Chapter 1 Flashcards

Chapter 1 Flashcards Regulations passed by governmental agencies are a means of implementing and enforcing which kind of act?The answer is legislative.When a large quantity of wood milled in the United States is exported to a foreign country, leaving a shortage for domestic construction projects, which would be negatively affected?The answer is supply of housing. A shortage of skilled labor or building materials or a significant increase in the cost of labor or materials can decrease the amount of new construction.Which of the following is TRUE of the National Association of REALTORS®?The answer is it is the largest trade association in the real estate industry.A developer who seeks to build apartments on the site of a former school must first receive the approval of The answer is local government, typically including zoning and planning boards. Authority to regulate local land use is commonly given over to local government bodies.Which of the following is NOT an institute or society under the umbrella of the National Association of REALTORS®?The answer is Real Estate Law School.Government-owned building complexes that are sold to school districts for educational purposes should be classified as The answer is special purpose. As a practical matter, both government properties and school properties such as schools carry the same classification-special purpose. No reclassification is needed.The Resort and Second Home Property Specialist designation is conferred on real estate professionals by what organization?The answer is the National Association of REALTORS®.If a large factory that employs a large number of local residents closes, what will the impact on housing likely be?The answer is the price of housing would tend to be depressed. When major employers leave communities, many laborers are left without jobs and must find work elsewhere.A family's wanting to buy a home near good schools is an example of which characteristic of real estate?The answer is area preference. This also is called situs.Area preference is the most important economic characteristic of real estate.Which term refers to working with the parties in negotiating the sale, rental, or purchase of real estate?The answer is brokerage. Bringing together the buyer and the seller is called real estate brokerage.Land on which three contiguous residential properties were razed and replaced by a legally rezoned parking lot would carry what classification?The answer is commercial.Because of the nonhomogeneity of real estate, which statement is TRUE?The answer is no two parcels of land are ever exactly the same.What is the classification of a farmhouse for sale that has been legally separated from its auxiliary buildings and surrounding acreage?The correct answer is residential.The initials NAR stand forThe answer is National Association of REALTORS®. NAR is a membership group that is considered the largest trade association in the United States.

If a question arises over the behavior of a licensed real estate sales agent or broker, a consumer usually will first file a complaint with The answer is the Texas Real Estate Commission. The Commission has the authority to discipline real estate license holders, with punishments ranging from monetary fines to loss of license. Lower courts will often refuse to hear license-holder complaints, deferring to Commission action.Under what real estate classification must a broker list a property if that property-once a very large single-family home-has since been carved into three condominium units and one rental apartment?The answer is residential.What is the effect on housing when a city is named the site of a major event-such as a political convention or sporting events-that will employ a large number of local people?The answer is there will be little to no impact.Which factor primarily affects supply in the real estate market?The answer is government financial policies.Supply can be defined as which of the following? The answer is the amount of goods offered for sale at a given price during a given time period.What is the classification of a legal, single condominium unit that is being sold along with a retail unit on the ground floor below it?The answer is mixed use.The term demographics does NOT includeThe answer is number of people living in an area.Mortgage rates respond to a variety of influences. Is one of them supply and demand?The answer is yes, if the financial system has an excess of money and few buyers, rates may drop. Likewise, when money is tight, rates will increase according to supply and demand.All of the following affect the demand for real estate

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The answer is construction material availability.Warehouses, factories, and research facilities are classified as which kind of property?The answer is industrial. Industrial property includes factories, warehouses, and research and development facilities. Agricultural property includes farms, orchards, timberland, ranches, and hatcheries. Special-purpose property includes churches, government land, and schools.Commercial property includes retail stores, shopping malls, office buildings, theaters, and parking lots.Why are real estate prices slow to adjust? The answer is all of these. Real estate prices may be slow to adjust because real estate is nonmobile and nonstandard, and construction time may be lengthy.Real estate license holders who are not members of the National Association of REALTORS® may call themselves The answer is license holders or agents.Which of these can be seen as harming the objective value of a property?The answer is furnace beyond its usable lifespan.If there are only two remaining spec homes in a development of 100 completed and sold units, the prices of those remaining homes can be expected to rise. What economic principle is that?The answer is as supply falls, demand increases.

Which of the following stages of the business cycle is characterized by a general economic decline?The answer is recession. The normal business cycle has a period of growth or expansion, followed by a peak and a slow down or recession, followed by a depression and trough (or low point), followed by a period of renewed growth or revival.The Texas Real Estate License Act is an example of which of the seven sources of law?The answer is laws passed by the state legislature.When supply decreases and demand decreases, real estate prices The answer is remain stable. When supply and demand increase or decrease together, prices remain stable.When demand increases, real estate prices The answer is increase. Demand and price move in the same direction. When demand increases, prices increase.What is the classification of a ranch for sale that includes a ranch house and outbuildings, as well as acreage?The answer is agricultural.What is the classification of a legal, single condominium for sale that is above a retail store that is not for sale?The answer is residential.When a broker has a question regarding a serious legal issue in a transaction, the proper course of action is to The answer is consult an attorney. Although property transactions are conducted within a legal framework, neither brokers nor sales agents are skilled in the practice of real estate law. Legal issues should be discussed with licensed attorneys.Which is a body of law developed by the courts based on custom and usage?The answer is common law. Common law covers situations where there are no statutes.Because real estate is immobile,The answer is its value is heavily influenced by changes in the surrounding area.An obsolete shopping center seized by the city for back taxes is sold for redevelopment as senior housing units with an expansive area for gardening vegetables and herbs, making its new classification The answer is residential.The 14th Amendment, providing civil rights protections, is an example of which of the seven sources of law?The answer is U.S. Constitution.When supply increases, real estate prices usually The answer is decrease. Supply and prices usually move in the opposite direction. When supply increases, prices drop.Does the lack of permanence of investment have an impact on development potential for a community?The answer is yes, lack of forward-looking infrastructure makes investors leery of committing to projects.New construction in a community typically means The answer is that property values will move depending on the type and purpose of construction.