Chapter 1 - The Real Estate Business Flashcards Preview

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Flashcards in Chapter 1 - The Real Estate Business Deck (59):
1

A real estate licenses is a professional who provides specialized service and expertise in the following 5 areas:

1. Details of property transfer
2. Knowledge of market conditions
3. Knowledge of how to market real estate or businesses
4. Knowledge of how to analyze buyers needs
5. Knowledge of laws that pertain to real estate

2

What is involved in property transfer?

Transrs of titles, property taxes, financing, and local zoning ordinances; knowledge of real estate purchase and sale contract used

3

What is market condition?

Changes in income tax laws, building moratoriums, and fluctuations in supply and demand that affect property values

4

What is farm area?

Staying specific to an area to have an expertise in that particular portion

5

What is the most prevalent and most well known component of real estate brokerage?

Sales

6

What are the the 5 major sales specialties real estate sales associates can become involved in?

1. Residential
2. Commercial
3. Industrial
4. Agricultural
5. Businesses

7

What is included in residential sales?

Four or fewer residential units, vacant land zoned for four or fewer residential units, or agricultural property of ten or fewer acres

8

What in included in commercial sales?

Income- producing properties, investment analysis, and the various techniques for increasing after-tax cash flow; examples include improved residential property of more than four units, retail stores, office buildings, and shopping centers

9

What is included in industrial sales?

Sites in industrial parks or subdivisions, redeveloped industrial parcels in central areas, and industrial acreage

10

What is included in agricultural sales?

Agricultural property of more than ten acres

11

What is included in business sales?

Sales or lease of an existing business, including the sale of tangible and intangible assets
Also known as business brokers or business opportunity brokerage

12

What is follow up and why is it important?

What a sales associate does for buyers and sellers after the sale; it ensures satisfied buyers and sellers

13

What is property management?

Leasing, managing, marketing, and overall maintenance or property for others

14

What is an absentee owner?

Property owner who does not reside on the property and who often relies on a professional property manager to manage the investment

15

What is appraisal?

Process of estimating the value of real property; considered to be an art, not a science, because although the appraisal process involves mathematical calculations, appraisers also use their own judgment when appraising real property

16

What is the FREAB?

The Florida Real Estate Appraisal Board - they regulate state certified, licensed, and trainee appraisers

17

What is a real estate licensee?

A person paid to handle other peoples properties

18

What is a CMA?

Comparative market analysis; it helps potential sellers determine an asking price and buyers to make an informed decision when offering to purchase real property

19

How are CMAs developed?

By collecting information concerning real estate activity in the area, including recent sales of similar properties, properties currently offered for sale, and expired listings

20

Appraisers are paid a ________, not a ___________.

Fee, commission

21

What is a subdivision plat map?

Engineers plan for land use superimposed on a map of the he land to be developed

22

What is dedication?

Gift of land by an owner or developer to a government body for a public use ( roads, sewers, etc)

23

What do restrictive covenants do?

Affect how the land can be used and establish criteria such as minimum square footage, type of construction, architectural design, etc. To ensure that homes built there conform to the neighborhood

24

Developer Bob acquires a tract of land that he divides into 25 home sites. Prior to marketing the home sites, Bob must submit the subdivision plat to the:

Local governmental planning agency

25

The term follow-up refers to:

What a sales associate does for buyers and sellers after the sale

26

Even though certain exceptions apply, an active real estate licensee is legally entitled to appraise real property for compensation concerning a non federally related transaction as long as:

She does not represent herself as a state-certified or licensed appraiser, and complies with the USPAP

27

The field of property management has experienced growth and specialization primarily because of:

The increase in the number of absentee owners

28

Appraising is considered to be:

An art

29

Appraisers are paid a fee because:

To accept compensation based on the appraised value is a conflict of interest

30

When a developer makes lots available for custom building in a newly developed subdivisions, the overall purpose of restrictive covenants is to ensure that custom-built homes will:

Not decrease the value of neighboring properties

31

The real estate activity that is devoted to leasing, managing, marketing, and overall maintenance of property for others is referred to as:

Property management

32

Which type of construction involves building for a specific buyer to his or her specifications?

Custom Homes

33

The term dedication as it applies to development and construction refers to:

A gift of land by the owner to the local government for public use

34

Sales associate Harry recently began working at All Action Realty. All Action is not a member of the local association of Realtors. Can Harry join the association?

No, Harry cannot join the association unless All Action Realty joins the association

35

Residential real estate is defined in Chapter 475, F.S., as:

Vacant land zoned for four or fewer residential units

36

The real estate profession requires:

Skill and experience in real estate values, specialized service, and expertise

37

Selecting a limited geographical area in which a real estate professional develops special expertise is referred to as:

Farming

38

Broker Mike charges a prospective seller $50 for a comparative market analysis (CMA). Is this allowed?

Yes, provided Mark does not represent the CMA as an appraisal

39

The duties of a property manager include all except:

Selling the property

40

Which is the most important issue for a broker acting as a property manager to accomplish?

To get maximum income while preserving the value of the investment

41

The real estate industry makes up about ____% of the nation's economy.

25%

42

It is unethical for an appraiser to accept compensation for performing an assignment when it is contingent upon:

The reporting of a pre-determined result

43

The act of appraisal can be completed by:

An appraiser following the USPAP standards

44

The practice of a real estate sales associate specializing in a certain geographic area is called:

Farming

45

Which would not usually be involved in financing real estate:

A real estate broker

46

Services that a property manager must perform for the owner are listed in:

A property management agreement

47

Agriculture property in Florida is property that:

Has more than 10 acres

48

A real estate professional needs a license because:

He has expert information on real estate that an average layperson does not have

49

Local communities regulate real estate by:

Creating zoning laws

50

Putting together two or more parcels of land to make a large piece is called:

Assemblage

51

A home that is specially built for a buyer, using his blueprints is called:

A custom home

52

Which is not commonly an area of federal government interference in real property:

Zoning laws

53

What are the common areas of local government interference in real property?

Zoning laws
Occupancy permits
Taxation of real property
Business permits for real estate professionals

54

What are the common areas of state government interference in real property?

Recording of deed, transfers of property
Estate taxes and rules regarding inheritance

55

What are the common areas of federal government interference in real property?

Federal agencies (HUD, FHA, VA)
Laws (Federal Fair Housing, RESPA, Truth in Lending Act)
Taking of land for National parks, wildlife, and wetland areas
Environmental rules and regulations
Inheritance taxes

56

Dedication most nearly means:

Giving private land for public use

57

In Florida, there is a demand for property management services due to the large amount of:

Absentee owners

58

The Florida Real Estate Appraisal Board (FREAB) is headquartered in Orlando and consists of how many members?

9 members

59

One example of a Loan Originator would be a:

Seller who finances more than hone home in a two year period