Unit One Quiz Flashcards
(20 cards)
Which factor MOST likely influences the demand for real estate?
-labor force
-contruction costs
-wage levels and employment opportunities
-governmental financial policies
The answer is wage levels and employment opportunities. Factors that tend to affect the demand side of the real estate market include population, demographics, and employment and wage levels.
A professional opinion of a property’s market value, based on establishing methods and using trained professional judgement is performed by a
* real estate broker
* home inspector
* real estate counselor
* real estate appraiser
The answer is real estate appraiser. Although real estate training will provide brokers and managing brokers some understanding of the valuation process, most lenders require that a loan package be accompanied by a professional appraisal performed by a licensed appraiser. Illinois does not have a license for a real estate counselor. It is important to note that every state has a license for this profession. Those individuals would be considered a broker or managing broker and need to be sponsored.
In general, when the supply of a certain commodity increases, prices tend to ***
The answer is prices tend to drop. Greater supply means producers need to attract more buyers, so they lower prices.
All of these are categories of the uses of real property EXCEPT
A) agricultural.
B) industrial.
C) residential.
D) developmental.
The answer is developmental. The five categories of real property include residential, commercial, industrial, agricultural, and special purpose.
A licensed real estate professional who performs a visual survey of a property’s structure and systems and prepares an analytical report for a purchaser or an owner is acting as
O A) a home inspector.
O B) an appraiser.
O C) an educator.
O D) a property manager.
The answer is a home inspector. Professional home inspectors conduct a thorough visual survey of a property’s structure, systems, and site conditions and prepare an analytical report that is valuable to both purchasers and homeowners. Illinois does not have a license for a real estate counselor. It is important to note that every state has a license for this profession. Those individuals would be considered a broker or managing broker and need to be sponsored.
All of these would affect overall demand in the real estate market EXCEPT
A) demographics.
B) zoning ordinances.
C) population.
D) wage levels.
The answer is zoning ordinances. Factors that tend to affect the demand side of the real estate market include population, demographics, and employment and wage levels.
A licensee who has several years of experience in the industry decided to retire from actively marketing properties. Now this licensee helps clients choose among the various alternatives involved in purchasing, using, or investing in property. What is the licensee’s profession?
O A) Real estate educator
O B) Real estate counselor
O C) Real estate appraiser
O D) REALTOR®
The answer is real estate counselor. A real estate counselor helps clients choose among the various alternatives involved in purchasing, using, or investing in property. A counselor’s role is to furnish clients with the information needed to make informed decisions. Professional real estate counselors must have a high degree of industry expertise.
A REALTOR® is
A) a real estate licensee who is a member of the National Association of REALTORS®.
B) any real estate broker who assists buyers, sellers, landlords, or tenants in any real estate transaction.
C) a specially licensed real estate broker.
D) a member of the National Association of Real Estate Brokers who specializes in residential properties.
Explanation
The answer is a real estate licensee who is a member of the National Association of REALTORS®. The largest trade organization serving the real estate business is the National Association of REALTORS® (NAR). Members subscribe to a Code of Ethics and are entitled to be called REALTORS® or REALTOR-ASSOCIATES®. You must be a member of NAR to use the term REALTORS.
When the supply of a commodity decreases while demand remains the same, price tends to
A) drop.
B) go in the direction of supply.
C) rise.
D) not be affected.
Explanation
The answer is rise. When demand increases or remains steady and supply decreases or remains stable, prices go up. Greater demand means producers can raise their prices because buyers compete for the product.
Property management, leasing, appraisal, financing, and development are all examples of
A) government regulation of the real estate industry.
B) non-real estate professions.
C) specializations within the real estate industry.
D) factors affecting demand.
Explanation
The answer is specializations within the real estate industry. Appraisal, property management, financing, subdivision and development, home inspection, counseling, education, and auctioning are all separate businesses within the real estate field. To succeed in this complex industry, every real estate professional must have a basic understanding of these specialties.
Local government can influence the supply of real estate by
A) zoning ordinances.
B) all of these.
C) building codes.
D) land-use controls.
Explanation
The answer is all of these. These government controls shape the character of a community and control use of land, thus affecting housing supply.
Which of these factors tends to affect supply in the real estate market?
A) Demographics
B) Employment and wage levels
C) Government controls and financial policies
D) Population
Explanation
The answer is government controls and financial policies. Factors that tend to affect the supply side of the real estate market’s supply and demand balance include the labor force, construction and material costs, government controls, and financial policies.
The term appraisal is defined as the
A) transfer of funds in the financing of real estate transactions.
B) method of estimating a property’s market value based on established methods and the appraiser’s professional judgment.
C) process of providing clients with competent independent advice.
D) process of splitting a single property into smaller parcels.
Explanation
The answer is method of estimating a property’s market value based on established methods and the appraiser’s professional judgment.
When responsible for maintaining a client’s property and maximizing the return on the client’s investment, a real estate licensee is serving as
A) a rental agent,
B) an investment counselor,
C) a building maintenance specialist.
D) a property manager.
Explanation
The answer is a property manager. A property manager is a person or company hired to maintain and manage property on behalf of its owner. By hiring a property manager, the owner is relieved of many of the day-to-day management tasks.
A major manufacturer of automobiles announces that it will relocate one of its factories, along with 2,000 employees, to a small town. What effect will this announcement MOST likely have on the small town’s housing market?
A) Housing will become less expensive.
B) The announcement involves an issue of demographics, not a supply and demand issue; housing prices will stay about the same.
C) Housing will become more expensive.
D) The announcement involves an industrial property; residential housing will not be affected.
Explanation
The answer is housing will become more expensive. Real estate supply and demand is affected by many factors, including availability of labor. Demand influences supply. High demand equals high prices; low demand equals low prices.
Detailed information about the age, education, behavior, and other characteristics of members of a population group is called
A) family lifestyles.
B) demographics.
C) population analysis.
D) household data.
Explanation
The answer is demographics. Demographics is the study and description of a population.
Schools are considered part of which real estate classification?
A) Commercial
B) Government-held
C) Special-purpose
D) Industrial
Explanation
The answer is special-purpose. Special-purpose real estate includes churches or places of worship, schools, cemeteries, and government-held lands.
When demand for a commodity decreases and supply remains the same,
A) price tends to fall.
B) the market becomes stagnant.
C) price tends to rise.
D) price is not affected.
Explanation
The answer is price tends to fall. When supply increases or stays steady and demand decreases or remains stable, prices go down.
The term REALTORS refers to
A) a real estate educator,
B) any real estate licensee.
C) a real estate licensee specializing in residential properties.
D) a member of the National Association of REALTORS®.
Explanation
The answer is a member of the National Association of REALTORS®. The largest trade organization serving the real estate business is the National Association of REALTORS® (NAR). Members subscribe to a Code of Ethics and are entitled to be called REALTORS® or REALTOR-ASSOCIATES®. You must be a member of NAR to use the term REALTORS.
The Federal Reserve Board
A) monitors the Federal Housing Administration.
B) monitors nationwide construction costs.
C) establishes a discount rate of interest for the money it lends to its member banks.
D) establishes real estate appraisal standards.
Explanation
The answer is establishes a discount rate of interest for the money it lends to its member banks. That rate has a direct impact on the interest rates that banks charge to borrowers. These interest rates play a significant part in people’s ability to buy homes. The Federal Reserve Board attempts to keep the rates at a level that will keep the market moving without leading to inflation.
