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Modern Real Estate Practice 1
| Term | Definition |
|---|---|
| A professional opinion of a property's market value, based on established methods and using trained judgement, is performed by | Real estate appraiser. Only an appraiser can is qualified to produce a formal opinion of value -- an appraisal |
| In general, when the supply of a certain commodity increases, | the price tends to drop. If demand is constant and supply increases, sellers compete with each other by lowering prices. |
| Which factor primarily affects supply in the real estate marktet? | Governmental monetary policy. Population, demographics, and employment impact demand for a commodity, but governmental monetary policy strongly influences the supply and value of property in a local market. |
| Which factor is MOST likely to influence demand for real esate? | Wage levels and employment opportunities. When wage levels and job expansion are increasing, workers are more likely to buy real estate; when job opportunities are scarce or wage levels are low, demand for real estate usually drops. |
| Property management, appraisal, financing, and development are all examples of | Specializations within real estate. Every real estate professional must have basic knowledge of these specialties. |
| What type of federal law prohibits discrimination in the provision of housing and housing-related services (including lending) based on an individual's race, color, national origin, religion, sex, familial status, or disability? | Fair housing. Fair housing laws prohibit discriminatory practices against protected classes of individuals. |
| A major manufacturer of automobiles announces that it will relocate one of its factories, along with 2,000 employees, to a small town. What effect will this announcement MOST likely have on the small town's housing market? | Houses will likely become more expensive. The expected arrival of 2K employees & their families in a small town will cause sellers to raise their prices in expectation of the increased demand & the long time it takes to build new housing (seller's market) |
| A real estate professional with several years of experience in the industry retires from actively marketing properties. Now they help clients choose among the various alternatives i.e. purchasing, using, or investing in property. What's their profession? | Real estate counselor. Advising & guiding investors & other buyers is counseling them. Many states require them to have a real estate license to serve as a real estate advisor/counselor for a fee because it involves skills & duties related to RE brokerage |
| Nationwide Multistate Licensing System and Registry was created to register? | Mortgage Loan Originators. Federal law requires mortgage loan originators to qualify for the Nationwide Multistate Licensing System and Registry. |
| Schools would be considered part of which real estate classification? | Special purpose. Special purpose properties include schools, churches, cemeteries, and municipal service building. |
| When demand for a commodity decreases and supply remains the same, | Price tends to fall. Under the concept of supply and demand, if demand decreases and supply remains the same, producers need to attract more customers, and so prices fall. |
| The difference between the cost basis of property and its net selling price is | Capital gain. This is essentially the profit earned from the sale of an asset. |
| The use of borrowed money to finance an investment is called | Leverage. As a rule, an investor can receive a maximum return from the initial investment by making a small down payment, paying a low interest rate, and spreading mortgage payments over as long a period as possible. |
| All of the following are categories of the uses of real restate EXCEPT | Development. Residential, agricultural, and industrial are all classifications of real estate. Development can occur with any of these types. |
| All of the following would affect demand EXCEPT | Monetary policy. Government monetary policies affect the supply of land available for development. Population, demographics, and wage levels affect demand for real estate. |
| All of the following affect how quickly the forces of supply and demand work EXPECT | Degree of standardization of the property's price. Uniqueness and immobility of product and parties to the transaction, not the standardization of the product price, govern the way the market reacts to the pressures of supply and demand. |
| A person who performs a visual survey of a property structure and writes a report for a buyer is | Home inspector. The home inspector, who prepares an analytical report of a visual inspection of the property's structure and systems, is becoming more important in the real estate transaction as more consumer rely on these reports when buying property. |
| Another name for depreciation is | Cost recovery. Depreciation, or cost recovery, allows an investor to recover the cost of an income-producing asset through tax deductions over the asset's useful life. |
| A person or company responsible for maintaining a client's property and maximizing the return on the client's investment is serving as | Property manager. The basic responsibility of the property manager is to protect the owner's investment and maximize the return on investment. |
| Detailed information about the age, education, behavior, and other characteristics of members of a population group is called | Demographics. Information about members of a population group is called demographics. These factors are important because they contribute to the amount and type of housing needed. |
Created by: jr84
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