,Real Estate Principles and Practices Exam
1 QUESTIONS AND ANSWERS 100%
CORRECT!
Broker - ANSWER intermediary b/w a buyer and a seller for sale, purchase or rental of
a property
-licensed to do so
-hires agents
Dual Agency - ANSWER broker represents both buyer and seller in the same deal
-both sides need full knowledge
Agent - ANSWER sales person/representative
-can do nothing by himself, not even take the test without a broker sponsor
Appraisal - ANSWER attempting to assign value
-must be licensed in Ohio
Home Inspection - ANSWER conditions of homes (plumbing, electric, structural,
foundation, roof, and heating and cooling system)
-usually does not include environmental testing
Property Management - ANSWER managing a rental property
-good way to learn investment reality
-finding new tenants, collecting rent, altering/constructing new space for tenants,
ordering repairs
-specific requirements set forth in the management agreement
-maximize owner's return on investment
Real Estate Development - ANSWER adding value to land
-must like diversity, strategy/visualization, marketing, finance, legal, get in get out and
move on
-on-site: new homes, pools
-off-site: water lines and storm sewers made on public land
Finance - ANSWER mortgage banking/lending/brokerage
, Law - ANSWER specializing in real estate
Education - ANSWER licensing programs/ technical aspects of tax and exchange law
seminars
Counseling - ANSWER inspector, loan hand holding, how to negotiate
-wave of the future! to balance the playing field
Areas of Real Estate Specialization (11) - ANSWER 1. Broker
2. Agent
3. Appraisal
4. Home Inspection
5. Property Management
6. Real Estate Development
7. Finance
8. Law
9. Education
10. Contruction
11. Counseling
2 characteristics of real estate that govern the way the market reacts to the pressure of
supply and demand (Physical Characteristics of RE) - ANSWER 1. Uniqueness: each
parcel of real estate occupies its own unique geographic location
2. Immobility: property cannot be relocated to satisfy demand where supply is low
3. Scarcity
Real Estate adjustment time period to supply and demand - ANSWER very slow
reactions to changes in supply/demand
over supply will result in... - ANSWER lower prices
supply may not be able to meet demand b/c... - ANSWER development and
construction times
Factors affecting the supply side of real estate - ANSWER 1. Labor Force and
Construction and Material Costs
3. Government Controls and Financial Policies
Labor Force and Construction and Material Costs
-factor affecting supply - ANSWER -shortage of workers/building materials
-increase in the cost of materials
1 QUESTIONS AND ANSWERS 100%
CORRECT!
Broker - ANSWER intermediary b/w a buyer and a seller for sale, purchase or rental of
a property
-licensed to do so
-hires agents
Dual Agency - ANSWER broker represents both buyer and seller in the same deal
-both sides need full knowledge
Agent - ANSWER sales person/representative
-can do nothing by himself, not even take the test without a broker sponsor
Appraisal - ANSWER attempting to assign value
-must be licensed in Ohio
Home Inspection - ANSWER conditions of homes (plumbing, electric, structural,
foundation, roof, and heating and cooling system)
-usually does not include environmental testing
Property Management - ANSWER managing a rental property
-good way to learn investment reality
-finding new tenants, collecting rent, altering/constructing new space for tenants,
ordering repairs
-specific requirements set forth in the management agreement
-maximize owner's return on investment
Real Estate Development - ANSWER adding value to land
-must like diversity, strategy/visualization, marketing, finance, legal, get in get out and
move on
-on-site: new homes, pools
-off-site: water lines and storm sewers made on public land
Finance - ANSWER mortgage banking/lending/brokerage
, Law - ANSWER specializing in real estate
Education - ANSWER licensing programs/ technical aspects of tax and exchange law
seminars
Counseling - ANSWER inspector, loan hand holding, how to negotiate
-wave of the future! to balance the playing field
Areas of Real Estate Specialization (11) - ANSWER 1. Broker
2. Agent
3. Appraisal
4. Home Inspection
5. Property Management
6. Real Estate Development
7. Finance
8. Law
9. Education
10. Contruction
11. Counseling
2 characteristics of real estate that govern the way the market reacts to the pressure of
supply and demand (Physical Characteristics of RE) - ANSWER 1. Uniqueness: each
parcel of real estate occupies its own unique geographic location
2. Immobility: property cannot be relocated to satisfy demand where supply is low
3. Scarcity
Real Estate adjustment time period to supply and demand - ANSWER very slow
reactions to changes in supply/demand
over supply will result in... - ANSWER lower prices
supply may not be able to meet demand b/c... - ANSWER development and
construction times
Factors affecting the supply side of real estate - ANSWER 1. Labor Force and
Construction and Material Costs
3. Government Controls and Financial Policies
Labor Force and Construction and Material Costs
-factor affecting supply - ANSWER -shortage of workers/building materials
-increase in the cost of materials
