code contains statements designed to advise, guide, and

Modern Real Estate Practice 20th Edition Unit 1 Introduction to Real Estate Business Flashcards Allows an investor to recover the cost of an income-producing asset through tax deductions over the asset's useful life.In appraisals it is a loss in value in property due to any cause.Capital Gain Is a person or company hired to maintain and manage property on behalf of the property owner.Financing Is a written system of standards for ethical conduct. The code contains statements designed to advise, guide, and regulate behavior.Types of Real Property All property used for single-family or multifamily housing, whether in urban, suburban, or rural area Commercial Property Exist when goods/services can be bought and sold. The function is a setting in which supply & demand can establish market value.Supply and Demand

Factor affecting supply: A shortgage of skilled labor or

building materials affect the cost of increase or decrease of construction cost Governmental Controls Is the dividing of a single property into smaller parcels.Development New homes or swimming pools, are made on individual parcels.Home inspection Unit 1Brokerage The business of providing the funds that make real estate transactions possible through loans secured by a mortgage or deed of trust on the property, with funding provided by commercial banks, thrifts (which include savings associations), credit unions, mortgage bankers, and mortgage brokerage companies.Subdivision Is of interest to both purchasers and homeowners, and an inspection report will show results of a thorough survey of observable property conditions. A state license may be required of a home inspector.Counselor They establish standards for integrity and competence in dealing with consumers of an industry's services.They define a code of conduct for relations within the industry among its professionals.Code of ethics Water lines and storm sewers are made on public lands to serve the new development.Development (On-site improvements) ResidentialCommercialMixed useIndustrialAgriculturalSpecial purpose Residential Property

Federal law prohibits discrimination in the provision of housing and housing-related services (including lending) based on an individual's race, color, national origin, religion, sex, familial status, or disability.Advantages of real estate investment Most popular housing types, although it has been adapted in urban areas to take the form of the row house that may share a wall with an adjoining property.Types of Housing Single-family detached houseApartment buildingCondominiumCooperativePlanned unit developments (master-planned communities)Mixed-use developments (MUDs)Converted-use propertiesFactory-built housingModular home Apartment building Refers to the fact that property cannot be relocated to satisfy demand where supply is low, nor can buyers always relocate to areas with greater supply Factors Affecting Supply PopulationDemographicsEmployment and wage levels Fair Housing The response to housing demand in crowded urban areas.Modern highrise structures can offer residents many amenities. Normally set up with a contract between the landlord and tenant.Condominium Business property, including office space, shopping centers, stores, theaters, hotels, and parking facilities Mixed use Property Consist entirely of residences, but they can also serve to merge such diverse land uses as housing, recreation, and commercial units into one self-contained development.PUDs are planned under special zoning ordinances. These ordinances often permit maximum use of open space by reducing lot sizes and street areas. Owners do not have direct ownership interest in the common areas. A community association is formed to maintain common areas with fees for expenses collected from the owners.May be a small devlopment or an entire planned community Mixed-use developments (MUDs) (Highrise developments) The difference between the purchase price of property and its net selling price.Exchanges Required for license renewal in most states to ensure licensees keep their skills and knowledge current.Labor Force, construction and material cost Is employed by or associated with the broker to perform brokerage activities on behalf of or for the broker, and may also be referred to as a sales associate or associate licensee Real Estate Licensee Components that are assembled at a building site on a prepared foundation. Workers finish the structure and connect plumbing and wiring.Market

Is the process of developing an opinion of a property's market value, based on established methods and the appraiser's professional UNBIASED judgment.Property manager Farms, timberland, ranches, and orchards Special purpose Liquidity- The ability to sell an asset and convert it into cash, at a price close to its truest value, in a short period of time.Active Management- The investor may choose to personally manage the property or may hire a professional property manager, but management decisions still must be made.Risk- Despite its popularity, a real estate investment does not guarantee profit.Education

Factors affecting Demand: Demand of housing grows with

the populatin and the demand for real estate increases.Same as when the popluation decreases, the demand decreases for real estate.Domographics No matter how identical they may appear, no two parcels of real estate are ever exactly alike; each occupies its own unique geographic location Immobility

Factor affecting supply: Government's monetary policy

such as the FED discount rate of interest increases which increases consumers interest rate Local Government Factors Factories, warehouses, office buildings, hotels, schools, churches, and other structures that have been converted to residential use.Factory-built housing (Manufactured Homes) The business of bringing people together in a real estate transaction Broker A transaction in which all or part of the consideration is the transfer of like-kind property Disadvantages of real estate investment Involves the construction of improvements that benefit the land. These improvements may be either on-site or off-site.Development (Off-site improvements) Is a person who has satisfied the requirements of a licensing agency, as authorized by state legislation.Appraisal Labor force, construction, and material costsGovernment controls and financial policiesLocal government factors.Factors Affecting Demand The types of properties that include churches, schools, cemeteries, and government-held lands.Single-family detached house Combine office space, stores, theaters, and apartment units into a single vertical community. MUDs are usually self-contained and may offer laundry facilities, restaurants, food stores, beauty parlors, barbershops, swimming pools, and other attractive and convenient features streetside with living in the upper floors.Converted-use Properties Is a popular form of residential ownership, offering the security of owning property without the care and maintenance responsibilities a house demands. Shares

common elements, such as halls, elevators, reception area, swimming pool, as well as other amenities that the condominium owner shares with its tenant Cooperative Where prices for goods and services in the market are established. SUPPLY is the quantity of goods or services