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
