Level 2 - What is Real Estate?

Question 1

Residential Real Estate

Answer 1

houses, condos, co-ops & townhouses

Question 2

What two types of real estate can brokers specialize in in NC?

Answer 2

residential and commercial

Question 3

Commercial Real Estate

Answer 3

property that is used for business. Ex.: gas stations, office buildings, office parks, convenience stores.

Question 4

Land

Answer 4

the surface of the earth, including all permanently attached natural features, extending downwards to the center of the earth and upwards to infinity.

Question 5

Real Estate

Answer 5

land plus improvements.

Question 6

Improvements

Answer 6

non-natural structure built on or permanently affixed to the land. (modifications)

Question 7

Real Property

Answer 7

land from the surface to the center of the earth and upward into space, all attachments and the bundle of legal rights of ownership

Question 8

Personal Property

Answer 8

any asset other than real estate

Question 9

What are the 3 unique physical characteristics of land?

Answer 9

indestructibility, immobility, uniqueness

Question 10

Accession

Answer 10

the right to all of one’s own property products, including that which is added, either naturally or by human action, to the property already owned.

Question 11

Accretion

Answer 11

gradual increase in land from soil deposits

Question 12

Erosion

Answer 12

gradual decrease in land

Question 13

Reliction

Answer 13

gradual increase in land from water withdrawing

Question 14

Avulsion

Answer 14

sudden loss of land due to water flooding or changing course

Question 15

What are the economic characteristics of land?

Answer 15

scarcity, situs, improvement, permanence of investment

Question 16

Permanence of Investment

Answer 16

the economic principle that the capital and labor it takes to create improvements to and on land makes real estate a long-term investment.

Question 17

Scarcity

Answer 17

the economic characteristic that informs the economic Principle of supply and demand

Question 18

Situs

Answer 18

the economic significance of a property’s location.

Question 19

When is the property’s highest and best use achieved?

Answer 19

when the property is used for the most appropriate purpose and yields its highest possible returns.

Question 20

When demand is high and supply is low, what happens to the property?

Answer 20

becomes more valuable and prices rise

Question 21

When demand is low and supply is high, what happens to the property?

Answer 21

becomes less valuable and prices fall.

Question 22

Demand

Answer 22

a measure of general desire for an asset or commodity at a given time.

Question 23

Market

Answer 23

a theoretical construct that isolates the selling and purchasing of any one particular commodity from the economy as a whole

Question 24

Supply

Answer 24

in real estate, the amount of properties that are vacant or are available for sale or rent.