Chapter 1 - The Real Estate Business Flashcards Preview

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

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


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


What is market condition?

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


What is farm area?

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


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



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


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


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


What is included in industrial sales?

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


What is included in agricultural sales?

Agricultural property of more than ten acres


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


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


What is property management?

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


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


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


What is the FREAB?

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


What is a real estate licensee?

A person paid to handle other peoples properties


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


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


Appraisers are paid a ________, not a ___________.

Fee, commission


What is a subdivision plat map?

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


What is dedication?

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


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


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


The term follow-up refers to:

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


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


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

The increase in the number of absentee owners


Appraising is considered to be:

An art


Appraisers are paid a fee because:

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


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


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

Property management


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

Custom Homes


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


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


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

Vacant land zoned for four or fewer residential units


The real estate profession requires:

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


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



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


The duties of a property manager include all except:

Selling the property


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


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



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


The act of appraisal can be completed by:

An appraiser following the USPAP standards


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



Which would not usually be involved in financing real estate:

A real estate broker


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

A property management agreement


Agriculture property in Florida is property that:

Has more than 10 acres


A real estate professional needs a license because:

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


Local communities regulate real estate by:

Creating zoning laws


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



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

A custom home


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

Zoning laws


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


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

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


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


Dedication most nearly means:

Giving private land for public use


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

Absentee owners


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

9 members


One example of a Loan Originator would be a:

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