Real Estate Academy Exam REB01 U-01 Review

This set of vocabulary flashcards covers key real estate concepts, property types, market characteristics, and legal definitions based on the REB01 U-01 exam.

Industrial properties

Real estate categories that include warehouses, factories, and power plants.

Demand

A market force influenced by population demographics and wage levels.

Uniqueness and immobility

The two characteristics of real estate that govern the way the market reacts to supply and demand.

Local

The geographical term that best describes real estate markets.

Price rise

The tendency of a commodity's price when supply decreases and demand remains the same.

Home inspector

A real estate professional who performs a visual survey of a property's structure and systems and prepares an analytical report for a purchaser or owner.

Property manager

A broker responsible for maintaining a client's property and maximizing return on the client's investment.

Real property

The land, plus improvements (Real Estate), plus the interests, benefits, and rights known as the bundle of legal rights.

Trade fixture

An item installed by a tenant for business use that is considered personal property and and can be removed by the tenant before the lease expires.

Area preference (situs)

An economic characteristic of real estate based on a buyer's concern about the location of a property.

Personal property

Items that are not permanently attached to the land, such as patio furniture or trade fixtures.

Manufactured housing

Housing that is constructed off-site and transported to its location.

Severance

The act of separating an item from the house to turn real property into personal property, such as removing a garage door opener if stipulated in the sales contract.

Indestructibility, uniqueness, and immobility

The physical characteristics of land.

Scarcity

An economic characteristic of land, not to be confused with physical characteristics.

Affordability

The foremost consideration in the purchase of a home.

Location

The second most important consideration in the purchase of a home after affordability.

Coinsurance clause

A clause contained in most homeowners' insurance policies.

Original cost calculation

The original price of a property ($170,909$) that was sold for $188,000$ to yield a profit of $10\%$.

Basic form

A type of homeowners' insurance policy that covers theft, smoke damage, and damage from fire.

Mixed-use development

A development that combines office space, stores, and residential units in a single community.

$$500,000$$

The maximum allowable gain that may be claimed as tax-exempt by a couple filing jointly under the Federal Income Tax Code.

Real estate taxes

Payments that federal income tax regulations allow homeowners to use to reduce their annual taxable income.

Equity

The interest or value an owner has in a property over and above any indebtedness or mortgage debt.

Profit percentage calculation

The percentage of profit ($25\%$) earned when a property costing $80\%$ of its $100,000$ listing price is sold for the full listing price.

1031 exchange

A real estate transaction based on the philosophy that capital gains tax should not apply as long as an investment remains intact.