Unit 1; Introduction to the real estate business

Question 1

real estate licensee

Answer 1

In real estate practice, a person who has the skills and knowledge to be licensed as a real estate broker or salesperson.

Question 2

REALTOR

Answer 2

A registered trademarked term reserved for the sole use of active members of state and local realtor associations affiliated with the National association of REALTORS.

Question 3

sales associate

Answer 3

A person who performs real estate activities while employed by a licensed real estate broker

Question 4

supply

Answer 4

the amount of goods available for sale in the market. The term is often coupled with demand

Question 5

supply and demand

Answer 5

The appraisal principle that follows the interrelationship of the supply of and demand for real estate. Because appraising is based on economic concepts, the principle recognizes that real property is subject to the influences of the marketplace as with any other commodity.

Question 6

syndicate

Answer 6

. In a real estate investment syndicate the main profit generally arising from the sale of the property.

Question 7

tax basis

Answer 7

The point from which gains and losses are figured for tax purposes.

Question 8

tax credit

Answer 8

an amount by which tax owed is reduced directly

Question 9

uniqueness

Answer 9

The idea that not matter how identical they ay appear, no two parcels of real estate are ever exactly the same.

Question 10

Real estate investment trust (REIT)

Answer 10

Trust ownership of real estate by a group of individuals who purchase certificates of ownership in the trust, which in turn invests the money in real property and distributes the profits back to the investors free of corporate income tax.

Question 11

real estate broker

Answer 11

A person licensed to arrange the buying, selling, leasing, or exchange of real property for a fee.

Question 12

planned unit development(PUD)

Answer 12

A planned combination of diverse land uses, such as housing recreation, and shopping, in one contained development or subdivision.

Question 13

Propriety lease

Answer 13

a lease given by the corporation that owns a cooperative apartment building to a shareholder who has the right as a tenant to an individual unit.

Question 14

niche marketing

Answer 14

The target marketing of specific demographic populations, within the bounds of fair housing laws.

Question 15

National Association of REALTORS (NAR)

Answer 15

The largest real estate organization in the world; NAR members subscribe to a strict code of ethics. Active members are allowed to use the trademarked designation, realtors.

Question 16

mortgage

Answer 16

A conditional transfer of pledge of real estate as security for the payment of a debt. Also, the document creating a mortgage lien.

Question 17

monetary policy

Answer 17

Govermnental regulation of the amount of money in circulation through such institutions as the Federal Reserve Board.

Question 18

modular home

Answer 18

A type of factory-built housing with components that are assembled at a building site on a prepared foundation.

Question 19

master-planned community

Answer 19

A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision; also called a planned unit development(PUD)

Question 20

manufactured home

Answer 20

A permanent installation built to federal specifications, providing a principal residence or vacation home.

Question 21

liquidity

Answer 21

The ability to sell an asset and convert it into cash, at a price close to its true value, in a short period of time.

Question 22

leverage

Answer 22

The use of borrowed money to finance an investment.

Question 23

intrinsic value

Answer 23

An appraisal term referring to the value of a property unaffected by a person’s personal preferences.

Question 24

installment sale

Answer 24

A transaction in which the sales price is paid in two or more installments over two or more years. If the sale meets certain requirements, a taxpayer can postpone reporting such income until future years by paying tax each year only on the proceeds received that year.

Question 25

ethics

Answer 25

The system of moral principles and rules that becomes the standard for professional conduct.

Question 26

equity buildup

Answer 26

portion of the loan payment directed toward the principle plus any gain in property value due to appreciation.

Question 27

demographics

Answer 27

The study and description of a population

Question 28

cost recovery

Answer 28

an internal service term for depreciation.

Question 29

caveat emptor

Answer 29

A latin phrase meaning” let the buyer beware”

Question 30

capital gain

Answer 30

Profits

Question 31

broker

Answer 31

One who acts as an intermediary on behalf of others for a fee or comission.

Question 32

basis

Answer 32

Cost of the property with any capital expenditures

Question 33

associate licensee

Answer 33

A licensed real estate salesperson who is employed by or associated with the broker to perform brokerage activities on behalf of or for the broker.

Question 34

assessment

Answer 34

The imposition of a tax, charge, or levy, usually according to established rates.

Question 35

appreciation

Answer 35

An increase in the worth or value of a property due to economic or related causes, which may prove to be either temporary or permanent; opposite of depreciation.

Question 36

appraiser

Answer 36

an independent person trained to provide an unbiased estimate of value

Question 37

code of ethics

Answer 37

a written system of standards for ethical conduct

Question 38

demand

Answer 38

The amount of goods people are wiling and able to buy at a given price; often coupled with supply.

Question 39

development

Answer 39

the constrution of improvements that benefit land.

Question 40

exchange

Answer 40

A transaction in which all or part of the consideration is the transfer of like-kind property

Question 41

home inpection

Answer 41

A thorough visual survey of a property’s structure, systems, and site conditions conducted by a professional.

Question 42

immobility

Answer 42

The fact that property cannot be relocated to satisfy demand where supply is low, nor can buyers always relocate to areas with greater supply.

Question 43

inflation

Answer 43

The gradual reduction of the purchasing power of the dollar, usually related directly to increase in the money supply by the federal government

Question 44

market

Answer 44

A place where goods can be bought and sold and a price established

Question 45

mixed use

Answer 45

Property that accommodates more than one use, such as commercial use and residential use.