Unit 1 Flashcards
A seller’s market can be defined as having a:
surplus supply, high demand, and downward price movement.
surplus supply, low demand, and upward price movement.
short supply, high demand, and upward price movement.
short supply, low demand, and downward price movement.
short supply, high demand, and upward price movement.
Response Feedback:
Correct! A seller’s market can be defined as having a short supply, high demand, and upward price movement.
In estimating a market value for a real estate investment, an evaluator would use all of the following appraisal principles EXCEPT:
substitution.
anticipation.
agglomeration.
highest and best use.
agglomeration.
Response Feedback:
Correct! In estimating a market value for a real estate investment, an evaluator would use all of the following appraisal principles EXCEPT agglomeration.
Your clients are interested in an investment that may appreciate in value and be a hedge against inflation. Their best alternative is in:
real estate.
the stock market.
antique cars.
municipal bonds.
real estate.
Response Feedback:
Correct! Your clients are interested in an investment that may appreciate in value and be a hedge against inflation. Their best alternative is in real estate.
Money accumulated in excess of funds required to secure life’s necessities, which may be used for investment purposes is:
free income.
discretionary funds.
surplus income.
investment funds.
discretionary funds.
Response Feedback:
Correct! Money accumulated in excess of funds required to secure life’s necessities, which may be used for investment purposes is discretionary funds.
The real estate market is an imperfect market and
is generally predictable in its cycles.
each property is unique.
perfect knowledge of the investment is readily available.
generally attracts short-term investors.
each property is unique.
Response Feedback:
Correct! The real estate market is an imperfect market and each property is unique.
Key term: Bundle of rights
Describes the owner’s rights of control over the property.
Key term: Buyer’s Market
When the supply of a commodity exceeds the demand.
Key term: Cycle
Events that repeat themselves on a regular basis; may be a business cycle, an economic cycle, or a real estate cycle.
Key term: Demand
The desire to acquire properties or services.
Key term: Disintegration
A period of decline when the property’s economic usefulness is near an end and constant upkeep is necessary.
Key term: Easy Money
When interest rates are low and funds of loans are plentiful.
Key term: Equilibrium
A condition of stable value during the holding period.
Key term: Fixity
Real estate that is permanently attached to the ground.
Key term: Highest and Best Use
That possible use of property that will produce its greatest net income, and thereby develop its highest value.
Key term: Integration
A condition of developing value when building new.
Key term: Longevity
The concept of real estate that recognizes the long-term nature of most real estate investments.
Key term: Market Segmentation
Due to the fractured aspect of the real estate business, the market trends to be local in the nature of its conditions may vary greatly from location to location.
Key term: Market Value
The highest price for which a property would sell, assuming a reasonable time for the sale and a knowledgeable buyer and seller acting without duress.
Key term: Permanence
An attribute of real estate the recognizes that real estate investment is long term, complex, and often requires large sums of money.
Key term: Personal Property
Movable property that does not fit the definition of realty.
Key term: Property
Anything capable of being owned.
Key term: Real Estate
A portion of the earth’s surface, extending downward to the center of the earth and upward into space, including all things permanently attached thereto by nature or people, and all legal rights therein.
Key term: Real Property
The rights of real estate ownership; often called the bundle of legal rights. See also real estate.
Key term: Relative Scarcity
A situation in which the consumer perceived a shortage and bids up the value of the commodity accordingly.
Key term: Risk
The possibility of loss.
Key term: Supply
Products and services available for consumption.
Key term: Seller’s Market
When demand exceeds supply.
Key term: Tight Money
When interest rates are high and funds for loans are scarce.
Key term: Value in Use
A specific use that defines a property’s value
