Unit 1 KW PREP SC RE

Real Estate Brokerage

business of bringing together buyers & sellers, owners & renters, & completing real estate transactions

Real Estate Broker

Person or company licensed to buy, sell, exchange, or lease real property for others for compensation.

Real Estate Salesperson

A person who conducts brokerage activities on behalf of the broker.

Appraisal

the process of developing an opinion of a property's market value, based on established methods and the appraiser's professional judgement

Property Management

The leasing, managing, marketing, and overall maintenance of property for others.

Property Manager

A person or company hired to maintain and manage property on behalf of the property owner

Management Agreement

A contract between the owner of income property and a management firm or individual property manager that outlines the scope of the manager's authority.

Financing

The business of providing the funds that make real estate transactions possible.

Subdivision and Development

involve splitting a single property into smaller parcels (subdividing) and constructing improvements on the land (development).

Home Inspection

A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.

Real Estate Counseling

involves independent advice based on sound professional judgment regarding how to buy, sell, or invest in property.

Residential Property

all property used for single-family or multifamily housing, whether in urban, suburban, or rural areas

Commercial Property

Business property, including office space, shopping centers, stores, theaters, hotels, and parking facilities

Mixed Use Property

a real estate development that combines residential, commercial, or other uses in a single building or complex

Industrial Property

both intellectual property and physical properties used for commercial purposes.

Agricultural Property

any tract of real property which is used to raise, harvest or store crops, feed, breed or manage livestock, or to produce plants, trees, fowl or animals useful to man

Special Use Property

designed and built for only one specific purpose. A few examples of special purpose properties: religious buildings, public and private schools, hospitals, and railways for a transportation system.

Real Estate Supply and Demand

Influenced by the uniqueness and immobility of parcels of real estate. When supply increased relative to demand, prices go down, and when demand increases relative to supply, prices go up.

Factors affecting supply

Labor force, construction costs, government controls, and financial policies.

Factors affecting demand

Population, demographics, employment and wage levels.

Advantages of investing in real estate include

a typically high rate of return, greater control over the investment than other options, property appreciation over time that leads to equity buildup, leveraging of funds to provide greater purchasing power, and the tax benefits of depreciation, deductions, the use of a property exchange to avoid taxation, and treatment of income from a property sale as capital gain.

The buyer of a home can benefit from

tax deductions, exclusion of gain on the sale of the home, and tax credits when available

Disadvantages of investing in real estate include

-The illiquidity of property (It cannot be bought or sold as quickly as other assets the local (immobile) nature of Realestate market compared to other types of investments that can be bought and sold in a variety of other markets.

Liquidity

The ability to sale an asset and convert it into cash, at a price close to its true value, in a short period of time.

Capital Gain

Profit earned from the sale of an asset.