Principles of Real Estate Ch. 1-3, Texas Principles of Real Estate 1: Chapter 1 Quiz, Texas Principles of Real Estate 1 - Chapter 1, Texas Principles of Real Estate I - Chapter 2 Real Estate Express, Texas Real Estate Principles 1 Chapter 3, TEXAS PR...
7 Characteristics of Real Estate Markets
*Durability (50 years)*, Large economic unit, lumpy asset, *high transaction costs*, fixed location, heterogeneity, *government regulation*.
Three economic bases
1. income from current employer 2. income from accumulated wealth or pensions 3. Transfer payments from government
Fort Worth
16th largest city in the U.S.
Percentage that reside in MSAs
80%
How many members does the Texas Real Estate Commission (TREC) consist of?
9
Percentage of real estate in urban areas
90%
Listing Contract
A contract in which a property owner employs a real estate broker to market the property described in the contract is known as the...
Market Comparison Approach
A means of comparing similar type properties, which have recently sold, to the subject property is known as the...?
Market
A mechanism through which goods and services are voluntarily changed among owners.
What is a good source of money for a real estate purchase?
A mortgage company A bank A friend or relative
General Agent
A property manager is an example of what type of agent...?
Special Agent
A real estate agent is an example of what type of agent...?
TREC, as a state agency, is a member of which organization?
ARELLO
Which of the following actions is NOT involved in creating real properties from raw land?
Allowances
What is the investment property?
Any property held for investment purposes
Who performs function of property estimation among the real estate specialists?
Appraisers
What qualities should the counselors possess?
Be experienced and have wide array of knowledge
Why are the categories of real properties not absolute?
Because they often partially match with each other
CCIM
Commercial or Investment real estate broker
Which action is often used to define specific aspects of newly created law?
Court Decision
Economic characteristics of real estate
Governed by supply, demand, price, costs, value components, government influence
The salesperson's sponsoring broker
If a real estate salesperson closes on a transaction, who pays the salesperson their commission...?
Which of the following would be considered real estate professionals?
Individuals and business organizations whose sole enterprise is performing a real estate related service or function and licensed by the Texas Real Estate Commission to perform those services
Which of the following is NOT a typical property agent type?
Land agents Special agent xxxxx no Industrial agents Commercial agents
Who routinely pass rules and regulations by, in addition to the federal and state agencies?
Local agencies
Real estate professionals perform which of the following functions?
Management and maintenance
Busy Season of Residential Market
May through sept/oct
MAI
Member of the Appraisal Institute
Why do many brokers restrict their business to representing either buyers or sellers exclusively?
Minimized conflicts of interest
Which of the following would be classified as a common use type property?
Office
Pro Forma
Projected cash flow for rental properties. Look at trends in demand and supply.
Commercial Property
Properties with five or more dwelling units are considered...?
What are the two types of real estate managers?
Property managers and Asset managers
Typically, brokers and agents do NOT specialize along which one of the following business lines?
Property type Geographical area Futures xxx Type of relationship
Which entity administered real estate law at the state level?
Real Estate Commission
Who administers state real estate license laws in each state?
Real Estate Commission
REIT
Real Estate Investment Trust: institutional investors. utilize commercial brokers in the local markets and make real estate investments.
What is the term given to property that is owned and used for habitation?
Residential Property
What are the principal types of transaction in brokerage activity?
Sales, leases and subleases, exchanges, and options
Which of the following would be classified as a special purpose property?
School
Who appoints members of the Texas Real Estate Commission (TREC)?
The Governor
Supply
The amount of goods offered for sale within a given market at a given price during a given time period is known as...
Principal
The employer of an agent is known as the...?
Residential Commercial Industrial
The general uses of real property include which of the following...?
Residential
The market comparison approach is commonly used for this property type...?
Rent
The price of occupancy service for a specific period of time
What single industry is the largest in the American economy?
The real estate industry
Do real estate trade organizations influence the real estate industry?
The trade organizations influence the real estate industry through the use of codes of ethical conduct
Which of the following is a skill that a successful real estate agent must have?
