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Real Estate as a Professional Career

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Tangled Sense

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legal relationship between principal and agent, where an agent is employed and authorized by the principal to represent the principal in business transactions with a third party.


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Real Estate as a Professional Career - Details



76 questions
What is a Corporation?
Can vary from small privately held operations to large public companies.
What is a Partnership?
Involves two or more people that pool their personal and financial resources in a joint effort.
What is a Sole Proprietorship?
Involves a business operation owned by one person who operates individually or with the assistance of employees.
What is CREA
Canadian Real Estate Association.
What is OREA?
Ontario Real Estate Association
What is ICI?
Refers to Industrial, Commercial, and Investment.
What is Organized Real Estate?
Voluntary membership organizations consisting of local real estate boards, provincial associations and CREA.
What is a 3-way Relationship?
A legal relationship between real estate boards, provincial/territorial associations (such as OREA- in the case of Ontario), and CREA.
What is RECO?
A self-managed, not-for-profit organization responsible for administering and enforcing REBBA 2002.
What is a Discipline Committee?
A committee established under REBBA 2002 to determine whether a registrant has failed to comply with the code of ethics.
What is RCI?
Registrar's Complaints and Inquiries.
What is the Registration Cycle?
The length of time from registration of a registrant to renewal of that registration.
Who establishes overall policies?
The RECO Board of Directors.
What are the 3 coverages under the RECO insurance program?
Errors and Omissions Commission Protection Consumer Deposits
What is a mixed economy?
An economy consisting of both private economic units (eg. individual, families, and corporations) as well as government participation in the direction economic activity and production of goods/services.
What are factors in the cyclical flow of the economy?
Resource Markets (land, labour, capital, entrepreneurial skills)
What is G.N.P?
Gross National Production
What is G.D.P?
Gross Domestic Production
What is C.P.I?
Consumer Price Index
What is Simple Index?
A base year is selected, and all subsequent years are compared as a percentage of the base
What is Seasonally-Adjusted?
By averaging seasonal fluctuations, it is possible to reveal underlying trends.
What is Weighted-Average?
Basically simple average, just more in depth by breaking everything down.
What is Demand?
The quantity of goods or services that buyers are capable of acquiring at various prices.
What is Supply?
The quantity of goods or services that sellers are capable and willing to produce at various prices.
What is market equilibrium?
The point at which supply and demand curves intersect / the point where quantity supplied equals quantity demanded.
What are Market Bubbles?
The over expansion of a market due primarily to excessive buyer confidence resulting in inflated values.
What is a Business Cycle?
A series of events within the business environment that take place roughly the same order at the same approximate intervals.
What are the three phases of the Business Cycle?
Prosperity: high employment, consumer confidence, intense market activity. Recession: rising unemployment, no real growth in the market. Recovery: economic corrections, improvement in key growth indicators.
What are Influencing factors in real estate?
Demographic changes - the study of population trends Employment conditions and wage levels - strong employment/raising wages = more new home owners. Mortgage volume and interest rates - loans are only made the lenders feel that real estate is a good/beneficial investment. - interest rates high = people stay in their homes - interest rates are low = more affordable mortgages, consumers react accordingly. Building activity = Solid building activity normally indicates a strong real estate market -over building = depress real estate values.
What are the different types of markets?
Seller's market - the number of buyers wanting properties exceeds the supply - properties sell quicker, rising prices, and many buyers looking - more offers to choose from Buyer's market - the supply of properties on the market exceeds demand. - longer selling periods, fewer buyers compared to properties available. stabilized or declining prices. - Balanced Market
Real Estate Market Cycles - Long vs Short: name the differences.
Long cycle is driven by demographics (eg. age, marriage patterns, population changes, migration) Short cycle is affected by interest rates and consumer
What is Market Correction?
Happens after recession or prosperity.
How to do Mean, Median and Mode?
Mean- you add up all the numbers and divide by the amount of numbers in the sequence. Median- you put all the number in order from least to greatest, and find the number in the middle. If there happens to be two numbers in the middle, you divide them by each other. Mode- the number that shows up the most in the number
What is amplitude?
Distance between high and low points in the real estate cycle.
What is a Census?
A periodic count of population conducted by the Government of Canada.
What is Demography?
The study of population changes over time with particular emphasis on the growth/size, distribution and composition of the population.
What is value?
The quantity of one thing that can be obtained in exchange for another.
What is objective value?
The direct cost of creating.
What is subjective value?
Value that exists in the mind of the buyer/seller.
What is "Value in use" ?
The value of an economic good to the owners typically over and above market value.
What is market value?
Value based on the actions of typical buyers/sellers. Estimate of value coming from many sales.
What is investment value?
Value of the subject property based on individual investor needs, goals and objectives.
What is value in exchange?
Probable price at which a commodity trades in a free, competitive and open market.
What is value in use? And what is value in use in Real Estate?
Involves the economic goods to its owner/user, which is based on the productivity of the economic good to that specific person. In real estate, it is the value attributed by owner who is using that property.
What is valuation?
Estimated value or price
What is market price?
Price paid for specific property.
What are the 15 Principles?
Anticipation highest and best use balance increasing and decreasing returns change progression competition regression conformity substitution consistant use supply and demand contribution surplus productivity external factors
What is anticipation?
Value is created by anticipation benefits: money.
What is balance?
The value of a property is governed by the balance found within a particular marketplace.
What is change?
Economic and social forces are constantly at work and those changes are caused by these forces.
What is competition?
Excessive profits will tend ti create competition that, in turn, have a negative impact on profits.
What is conformity?
Land must be utilized to reasonably conform with the existing standards of the area in order to get max value.
What is consistent use?
When improved land is in transaction to another highest and best use, it cannot be appraised with one use, allocated to the land of building.
What is contribution?
The value of any component of a property is measured by how much it adds to the net income (or market value)
External factors?
Involve situations that can impact the value of property
What is highest and best use?
Most likely to produce the greatest net return in money
What is increasing and decreasing returns?
Diminishing returns or the principle of variable proportion.
What is progression?
(extension of conformity) house with lower value will be positively affected by the presence of another house of high value.
What is substitution?
This principle presumes that buyers will consider the alternatives available to them, that they will act rationally,and that time isn't a factor.
What is Psychographic?
Research concerning the study of consumer lifestyles based on interests, opinions, actions and activities.
What is a Green Building?
Energy efficient construction methods used in residential and commercial methods used in residential and commercial structures.
Reference groups - sociology
FORMAL- a structured group. INFORMAL- friends/family, people you met informally.
What is market segmentation?
The division of a market into submarkets in which consumer needs are similar.
Consumer need vs consumer want:
Need: underlying biological or psychological desire to attain something for a particular purpose. want: what we think we require in order to meet the need.
Maslow's hierarchy of needs:
1. self fulfillment and creativity. 2. status and personal accomplish. 3. love, family, companionship, social ties, desire to belong. 4. shelter and safety. 5. human drive for self-preservation (food/water)
What does being vulnerable mean?
The potential of being open to attack or damage and being taken advantage
Difference between laws and ethics:
Laws try to keep us from doing wrong, whereas ethics encourages us to do right.