

LAWYERS, LAND-USE PLANNERS EMPLOYED BY STATE AND LOCAL AGENCIES and TAX ASSESSORS.

Question 15

The largest trade organization that serves the real estate business is….

Answer 15

NATIONAL ASSOCIATION OF REALTORS (NAR)

Question 16

ETHICS refers to a system of moral principles, rules, and standard of conduct. These moral principles do two things….

Answer 16

1. They establish standards for integrity and competence

2. They define a code of conduct for relations within the industry.

Question 17

A CODE OF ETHICS is…

Answer 17

a written system of standards for ethical conduct. The code contains statements designed to advise, guide, and regulate behavior. They are STANDARDS OF PRACTICE.

Question 18

There are SIX categories of REAL PROPERTY. They are…

Answer 18

1. Residential
2. Commercial
3. Mixed Use - property that allows for two uses-commercial and residential
4. Industrial - warehouses, factories
5. Agricultural - farms, ranches, orchards
6. Special Purpose - churches, schools, cemeteries…

Question 19

A SINGLE-FAMILY DETACHED HOUSE is a type of house…and the most popular. What do you need to show ownership?

Answer 19

DEED

Question 20

An APARTMENT BUILDING is a type of house. What do you need to show occupancy?

Answer 20

LEASE

Question 21

The CONDOMINIUM is a type of housing where a owner owns an individual unit and also shares ownership with other unit owners of common facilities called…

Answer 21

COMMON ELEMENTS or COMMON AREAS

Question 22

A Cooperative is a type of housing where the owners do not own the units; instead, each owner owns shares in a corporation that holds title to the real estate. Each shareholder receives a….

Answer 22

PROPRIETARY LEASE to a specified unit in the building.

Note: proprietary leases are only associated with cooperatives.

Question 23

PUDs or PLANNED UNIT DEVELOPMENTS or MASTER-PLANNED COMMUNITIES are types of housing that may consist entirely of residences, but they can also serve to merge such diverse land uses as…

Answer 23

HOUSING, RECREATION and COMMERCIAL UNITS into one self-contained development. PUDs are planned under special zoning ordinances.
NOTE: Westhaven, Lenox Village & Fieldstone Farms are PUDs.

Question 24

High-rise developments, sometimes called____________

are types of housing that combine office space, stores, theaters, and apartment units into a single vertical community.

Answer 24

MIXED-USE DEVELOPMENTS (MUDs)

Question 25

CONVERTED-USE PROPERTIES are types of housing where…

Answer 25

factories, warehouses, office buildings, hotels, schools, churches, and other structures that have been converted to residential use.

Question 26

FACTORY-BUILT housing is a type of housing also known as…

Answer 26

a MOBILE HOMES or MODULAR HOMES

Question 27

A ________ is a place where goods can be bought and sold.

Answer 27

MARKET

Question 28

Prices for goods and services in the market are established by the operation of…

Answer 28

SUPPLY AND DEMAND.

Question 29

When supply increases and demand remains stable, prices…

Answer 29

GO DOWN

Question 30

When demand increases and supply remains stable, prices …

Answer 30

GO UP

Question 31

___________means that, no matter how identical they may appear, no two parcels of real estate are every exactly alike.

Answer 31

UNIQUENESS

Question 32

__________refers to the fact that property cannot be relocated to satisfy demand where supply is low, nor can buyers always relocate to areas with greater supply.

Answer 32

IMMOBILITY

Question 33

Factors affecting real estate SUPPLY are:

Answer 33

1. Labor force, construction, and material costs.
2. Government controls and financial policies; and
3. Local government factors.

Question 34

Factors affecting real estate DEMAND are:

Answer 34

1. Population
2. Demographics, (the study & description of a population)
3. Employment and wage levels