Time management
What is the role of the inspectors?
To inspect property's condition
What do the License laws in each state specify?
Who must obtain a license to practice real estate and set the requirements for obtaining and maintaining the license
Which entity is given the authority to pass zoning laws?
Zoning Boards
Metropolitan Statistical Area
a basic metropolitan area that consist of one designated central cities whose population exceeds 50,000 plus the surrounding urbanized area.
Consolidated Metropolitan Statistical Area
a cluster of two or more adjacent MSAs that are economically linked to some degree to a dominant MSA and together have a population of at least 1 million.
What type of payment may broker receive in exchange for delivery of services?
a fee a salary a retainer any of them
Master Plan Communities
a long term plan about how the community will be developed.
Supply, demand, and price interact continuously in a market. Underlying and influencing these forces are the dynamics of value and the costs of producing goods and services. A market tends toward
a state of market equilibrium
What types of relationship have many brokers specialized in recent years?
advisory services
The Texas Real Estate Commission does NOT have authority to
amend real estate laws.
Analytical Professions
appraisers, mortgage lenders, corporate real estate managers, and property managers.
Market imbalances
are caused by changes in supply or demand, resulting in an equilibrium time lag
Central Business District
central city and business core of the city. Premium prices for properties in these areas.
Economies of scale
certain items or services must be produced in certain minimum quantities in order to be produced as efficiently as possible.
Agglomeration economies
cost or productivity advantages from the clustering of firms or worksites near each other. Result from the ability of different types of workers and production processes to help each other if they are physically near each other. Ex: silicon valley
Value components
desire; utility; scarcity (availability in relation to demand); purchasing power (the consumer's ability to pay for the item).
New Jobs
each new job creates the demand for .75 new housing units.
Three major centripetal forces
economies of scale, economies of agglomeration, and positive locational externalities.
Service Sector
employment geared toward serving the local population such as grocery store workers, hair cutting salons, local teachers, lawyers, local insurance sales people, etc.
Export Sector
employment that brings revenue into the region example: manufacturers that serve more than the local population and brings in revenues from outside the region.
Micro Influences
factors that affect property on a local level such as employment trends within part of a city near a property of interest. Affects local supply and demand
Supply
goods or services available for sale, lease, or trade
Demand
goods or services desired for purchase, lease, or trade
Standard Industrial Classification
industries are classified in hierarchical layers of aggregation.
Production cost
influence value
transportation costs
last major factor that affects real estate markets, lower costs increase real estate demand and spread over space.
Cost plus profit equals
minimum price
People Oriented and Analytical
negotiating leases.
A condominium would be considered as investment property if it is
non-occupant owned.
What are the surveyors required to identify?
possible nature risks
If supply increases relative to demand
price decreases
If demand increases relative to supply
price increases
Who is responsible for management of day to day operations?
property managers
Price mechanism
quantified value of an exchange
People Oriented
real estate broker
sprawl
real estate demand spreading over space
Salespersons not associated with NAR are known as
real estate licensees or agents.
Jobs
second most important factor on real estate. More jobs = better real estate sales.
Who may hire a broker?
seller, buyer, landlord or tenant
Interest rates
significant changes can negatively affect the number of real estate transactions that occur.
During Market equilibrium
supply and demand tend toward balance where they are equal Also, price, cost, value theoretically the same
Essential production costs are
the costs of capital, materials, and supplies; labor; management; and overhead.
Who are the key parties involved in creation of real properties?
the developer, the landowner, and the mortgage lender
economic base of a city
the source of a city's total income, that is, the total income of all households in the region.
Macro Influences
those factors that affect almost all property within a country. tax laws and interest rates.
Market
transaction arena where suppliers and demanders define value through the price mechanism
Centripetal forces
what causes cities to form
It is in market equilibrium
where supply equals demand, and price, cost, and value are identical.
Tax increment financing (TIF)
where the city issues bonds against future property taxes associated with a development and uses the proceeds to buy land and/or other forms of subsidy to the developers.