Chapter 1 Flashcards
Basic Real Estate Concepts
Real Estate
The actual physical land and everything, both natural and man-made, that is
attached (or appurtenant) to it.
Real Property
The physical land and everything attached to it, and the rights of ownership
(bundle of rights) in the real estate. Also called Realty.
Land
The surface of the earth, everything under the ground to the center of the earth, and
everything over the earth into the air (allowances for air traffic).
Used interchangeably to describe the combination of land, improvements, and rights and privileges
Real estate, real property, realty, and land
Deed
Used to convey (ownership) of real estate or land
Bill of Sale
Used to convey ownership of personal property, personalty, or chattel.
Personal property
Tangible items that (usually) are not permanently attached to or part of real
estate; any property that is not real property; movable property not affixed to land. Also called
Chattel or Personalty.
Chattel
A piece of personal property
What three components make up the concept of real property?
land, improvements, and rights & privileges
Property is categorized as either:
Real or personal
Land consists of what three components?
surface, subsurface, and airspace
Improvements
Anything used to better or “improve” the use of land. Real property, not personal
Appurtenance
A right that goes along with ownership of real property; usually transferred with
the property but may be sold separately.
Tenements
Ownership interest in anything immobile and is considered part of the real property
Hereditaments
Any rights capable of being inherited
Immobility
A physical characteristic of real estate referring to the fact that it cannot be moved from one place to another. It is the primary distinction between land and personal property
Situs
Location of land, what does the site tell us
Scarcity
An economic characteristic of real property that says there is a limited supply of real
estate; the perceived supply of a good or service relative to the demand for the item.
Indestructibility
land cannot be destroyed (physical characteristic)
Nonhomogeneity
A characteristic of real property; each piece of land, each building, and
each house is a unique piece of real estate. Also called Uniqueness or Heterogeneity.
Specific Performance
Legal remedy in which a court orders someone who has breached a
contract to perform as agreed, rather than paying monetary damages.
Present Value
The value at the time of appraisal
Highest and Best Use
Use that will provide the property owner the best possible return on investment over a specified time period, resulting in the highest possible present value of land.
Land use controls
Rules and regulations that govern how land can be used and developed. These controls ensure that land is used in a way that benefits the community, protects the environment, and promotes orderly growth.
Appreciation
The increase in value of an asset over time.
Positive Cash Flow
Brokerage specializations of real estate include
Farm and land, residential property, and commerical/investment property
Non-brokerage specializations in real estate include
Property management, appraising, financing, construction, property development, real estate education, and government service
REALTOR
A registered trademark of NAR and it identifies licensees who are members of the local, sate, and national associaton.
NAR
National Association of REALTORS
Free Market
one in which the buyer and seller negotiate a purchase and sale without undue pressure, urgency, or outside influence other than the principle of supply and demand,
Improvements
Structures, walls, roads, and so on
What factors effect supply & demand?
- interest rates
- availability of financing
- population migrations
- variations in population trends
- government regulations
- local/national economic conditions
- availability & cost of construction
