Unit 1 - Intro to Real Estate Flashcards
What are 6 types of Real Property
Residential, Commercial, Mixed Use, Industrial, Agricultural, Special Purpose
What is Counseling
Providing clients with competent and independent advice based on sound professional judgment.
What are Add-Ons
Additional home examination of mold, radon, termites, etc. by home inspector
What is a Home Inspector
Conducts thorough visual survey of property’s structure systems and site conditions
What is a subdivision
Dividing of a single property in to small units
What are 8 realestate specializations
Brokerage, Appraisal, Property Management, Financing, Subdivision-Development-Builder, Home Inspection, Counseling, Education
What is M.L.O.
Mortgage Loan Originator
What is financing
Business of providing the funds that make real estate transactions possible.
What is a property manager
Person or company hired to maintain and manage property on behalf of property owner.
What is an appraisal
Process of developing an opinion of a property’s market value based on established methods and professional judgment.
What is a broker
Person or company licensed to buy, sell, exchange, or lease real property for others for a fee.
What is brokerage
The business of bringing people together in a real estate transaction
What is L.T.V.
Loan-To-Value, need 80% and is loan divided by value
What is rate of return
Amount of return on investment. Put in $60, Value is $80, Made $20. 20 divided by 60 = 33% R of R
What two characteristics govern way market reacts to pressure of supply and demand
Uniqueness - No property exactly alike
Immobiliity - Cannot be relocated to satisfy demand
What factors affect real estate supply
-Labor force, construction, material costs
-Government controls and financial policies
-Local government factors
What factors affect real estate demands
-Demographics
-Employment and wage levels
-Population
What are capital gains
Profit from selling property
Tax exclusion for married is 500k, single 250k and must be principle residence for 2/5 years
What is leverage
Slang for value, use of borrowed money to finance investment
Supply Increase vs. Demand Increase
Supply increases but demand is stable, prices are down
Demand increases but supply is stable, prices increase
What are advantages of real estate investment
CCLEARTD
Control, Capitol Gains, Leverage, Equity build-up, Appreciation, Rate of Return, Tax benefits, Depreciation
What are benefits of exchanging properties
Avoid federal taxation on capitol gain by exhanging property for “like kind” (investment-investment)
What are disadvantages of real estate investment
Risk, Active Management (collecting rent, Liquidity
What are Supply and Demand
Supply is quantity of goods sold at a given price.
Demand is quantity of goods consumers are willing and able to buy at a given price.
