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.