Unit 1: Introduction to the Real Estate Business

Question 1

Associate licensee

Answer 1

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 2

Broker

Answer 2

for compensation or valuable consideration (i) sells or offers for sale, buys or offers to buy, or negotiates the purchase or sale or exchange of real estate

Question 3

Code of Ethics

Answer 3

A written system of standards for ethical conduct.

Question 4

Market

Answer 4

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

Question 5

Real Estate Licensee

Answer 5

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

Question 6

Sales Associate

Answer 6

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

Question 7

Salesperson

Answer 7

Any person, other than an associate broker, who acts on behalf of a real estate broker in performing any act authorized to be performed by the broker in this unit.

Question 8

Supply and Demand

Answer 8

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

Question 9

Home Inspection

Answer 9

• Professional evaluates the structural and mechanical condition of the property
• Urge clients to get this to cover avoid liability

Question 10

Specializations

Answer 10

• Broker
• Salesperson, sales associate, associate licensee
• Appraisal
• Property Manager
• Financing
• Development
• Inspections
• Counselor

Question 11

Code of Ethics vs. Standards of practice

Answer 11

written system vs. praxis

Question 12

Types of Residential Property

Answer 12

1. Single-family
2. Apartment building
3. Condominium
4. Cooperative
5. Planned Unit Development
6. Highrise Development/Mixed US Development
7. Converted Use Property
8. Factory Built Housing

Question 13

Types of Real Property

Answer 13

Residential
Commercial
Mixed-Use
Industrial
Agricultural
Special Use

Question 14

Describe how the Real Estate Market is set up

Answer 14

• Property is unique and immobile
• Supply Factors: construction, government controls, and monetary policy
• Demand Factors: population, demographics, employment, and wage levels

Question 15

Supply Factors

Answer 15

Labor force
Construction and material costs
Government Controls
Monetary Policy

Question 16

Demand Factors

Answer 16

Population
Demographics
Employment and wage levels

Question 17

On-site vs. Off-site development

Answer 17

On-site: new homes, pools

Off-site: water lines, storm sewers

Question 18

What is NAR?

Answer 18

• National Association of Realtors TM
• Largest organization
• ethics on consumers and peer
• GRI=completed requirement of Realtor Institute
• CRS= affiliate of NAR for residential property
• Realist= member of national association of real estate brokers

Question 19

When does a mobile home become real property?

Answer 19

Wheels off = Real Property

Wheels on = Personal Property

Question 20

Appreciation

Answer 20

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 21

Capital Gain

Answer 21

Profit earned from the sale of an asset.

Question 22

Equity Buildup

Answer 22

That portion of the loan payment directed toward the principal rather than the interest, plus any gain in property value due to appreciation.

Question 23

Exchange

Answer 23

A transaction in which all or part of the consideration is the transfer oflike-kindproperty (e.g., real estate for real estate).

Question 24

Fair Housing Act

Answer 24

The federal law that prohibits discrimination in housing based on race, color, religion, sex, disability, familial status, and national origin.

Question 25

Leverage

Answer 25

The use of borrowed money to finance an investment.

Question 26

Liquidity

Answer 26

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.