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CLI Prelicensing > Unit 1 > Flashcards

Unit 1 Flashcards

1
Q

Broker

A

any person or company licensed to buy, sell, exchange or lease real property for others and charge a fee

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2
Q

Real Estate Firm

A

company with a managing broker or principal broker (in TN) that is licensed for real estate

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3
Q

Principal Broker

A

in charge of all the agents

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4
Q

How long do you need to be an affiliate broker until you can be a principal broker?

A

3 years

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5
Q

Salesperson, associates or affiliate broker

A

employed by or associated with broker and real estate firm

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6
Q

Who is the listing agreement with?

A

principal broker of your firm

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7
Q

if you move firms does your listing go with you?

A

no, stays with firm it was listed with

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8
Q

What is TREC?

A

Tennessee Regulating Committee in change of licensing agents

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9
Q

appraisal

A

Developing an opinion of market value based on Three methods of valuing property

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10
Q

who requires appraisals?

A

lender

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11
Q

property management

A

Person or Company hired to manage and maintain property on behalf of owner

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12
Q

what do property managers do?

A

Finding tenants, collecting rent, maintaining and updating, repairing, protecting the owner’s investment and maximizing profits

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13
Q

In TN, do you need a special license for property management?

A

no

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14
Q

what are financing options?

A

bands, credit unions, mortgage banks, mortgage brokerage companies

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15
Q

what does federal law require mortgage originators join

A
  1. NMLS

2. National Licensing for Lenders

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16
Q

Subdivision

A

dividing a single property into smaller parcels

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17
Q

development

A

preparing the site for construction of improvemnets

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18
Q

improvement types

A

off site and on site

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19
Q

off site improvements

A

water, power lines, or drainage that are constructed on public land

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20
Q

on site improvements

A

new homes, clubhouse, etc. built on specific parcels

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21
Q

Are home inspectors licensed in TN?

A

yes

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22
Q

ASHI

A

American Society of Home Inspectors

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23
Q

Caveat Emptor

A

common law in many states that buyer must discover and verify all information for their purchase

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24
Q

What are most contracts contingent on?

A

home inspection

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25
Q

what do home inspectors examine?

A

foundation, chimney, water (structure and lot), mold, etc.

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26
Q

how can real estate agents get education

A

Continuing education, colleges/university courses, trade organizations, lunch and learns, homebuyer seminars

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27
Q

What are some related professions?

A

Lawyers, title attorneys, land use planners, tax assessors

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28
Q

who determines zoning?

A

county and city

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29
Q

What are the zoning classifications?

A
  1. residential
  2. commercial
  3. mixed use
  4. industrial
  5. agricultural
  6. special purpose
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30
Q

Why would someone want to buy property?

A

stability, investment, tax benefits, pride, security, community

31
Q

Why would someone want to lease property?

A

finances limited, need flexibility, access to amenities, using funds for other purposes

32
Q

What are the types of housing?

A
  1. single family detached
  2. apartment building
  3. condominium
  4. cooperative
  5. planned unit development (PUD)
  6. mixed use development (MUD)
  7. converted use properties
  8. factory built housing
33
Q

What type of lease do you get for a cooperative

A

proprietary lease

34
Q

What are the types of factory built housing?

A
  1. mobile
  2. manufactured
  3. modular homes
35
Q

mobile housing

A

can be moved

36
Q

manufactured housing

A

sits on a foundation that is permanent

37
Q

modular home

A

house is delivered as a package; lot pre-built in the factory but assembled on the building site

38
Q

Federal Fair Housing Laws

A

cannot discriminate on race, color, national origin, religion, sex, familial status, disability, creed

39
Q

What are the classes in the FAIR housing laws?

A
  1. Race
  2. color
  3. national origin
  4. religion
  5. sex
  6. familial status
  7. disability
  8. creed
40
Q

What happens to price when supply goes up and demand is constant?

A

prices go down

41
Q

What happens to price when supply goes down and demand goes up?

A

prices go up

42
Q

What are 2 features of real estate that affect the real estate market?

A
  1. uniqueness

2. immobility

43
Q

What are factors affecting supply?

A
  1. labor force
  2. construction cost
  3. material cost
  4. government controls
  5. financial policies
  6. local government factors
44
Q

Federal Reserve Board

A

establishes rate at which they will loan to lenders and then lenders establish rate they will lend to consumers

45
Q

Local government control zoning

A

they can slow down growth of an area with zoning

46
Q

What are the factors that affect demand?

A
  1. population
  2. demographics
  3. employment and wage levels
47
Q

Niche marketing

A

based on demographics

48
Q

Equity

A

the difference between what they owe on the property and what it’s worth

49
Q

When do you get a Capital Gains Exemption

A

if lived in home 2 of the past 5 years

50
Q

Tax Credit

A

if you are paying $10k and you have a $1k tax credit, it will come right off your taxes

51
Q

If you get a tax deduction, what does it come out of?

A

income that is taxed

52
Q

Are tax incentives permanent?

A

no

53
Q

Advantages to investing in real estate

A
  1. high than average ROR or ROI
  2. Control
  3. Appreciate
  4. Equity build up
  5. leverage
  6. tax benefits
  7. capital gains
54
Q

Can owners depreciate an asset?

A

yes for tax purposes

55
Q

Annual Tax Depreciation

A

a way to reduce investment income

56
Q

Basis

A

original sales price

57
Q

adjusted basis

A

basis - total depreciation

58
Q

what is capital gains based on?

A

adjusted basis

59
Q

1031 Exchange

A

property is sold first then have 45 days to find property and 180 days to close on new property

60
Q

Reverse 1031

A

replacement property is purchased before the relinquished or old property is sold

61
Q

Disadvantages of real estate investing

A
  1. liquidity
  2. active management
  3. risk
  4. liability
62
Q

Residential property

A

all property used for single-family or multifamily housing, whether in urban, suburban or rural areas

63
Q

Commercial Property

A

business property, including office space, shopping centers, stores, theaters, hotels, and parking facilities

64
Q

mixed use property

A

property that allows for two or more commercial and residential uses in the same building

65
Q

industrial property

A

warehouses, factories, land in industrial districts, and power plants

66
Q

agricultural property

A

farms, timberland, ranches, orchards

67
Q

special purpose property

A

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

68
Q

Equity

A

amount invested in a property

69
Q

intrinsic value

A

higher value because of market preferences

70
Q

Leverage

A

use of borrowed money to finance an investment

71
Q

what does a 1031 allow you to avoid

A

federal taxation on a capital gain

72
Q

What determines the value of a house?

A

what the seller accepts what the buyer offers

73
Q

proprietary lease

A

document the corporation gives you to occupy a certain part of the corporation

74
Q

What shows ownership in a cooperative

A

stock

CLI Prelicensing (23 decks)

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