Unit 1 Flashcards
Brokerage
The business of bringing people together in a real estate transaction.
Broker
A person or company licensed to buy, sell, exchange, or lease real property for others and to charge a fee for these services.
Salesperson
Employed by or associated with the broker to perform brokerage activities on behalf of or for the broker.
Also referred to as a Sales Associate or Associate Licensee.
Real Estate Licensee
A person who has satisfied the requirements of a licensing agency, as authorized by state legislation.
Appraisal
The process of developing an opinion of a property’s market value, based on established methods and the appraiser’s professional judgment.
Property Manager
A person or company hired to maintain and manage property on behalf of the property owner.
With a commercial leasing company rents space in a mall, or the owner of a building rents an apartment, it’s a
Real estate transaction
The most common transaction is the
Purchase of a home, whether by a first-time buyer, by someone seeking a larger or smaller place to live or a second home, or by an investor interested in the property’s income-producing potential.
Consumers of real estate services include:
Buyers and sellers of homes, tenants and landlords, investors, and developers.
Specialized areas in the real estate business include:
Appraisal, property management, financing, subdivision and development, home inspection, counseling, and education.
A licensed real estate broker acts as a point of contact between:
Two or more people in negotiating the sale, purchase, or rental of the property.
For most transactions lenders require:
A professional appraisal
Appraisers must have a detailed knowledge of:
The methods of valuation
The largest trade association of real estate appraisers is:
The Appraisal Institute
By hiring a property manager, the owner is relieved of:
Day-to-day management tasks, such as finding new tenants, collecting rents, finishing or altering space for tenants, ordering repairs, and generally maintaining the property.
The basic responsibility of the property manager is to:
Protect the owner’s investment and maximize the return on that investment.
Where to find useful resources for both owners and managers:
The Building Owners and Managers Association International
Financing
The business of providing the funds that make real estate transactions possible.
Most transactions are financed by a loan that is:
Secured by a mortgage or deed of trust on the property purchased.
Subdivision
The dividing of a single property into smaller parcels.
Development
Involves the construction of improvements that benefit the land on-site (swimming pools or new homes) or off-site (water lines and storm sewers).
Home inspection
A profession that combines a practitioner’s interest in real estate with skills and training in the construction trades.
Trade groups for home inspection professionals:
The American Society of Home Inspectors, and The National Association of Home Inspectors.
A professional home inspector conducts a thorough visual survey of a property’s:
Structure, systems, and site conditions and prepares an analytical report that is valuable to both purchasers and homeowners.
Caveat emptor
Buyer beware
Contingent
Conditioned upon
Counseling
Involves providing clients with competent independent advice based on sound professional judgment.
Real estate education
Is available to both practitioners and consumers. Colleges and universities, private schools, and trade organizations all conduct real estate courses and seminars covering topics from the principles of a pre-licensing program to the technical aspects of tax and exchange law.
NAR
National Association of Realtors is composed of state, regional, and local associations.
Members of NAR are entitled to be known as:
Realtors or Realtor Associates
State licensing laws
Establish what activities are illegal and, therefore, prohibited.
Ethics
Refers to a system of moral principles, rules, and standards of conduct.
Code of Ethics
A written system of standards for ethical conduct. The code contains statements designed to advise, guide, and regulate behavior.
NAREB
The National Association of Real Estate Brokers. Members are known as Realtists.
Arose out of the early days of the civil rights movement as an association of racial minority real estate brokers in response to the conditions and abuses that eventually gave rise to fair housing laws.
Types of real property
Residential Commercial Mixed Use Industrial Agricultural Special Purpose.
Residential
All properties used for single-family or multi family housing, whether in urban, suburban, or rural areas.
Commercial
Business property, including office space, shopping centers, stores, theaters, hotel, and parking facilities.
Mixed Use
Property that allows for two uses, commercial and residential, in the same building.
Industrial
Warehouses, factories, land in industrial districts, and powerplants.
Agricultural
Farms, timberland, ranches, and orchards.
Special purpose
Privately owned properties, such as places of worship, schools, and cemeteries, as well as publicly held properties, such as schools, municipal service buildings, and parks.
The market for each type of real property can be divided into three main functions:
Buying, selling, and leasing.
Types of housing:
Single-family detached house Apartment building Condominium Cooperative Planned unit development PUD Mixed use developments or HighRise Converted use properties Factory built housing or mobile home or modular home
Market
A place where goods can be bought and sold.
The function of a market:
Is to provide a setting in which supply and demand can establish market value, making it advantageous for buyers and sellers to trade.
Prices for goods and services in the market are established by the operation of:
Supply and demand
Supply
The quantity of goods and services that can be sold at a given price.
Demand
Refers to the quantity of goods or services that consumers are willing and able to buy at a given price.
Inflation and deflation
Prices increasing and prices decreasing
