Unit 1

Realtist

The members of the National Association of Real Estate Brokers (NAREB) key: democracy and housing

If a question arises over the behavior of a licensed real estate sales agent or broker, a consumer usually will first file a complaint with

the Texas Real Estate Commission in Austin.

Regulations passed by governmental agencies have which of the following characteristics?

the effect of law

MAX amount that the Commission will pay from the real estate recovery trust account

$100,000

seven sources of law

*affect the ownership and transfer of real estate* 1. U.S. Constitution 2. Laws passed by Congress 3. Rules of the regulatory agencies 4. State constitutions 5. State statutes 6. Local ordinances 7. Common law

Texas Real Estate Commission (TREC)

9: six broker-members and three public members appointed by the governor for *six-year staggered terms*

Labor force and construction costs

A shortage of skilled labor or building materials or a significant increase in the cost of labor or materials can decrease the amount of new construction

Which real estate discipline is represented by BOMA?

BOMA represents building owners and managers

Why is "area preference" considered the single-most important economic characteristic of land?

Because "area preference" expresses an individual's desire to own a property that meets what often is an abstract need, such as a home on a golf course or a highrise condo with specific view

Which term refers to working with the parties in negotiating the sale, rental, or purchase of real estate?

Brokerage

Which of the following designations is NOT offered by the National Association of REALTORS®?

Certified Residential Appraiser

Improvements

Changes in a parcel of land; can be new construction or a modification, and it can influence other parcels favorably or unfavorably.

continuing education (CE)

Courses for the renewal of an active real estate broker or sales agent license

Which of these can be seen as harming the objective value of a property?

Furnace beyond its usable lifespan

Employment and wage levels

Decisions to buy or rent and how much to spend depends on income. jobs are plentiful=wages are competitive, and an employee feels secure in a job, demand for housing is likely to increase. jobs are scarce/wage levels low= demand for real estate drops. The market might, in fact, be affected drastically by a single major employer's moving in or shutting down.

What is an example of where permanence of investment can improve property values?

Extension of sewer, water, gas, and electric into areas primed for development

Government controls and financial policies

Government monetary policy can have a substantial impact on the real estate market. The Federal Reserve Board establishes a discount rate of interest for the money it lends to commercial banks.

precedent

How similar cases have been decided in the past. an earlier event is used as an example

Indestructibility

Land is also indestructible. This permanence of land, coupled with the long-term nature of improvements, tends to stabilize investments in real estate. just b/c land is indestructible does not change the fact that the improvements on land depreciate and can become obsolete, which may dramatically reduce the land's value. Because land is indestructible, it cannot be depreciated and is not insurable.

Immobility

Land that is immobile . Some of the substances of land are removable, and its topography can be changed, but the geographic location of any given parcel of land can never be changed. The location is fixed.

Regulations passed by governmental agencies are a means of implementing and enforcing which kind of act?

Legislative

REALTOR®

Member of NAR

What is a common market response when supply is limited and demand begins to rise?

New developers move into the market to siphon off excess demand.

Nonhomogeneity

No two land are exactly the same. all parcels differ geographically because each parcel has its own location and, therefore, its singular legal address This characteristic may also be called heterogeneity.

The Women's Council of REALTORS offers training to receive which professional certification?

Performance Management Network

What has been the impact on housing to date of environmental concerns such as climate change and the potential for an increase in hurricanes and flooding from severe storms?

Prices of homes with water views have been largely resilient to environmental factors.

Which of the following is NOT an institute or society under the umbrella of the National Association of REALTORS®?

Real Estate Law School

Under what real estate classification must a broker list a property if that property—once a very large single-family home—has since been carved into three condominium units and one rental apartment?

Resedental

If market analysis suggests there is need for a new condo development, but two developments are constructed across the street from each other, will supply and demand determine which is successful?

Success is likely to be based on something other than "supply and demand," such as pricing.

The first law to regulate real estate brokerage in Texas

Texas Real Estate Dealers Act 1939

What organization has the education of new and existing real estate license holders as its primary objective?

The Texas Real Estate Teachers Association

Permanence of investment

The capital and labor used to build an improvement represent a large fixed investment

Population

The demand for housing grows with the population

If a large factory that employs a large number of local residents closes, what will the impact on housing likely be?

The price of housing would tend to be depressed.

What is the effect on housing when a city is named the site of a major event—such as a political convention or sporting events—that will employ a large number of local people?

There will be little to no impact.

subjective value

affected by the relative worth an individual places on a specific item EX: house may be beautifully designed and constructed with expensive materials and still be of no value to someone who does not want such a home

The 14th Amendment, providing civil rights protections, is an example of which of the seven sources of law?

U.S. Constitution

Mortgage rates respond to a variety of influences. Is one of them supply and demand?

Yes, if the financial system has an excess of money and few buyers, rates may drop.

Does the lack of permanence of investment have an impact on development potential for a community?

Yes, lack of forward-looking infrastructure makes investors leery of committing to projects.

Should sales agents bother listing rundown properties in depressed neighborhoods?

Yes, many buyers look for such properties to rehabilitate

A REALTOR® is BEST described as an individual who is

a member of the National Association of REALTORS®.

