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Fundamentals of Real Estate > Unit 1: Overview > Flashcards

Unit 1: Overview Flashcards

1
Q

Real Estate is…

A

the land and any fixed improvements to that land

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2
Q

Personal Property is…

A

an items that can be removed without causing damage to the property (aka chattels)

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3
Q

What are the 7 building classifications?

A

Residential, recreational, commercial, industrial, retail, institutional, agricultural

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4
Q

Residential Building Classification refers to…

A

buildings used as dwellings by one or more occupants. (e.g. house, condo, etc.)

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5
Q

Recreational Building Classification refers to…

A

buildings meant for leisure or as a second residence. (e.g. cottage)

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6
Q

Commercial Building Classification refers to…

A

buildings intended for business use, and generally only used during business hours. (e.g. skyscrapers)

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7
Q

Industrial Building Classification refers to…

A

buildings used for processing raw materials and manufacturing/storing goods. (e.g. factories)

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8
Q

Retail Building Classification refers to…

A

buildings that promote commerce with consumers in exchange for goods and/or services. (e.g. strip malls)

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9
Q

Institutional Building Classification refers to…

A

buildings with specialized uses aimed at serving the public or private clientele. (e.g. schools, hospitals, labs)

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10
Q

Agricultural Building Classification refers to…

A

buildings used in the production of food or other goods such as farming, ranching, or forestry. (e.g. barns, greenhouses, silos)

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11
Q

What are the 2 types of real estate sectors?

A

Residential and Commercial

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12
Q

Residential Real Estate includes…

A

the listing and selling of new and resale properties. (e.g. homes, townhouses, condos, country residences, recreational properties, mobile homes)

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13
Q

Commercial Real Estate includes…

A

activities involved with the sale / leasing of office, retail or industrial spaces, and any business operations where real estate property is involved.

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14
Q

What is the maximum number of units that can be sold by a residential real estate agent?

A

4 units

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15
Q

How many properties can be sold in a single residential real estate transaction?

A

1 property, which can include a maximum of 4 units if it’s a shared living complex

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16
Q

What are the 4 types of Commercial Real Estate?

A

Retail, Office, Industrial, Investment

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17
Q

Definition of Economics

A

The study of analyzing how individuals, businesses, and governments make choices on allocating limited resources such as land, labour, and capital to satisfy unlimited wants.

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18
Q

Macroeconomics looks at…

A

how economy-wide phenomena such as inflation and unemployment affect society (e.g. production, employment, price levels)

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19
Q

Microeconomics looks at…

A

how individuals, households and firms make decisions to allocate limited resources, typically in markets where goods / services are being bought and sold. (e.g. supply and demand and their affect on prices)

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20
Q

What are 4 key variables of Economic growth?

A

Natural resources
Capital,
Rate of savings,
Technological progress

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21
Q

Investment is…

A

the process of acquiring capital

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22
Q

Costs of economic development include:

A
  • Depletion of natural resources
  • Raising inflation rates
  • Increasing environmental impacts
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23
Q

Indicators of economic growth as they relate to real estate:

A
  • Number of housing starts (residential units under construction)
  • Real estate sales
  • Building permits issued
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24
Q

Vacancy Rates compare the…

A

number of available unoccupied units to total number of units available (can be measured in sq footage)
(e.g. commercial building with 4,400 sq m available space with 1,200 sq m vacant is 1,200 / 4,400 = .2727 or 27.27% vacancy rate

