Unit 1: Intro to Real Estate

Question 1

Define associate licensee, broker, and salesperson.

Answer 1

A broker is defined as a person or company licensed to buy, sell, exchange, or lease real property for others, for a fee. A Salesperson is employed by or associated with the broker, can perform brokerage activities for the broker, and is also called an associate licensee/sales associate.

Question 2

Define real estate licensee

Answer 2

A person who has satisfied the requirements of a licensing agency, as authorized by state legislation.

Question 3

Define code of ethics

Answer 3

A written system of standards for ethical conduct.

Question 4

What is real estate brokerage?

Answer 4

The business of bringing people together in a real estate transaction conducted by a real estate broker.

Question 5

Define appraisal

Answer 5

The process of developing an opinion of a property’s value based on established methods and an appraisers professional judgement.

Question 6

Define property management

Answer 6

Conducted by a property manger, hired to maintain and manage property on behalf of the property owner.

Question 7

Define financing

Answer 7

The business of providing the funds that make real estate transactions possible through loans secured by a mortgage or deed of trust on the property, with funding provided by commercial banks, thrifts, credit unions, mortgage bankers, and mortgage brokerage companies.

Question 8

Define subdivision and development

Answer 8

Splitting a single property into smaller parcels and constructing improvements on the land.

Question 9

Define home inspection

Answer 9

The surveying of a property’s observable conditions, is beneficial for both buyers and sellers.

Question 10

What is real estate counseling?

Answer 10

Independent advice based on sound professional judgement regarding how to buy, sell, or invest in property.

Question 11

List the 6 types of real property

Answer 11

1. Residential
2. Commercial
3. Mixed use
4. Industrial
5. Agricultural
6. Special purpose

Question 12

Name the 4 factors affecting the supply of real estate

Answer 12

1. Labor force availability
2. Construction and material costs
3. Government controls (environmental restrictions, land use policies, building codes, zoning)
4. Monetary policy that impacts interest rates and money supply

Question 13

Name the 3 factors affecting demand for real estate

Answer 13

1. Population
2. Demographics
3. Employment and wage levels

Question 14

List the 8 types of housing

Answer 14

1. Single family detached house
2. Apartment building
3. Condominium (owner owns unit, corp takes care of maintenance)
4. Cooperative (owners dont own units, just a share in the corp that owns it)
5. Planned unit developments (sodosopa)
6. High rise or mixed use developments
7. Converted use properties (ex. Warehouse turned into residential housing)
8. Factory built housing (mobile home)

Question 15

What 3 real estate industry careers require a license?

Answer 15

Appraiser, Mortgage, and Real Estate Agent

Question 16

What is PCEED?

Answer 16

Possession 
Control 
Enjoyment 
Exclusion 
Disposition

The rights that make real estate into real property