Texas Real Estate - Unit 1 Exam Flashcards

Texas Real Estate - Unit 1 Exam Flashcards If the number of skilled workers to frame houses in a particular city has declined in the last few months, that factor wouldA) more likely affect the demand for housing.B) not affect supply or demand.C) none of these.D) more likely affect the supply of housing.

• more likely affect the 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.Why are real estate prices slow to adjust?A) Nonmobile nature of real estateB) Length of time to complete constructionC) Nonstandard characteristic of real estateD) All of these

• All of theseReal estate prices may be slow to adjust

because real estate is nonmobile and nonstandard, and construction time may be lengthy.What has been the impact on housing to date of environmental concerns such as climate change and the potential for an increase in hurricanes and flooding from severe storms?A) Prices of homes inland have tended to soar as more residents flee the coast.B) Prices of homes with water views have been largely resilient to environmental factors.C) Home prices have deteriorated along the coast.D) Changes in pricing have only effected those homes that have been directly hit.

• Prices of homes with water views have been largely

resilient to environmental factors.Although climatologists believe coastline dwellings will be destroyed by climate change, that fear has not translated to deterioration of prices. Brokers should, however, be mindful of climate forecasts as they work with buyers.New construction in a community typically meansA) there will be no impact on property values.B) land values are about to go down.C) land values are about to go up.D) property values will move depending on the type and purpose of construction.

• property values will move depending on the type and

purpose of construction.Construction of a new factory would likely mean new jobs and competition for close by housing. Construction of a sewer treatment plant, however, could bring deterioration in pricing.Nonhomogeneity and heterogeneity areA) different terms.B) synonymous terms.C) none of these.D) opposite terms.

• synonymous terms.Nonhomogeneity and heterogeneity

are synonymous terms, and both indicate that no two parcels of land are ever exactly the same. All parcels differ geographically.Which term refers to working with the parties in negotiating the sale, rental, or purchase of real estate?A) AppraisalB) DevelopmentC) ConsultingD) Brokerage

• BrokerageBringing together the buyer and the seller is

called real estate brokerage.The 14th Amendment, providing civil rights protections, is an example of which of the seven sources of law?A) U.S.ConstitutionB) Laws passed by the Texas LegislatureC) Texas ConstitutionD) Laws passed by Congress

• U.S. ConstitutionThe primary purpose of the U.S.

Constitution is to establish the rights of citizens and delineate the limits of governmental authority. The 14th Amendment to the U.S. Constitution provides civil rights protections that serve as the basis for federal fair housing legislation.A factor affecting supply of real estate isA) population.B) government financial policies.C) employment.D) demographics.

• government financial policies.For example, increased

government spending could raise interest rates and make it more expensive for builders and developers to construct homes and commercial property. At some point, the profits are not enough and the number of new houses and

commercial buildings decreases. Other factors affecting supply are government controls and the cost and availability of labor and construction materials.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?A) ResidentialB) Mixed useC) CommercialD) Special purpose

• ResidentialIf the large home has been legally divided

into smaller units in an area where multifamily units are

permissible, there is no reason to change the classification.Classification does not make a distinction between single- and multifamily dwellings.What is the classification of a legal, single condominium for sale that is above a retail store that is not for sale?A) AgriculturalB) CommercialC) Special purposeD) Residential

• ResidentialLegal condominiums are classified as

residential units, provided they are being sold separately from surrounding real estate properties. They are residential regardless of the classification of surrounding units.When supply decreases and demand decreases, real estate pricesA) remain stable.B) decrease.C) drop.D) increase.

• remain stable.When supply and demand increase or

decrease together, prices remain stable.In real estate markets, which may change quickly?A) All of theseB) PricesC) SupplyD) Demand

• DemandSupply and prices are relatively slow to adjust,

but demand may change quickly. For example, if mortgage rates drop suddenly, the demand for real estate may increase quickly as homebuyers rush to lock in the lower mortgage rates.Because of the nonhomogeneity of real estate, which statement is TRUE?A) Land cannot be depreciated and is not insurable.B) The return on real estate is considered long term and relatively stable.C) No two parcels of land are ever exactly the same.D) Construction of an improvement on a parcel of land can affect the value and use of that particular parcel of land.

• No two parcels of land are ever exactly the

same.Nonhomogeneity, aka heterogeneity, describes a physical characteristic of real estate providing that no two parcels of land are exactly the same. Although two properties may be substantially similar, all parcels differ geographically because each parcel has its own location.Rules passed by the Texas Real Estate Commission are which of the seven sources of law?A) Court decisionsB) Ordinances passed by local governmentsC) Federal regulationsD) State regulations

• State regulationsRegulations passed by state and local

agencies are a means of implementing and enforcing legislative acts; they provide detailed information on legal and illegal actions and practices; they designate violations and penalties; and they expand on the law and have the effect of law. Decisions handed down by federal, state, and municipal courts serve to clarify and interpret laws, regulations, and constitutional provisions. By applying and interpreting the laws in relation to a specific event, a court decision expands the meaning of the law, establishing a precedent for future decisions.The term demographics does NOT includeA) ratio of adults to children.B) family size.C) lifestyle.D) number of people living in an area.

• number of people living in an area.Demographics is a

demand factor used to describe the characteristics of the population in a community, including family size, the ratio of adults to children, the number of retirees, family income, lifestyle, and the number of single-parent and empty-nester households. Other demand factors include population (the number of people living in an area) and employment and wage levels.Mortgage rates respond to a variety of influences. Is one of them supply and demand?A) No, mortgages are set by the Federal Reserve.B) No, mortgages are set by the federal