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25
Occupancy Rates compare the...
number of occupied units to total number of units available (can be measured in sq footage) (e.g. apartment building with 100 units where 85 of the units are rented. 85/100 = .85 or 85% occupancy rate
26
Factors of production are...
resources required to produce and distribute goods and services in the economy. (e.g. land, labour, capital, entrepreneurship)
27
The Canadian economy is called a...
Mixed Economy (private and public ownership)
28
Supply is...
the amount of goods or services available at a certain price
29
Non-price determinants of supply are:
- Production costs - Technology - Producer expectations - # of suppliers - Government taxes and subsidies
30
Movements along the supply line occur when -
a change in quantity supplied is caused only by change in price
31
Shifts along the supply line occur when -
something other than price causes supply to change
32
Demand is...
quantity of goods or services that consumers are willing to purchase at a certain price at a certain time
33
Non-price determinants of demand are:
- Market size - Consumer expectations - Availability of credit - Consumers' disposable income - Consumers' tastes and preferences - Price of similar products
34
Movements along the demand line occur when -
there's a change in the price of products / services which changes the quantity demanded
35
Shifts in the demand line are caused by -
a change in a factor other than price
36
When demand = supply, it's called
Market Equilibrium
37
Supply > Demand is called
Market Surplus
38
Demand > Supply is called
Market Shortage
39
Gross Domestic Product is...
the monetary value of all finished goods / services produced within a country over a given period GDP = Consumer spending + government spending + business spending + exports - imports
40
Gross National Product is...
the monetary value of all finished goods produced by a country's citizens / enterprises both within its borders and abroad GNP = GDP + Net income from abroad - Net income from foreign residents
41
Changes in economic activity are generally caused by:
- seasonal changes - business cycle - secular trends
42
Indicators of Balanced Market (for Real Estate)
- Supply = Demand - Property prices are stable - Interest rates are affordable - Decent number of properties on market - Properties sold in reasonable timeframe
43
Indicators of Buyers' Market (for Real Estate)
- Supply > Demand - Local economy is declining - Property prices go down - Property on market for longer - More properties to choose from
44
Indicator of Sellers' Market (for Real Estate)
- Supply < Demand - Local economy is thriving - Property prices increase - Fewer properties for sale - Rush sales and limited decision making abilities
45
Characteristics of Real Estate Market
- Local, - Slow to respond to supply and demand, - Non-standardized, - Transactions are private
46
Physical Characteristics of Real Estate
- Unique - Durable - Fixed - Scarce
47
Recession is marked by how many consecutive quarters of negative GDP?
2 quarters, so 6 months
48
The lowest point in the business cycle is called the?
Trough
49
What is a Market Bubble?
Where prices for a product become grossly overinflated beyond its realistic value due to excessive consumer confidence.
50
The Minister of ____ is responsible for enabling the Real Estate Act
Service Alberta
51
Real Estate Council of Alberta (RECA) is the independent governing body that...
sets, regulates and enforces standards for real estate professionals in the province.
52
RECA's Board of Directors is composed of -
7 members total : 3 members of the public appointed by the Minister of Service Alberta and 4 licensees (one from each Industry Council)
53
RECA board members are appointed for _ year terms and can serve _ terms consecutively
3 year terms and 2 terms consecutively
54
What are the 4 Industry Councils that RECA draws board members from?
1) Residential 2) Commercial 3) Residential Property Management 4) Mortgage Brokerage
55
RECA's Office of the Registrar is responsible for
licensing, discipline, trust assurance, and practice review
56
RECA's audit program is referred to as:
trust assurance and practice review
57
Professional Conduct Reviews investigate...
complaints related to alleged failures by industry professionals to follow standards of practice
58
Professional Conduct Proceedings aim to...
protect the public while upholding the principles of natural justice and fairness for industry professionals
59
The Real Estate Act defines trade as the following activities:
- Disposal or acquisition of real estate by purchase or sale - An offer to purchase or sell real estate - An offering, ad, listing, or showing of real estate for purchase or sale
60
The Real Estate Act defines property management as the following activities:
- Leasing, negotiating, or approving a lease or rental (or offering to do so) - Holding money in connection with above activities - Advertising, negotiating or carrying out activities as mentioned - Engaging in condo management services - Offering to or collecting money on behalf of a person in charge of real estate either rent or contributions to manage or administer it
61
Condo Management professionals...
exercise the power of duty of a condo corporation on their behalf
62
Mortgage Brokerage Professionals...
solicit a person to borrow / lend money for a mortgage, negotiates the transaction, collects the payments, and / or buys, sells, or exchanges offers to do so
63
A Property Inspector...
provides independent and objective analysis of a property's systems and components. MUST BE LICENSED
64
A Mortgage Lender...
can be any person, group, or institution participating as a lender that's secured by a mortgage.
65
Who is responsible for producing a Real Property Report?
Land Surveyor
66
__________ is a non-profit, member-based association, representing the interests and concerns of 10 regional real estate boards in Alberta.
Alberta Real Estate Association (AREA)
67
___________ is a national organization for members of each local board and provincial association
Canadian Real Estate Association (CREA)
68
_________ is funded by interest earned on money deposited in real estate and mortgage brokers' pooled trust accounts
Alberta Real Estate Foundation (AREF)
69
The Real Estate Assurance Fund compensates consumers who have suffered financial loss due to -
fraud, breach of trust, or failure to disburse money from a trust account.
70
The Real Estate Insurance Exchange (REIX) covers claims arising from -
errors, omissions, and negligent acts by real estate professionals that cause damage or loss to consumers.
71
___________ administers the Land Titles Offices and the online land titles database (SPIN 2)
Service Alberta
72
In a ________ there is no common property, the owner owns the entire structure plus the land it sits on.
Single-Family Home
73
An owner of a _________ doesn't own the land or the structure of their home
Traditional condominium
74
An owner of a __________ owns the structure of the home but not the land it sits on
Bare-land Condo
75
If your mortgage is ___% of the purchase price (or more) you don't require mortgage insurance
20%
76
___________ properties have unfavourable qualities that make it less attractive to some buyers
Stigmatized e.g. death or suicide took place there, scene of a crime, address has wrong numerals, reportedly haunted
77
For Transaction Brokerage, parties must sign an _____________ form
Agreement to Represent Both Buyer and Seller
78
Deposits are usually held by the __________ brokerage
seller's
79
A _______ is a detail in the purchase contract that the buyer and seller agree to.
term
80
Terms include:
- Possession date - Inclusions / exclusions - Timing for acceptance of offer - Pre-possession inspection
81
A __________ is a requirement placed in an offer to protect a party's interest. Each must have an expiry date
Condition
82
A _________ is when a buyer keeps some of the money for the purchase on closing until the seller completes certain tasks. It is a formal agreement between both parties.
Holdback e.g. incomplete reno, roof replacement, etc. *Must be signed off in the contract
83
RPRs are available for 2 property types
Single-family homes and bare-land condos
84
Home Inspectors in Alberta need a license through _______
Service Alberta

Fundamentals of Real Estate (19 decks)

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