Chapter 1: The Real Estate Business

Question 1

Real Estate Professionals perform the following property-related functions:

Answer 1

creation and improvement
management and maintenance
demolition
investment ownership
regulation
transfer

Question 2

creating real properties from raw land involves capital formation, financing, construction contracting, and regulatory approvals. key parties involved are typically the developer, landowner, and mortgage lender.

Answer 2

creation and development

Question 3

all real estate, whether raw land or improved property, must be managed and maintained. The two types of managers are property managers and asset managers.

Answer 3

management and maintenance

Question 4

property managers

Answer 4

oversee specific properties on behalf of the owners, making sure the condition of the property and its financial performance meet specific standards.

Question 5

asset managers

Answer 5

oversee groups of properties, or portfolios. their role is to achieve the investment objectives of the owners as opposed to managing day to day operations.

Question 6

specialized niche in the real estate business is the real estate investor who risks capital in order to buy, hold, and sell real properties. in contrast to property owners whose primary interest is in some other business, the real estate investor focuses on identifying and exploiting real estate investments.

Answer 6

Investment ownership

Question 7

removal of properties that are no longer economically viable from the market. demolition experts in conjunction with excavation and debris removal experts.

Answer 7

demolition

Question 8

all real estate is to some degree regulated by government. the principal areas of regulation are usage, taxation, and housing administration. Professional regulatory functions include public planners, zoning administrators, building inspectors, assessors, and administrators of specific federal statues such as federal fair housing laws.

Answer 8

Regulation

Question 9

Rights and interests in real estate can be bought, sold, assigned, leased, exchanged, inherited, or otherwise transferred from one owner to another.

Answer 9

Transfer

Question 10

property that is owned and used for habituation. such properties may be further classified in terms of how many families they are designed to house, whether they are attached to other units or detached, and so forth.

Answer 10

Residential property

Question 11

generally refers to retail and office properties, but may also include industrial real estate. The term commercial relates to the fact that the property can potentially generate income from a business’s usage.

Answer 11

Commercial Property

Question 12

refers to any property that is held by its owners for investment purposes. All classifications of property may be investment properties.

Answer 12

Investment Properties

Question 13

Primary real estate brokerage activities

Answer 13

locating a buyer for a seller
locating a seller for a buyer
locating a tenant for a landlord
locating a landlord for a tenant