Chapter 1 Flashcards
Situs
Takes into account Societal & Economic factors of where the land is located.
Most important economic factor in real estate
Society & Economics
Permanence of Investment
Court Order Party harmed by breach of RE Contract Judge forces breaching party to pay monetary damages Physical Characteristic of land Doctrine of Specific Performance
Heterogenity & Non Homogeneity
No 2 parcels are alike
Both words mean the same thing
Unique
Ex: House/lot differences
Bill of Sale
Document used to transfer personal property
ex: Receipt
Title
Title = Ownership
Receipt of a Title = Deed
Supply & Demand
Supply increases = Price decreases
Demand increases = Price increases
Scarcity
Short Supply in comparison with demand
Real Estate Cycles
The cycle of Real Estate: E R D R E - Expansion R - Recession D - Depression R- Revival
Personal Property
aka - Chattel or Personalty
Readily Moveable or things you can take when you move
-Shake the house upside down, whatever comes out you can take
Ex: Couch, lamp, washer/dryer
NCREC Disciplinary Actions
- Reprimand
- Revoke
- Suspend
- Censure
* CANNOT GIVE FINES*
Who is eligible to take the course and get licensed?
- 18 years or older
- US Citizen
- SSN
- No formal education needed (not even HS)
- Pass a background check
- Committed to challenging course
- NCREC requires contract (our registration for this course)
Fructus Industriales
Personal Property
Fruits of the the tree, but not the actual tree
Annual Crops
5 Categories of Real Estate
- Residential (1-4 units)
- Commercial
- Industrial
- Agricultural
- Special Purpose (Funeral Home)
Real Estate
Artificially Attached
Land, buildings, sheds, Fences
Land
Immobile & Indestructible
Earth’s Surface
Downward to the center of the earth upward to heaven
FFA has access through for air space
North Carolina Real Estate Commission
NCREC: 9 members duty is to protect & promote interest of the Public, they create rules & regs
7 appointed by the Government
2 appointed by Legislative
3 must hold RE licenses
2 must be lay people
Chair selected by the Commission
Realtor vs. Broker
Realtor: Trade organization member (you do not have to join)
Broker: Real Estate Brokers License holder
Must be a Broker to become a Realtor
Provision Broker
- Supervised by BIC
- Needs to complete post licensing education
complete courses 301, 302 & 303 within 18 months of passing exam
You are considered Active if:
- Completed all Continuing Education (CE)
- Renewed your license annual $45
- Affiliated with a BIC
If not all of those 3 things are a yes, you are inactive
Full Broker
- Complete all of your CE (301,302 & 303)
- Renewed your license annual $45
You no longer need BIC Supervision
If not all of those things are a yes, you are inactive
BIC Eligible
Has met the requirements to become a BIC but is not actively serving as a BIC
aka Vice President
BIC
Broker in Charge (pronounced like Bic pen)
Supervises the entire office
aka Head honcho, President
4 North Carolina License Status’
- Provisional Broker
- Full Broker
- BIC Eligible
- BIC
When is a Real Estate License required?
MUST BE ALL 3:
- It is a Real Estate activity: LL BEANS
List, Lease, Buy, Exchange, Auction, Negotiate & Sell - For someone else other than yourself
- Getting Paid
Exceptions:
- Salaried employees of a broker/developer/owner of the property.
1a. Unlicensed RE assistants CAN NOT show a property for sale, only rentals - An attorney providing a legal service (ex: probate estate)
Rate of Return (ROR)
The % of the net income produced by a property or another investment
Net = AFTER TAXES
Appreciation
An increase in property value
Inflation
The Purchase price of goods changes over time & typically grows 1-2% annually.
ex: Milk 1920’s = $0.20. Milk 2020 = $3.50
Appurtenance
Any right or privilege that is considered to run w/ the land. Not all rights and privileges run w/ the land, must be perusal in nature.
Ex: Municipal water & sewer lines: it is the right and privilege that the government has to place the pipes to provide utility services.
Land Use Controls
- Public
- Private
- Government
Highest & Best Use
Physical & Economic factors affecting the land that provide:
- The GREATEST return
- Maximizes the value of Real Estate
- Must be a use feasible future use
Ex: Transportation, Resources, Zoning, Elevation & Contour (shape of the land)
Protective Covenants
An agreement restricting specified financial transactions.
Ex: a loan agreement states that a person may not borrow money from another lender against certain collateralized property.
Immobility
Physical Characteristic that is impossible to move or relocate. B/c of the immobility, the value of the piece of RE is directly affected by its surroundings.
Ex: Land
Indestructible
A Permanence of land
What is the single most important economic characteristic of land?
Location
What increase in economic supply of land?
- Increased utilization of the physical supply of land
- Modification of improvements to the land
- High density development
Restrictive Covenants
- A clause in a deed or lease to real property that limits what the owner of the land or lease can do w/ the property.
- It allows surrounding property owners w/ similar covenants in their deeds to enforce the terms of covenants in a court of law.
What are physical characteristics of land?
- NonHomogeneity
- Permanence
- Immobility
- Indestructibility
What are public land use restrictions?
- Building Codes
- Zoning Laws
- Regional Planning
What is a separable Ownership in land?
The characteristics of land that causes the RE market to be essentially a local market of its physical characteristic of immobility
Exceptions: Nonhomogeneity
