Chapter 1: Introduction to Real Estate Questions and Answers Already Passed

Chapter 1: Introduction to Real Estate Questions and Answers Already Passed brokerage business of bringing people together in a real estate transaction broker person or company licensed to buy, sell, exchange, or lease real property for others and charge a fee for these services. licensee person who has passed a state mandated real estate licensing exam and conducts brokerage activities on behalf of, or for the broker. appraisal the process of estimating a property's market value based on established methods and the licensed or certified appraiser's professional judgement. property management person or company hired to maintain and manage property on behalf of its owner to protect the owner's investment and maximize the return on their investment. financing business of providing the funds that make real estate transactions possible. Usually mortgage loans or trust deed loans secured by the property. subdivision and development the division of a single property into smaller parcels -- involves on-site and off-site improvements on the land home inspection professional conducts a visual survey of property's structure, systems, and site conditions then prepares a valuable analytical report to purchaser and homeowner. Counseling individual with industry expertise provides clients with competent independent advice based on sound professional judgement. Education teaches courses in pre-licensing programs of real estate to technical aspects of tax law to practitioners and consumers. Mandates by state licensing laws establish minimum educational requirements for obtaining and keeping a real estate license. Continuing ed courses ensure licensees keep their skills and knowledge current National Association of Realtors largest trade organization serving the real estate business. Sponsors organizations and designations to those who complete specific courses in area of interest. Members subscribe to a Code of Ethics and are entitled to be called REALTORS or REALTOR-ASSOCIATES. See website at or. org. (NAR) National Association of Real Estate Brokers members are known as Realtists, also adhere to a Code of Ethics, and rose out of civil rights movement as an association of racial minority real estate brokers in response to unfair housing laws. The NAREB is dedicated to equal housing opportunity. Residential (real property type) all property used for single or multi-family housing Commercial (real property type) business property: includes office space, shopping centers, hotels, theaters, parking garages. Mixed-use (real property type) property that allows for two uses: commercial and residential, in the same building. Industrial (real property type) warehouses, factories, power plants, land in industrial districts, etc. Agricultural (real property type) farms, timberlands, ranches, and orchards. Special purpose (real property type) churches, schools, cemeteries, and government-held lands. supply and demand prices for goods and services are determined by s and d. when supply increases and demand is stable prices decline; when supply is stable but demand increases prices rise. factors affecting supply factors affecting supply: labor force availability; construction and material costs; government controls; and financial policies labor force availability shortage of skilled labor may decrease new construction lowering supply construction and material costs affect supply as incresed costs of construction and materials may decrease new construction, lead t higher prices and increased rents further slowing market. government controls monetary policy of Federal Reserve Board in setting discount rate of interest for the money it lends to commercial banks plays a signficant role in people's ability to purchase homes. environmental regulations may affect supply or value of land in a local market. State and local taxation policies may have a positive or negative affect, employment, new businesses, and industries can expand or contract local markets. local governments regulation of land use controls, building codes, and zoning ordinances shape the character of a community and control use of land. This may stabilize, increase or decrease real estate values. Factors affecting demand population, demographics, employment and wage levels are affect demand in the real estate market. population demand for housing rises and falls with the population. Population shifts and changes from cold climates to warm, economic changes (plant closings) social concerns (public school quality) effect demand in one location, matched by increased demand elsewhere demographics study and description of a population which is a major factor in determining the quantity and type of housing in a community. Family size, ratio of adults to kids, ages of children, number of retirees, income, lifestyle and other factors influence the amount and type of housing needed employment and wage levels decisions about entering the market are closely related to consumer confidence and stability of income. Low wages and scarce job opportunities lead to a drop in real estate demand. Conversely high wages and abundance of jobs lead to a rise in demand. consumer confidence perceived job security, availability of credit and impact of inflation all contribute to people's decisions to enter the real estate market or not.