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Real Estate 306 Midterm 1; Questions and Answers 100% Correct $14.99
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Real Estate 306 Midterm 1; Questions and Answers 100% Correct

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Real Estate 306 Midterm 1; Questions and Answers 100% Correct real estate Correct answer-physical asset anything that can be owned or possessed; RIGHTS from owning property if you have right of possession, you own real estate profession and an industry real estate as a physical asset Correct...

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  • August 8, 2024
  • 27
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • Real Estate 306
  • Real Estate 306

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Real Estate 306 Midterm 1; Questions and
Answers 100% Correct
real estate Correct answer-physical asset

anything that can be owned or possessed; RIGHTS from owning property

if you have right of possession, you own real estate

profession and an industry




real estate as a physical asset Correct answer-is the land and all permanent attachments
to the land and anything it is suitable for; ex. fixed structures or parking garage potential




real estate as a bundle of rights Correct answer-it is the services/benefits real estate
provides ex. shelter, privacy etc

also have air rights, surface rights, mineral, oil and gas rights

can pick an choose sticks in the bundle of "ownership rights"




real property vs personal property Correct answer-real property = anything immovable,
ex land, home, anything attached to the land, permanent

personal property = something that can be moved like RV or furniture




what are the three different markets in RE Correct answer-user markets

capital markets

property markets

, Real Estate 306 Midterm 1; Questions and
Answers 100% Correct
user market Correct answer-competition among users for physical location and space.
competition determines the price of each land parcel

creates supply and demand




user market for physical real estate Correct answer-buyers receive the right to use space

rental rates are determined by supply and demand

demand: individuals, households, and firms who require space for consumption or production
purposes

supply: real estate owners/operators who rent space to tenants




capital markets Correct answer-allocate financial resources among households and firms
requiring funds

ex. stocks, bonds, mortgage contracts... anything that will give a financial return

provides equity and debt




property markets Correct answer-determine required property specific investment
returns, values, etc

intersection of user and capital markets




other characteristics of real estate markets Correct answer-high transaction costs b/c
expensive to enter and exit market (time and $)

real estate is illiquid, fewer buyers

, Real Estate 306 Midterm 1; Questions and
Answers 100% Correct
high asset value - debt financing is needed

long economic life

traditions - symbol of power, stability (people want to won homes, white house)




capitalization rate Correct answer-ratio of property's annual net income from rental
operations to its value

net income/price of property




role of government on real estate Correct answer-local government = most influential,
property taxes, fees, construction restrictions

state government = least influential, sets requirements for local governments

federal government = housing subsidies, income tax policies, environmental policies




explain why real estate is heterogeneous Correct answer-each property has unique
features... even homes that are built exactly the same are different because they're in different
locations




what is a localized market Correct answer-homes are near other homes, apartments are
near other apartments. this increases competition in the market

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