Introduction to Real Estate

Question 1

All things attached to the land and all rights inherent with that land. General rule things that are immovable

Answer 1

Real Property

Question 2

Property that is movable. That is, the asset is not fixed permanently to one location as with real property such as land or buildings. Examples include vehicles, furniture, boats, collectibles, etc.

Answer 2

Personal Property

Question 3

Land and anything fixed, immovable, or permanently attached to it such as appurtenances, buildings, fences, fixtures, improvements, roads, shrubs and trees (but not growing crops), sewers, structures, utility systems, and walls.

Answer 3

Real Estate

Question 4

Normally includes title to air rights, mineral rights, and surface rights which can be bought, leased, sold, or transferred together or separately. Also called real property or realty.

Answer 4

Title to real estate

Question 5

Why is real estate considered a commodity?

Answer 5

1. Utility to most people

2. Marketable in its own specialized area

Question 6

What composes the real estate commodity?

Answer 6

Physical component > Land > “Dirt”
Physical Component > Improvements (in most cases) - “bricks & sticks”
Legal Component > Bundle of Rights

Question 7

What is the physical concept of land?

Answer 7

Solid surface of the earth

Question 8

What is the legal concept of land?

Answer 8

Bundle of rights; or the rights we obtain with owning the land.

Question 9

Bundle of rights

Answer 9

1. Posess
2. Use
3. Dispose
4. Exclude others

Question 10

What are improvements?

Answer 10

Physical concept: Anything that improves or develops land.

Question 11

Includes land developments & utilities.

Answer 11

Improvements to the land

Question 12

things added to the land

Answer 12

Improvements on the land

Question 13

All things that are attached to property, such as ceiling lights, awnings, window shades and doorknobs.

Answer 13

Fixture

Question 14

fixture in a a business and considered personal property. Supposed to take with after business is sold

Answer 14

Trade Fixture

Question 15

How does personal property become a fixture?

Answer 15

Manner of attatchment - if it is screwed in or attached it should go with the property
Adaption of the object - custom built objects (drapes, curtains, entertainment center)
Relation of the parties - tenant has legal right to keep what is in it.
Intent of the parties - put in contract

Question 16

Legal rights obtained when owning land?

Limits for air rights?

Answer 16

surface right
mineral (subsurface) rights
air rights (no more than 20,000 ft below ground and 1500 above ground).

Question 17

River or Stream rights.

Answer 17

Riparian rights

Question 18

Ocean, Seas, and Large lake rights

Answer 18

Littoral rights

Question 19

Right to make money off your property by leasing it or borrow money on your property by mortgaging it.

Answer 19

Financial rights

Question 20

Ownership rights

Answer 20

Freehold estate

Question 21

There must be actual ownership in the land and improvements and the estate must be of unpredictable duration.

Answer 21

Freehold estate

Question 22

Most complete form of ownership. The most extensive interest in real property that an individual can possess, since it is limited completely to the individual and his or her heirs and assigns forever, and it is not subject to any limitations or conditions.

Answer 22

Fee Simple Estate

Question 23

If no restrictions are placed on the owner of a fee simple estate through their title, does this mean they can do anything they want with the land?

Answer 23

No zoning by government restirctions

Question 24

This is ownership that lasts only as long as the owner is alive. The property transfers back to the original owner at death through reversion. The designated future owner has a remainder interest and will eventually own the property fee simple.

Answer 24

Life Estate

Question 25

Which right of the bundle of rights does this

Answer 25

Dispose

Question 26

Although there is posession of land there is not ownership of land. The estate is for a definate duration.

Answer 26

Leasehold Estates

Question 27

Where induviduals can own a fractional interest of the property. For example Developer invest in a property with differing amounts of equity (cash invested): - Owner A has 50% - Owner B has 30% - Owner C has 20%

Answer 27

Tenancy in common (TIC)

Question 28

Co-Ownership, has the right to survivorship. Reverts to other owner at death. Each person has a 50 percent ownership of that piece of property. If one person dies, the other person automatically owns 100 percent of the property.

Answer 28

Joint Tenancy

Question 29

Normal marriage ownership

Answer 29

Tennancy by the entirety

Question 30

Wifes life estate in the property of her deceased husband.

Answer 30

Dower

Question 31

Husbands life estate in the property of his deceased wife

Answer 31

Curtesty

Question 32

Each Spouse has an equal percentage in th property due to the joint effort of marriage. Upon death 1/2 interest goes to the heirs and the other 1/2 stays with the spouse. (some states are changing this law to survivorship).

Answer 32

Community Property

Question 33

Co-ownership, owns condo, halls are separte

Answer 33

Condominium

Question 34

People own the whole building and lease the space. Cannot get a mortgage on this form of ownership.

Answer 34

Cooperative

Question 35

Buy ownership for a limited period of time.

Answer 35

Timeshare

Question 36

Homogeneous products (to an extent) National markets with easy product supply and transport Large supply of buyers and sellers Public transactions (perfect knowledge) Products are priced and sold (with few exceptions)

Answer 36

Characteristics of an efficient market

Question 37

Heterogeneous products Localized markets with an illiquid product. Segmented markets with a limited number of buyers and sellers Proprietary transactions Sequential bidding (Negotiation)

Answer 37

Characteristics of Real Estate Markets

Question 38

Real estate professionals

Answer 38

Real Estate Agent, Broker Mortgage banker, originator, underwriter Real Estate Appraiser, Tax Assessor Real Estate Attorney and/or Title Insurer Property Manager, Asset Manager Real Estate Developer, General Contractor, Subcontractor Urban Planner Real Estate Investors (houses, REITs, land, etc.)Lan

Question 39

The right of the government to regulate for the purpose of promoting the health, safety, and welfare of the public (zoning, building codes, and subdivision regulations).

Answer 39

Police Power

Question 40

The right of a government to take property for public use. Just compensation must be paid to the owner. The government exercises the right to take the property by the process of condemnation.

Answer 40

Eminent domain

Question 41

The right of a governement to charge a property owner

Answer 41

Taxation

Question 42

Escheat

Answer 42

When a property owner dies intestate, that it, leaves no will and no heirs can be found, the property reverts to the state or county.

Question 43

Government Powers

Answer 43

1. Police Power 2. Eminent Domain 3. Taxation 4. Escheat