UNIT 1- INTRODUCTION TO THE REAL
ESTATE BUSINESS EXAM
QUESTIONS & CORRECT ANSWERS
A licensee is a person who has satisfied the requirements of the employing broker -
CORRECT ANSWER False
Improvements, such as water lines and storm sewers, made on public lands to serve a
new development are called off-site improvements. - CORRECT ANSWER Off-Unit
Improvements
Divides a single property into smaller parcels - CORRECT ANSWER Subdivider
Relieves an investment property owner from day-to-day activities - CORRECT
ANSWER Property manager
Combines an interest in real estate with skills in the housing trades - CORRECT
ANSWER Home inspector
Helps clients choose among alternatives in real property investment - CORRECT
ANSWER Real estate counselor
Forms an opinion of property value - CORRECT ANSWER Real estate appraiser
Brings people together in a real estate transaction - CORRECT ANSWER Real estate
professional
Each owner owns shares in a corporation that holds title to the property - CORRECT
ANSWER Cooperative
Each owner owns a unit and is a co-owner of common areas - CORRECT ANSWER
Condominium
Each owner owns a unit in a development and has access to shared amenties -
CORRECT ANSWER Planned unit development (PUD)
Commercial - CORRECT ANSWER Theater, Hotel, Parking Facility, Office Space,
Shopping Center
Special Purpose - CORRECT ANSWER Cemetery, School, Place of Worship,
Government-help land
, Agricultural - CORRECT ANSWER Timberland, Orchard, Ranch, Farm,
Industrial - CORRECT ANSWER Power Plant, Factory, Warehouse
Residential - CORRECT ANSWER Mult-family Home, Single-family Home
Shopping centers, stores, theaters, hotels, and parking facilities are examples of
special-purpose properties - CORRECT ANSWER False
Because it is possible for a single real estate firm or an individual real estate
professional to perform all the services and handle all classes of property, few firms and
professionals specialize in any one type - CORRECT ANSWER False
The Federal Reserve Board (the Fed) establishes a discount rate of interest for the
money it lends to commercial banks - CORRECT ANSWER True
Two characteristics of real estate govern the way the market reacts to the pressures of
supply and demand: uniqueness and immobility - CORRECT ANSWER True
Advantages of Real Estate Investment - CORRECT ANSWER Rate of return, Control
over investment
Disadvantages of Real Estate Investment - CORRECT ANSWER Liquidity, Active
Management, Amount of capital needed, Expert advice needed
A benefit of investing in real estate is that it does NOT require active management -
CORRECT ANSWER False
A disadvantage of investing in real estate is that it involves a high degree of risk -
CORRECT ANSWER True
Mortgage loan originators work in which specialization of the real estate market?
a) Financing
b) Subdivision and development
c) Appraisal
d) Home inspection - CORRECT ANSWER a) Financing
A real estate professional who performs a visual survey of a property's structure and
prepares a report for a purchasers or an owner is
a) an educator
b) a home inspector
c) a property manager
d) an appraiser - CORRECT ANSWER b) a home inspector
A person licenses to sell, buy, lease, or exchange real property for others for a fee is a
ESTATE BUSINESS EXAM
QUESTIONS & CORRECT ANSWERS
A licensee is a person who has satisfied the requirements of the employing broker -
CORRECT ANSWER False
Improvements, such as water lines and storm sewers, made on public lands to serve a
new development are called off-site improvements. - CORRECT ANSWER Off-Unit
Improvements
Divides a single property into smaller parcels - CORRECT ANSWER Subdivider
Relieves an investment property owner from day-to-day activities - CORRECT
ANSWER Property manager
Combines an interest in real estate with skills in the housing trades - CORRECT
ANSWER Home inspector
Helps clients choose among alternatives in real property investment - CORRECT
ANSWER Real estate counselor
Forms an opinion of property value - CORRECT ANSWER Real estate appraiser
Brings people together in a real estate transaction - CORRECT ANSWER Real estate
professional
Each owner owns shares in a corporation that holds title to the property - CORRECT
ANSWER Cooperative
Each owner owns a unit and is a co-owner of common areas - CORRECT ANSWER
Condominium
Each owner owns a unit in a development and has access to shared amenties -
CORRECT ANSWER Planned unit development (PUD)
Commercial - CORRECT ANSWER Theater, Hotel, Parking Facility, Office Space,
Shopping Center
Special Purpose - CORRECT ANSWER Cemetery, School, Place of Worship,
Government-help land
, Agricultural - CORRECT ANSWER Timberland, Orchard, Ranch, Farm,
Industrial - CORRECT ANSWER Power Plant, Factory, Warehouse
Residential - CORRECT ANSWER Mult-family Home, Single-family Home
Shopping centers, stores, theaters, hotels, and parking facilities are examples of
special-purpose properties - CORRECT ANSWER False
Because it is possible for a single real estate firm or an individual real estate
professional to perform all the services and handle all classes of property, few firms and
professionals specialize in any one type - CORRECT ANSWER False
The Federal Reserve Board (the Fed) establishes a discount rate of interest for the
money it lends to commercial banks - CORRECT ANSWER True
Two characteristics of real estate govern the way the market reacts to the pressures of
supply and demand: uniqueness and immobility - CORRECT ANSWER True
Advantages of Real Estate Investment - CORRECT ANSWER Rate of return, Control
over investment
Disadvantages of Real Estate Investment - CORRECT ANSWER Liquidity, Active
Management, Amount of capital needed, Expert advice needed
A benefit of investing in real estate is that it does NOT require active management -
CORRECT ANSWER False
A disadvantage of investing in real estate is that it involves a high degree of risk -
CORRECT ANSWER True
Mortgage loan originators work in which specialization of the real estate market?
a) Financing
b) Subdivision and development
c) Appraisal
d) Home inspection - CORRECT ANSWER a) Financing
A real estate professional who performs a visual survey of a property's structure and
prepares a report for a purchasers or an owner is
a) an educator
b) a home inspector
c) a property manager
d) an appraiser - CORRECT ANSWER b) a home inspector
A person licenses to sell, buy, lease, or exchange real property for others for a fee is a