Which one of these adds objective value to a property?

a new roof

broker

acts as an agent of the buyer or the seller (or both) in negotiating the sale, purchase, or rental of property

objective value

actual value measured in $ (based on facts) EX: marble entrance hall and hardwood floors would have a greater objective value than a house with only rough concrete floors.cap

In real estate markets, which may change quickly?

demand

residential real estate

all property used for housing small city lots acreage both single-family and multifamily in urban, suburban, and rural areas

price

amount of money paid for a property

mixed use

any lawful combination of the other five basic categories of real property permitted by local zoning. EX: building downstairs used for restaurant but upstairs is a home

If there are only two remaining spec homes in a development of 100 completed and sold units, the prices of those remaining homes can be expected to rise. What economic principle is that?

as supply falls, demand increases

commercial real estate

business property, including offices, shopping centers, stores, theaters, hotels, and parking facilities

cost

capital outlay for land, labor, materials, and profits necessary to bring a property into existence.

Demographics

characteristics of the population in a community

The distance a home must be set back from a city street is regulated by

city ordinance

Court decisions of federal, state, and municipal courts serve to

clarify and interpret not establish, laws, regulations, and constitutional provisions.

Land on which three contiguous residential properties were razed and replaced by a legally rezoned parking lot would carry what classification?

commercial

Texas Real Estate License Act (TRELA)

controles license of those allowed to to practice real estate brokerage

When supply increases, real estate prices usually

decrease

Governmental agencies

enact rules and regulations range from the federal Consumer Finance Protection Bureau (CFPB) to the Texas Real Estate Commission to local zoning boards

The primary purpose of the U.S. Constitution and the individual state constitutions is

establish the RIGHTS OF CITIZENS and limit governmental authority. For example, the 14th Amendment to the U.S. Constitution provides civil rights protections that serve as the basis for federal fair housing legislation; homestead and community property laws derive from the Texas Constitution.

business cycles

expansion, recession, depression, and revival. measured by the gross domestic product (GDP) having ups and downs

agricultural real estate

farms, timberland, pastureland, ranches, and orchards

To qualify for license renewal and continue in business, license holders must

follow certain prescribed standards of business conduct and meet continuing education requirements.

physical characteristics of land are

immobility, indestructibility nonhomogeneity.

A potential purchaser learns that a new expressway overpass is to be constructed within two blocks of one of the houses she is considering. If this fact causes her to reduce the amount she offers for the property, that decision would likely be based on the economic characteristic of

improvements

When demand increases, real estate prices

increase

Because real estate is immobile,

its value is heavily influenced by changes in the surrounding area.

The purpose of the National Association of REALTORS® is to

keep members up to date on current housing trends, legal issues, and brokerage business practices.

factors affect *supply* in the real estate market

labor force construction costs government controls financial policies

Which is NOT insured by property insurance?

land

Laws that affect Real Estate practices

law of contract property law land-load tenant law law of agency real estate license law customer protection law

common law

laws based on customs, usage, and court

The Texas Real Estate License Act is an example of which of the seven sources of law?

laws passed by the state legislature

sales agent

license holder employed by or associated with a broker who conducts brokerage activities on behalf of the broker for a fee or commission

Real estate license holders who are not members of the National Association of REALTORS® may call themselves

license holders or agents

A developer who seeks to build apartments on the site of a former school must first receive the approval of

local government, typically including zoning and planning boards

The term demographics does NOT include

number of people living in an area

In reference to real estate, which phrase means that investments are long term?

permanence of investment

market

place where goods can be bought and sold

special purpose

places of worship, schools, cemeteries, and government-held lands

demand factors that affect real estate

population employment demographics (ex: young= 1 bedroom fam= 3 bed) wage leves

Factors that tend to affect the *demand* for real estate

population, demographics employment wage levels

sudden variations in supply and demand means

real estate Price is slow to adjust because real estate is nonmobile and nonstandard and because real estate's construction takes longer to complete.

Members of the National Association of Real Estate Brokers refer to themselves as

realists

abatement

reduction can attract new businesses reducing property taxes.

Wetlands issues often are resolved by the Texas Commission on Environmental Quality, which enforces

regulation of state and federal agencies

*economic* characteristics of land affect its investment value

relative scarcity, improvements, permanence of investment, area preference.

When supply and demand increase or decrease together, prices

remain stable

An obsolete shopping center seized by the city for back taxes is sold for redevelopment as senior housing units with an expansive area for gardening vegetables and herbs, making its new classification

residential

Real Property

residential commercial industrial agricultural special purpose

Area preference

sometimes called situs. People's desire for one area over another, based on a number of factors such as history, reputation, convenience, scenic beauty, and location.

Laws passed by Congress, State and Legislative bodies establish what

specific provisions on any issue, or they may set broad standards of conduct and establish administrative enforcement agencies.

Rules passed by the Texas Real Estate Commission are which of the seven sources of law?

state regulations

NAR is composed of

state, regional, and local associations

When a large quantity of wood milled in the United States is exported to a foreign country, leaving a shortage for domestic construction projects, which would be negatively affected?

supply of housing

Zoning and building ordinances are established by

the local government.

Relative scarcity

the total supply of land is fixed. ex: new york $$$ for little amt land

supply

too much of this causes prices to drop supply increases ---> $$ decreases as the *amount of goods offered for sale* within the market at a given price during a given time period

Some specific physical and economic factors that affect land use include

topography: contour and elevation prevailing winds; transportation; public improvements; availability of natural resources (such as water).

industrial real estate

warehouses, factories, and land in industrial districts

demand

when this increases prices go up the amount of goods consumers are *willing and able* to buy at a given price during a given time period