Chapter 1: Basic Real Estate Concepts

Question 1

Real Property/Real Estate/Realty

Answer 1

Land and everything that is attached to it. Immobile, indestructible, unique

Question 2

What is the document used to transfer real property?

Answer 2

Deed

Question 3

Deed

Answer 3

A written instrument that transfers an interest in real property when signed by a grantor and delivered to the grantee.

Question 4

Personal Property/Chattel/Personalty

Answer 4

All property that is not real property or attached to it. Readily movable.

Question 5

What is the document used to transfer personal property?

Answer 5

Bill of Sale

Question 6

What are the physical characteristics of real property?

Answer 6

• Immobile
• Indestructible
• Unique/non-homogeneous/heterogeneous

Question 7

Immobility, indestructibility, and non-homogeneity are __________ of real property.

Answer 7

physical characteristics of real estate

Question 8

Immobility

Answer 8

Land cannot be moved from one location to another. Physical characteristic of real estate

Question 9

Indestructibility

Answer 9

Land is a permanent commodity and cannot be destroyed. Physical characteristic of real estate

Question 10

Non-homogeneity

Answer 10

AKA uniqueness or heterogeneity. No two parcels are the same. Physical characteristic of real estate

Question 11

What are the economic characteristics of real property?

Answer 11

SLIP

• Scarcity
• Location
• Improvements
• Permanence of investments

Question 12

Scarcity, location, improvements, and permanence of investment are __________ of real property.

Answer 12

economic characteristics of real estate

Question 13

Scarcity

Answer 13

The physical supply of land does not change and cannot be adjusted to meet demand. Economic characteristic of real estate

Question 14

Location

Answer 14

Most important economic characteristic of real estate

Question 15

Improvements

Answer 15

Any permanent fixtures to or on the land such as roads, fences, or naturally growing things. Economic characteristic of real property

Question 16

Situs

Answer 16

Societal and economic factors tied to the location of the land

Question 17

How is real estate always regulated?

Answer 17

Based on the state laws where the land is located

Question 18

Highest and Best Use

Answer 18

The use that provides the best ROI to the owner and the highest possible present value of land.

Question 19

What form of land use controls exist?

Answer 19

1) Public
2) Private
3) Governmental

Question 20

Public land use controls

Answer 20

Zoning laws, building codes, environmental control laws

Question 21

Private land use controls

Answer 21

Conditions, covenants, and restrictions (CCR’s)

Question 22

Governmental land use controls

Answer 22

Public buildings and parks, watersheds, roads, military installations

Question 23

Zoning laws, building codes, and environmental restrictions are forms of local land use control known as

Answer 23

Public land use controls

Question 24

Conditions, covenants, and restrictions (CCR’s) are examples of which land use control?

Answer 24

Private land use controls

Question 25

Military bases and schools are examples of which land use control?

Answer 25

Governmental land use controls

Question 26

REALTOR®

Answer 26

A LICENSEE who is a member of the National Association of Realtors

Question 27

What are the categories of real estate?

Answer 27

1) Residential (1-4 units) 2) Commercial 3) Industrial 4) Agricultural 5) Special Purpose (churches, schools, airports etc)

Question 28

Free market

Answer 28

A market in which the buyer and seller negotiate a purchase and sale without undue pressure, urgency, or outside influence other than the law of supply and demand

Question 29

Factors affecting supply

Answer 29

- Labor - Government controls | - Costs

Question 30

Labor, govt controls, and costs are factors that are affecting __________.

Answer 30

Supply

Question 31

Factors affecting demand

Answer 31

- Population - Employment - Wages - Economy

Question 32

Population, employment, wages, and economy are factors that are affecting __________.

Answer 32

Demand