Review Questions Unit 1 Flashcards
A person who advises a real estate client who is making a purchase to use or invest in real estate is called
a counselor
Office buildings and retail space are examples of
commercial real estate.
All of these factors can affect the supply of real estate EXCEPT
demographics.
Demographics affect the demand for real estate. The labor force, construction costs, and government controls affect the supply of real estate.
When the population of a town suddenly increases, which of these is MOSTlikely to occur?
Real estate prices will increase
With a sudden influx of people, rental rates will increase; demand for housing will increase; and more new homes will be started to satisfy demand.
Property management, appraisal, financing, and development are all
separate professions within the real estate industry.
Property management, appraisal, financing, and development are not linked to the government; they are all linked to real estate business.
The six classes of real estate mentioned in the main textbook are residential, commercial, rental, agricultural, mixed-use, and special purpose.
False. The six classes of real estate mentioned in the text are residential, commercial, mixed-use, industrial, agricultural, and special-purpose. Rental is not a class of real estate.
Real estate professionals generally tend to specialize in one activity or class of real estate.
True. The real estate industry is complex, much more than brokers bringing together buyers and sellers, landlords and tenants. Other specialties include appraisal, property management, financing, education, and home inspection.
When the supply of a certain commodity decreases while demand remains the same, the price of that commodity will tend to
increase
When consumers continue to demand a product for which there is limited supply, the price generally increases.
Finding funds to put together real estate transactions is called appraising.
False. Finding funds involves financing; estimating the value of property is appraising
The real estate market is generally slow to adjust to the changing forces of supply and demand.
True. Because of real estate’s uniqueness and immobility, the market generally adjusts slowly to the forces of supply and demand; development and construction are lengthy processes.
The supply of labor and the cost of construction generally have a direct effect on the demand for real estate in a market.
False. Supply of labor and the cost of construction generally have a direct effect on the supply of real estate in a market.
A property owner who does not want to deal with the everyday tasks of managing a rental property can hire
property manager.
A property manager handles the day-to-day tasks of managing property for an owner. An appraiser estimates value; a home inspector looks for problems with the property; and the developer improves the property.
All of these factors will tend to affect demand for real estate EXCEPT
transfer taxes.
Transfer taxes affect the supply; employment levels, wage rates, and demographics affect demand.
Members of the National Association of Real Estate Brokers are called REALTORS®.
False
Members of the National Association of Real Estate Brokers are called Realtists. REALTORS® are members of the National Association of REALTORS®.
All of these are examples of government policies that can affect the real estate market EXCEPT
a shortage of skilled labor or building materials.
A shortage of skilled labor will affect the supply of real estate, and this labor shortage is not generally associated with governmental policies.
In general, the most widely recognized real estate activity is brokerage.
True. Although many people think that real estate is comprised of only brokers and salespeople, many other specialties exist, including financing, appraising, education, and property management.
The idea that no two parcels of land are exactly alike is called
uniqueness
No matter how identical they may appear, no two parcels of real estate are ever exactly alike; each occupies its own unique geographic location.
Market trends in supply and demand can be overturned by a natural disaster, such as a hurricane or earthquake
True. Even when supply and demand can be forecast with some accuracy, natural disasters, such as hurricanes and earthquakes, can disrupt market trends; the market also can be affected by sudden changes in financial markets or plant relocations.
Demand for real estate usually drops when jobs are scarce.
True. When job opportunities are scarce or wage levels are low, demand for real estate usually drops; in fact, the market may be drastically affected by a single major employer moving in or shutting down.
Warehouses, factories, and power plants are examples of commercial property.
False. Warehouses, factories, and power plants are examples of industrial property.
