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Real Estate > Chapter 1: Introduction to the Real Estate Business > Flashcards

Chapter 1: Introduction to the Real Estate Business Flashcards

1
Q

Brokerage

A

business of bringing people together in a real estate transaction

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2
Q

Broker

A

a person or company licensed to buy, sell, exchange, or lease real property for others and to charge a fee for their services (acts as a point of contact between two or more people in negotiating the sale, purchase, or rental of property)

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3
Q

Salesperson

A

employed/associated with broker to perform brokerage activities on behalf or for the broker (also known as sales associate or associate licensee)

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4
Q

Real Estate Licensee

A

a person who has satisfied the requirements of a licensing agency, as authorized by state legislation

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5
Q

Appraisal

A

a person who establishes value on a home based on established methods and the appraiser’s professional judgment (we only do a CMA “comparative market analysis”)

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6
Q

Property Manager

A

a person or company hired to maintain and manage property on behalf of the property owner (salary/hourly, lease up agent, property manager)

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7
Q

Financing

A

business of providing the funds that make real estate sales transactions possible (mortgage professionals)

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8
Q

Subdivision and Development

A

subdivision-dividing of a single property into smaller parcels
development-involves construction of improvements that benefit the land

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9
Q

Home Inspection

A

a profession that combines a practitioner’s interest in real estate with skills and training in the construction trades (in CT credit the buyer $500 at closing if they don’t fill out form that discloses house conditions)

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10
Q

Counseling

A

clients rely on you for everything, give them sound advice and judgment but establish boundaries and refer them to other people. furnish clients with the information needed to make informed decisions

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11
Q

Residential Property

A

single/multi family

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12
Q

Commercial Property

A

business space

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13
Q

Mixed-Use Property

A

commercial + residential in same building

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14
Q

Industrial Property

A

warehouses, factories, power plant

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15
Q

Agricultural Property

A

farms, wineries, orchards, ranches, etc

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16
Q

Special Purpose Property

A

church, temple, schools, municipal service buildings, privately owned or publicly held

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17
Q

Condominium

A

own house, share common deed areas (conventional ownership; deed)

18
Q

Cooperative (Co-Op)

A

share holder (personal property) (proprietary lease)

19
Q

Planned Unit Development (PUD)

A

(couple or master plan) a planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision

20
Q

Mixed-Use Development (MUD)

A

(highrise developments) combine office space, stores, theaters, and apartment units into a single vertical community

21
Q

Converted-Use Properties

A

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

22
Q

Factory-Built Housing

A

Manufactured Homes/Modular Homes

23
Q

Fair Housing

A

federal law prohibits discrimination in the provision of housing and housing-related services (including lending) based on an individual’s race, color, national origin, religion, sex, familial status, or disability

not about intention, very serious, first fine $20,000

24
Q

Market

A

a place where goods can be bought and sold (cyclical, it changes)

25
Q

Supply and Demand

A

this operation establishes prices for goods and services in the market

supply increases, demand remains stable, prices go down

demand increases, supply remains stable, prices go up

26
Q

Supply

A

quantity of goods or services that can be sold at a given price

27
Q

Demand

A

quantity of goods or services that consumers are willing and able to buy at a given price

28
Q

Uniqueness

A

no matter how identical two parcels appear they aren’t exactly the same, each occupies its own unique geographic location

29
Q

Immobility

A

refers to the fact that property/land cannot be moved

30
Q

Factors Affecting Supply

A
  • labor force, construction, material costs
  • government controls and monetary policy-the Fed (Federal Reserve Board) establishes a discount rate of interest for the money it lends to commercial banks. that discount rate has a direct impact on the interest rates the bank charge to borrowers, which in turn plays a significant role in people’s ability to buy homes.
  • local government factors (land-use controls, building codes, and zoning)
31
Q

Factors Affecting Demand

A
  • population
  • demographics (families, ages, etc)
  • employment and wage levels (businesses moving in and out, ex: Amazon coming to Long Island but deal didn’t go through)
32
Q

Niche Marketing

A

target marketing of specific demographic populations

fair housing prohibits this because it gears homes to certain people which is discriminatory

33
Q

Equity (financial considerations of a homeowner)

A

difference between market value and the amount still owed on the property

34
Q

Tax Deductions (financial considerations of a homeowner)

A

homeowners can get these based on mortgage interest paid

35
Q

Other tax benefits (financial considerations of a homeowner)

A
  • 1st time home buyer
  • (firefighters, veterans, teacher, etc…)
  • Tax credits
  • Investment properties
36
Q

Advantages of Real Estate Investment

Rate of Return

A

over time a real estate investment typically shows an above-average (or even high) rate of return (10 to 20 years, or more)

37
Q

Advantages of Real Estate Investment

Control

A

more immediate advantages, offers investors more control over their investments unlike stocks, bonds, or other insecurities

38
Q

Advantages of Real Estate Investment

Appreciation

A

an increase in value

39
Q

Advantages of Real Estate Investment

Equity Buildup

A

as it appreciates the value increases which includes the portion of the loan that has been paid off

40
Q

Advantages of Real Estate Investment

Leverage

A

the use of borrowed money to finance an investment

41
Q

Advantages of Real Estate Investment

Depreciation

A

in real estate investment-allows an investor to recover the cost of an income-producing asset through tax deductions over the asset’s useful life (also known as cost recovery)

42
Q

Advantages of Real Estate Investment

Capital Gain

A

the difference between the purchase price of a property and its net selling price

Real Estate (1 decks)

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