1. Name and describe the activities involved in at least seven areas of real estate specialization. Explain why there is specialization in the real estate business. List and give examples of the five uses of real property. Define market, supply and demand. Explain why the value of real property does not remain constant. Name at least three factors that affect supply. Name at least three factors that affect demand. Introduction to the Real Estate Business LEARNING OBJECTIVES:

2. Introduction to the Real Estate Business A.Brokerage—the business of bringing people together in a real estate transaction (Discussed in detail in Chapter 5) B.Appraisal—the process of estimating the value of real property (Discussed in detail in Chapter 18) C.Property management—the business of managing real estate to protect the owner's investment and maximize the owner's return (Discussed in detail in Chapter 17) D.Financing—the business of arranging for or providing funds for real estate transactions (Discussed in detail in Chapters 14 and 15) E.Subdivision and development—the activities of splitting a large parcel of realestate into smaller ones and constructing improvements on the land (Discussed in detail in Chapter 19) LECTURE OUTLINE: Real Estate Specialization

3. Introduction to the Real Estate Business F.Counseling—the activity of providing clients with competent and independent information and advice to assist in their real estate investment decisions G.Education—the provision of real estate education opportunities both to practitioners and consumers H.Others—settings in which real estate expertise is required such as the practice of law, for corporations with extensive land holdings and government agencies LECTURE OUTLINE: Real Estate Specialization

4. Introduction to the Real Estate Business LECTURE OUTLINE: Professional Organizations A. National Association of Realtors ® (NAR) Largest trade organization, comprised of national regional and local associations B. National Association of Real Estate Brokers (NAREB) C. American Institute of Real Estate Appraisers (AIREA) D. American Society of Appraisers (ASA) E. National Association of Independent Fee Appraisers (NAIFEA) F. Real Estate Educators Association (REEA) G. Real Estate Buyer's Agent Council (REBAC) H. National Association of Exclusive Buyer's Agents (NAEBA) I. Building Owners and Managers Association (BOMA) Institute of Real Estate Management (IREM) K. Commercial Investment Real Estate Institute (CIREI) L. American Society of Real Estate Counselors (ASREC)

5. Introduction to the Real Estate Business LECTURE OUTLINE: Types of Real Estate A. Residential—single-family dwellings, duplexes and double houses, triplexes, fourplexes, apartments, townhouses, condominiums, mobile homes, manufactured housing, modular housing and real estate used for specific residential purposes such as retirement homes, vacation property and others common in different parts of the country B. Commercial—office buildings, retail stores and shopping centers and other specialized facilities such marinas, air parks and certain mixed-use properties C. Industrial—factories, industrial parks, warehouses and power plants D. Agricultural—farms, ranches, orchards, vineyards, feedlots, hatcheries and timberland E. Special purpose—churches, schools, cemeteries, government-owned property

6. Introduction to the Real Estate Business LECTURE OUTLINE: Types of Real Estate F. Separate markets for each type of property 1.Sale market—where ownership is transferred from seller to buyer 2.Rental market—where rights to occupy and enjoy a designated portion of the real estate are transferred from the landlord to the tenant for a certain period of time 3.In Practice: Specialization within real estate firms

7. Introduction to the Real Estate Business LECTURE OUTLINE: The Real Estate Market A. Market Place - where goods are bought and sold B. Supply and demand are the economic forces that set prices for products. 1. Characteristics of real estate affecting supply and demand a.Uniqueness b.Immobility c.Effect of natural disasters or changes in financial markets or local events 2. Prices will generally drop as supply increases relative to demand. 3. Prices will generally rise as demand increases relative to supply. C. Factors affecting supply 1. Labor force 2. Construction costs 3. Government controls at all levels 4. Government fiscal and monetary policies

8. Introduction to the Real Estate Business LECTURE OUTLINE: The Real Estate Market D. Factors affecting demand 1. Population 2. Demographics—the make-up of the population including mobility, financial stability and size and nature of family unit 3. Employment and wage levels—where and how money is spent; perceived job security

9. Introduction to the Real Estate Business DISCUSSION QUESTIONS: 1.Why is there specialization in the real estate business? Is this comparable to that seen in other areas such as law or medicine? Do you think a specialist in real estate will have higher earnings than someone who does a little bit in each area of the business ? How specialized is the practice in broker firms in your area? 2. Describe the professional organizations that most real estate professionals in the area join.