What is Real Estate?

Question 1

Accession

Answer 1

the right to all that one’s own property produces, including that which is added, either naturally or by human action, to the property already owned

Question 2

Accretion

Answer 2

the process that results in the gradual increase in land area through deposits of soil by natural forces

Question 3

Alluvion

Answer 3

the soil that gets deposited in the process of accretion

Question 4

Erosion

Answer 4

the gradual loss of land over time

Question 5

Avulsion

Answer 5

the sudden loss of land by an act of nature

Question 6

Reliction

Answer 6

the exposure of previously submerged land due to receding waters

Question 7

Illiquidity

Answer 7

an asset’s state of relative difficulty in converting to cash without loss of value

Question 8

Bundle of Rights

Answer 8

ownership of land with all of the legal rights of possession, control, enjoyment, exclusion, and disposition

Question 9

Subsurface Rights

Answer 9

ownership rights to all that is found beneath the surface of the tract of land owned, extending downward to the center of the earth

Question 10

Air Rights

Answer 10

the right to use the airspace above the surface of land

Question 11

Riparian Rights

Answer 11

rights that govern the use of flowing water, such as rivers and streams that pass through or border a property

Question 12

Littoral Rights

Answer 12

rights that govern lakefront or oceanfront property and usually allow the property owner to use the water bordering their property

Question 13

Real Estate

Answer 13

a part of the surface of land to the center of the earth and upward to space, plus all improvements made by man or nature

Question 14

Real Property

Answer 14

land from the surface to the center of earth and upward into space, including everything attached by man or nature as well as the bundle of legal rights of ownership

Question 15

Personal Property

Answer 15

any unattached, movable asset on the property not considered real estate (land plus improvements); also known as chattel or personalty

Question 16

chattel

Answer 16

any unattached, movable asset on the property not considered real estate (land plus improvements); also known as personal property or personalty

Question 17

fixture

Answer 17

an object that was once personal property but is now firmly attached to the land in such a way that it is considered to be a part of the real estate

Question 18

trade fixture

Answer 18

personal property attached to real property that is owned by the tenant and needed for the tenant’s business; can be removed by tenant at expiration of lease

Question 19

Land has some unique physical characteristics.

These characteristics are:

Answer 19

Indestructibility
Immobility
Non-homogeneity

Question 20

Land’s Economic Characteristics

Answer 20

Scarcity
Situs
Modification
Fixity
Illiquidity

Question 21

Scarcity

Answer 21

the economic characteristic that informs the economic principle of supply and demand. The supply of land will never increase, but the demand for land will increase as the population grows. And this is because land is scarce.

Question 22

Situs

Answer 22

refers to the economic significance of a property’s location. The popular real estate phrase, “location, location, location,” is referring to the preferences people have for certain areas. Situs takes into account not only the geographical location of property, but also the economic qualities of that area that make it more or less desirable. Example: A buyer wants to move from a rural area to a home in a nearby city because the city has a strong local economy with plenty of job opportunities. The buyer is influenced by situs.

Question 23

modification

Answer 23

refers to the fact that the value of land can be affected by human-made changes to the land.
Put simply: Human-made changes (modifications) can affect the value of land.

Question 24

Fixity

Answer 24

refers to the fact that real estate exists in a fixed location and cannot be moved.

Question 25

Illiquidity

Answer 25

refers to an asset's state of relative difficulty in converting to cash without loss of value.

Question 26

Quick Recap: Land’s Economic Characteristics

Answer 26

Scarcity: The supply of land is finite. There are no coastal property factories. Situs: People prefer land for its location, both for natural (beach) and human-made reasons (good schools). Modification: Human-made improvements can affect the value of land (new amusement park nearby). Fixity: Land is a long-term investment. It can't be moved, and investors must seriously consider a real estate property before purchasing. Illiquidity: Land does NOT convert to cash very quickly relative to many other asset types.

Question 27

Attachments

Answer 27

physical objects permanently attached to land — can be man-made or natural.

Question 28

improvements

Answer 28

If man-made, they are usually referred to as improvements. Examples of improvements: Housing 🏡 Landscaping 🌷 Permanent BBQ pit 🍔 Horse stables 🏇

Question 29

natural attachments

Answer 29

These would include trees, plants, shrubs, and native growth that people have added to a property that, once planted, are also considered to be part of the land and, therefore, real property. 🌿

Question 30

A Bundle of Rights

Answer 30

The Right of Exclusion: The right to tell Aunt Sally that she can’t trespass on your property The Right of Possession: The right to occupy/live/breathe on your property, no matter what Aunt Sally has to say about it The Right of Disposition: The right to sell, lease, and/or will a property to Aunt Sally or whomever (You have the right to transfer all of your property rights or just some of them.) The Right of Quiet Enjoyment: The right to (legally) use the property for your enjoyment however you (legally) want, no matter what The Right of Control: The right to alter, change, or improve the property as the owner sees fit (Sorry, Aunt Sally, you have no say-so.)

Question 31

Interference of Rights

Answer 31

Some humans show a tendency that we robot types rarely do — the tendency to interfere. Even with the bundle of rights, interference is a thing. Here are two forms of interference that are related: Trespass: the physical invasion of land by an individual without lawful right to do so Encroachment: the physical invasion of land by an object onto land without lawful right to do so Put another way… ``` Trespass = violation by human Encroachment = violation by objects (like your neighbor's fence crossing over your property line) ```

Question 32

nuisance

Answer 32

A nuisance interferes with the property owner's right of quiet enjoyment. Loud noises, bad smells, and unsightliness are a few common examples of nuisances.

Question 33

Surface Rights

Answer 33

Surface rights are the property owner's rights and interests with respect to the surface of the earth, including natural elements and structures built on or attached to it (improvements).

Question 34

Subsurface Rights

Answer 34

Subsurface rights relate to everything beneath the surface of a tract of land, down to the center of the earth. The importance of this right lies largely in the fact that it may secure ownership of mineral deposits located under the surface of a property. For this reason, subsurface rights are also commonly referred to as mineral rights.

Question 35

Rule of Capture

Answer 35

A discussion of mineral rights should always include the rule of capture, which states that a landowner who drills a well for gas or oil on their land is entitled to all that well produces — even if the gas or oil migrates from beneath a neighbor's property.

Question 36

Supporting rights

Answer 36

the legal concept of responsibility adjacent landowners share.

Question 37

Air Rights

Answer 37

are the rights to use the airspace above a property.

Question 38

water rights

Answer 38

When a property borders a body of water or a river, the right to enjoy the water is usually included in the bundle of rights

Question 39

Riparian Rights

Answer 39

govern the use of flowing water, such as rivers and streams that pass through or border a property.

Question 40

Littoral Rights

Answer 40

govern lakefront or oceanfront property and usually allow the property owner to use the water bordering their property.

Question 41

Appropriative Rights

Answer 41

Independent of land ownership claims, however, are appropriative rights, which are water rights granted by the government to take water from a body of water for a specified and approved use. An example of this would be a farmer who needs water for crops from a nearby lake.

Question 42

Percolating water rights

Answer 42

refer to the use and ownership of underground water. Real property owners have a right to access that water by installing wells for their own use.

Question 43

Appurtenances

Answer 43

Rights associated with real property that usually convey (transfer) when property ownership changes include: rights of access; air and water rights; and mineral, gas, and oil rights, among others.

Question 44

Real Estate vs. Real Property

Answer 44

Real estate is the land and any improvements that have been added to it, whereas real property is all that plus the bundle of rights associated with the property. Real estate = land + improvements Real property = land + improvements + bundle of rights