Chapter 1 Flashcards
These are considered to be the “4 Forces” that affect real estate values:
1 ________
2________
3________
4________
- Geographic and Environmental
- Government and Legal
- Economic
- Social
Geographic and Environmental
The utility and the highest and best use of a parcel of land are greatly affected by:
- ______
- ______
- The physical characteristics
2. The locational characteristics
Each parcel of land is ______
unique
Government and Legal
Land use is regulated through _______.
Laws
The law focuses on
the rights and obligations associated with various interests in the land
The ____ of the rights and obligations of the stakeholders is the focus of real estate appraisal.
VALUE
Government and Legal
In Canada – the law provides that the holders of the land actually have _____ _______ (permission from the government to hold land) rather than _____ ______.
“Land Tenure”
“absolute ownership”
What is Fee Simple Ownership?
The construct that land holders actually have Land Tenure or permission from the government to hold land.
Land is subject to the rights of ___________.
The government.
Land includes
everything under and over it. Natural elements such as trees to man made ones such as buildings.
Economic Concept
Land (and its products) have economic value when:
- Can be converted to useful goods or services
- Are in demand
- Are limited in supply
Social Concept
Regulations and protection of the social aspect of land are put in place by the government through:
Land- use controls
Social Concept
1) As a resource
2) As a commodity
1) Land may be protected for the good of society
2) Land is regulated so individual rights are not violated
Define REAL ESTATE
Physical entities that are immobile and tangible.
We can see and touch them.
Land or improvements
Examples of REAL ESTATE:
Natural improvements
Man Made Improvements
Trees, minerals, mountains.
Buildings, landscaping, power grid towers
Define REAL PROPERTY
THE LEGAL SIDE
The attachment of interests, benefits, and rights TO REAL ESTATE which are intangible. Can’t see or touch.
What is an “Estate in the land”?
An interest in real estate.
It describes the degree, nature, or extent of interest a person has in the land.
What is “Bundle of Rights”?
A collection of individual INTERESTS and RIGHTS pertaining to specific REAL PROPERTY.
These individual interests and rights can be separated, and treated individually and ultimately traded in the market place.
You can use it, trade it, sell it, lease it, enter it, give it away.
The government maintains the right to define the limitations and restrictions of the above discussed rights
What’s the difference between REAL ESTATE, REAL PROPERTY and PERSONAL PROPERTY?
Real estate is tangible. It cannot be appraised nor sold.
Real property is the rights attached to the real estate. It can be appraised and sol.
Personal property is tangible, but not attached to real estate.
Personal property is
specific, portable and tangible objects.
Not attached to the land.
Examples of Personal Property
Furnishing, free standing appliances, decorations, artwork.
How are Chattels and Fixtures different?
Chattels are easily removable and thus do not add value to the real estate.
Fixtures are permanently affixed to the land. They add value to the real estate.
When does a chattel become a fixture?
- Look at degree of fixation.
2. Consider if the item is for the betterment of the PROPERTY or PERSON.
Appraisal Practice
Appraisal Institute of Canada - AIC Designations
CRA?
Canadian Residential Appraiser
Single Family Residential
