With your real estate exam looming in the distance, you have a lot at stake. You either want to enter the field or enhance your current career in real estate, so you need to pass the exam with ease. Here at Real Estate Prep Guide, we want to help you succeed. We offer challenging practice tests that are easy to use. They get your mind thinking, and you will be able to discover your strengths and deficiencies. By taking our practice tests, and using our comprehensive study materials, you can take the exam with the calm confidence that only comes with good preparation. Real Estate Prep Guide wants to help you prepare for your Salesperson or Broker exams. It is our mission to help you excel and succeed.
Defining Real Estate
One of the first things you will notice about real estate is all those words and definitions. You will be spending a lot of your time memorizing. You will notice that many of these words will be used in your real estate exam, so having a good foundation of real estate terminology is extremely important. We provide a glossary that you can use when you need a quick reference, or when you need to buckle down and study. Here are a few of the common words you will need to understand when it comes to real estate.
- Principle of Substitution: This is the theory that an informed buyer will not pay more for a home than a comparable substitute. Here is an example of the principle of substitution in use. If a buyer is looking for a home in a specific neighborhood and finds two similar homes, but one is listed for $500,000 and the other for $350,000, guess which one the buyer will choose. Remember that the homes are similar and in the same neighborhood. The buyer is going to go with the lower priced home. Using the principle of substitution will allow you to get good cost estimates on the prices of homes in a community.
- Principle of Conformity: This is the theory that a particular home (or neighborhood) achieves maximum value when it is surrounded by homes that are similar in style and function. Standing out in a crowd is a good thing, but if a home is standing out for the wrong reasons, it can be a determent. Fitting in is important when looking at homes. If your seller is looking to make enhancements to a home to add to its value, you can look to other homes in the neighbor for as a guide for improvements. That means if your seller thinks they should repaint their interior walls pink to improve salability, you will be able to point them in a better color direction.
- Principle of Regression: When the value of the “best” home in a given area is negatively affected by other homes in the area. Pretty much, if a super expensive home is located next to the eye-sore house on the street, you can expect the value of the expensive home to be reduced.
- Principle of Contribution: Theory that a particular item or feature of a home is worth only what it actually contributes in value to that property. Contributory values can even depend on a buyer’s preferences or the economy. For instance, if a home has a full sized basketball court in the backyard, the value of the home will increase to a family with teenage children. The basketball court is of little value if your buyers are an elderly couple. When it comes to the economy, having brand new appliances in a home when the economy is good will add to the salability. If the housing economy is sluggish, brand new appliances are not going to be worth the cost.
Real Estate Prep Guide
When you want the tools that will help you pass your upcoming real estate exam, you can count on Real Estate Prep Guide to deliver. We have practice exams and study guides for every state. Our practice questions and answers are created by industry experts. We constantly update our materials to reflect changes in licensing requirements. Our guides and quizzes will allow you to prepare for your upcoming exam, regardless of where you are. Using your smart phone or tablet, you can transform any time into study time. Real Estate Prep Guide gives you the skills and training you need to pass your exam.