Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Real Estate > Unit 1 > Flashcards

Unit 1 Flashcards

1
Q

What is the business of bringing people together in a real estate transaction?

A

A Brokerage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is a broker/brokerage/firm?

A

A person or company
licensed to perform brokerage services for a fee
may employ real estate licensees

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a A Salesperson/broker-associate/provisonal broker?

A

a person employed by or associated with a broker
performs brokerage services for the broker
may not provide brokerage services independently

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the process of developing an opinion of a properys market value, based on established methods and judgement called?
Who performs this?

A

Appraisal

Appraiser

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

A property manager is a person or company hired to maintain and manage property on behalf of the property own is what?

A

Property management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

The business of providing funds for real estate sales transactions

A

Financing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are subdivisions and Developments?

A

Subdivision: dividing a single property into smaller parcels
Development: site preparation, construction of structures and other improvements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are home inspections?

A

combines a practitioners interest in real estate with skins and training in the construction trades

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the six catagories of real estate?

A

residential: where people live
Commercial: retail office
Mixed use: commercial and residential uses in same building
Industrial: manufactures, plants, warehouses
Agricultural: farms
Special purpose: church, schools

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Deductions allowed on a first and second residence?

A

Points paid on loans used to improve or acquire
must itemize
mortgage interest
property taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What does POIT stand for?

A

Points, origination fees, interest, and property taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Capital Gains, Short term, and long term

A

Short term gain: property held 12 months or less taxed base on ordinary income
long term gain: property held more than 12 months is taxed differently

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Taxation of gain on sale or principal residence

A

250,000 max if single tax payer
500,000 maximum if married or filing jointly
must own and occupy for at least two of 5 years preceding the sale.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is depreciation also considered?

A

Cost Recovery

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Depreciation

A

Real Estate investors and business property owners are allowed to take an annual depreciation deduction on real estate improvements
the residential rent property allowance is taken over 27.5 years
the commercial property allowance is taken over 39 years

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How is the amount of Depreciation determined?

A

Straight line method

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

1032 tax-deffered exchanges (like-kind exchanges)

A

are used by investors and business property owners to DEFER PYMT of capital gains taxes on the sale of business or investment properties.
The taxes will eventually have to be paid for

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What are 4 benefits to real estate investment?

A

Cash flow,
tax benefits,
potential appreciation
principal reduction

19
Q

How real estate maxes money?

A

Cash flow: income(cashflow)-expenses(tax benefits)=increased cash flow
net worth: assets (appreciation) - liabilities (principal reduction)= increased net worth

20
Q

What are advantages to real estate investment?

A

Real estate investment typically produces an above average return over time
appreciation: the value of the property generally increases
equity buildup: principal and interest payments slowly pay down any debt used to purchase the property
leverage: investors can use borrowed money to finance an investment
tax benefits: depreciation deduction and 1031 exchange

21
Q

Disadvantages to Real estate investment?

A

Liquidity: refers to how quickly an asset may be converted into cash
real estate lacks liquidity compared to investments such as stocks and mutual funds

Investment property requires property management

Risk: rents may decrease due to competition or economics, values may decrease

22
Q

What is the business of bringing people together in a real estate transaction known as?

A

Real Estate brokerage

23
Q

What is the process of developing an opinion of a property’s value (typically, market value) based on established methods and professional judgement?

24
Q

Selling real estate can take a long time when compared to other types of investments. This disadvantage of owning real estate is called

A

lack of liquidity

25
A disadvantage to owning real estate is
The lack of liquidity
26
Fan sold her house that she owned in severalty and had a capital gain of $175,000 to exclude that gain from her income for tax purposes she must
Have lived in the house for or the last 5 years
27
What can be deducted from income taxes?
origination fees, points, interest and taxes POIT
28
To deduct items on personal income tax the tax payer
must use an itemized form
29
An investor who does not want to pay capital gains tax on the sale of an investment property should consider
using a 1021 tax deferred exchange
30
Who do clients hire for representation in real estate transactions
brokerage firms
31
The terms real estate agent, licensee, and real estate professional generally refer to
Real estate brokerage firms licensed brokers real estate salesperson
32
True of false? REal estate professionals must be licensed in each state where they practice.
true
33
Real estate brokerage activities include charge a fee for helping others
buy a property sell property and manage property
34
A real estate broker/brokerage/firm
is a person or a company is licensed to charge clients a fee for brokerage services may employ real estate licensees.
35
To act as an appraiser a real estate professional must obtain a license issued by which entity
the state
36
What best describes an appraisal
an opinion
37
A real estate brokerage hired to maintain and manage property on behalf of the property owner is
a property manager
38
Which licensee works with borrowers seeking a mortgage loan to buy a home?
mortgage loan originator (MLO)
39
Commercial real estate includes all of the following land uses
office buildings, retail facilities, parking structures
40
Commercial and residential uses in the same building or development is known as which type of real estate?
mixed use
41
Commercial property has improvements that cost $390,000 the depreciation allowance is 39 years. What is the annual depreciation deduction?
$10,000
42
Commercial property has improvements that cost $390,000. The depreciation allowance is 39 years how much depreciation would the owner be allowed to claim over an eight-year period?
$80,000
43
Tax advantages for real estate investors such as depreciation and 1031 exchanges hel
offset real estates lack of liquidity

Real Estate (22 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions