VA Real Estate Express - Chapter 1
Exam Questions With A+ GRADE
Answers
Creating real properties from raw land involves
capital formation, financing, construction contracting, and regulatory approvals.
The key parties involved in this aspect of the business are generally the
developer, the landowner, and the mortgage lender. Also involved are market
analysts, architects, engineers, space planners, interior designers, and
construction subcontractors. - ANSWER-Creation and Improvement
All real estate, whether raw land or improved
property, must be managed and maintained. The two principal types of
managers are property managers and asset managers. Property managers and
their staff oversee specific properties on behalf of the owners, making sure the
condition of the property and its financial performance meet specific standards. -
ANSWER-Management and maintenance
Demolition experts in conjunction with excavation and debris
removal experts serve to remove properties that are no longer economically
viable from the market. - ANSWER-Demolition
A specialized niche in the real estate business is the real estate investor who risks
capital in order to buy, hold, and sell real properties. In contrast to property owners
whose primary interest is in some other business, the real estate investor focuses on
identifying and exploiting real
estate investment opportunities for profit. The real estate investor provides capital
and liquidity to the real estate market. - ANSWER-Investment ownership
All real estate is to some degree regulated by government. The principal areas of
regulation are usage, taxation, and housing administration.
Professional regulatory functions include public planners, zoning administrators,
building inspectors, assessors, and administrators of specific federal statutes such
as Federal Fair Housing Laws. - ANSWER-Regulation
Rights and interests in real estate can be bought, sold, assigned, leased,
exchanged, inherited, or otherwise transferred from one owner to
another. Real estate brokers and the brokers' salespeople are generally centrally
involved in such transfers. Other professional participants are mortgage brokers,
mortgage bankers, appraisers, insurers, and title companies. - ANSWER-Transfer
______ refers to property that is owned and used for habitation. Such properties may
be further classified in terms of how many families they are
,designed to house, whether they are attached to other units or detached, and so
forth. - ANSWER-Residential Property
_____ generally refers to retail and office properties, but may also include industrial
real estate. The term "______" relates to the fact that the property can potentially
generate income from a business's usage. - ANSWER-Commercial Property
______ refers to any property that is held by its owners for _______ purposes. All
classifications of property may be investment properties. Generally, however, the
term does not refer to owner-occupied residences, even though such properties
constitute an investment. Apartments,
condominiums, cooperatives, and single-family homes may be considered as
investment property if non-occupants own the property for investment purposes.
These properties are also referred to as residential income properties. - ANSWER-
Investment Property
Since different properties have different features and potential buyers, brokers
commonly choose to specialize in a property type. Thus there
are:
- residential agents
- commercial agents (office, retail)
- industrial agents
- land agents - ANSWER-Property Type
Brokers and agents must maintain current, accurate data on properties. It is not
possible to keep track of every property in larger
markets. Therefore, one must create an area of geographical specialization. One's
area may be defined by natural barriers; by streets and highways; or by a certain set
of subdivisions. - ANSWER-Geographical Area
The principal types of transaction are sales, leases and subleases, exchanges, and
options. - ANSWER-Type of Transaction
Brokers increasingly represent buyers and tenants as well as sellers and landlords.
Since conflicts of interest may be involved, many brokers restrict their business to
representing either buyers and tenants or sellers and
landlords exclusively.
Some brokers and agents also specialize according to the type of business
their clients are in or their motivations for the transaction. Thus one finds
brokers who focus exclusively on hospitals, or fast food chains, or executive
relocations. - ANSWER-Type of Client
In recent years, many brokers have specialized in
providing advisory services to clients instead of the traditional transaction-based,
commission-compensated services. In the advisory relationship, the broker works
on identified real estate tasks or projects in exchange for a fee, salary, or retainer.
The fee advisor may or may not focus on completing a transaction.
12 Principles of Real Estate Practice
Some of the individual brokerage services that one might perform for a pre-set
fee are:
, - comparative price analysis
- database search
- prospect screening
- site analysis
Skills and knowledge Professionals in the brokerage business must have a broad
range of real estate knowledge and skills. Agents must develop a thorough
awareness of their local
market and the properties within it. In addition, agents must develop a proficiency
with the economics of real estate: prices, financing, closing costs, and so forth.
Equ - ANSWER-Type of Relationship
Among the laws most relevant to agents and brokers are those relating to: -
ANSWER-- agency
- contracts
- disclosure
- environmental impact
- fair housing
The general thrust of state real estate legislation is to: - ANSWER-- establish
personal, educational, and professional requirements for obtaining a license
- establish statutory guidelines of professional conduct and continuing education to
maintain a license
- establish a regulatory entity to administer and enforce licensing
- authorize the regulatory body to create regulations and procedures that will enable
it to discharge its legal responsibilities
An active broker's license authorizes a licensee to _____ clients by performing real
estate services - ANSWER-Represent
Broker's licenses are typically valid for a _________, after which they must be
renewed - ANSWER-one- or two-year period
Inactive status typically occurs at the option of a licensee who wants to leave the real
estate business _______ - ANSWER-Temporarily
The most common brokerage identity is the _________ - ANSWER-Sole
proprietorship
A broker who does business at locations other than the principal office requires a
________ - ANSWER-Branch office license
A _________ empowers a broker to practice in another state. This type of license is
commonly issued in areas near state lines where residents of the two states are
frequently principals in transactions. - ANSWER-Non-resident license
A ______ is a salesperson's license held by a duly licensed broker who prefers to act
as a salesperson on behalf of an employing broker instead of performing services as
a broker - ANSWER-Broker-salesperson's license
