Chapter 15

Question 1

A seller’s market occurs when

• too many homes are for sale.
• buyers have lots of choices.
• not enough inventory is available for buyers.
• seller’s price their homes for over the price that they purchased.

Answer 1

not enough inventory is available for buyers

Question 2

Karen has always wanted a home near the ocean. She recently received an inheritance that would help her purchase the house she’s always wanted down the street. This is an example of

• supply.
• financial stability.
• demand.
• availability.

Answer 2

demand

Question 3

A large factory closed in the area. Many workers lost their jobs as a result. This will probably result in a

• buyer’s market.
• seller’s market.
• lender’s market.
• renter’s market.

Answer 3

buyer’s market

Question 4

Real estate investment can be considered to be

• a quick way to make money.
• a relatively long term investment.
• a short term opportunity.
• independent of market conditions.

Answer 4

a relatively long term investment.

Question 5

A builder is looking to develop an area of several acres. Concrete in the area is hard to get due to a large complex being built down the street. He is being affected by

• workmanship.
• demand.
• pricing.
• supply.

Answer 5

supply

Question 6

Demand may be influenced by

• the ability of a buyer to get a loan.
• skilled labor.
• credit scores.
• the ability of a builder to get a loan.

Answer 6

the ability of a buyer to get a loan.

Question 7

Which of the following is NOT a demand factor?

• Price of real estate
• Availability of skilled workers
• Availability of mortgage credit
• Income of consumers

Answer 7

Availability of skilled workers

Question 8

The MOST important understanding of the vacancy rate is

• to indicate how much money the owner will receive.
• to indicate how much movement there is in the market.
• to indicate the location of the property.
• to indicate there are good neighbors in the complex.

Answer 8

to indicate how much movement there is in the market.

Question 9

Government interference influences the real estate market. Which is NOT government interference?

• Zoning
• Building codes
• Taxes
• Deeds

Answer 9

Deeds

Question 10

The principle of property being nonhomogeneous means

• all property must pay taxes.
• all property is similar.
• no two properties are the same.
• no two properties can be owned at the same time.

Answer 10

no two properties are the same.

Question 11

Key indicators of a change in the market could be

• a change in the sales volume.
• more real estate sales people coming into the business.
• less real estate sales people coming into the business.
• predictions of harsh weather in the north.

Answer 11

a change in the sales volume.