greatest net income and thereby develop the highest value.

Chapter 1: Basic Real Estate Concepts Vocabulary Flashcards

Real EstateLand; a portion of the earth's surface extending downward to the center of the earth and upward infinitely into space, including all things permanently attached to it, whether naturally or artificially.Highest and Best UseThe possible use of a property that would produce the greatest net income and thereby develop the highest value.Provisional BrokerA real estate licensee who performs real estate activities under the supervision of a licensed real estate broker-in-charge. Must complete postlicensing course to remove the provisional license status.Physical Characteristics of Real EstateImmobility, Indestructability, Nonhomogeneity, or uniqueness.DemandThe amount of goods people are willing and able to buy at a given price; often coupled with supply.MarketA pace where goods can be bought and sold and value established.Economic Characteristics of Real EstateScarcity, Location (Most Important), Improvements, Permanence of Investment SitusThe personal preference of people for one location over another, not necessarily based on objective facts and knowledge. Takes in social factors in addition to economic factors.SupplyThe amount of goods available in the market to be sold at a given price. The term is often coupled with demand.Factors that affect SupplyLabor Force, construction costs, government controls, and monetary or financial policies.LandThe earth's surface, extending downward to the center of the earth and upward indefinitely into space, including things permanently attached by nature, such as trees and water.Factors that affect demandPopulation, demographics, and employment and wage levels.Broker1. One who acts as an intermediary on behalf of others for a fee or commission. 2. One who is licensed to list, lease, buy, exchange, auction, negotiate or sell interest in real estate for others for a fee Chattel/ Personal Property/ PersonaltyItems, called chattels or personalty, that do not fit into the definiton of real property; movable objects. Examples would include furniture, clothing, jewelry, money, vehicles, etc.

AppraisalThe process of estimating a property's value (typically market value) that is based on established methods and an appraiser's professional judgement Business CycleThe upward and downward fluctuations in business activities generally characterized by four stages; expansion, recession, depression, and revival.Real PropertyThe land plus permanent improvements and the interests, benefits, and rights inherent in real estate ownership.Heterogenity/ NonhomogentiyA lack of uniformity; dissimilarity; heterogeneity. Because no two parcels of land are exactly alike, real estate is said to be nonhomogeneic.