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Real
Estate |
| The land and
improvements found on that land, commonly
consisting of raw land, and all man-made
permanent or fixed improvements to the land,
which affect the utility of a given parcel
of land. |
| |
| The term real estate
includes any improvements on the land which
are intended to be permanently affixed to
the land for the useful life of the
improvements such as a house built on the
land. |
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|
Real Estate
Broker |
| The precise
definition and role of a broker (agent) will
differ by your local jurisdiction: |
A
Broker (agent) can be generally described as
a person who, for another or others,
for compensation, gain or reward or hope or
promise thereof, either alone or through
one or more officials or salespeople is
licensed by the local regulatory body or
trade in
real estate. |
| |
| The brokerage,
as a partnership or corporation, is
typically registered as a broker in addition
to one or more individuals owning
controlling interest in the real estate
brokerage. Restrictions concerning
non-broker ownership of brokerage offices
will vary by provincial jurisdiction. |
| |
| The broker/salesperson relationship is
normally fully described by provincial
legislation. In most instances, a
salesperson is someone who is registered by
the provincial regulatory body to trade in
real estate and who is
employed/contracted/appointed by a broker. |
| |
| Since the broker is defined, in essence,
as a person who legally represents another,
it is obvious the broker is the agent in a
real estate transaction. Unfortunately, it
has become common place for both the public
and media to refer to real estate
salespeople as agents. Under the law,
salespeople cannot be agents as this implies
a degree of authority and independence of
action that does not statutorily exist. |
| |
| A salesperson is the broker’s employee
or appointee, authorized by the broker to
trade in real estate for that broker.
Legislation regulating the industry
establishes a very definite relationship
between broker and salesperson. Everything
is done in the broker’s name with the
salesperson carrying out the broker’s
instructions and policies. Further, no
salesperson is permitted to accept any
commission or other remuneration from any
person except the broker. |
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|
Real
Estate Cycle |
| The real estate
market generally moves through phases
similar to general business cycles, however
real estate make demonstrate more pronounced
peaks and valleys. |
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|
Real Estate
Market |
| The real estate
market is similar to the the general market
conditions of the overall economy, of course
there is no actual market where the sellers
display goods and buyers come to shop. |
| |
| No Standard
Products Exist in the real estate
market, as no two houses are exactly the
same. Even though if we take a subdivision
and list a few of the exact same properties
on the market, each will likely yield
different sales figures. |
| |
| Local Real Estate
Market, the real estate market remains
largely local in character, because the
commodity can not be moved to another
marketplace. Ownership may change hands
outside the community, but it is generally
what happens within the community that
determines the supply and demand and
therefore affects the price and value of
real estate. |
| |
| Fixed
Location, real estate is one
commodity that can never be taken to the
consumer, the consumer must come to see the
property in order to buy it. |
| |
| Supply vs.
Demand, in most markets the supply
will adjust itself according to the demand,
it is not always so in the real estate
marketplace. For instance, when the demand
is high, numerous building projects are
often commenced . If the market changes and
the demand drops, these projects are
completed anyway, adding to the oversupply.
On the other hand, when sudden demand for
real estate occur, no quick solution is
available given the time required, to plan,
finance, develop and to build. |
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| Private
Transactions, generally the
purchase and sale of real estate is a
private transaction between the buyer and
the seller, therefore is not visible to the
outsiders. Only those listings that have
been sold through the local MLS are
available to be seen as comparables. |
| |
| Influencing
Forces, the real estate market is
sensitive to change in economic, political
and social forces active in the overall
economy. Such change could be; |
- Family
Composition: change in the amount of
marriages and the birth rate in the
market place, will effect the real
estate market.
- Employment
Conditions and Wage Levels: during the
period of prosperity, workers making
more wages will be able to afford nicer,
bigger and pricier homes. The opposite
is true during the periods of high
unemployment.
- Mortgage Rates:
when the rates are high, it becomes more
costly for the public to afford real
estate, therefore the market is
oversupplied with sellers and doesn't
produce enough buyers.
|
| Market Types,
three different market types exist; |
- In
Seller's Market, the number of
buyers wanting to purchase property
exceeds the supply of available homes,
therefore driving the prices up. In this
type of market, the homes sell quickly
and minimal amount of inventory is
available.
- In
Buyer's Market, the supply of
homes on the market exceeds the demand
for homes. Homes are listed unsold
longer on the market therefore
increasing inventory and decreasing sale
prices. Such market, allows the buyers
to negotiate more favourable terms for
themselves, due to oversupply available
inventory.
- In a
Balanced Market, the number of
homes on the marketplace equals the
demand. Houses will sell at reasonable
prices and within a reasonable time
frame. The atmosphere is generally more
relaxed in a balance market.
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|
Real
Estate Option |
| A right given by the
owner of the property to another (for
valuable consideration), to buy certain
property within a limited time at an agreed
price. |
| |
| An
option
to buy is distinct from an agreement to
purchase and sale in that the latter creates
immediate mutual rights and obligations on
both the seller and the buyer. The option to
buy only gives the buyer a right to purchase
the property within a specified period
without imposing any obligations to purchase
that property. |
| |
| An option to purchase
is not a condition waiting to be fulfilled,
if the option is not exercised, the contract
will be at an end. If the option is
exercised, then a binding agreement will
result. |
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| The Seller must
understand, that while the option period is
in effect, the seller cannot sell the
property to a third party. |
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|
Real Estate Trust Account |
| When a buyer gives a
deposit for the purchase of a property, that
deposit is put into a Real Estate Trust
Account. The trust account protects the
buyer's deposit, as the money could only be
disbursed in accordance with the contract,
i.e. on fulfilment/waiver of conditions. |
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|
Real
Property |
| Real property is the
combination of tangible and intangible
attributes of land and improvements. |
| |
| Real property
includes both real estate and the
personal property affixed on it. |
