Unit 1- Vocab Flashcards
Buyer’s Market
housing market where there are more SELLERS than BUYERS
Cost of Money
the single most important factor is determining demand in the real estate market is the cost of money, which is the interest rate people or businesses must pay to use another’s money for their own purposes.
Economic Base
single most important factor in determining supply in real estate market is the economic base, which is the main business or industry that a community uses to support and sustain itself
Errors and Omissions Insurance (E&O)
professional liability insurance that protects the licensees from mistakes or negligence. Typical policy pays legal fees and judgments resulting form real estate activities. IS CRITICAL.
Common claims that are excluded from E&O insurance:
- Intentional misrepresentation or fraud
- Transactions involving buying or selling one’s real estate
- Civil right violations
- Commercial environmental issues
Independent Contractor
control the means and methods of accomplishing an assigned task; the broker has a right only to demand the end result. They are responsible for their own actions to the person or organization who contracted with him, and for his own tax liability
Inflation
an increase in the cost of goods or services. Also called cost inflation
Non-homogeneity
“not the same” another word for uniqueness, the fact that each parcel of land, each building and each house are said to be different.
Real Estate Cycles
general swings in real estate activity resulting in increasing or decreasing activity and property values during difficult phases of the cycle. Also called housing cycles are dependent on business cycles.
Business Cycles
general swings in business activity resulting in expanding and contracting activity during difficult phases of the cycle
Realtor®
name of a person after then join NAR (national association of realtors). Registered trademark. Members agree to abide by the realtor code of ethics and standards of practice. Benefits:
- Participation in the multiple listing service (MLS)
- Right to use the trademarked term REALTOR®
- Political and legislative voice at all levels of government defending the interests of the real estate industry
- Education and training that allows agents to earn professional designations
- Real estate business publications
- The use of standardized real estate forms
Salesperson
an individual licensee associated with a broker who may perform most of the acts of a broker. However, they may NOT work independently of his or her licensed broker and in fact, can function only through the broker with whom he or she is associated.
Scarcity
Physical Factor : refers to the fact that there is a limited supply of real estate
Seller’s Market
a housing market where there are more buyers than sellers
Statutory Nonemployee
treated as an independent contractor for all tax purposes if these conditions are met:
- The individual is property licensed
- All payments for services as a direct seller or real estate agent are directly related to sales or other input, rather than to the number of hours worked.
- The licensee performs services under a written contract providing this person will not be treated as an employee for federal tax purposes.
Supply and Demand
for all products, goods, and services, when supply exceeds demand, prices will fall, and when demand exceeds supply, prices will rise.
Property Development
the process of acquiring large tracts of land at a low cost per acre, then subdividing and improving it with the streets, sewers, and utilities so it can be resold at a higher cost per front foot (for lots) or per square foot (for building)
Speculation
where a buyer is found for a home after it’s completed
Securities Laws (Blue Sky Laws)
every state has them. Registers securities broker-dealer license to sell any type of investment opportunity or security, such as registered stocks and bonds or unregistered securities such as mortgages or land contracts.
Farming
many licenses concentrate on one type or style of property or one particular neighborhood, a practice called farming.
Residential properties include the following:
- Single-Family residential properties
- Multi-family residential properties
- Condominiums
- Cooperatives (co-op): is a building that is owned by a nonprofit corporation formed for that purpose. Residents are shareholders
Cooperatives (co-op) Properties
is a building that is owned by a nonprofit corporation formed for that purpose. Residents are shareholders
Specialized Residential Properties:
- Converted-use properties: are existing buildings such as factories, warehouses, office buildings, churches, and schools that are converted for residential purposes rather than being destroyed.
- Manufactured Housing: growing market in many areas. Homes are constructed in the same manner as trailers or mobile homes, as opposed to conventional on-site construction. Usually attached to foundations and considered permanent structures
- Timeshare: purchase of an ownership interest in a property (often in a resort area condominium) for a fixed or variable time period.
General Liability Insurance
provides coverage for bodily injury and property damage, paying for legal liability to others resulting from failure to act reasonably (negligence) on the part of the insured or anyone acting on behalf of the insured. They generally pay the cost of defense in addition to policy limits
Multiple Listing Service (MLS)
an arrangement whereby local member brokers agree to share listings and further agree to share commissions on properties sold jointly.
Accredited Buyer Representative (ABR)
ABR is awarded by the real estate buyers agent council and designates membership into the largest association of real estate professionals focusing on all aspects of buyer representative
