Unit 1

Broker

An individual who is directly involved in the business of bringing together people interested in completing a real estate transaction. Negotiates the sale, purchase, or rental of property on behalf of others for a fee or commission.

Business cycles

The upward and downward fluctuations in business activity. Can be characterized by four stages; expansion, recession, depression, and revival.

Chattel

An item of movable personal property, tangibles such as furniture, clothing, money, bonds, and bank accounts.

Demand

When demand increases and supply remains stable, prices go up. Factors that affect demand for real estate are population, demographics, and employment and wage levels.

Hereditaments

Any interests in real estate capable of being inherited.

Heterogeneity

The uniqueness of land.

Highest and Best use

The use that will five the owners the greatest actual return on their investment.

Land

Defined as the earth's surface extending downward to the center of the earth and upward to infinity, including things permanently attached by nature, such as trees and water. Includes the minerals and substances below the earth's surface together with the airspace above the land. Can be owned separately.

Market

A place where goods are bought and sold, where the value for those goods is established, and where it is advantageous for buyers and sellers to trade. The function of the market is to facilitate this exchange by providing a setting in which the supply and demand forces of the economy can establish market value.

Non-homogeneity

The uniqueness of land.

Non-provisional broker

Term used to describe former provisional brokers that have completed certain education requirements in order to engage in real estate transactions independently.

Personal property

Considered to be all property that does not fit the definition of real property. aka personalty, primary characteristic is movability.

Personalty

Considered to be all property that does not fit the definition of real property. aka personal property, primary characteristic is movability.

Provisional broker

An apprenticeship role that is the beginning of a real estate professionals career. Must be under the supervision of a real estate broker in charge in order to engage in any real estate transactions.

Real estate

Aka realty, is defines as land at, above, and below the earth's surface, including all things permanently attached to it, whether natural or artificial (man-made).

Real property

The land, everything that is permanently attached to the land, and everything that is appurtenant to (or goes with) the land, as well as all the rights of ownership that are usually referred to as the bundle of legal rights.

Situs

Societal factors that are related to the location

Supply

When supply increases and demand remains stable, prices go down. Factors that affect supply in real estate are labor force availability, construction and material costs, government controls, and government financial policies that impact interest rates and the money supply.

Tenements

Any structures attached to the land.

Bundle of Legal Rights

Includes the right to possession and use, the rights to exclude others, the rights to profit from the land, and the right to dispose of or encumber the land.

Physical characteristics

Immobility, indestructibility, uniqueness

Economic characteristics

Scarcity, location, improvements, permanence of investment. (SLIP)

Commission

A percentage of the amount of the real estate transaction, is usually paid by the seller in a sales transaction of by the owner in a rental transaction.

Appraisal

The process of estimating the value of a parcel of real estate.

Property management

Involves a person or people who handle the operations of a property for its owner. May be responsible for soliciting tenants, collecting rents, altering or constructing new space for tenants, ordering repairs, and generally maintaining the property. Basic responsibility is to protect the owner's investment and maximize the owner's return on the investment.

Financing

The business of providing the funds necessary to complete real estate transactions.

Property Development

Includes the work of developers, or sub-dividers, who purchase raw land, divide it into lots, build roads, and install sewer systems.

Counseling

Providing competent independent advice and guidance on a variety of real estate problems. A counselor attempts to furnish the client with direction in choosing alternative courses of action, basically increasing the client's knowledge.

Education

The provision of information to both the real estate practitioner and the consumer.

Residential

All property used for housing, form acreage to small city lots, both single-family and multifamily, in urban, suburban, and rural areas.

Commercial

Business property, including offices, shopping centers, stores, theaters, hotels, and parking facilities.

Industrial

warehouses, factories, land in industrial districts, and power plants.

Agricultural

Farms, timberland, ranches, and orchards.

Special purpose

Churches, schools, cemeteries, and government held lands.