Chapter 1 Concepts Flashcards
What are two major classifications of property?
Real Property and Personal Property
What is Real Property defined as?
is defined as the land, everything that is permanently attached to the land, and everything that is appurtenant to the land
What is appurtenant?
attached or goes with (the land)
Q
The primary characteristic of personal property is
Movability
What is a Chattel?
is an item of movable personal property
What is land?
is defined as the earth’s surface extending downward to the center of the earth (includes the minerals and substances below the earth’s surface) and upward to infinity (airspace above it), including things permanently attached by nature, such as trees and water
The surface, subsurface, and airspace can be owned separately as surface rights, subsurface rights, and air rights and can be severed by separate
conveyance
A specific tract of land is commonly referred to as a
parcel
A) Real estate, or realty, is defined as
B) How does the definition make it somewhat broader than land?
A) land at, above, and below the earth’s surface, including all things permanently attached to it, whether natural or artificial
B) because it includes not only the physical components of the land provided by nature but also all human-made permanent improvements on and to the land.
Land is referred to as improved when
streets, utilities, sewers, and other improvements are brought to the land, making the land suitable for building.
The broader term real property includes
the bundle of rights
What are tenements and hereditaments
tenements are any structures attached to the land
Hereditaments are any interests in real estate capable of being inherited
Seven characteristics define the nature of real property and affect its use. These characteristics fall into two broad categories:
physical characteristics and economic characteristics
Physical Characteristics of land are:
Immobility
Indestructibility
Uniqueness
What is highest and best use?
the use that will give the owners the greatest actual return on their investment
What are the advantages of real estate as an investment?
-good rate of return
-Most real estate values tend to keep pace with the rate of inflation
-real estate entrepreneurs may enjoy various tax advantages
What are the disadvantages of real estate as an investment?
-Unlike stocks and bonds, real estate is not a liquid asset
-it is difficult to invest in real estate without some degree of expert advice.
-Rarely can a real estate investor sit idly by and watch the invested money grow. Management decisions must be made.
-a high degree of risk often is involved in real estate investment.
The business of bringing together people interested in completing a real estate transaction is called
brokerage
Real estate sales professionals in North Carolina usually begin their career in apprenticeship roles as
provisional brokers
Real estate can generally be classified into one of the following five categories:
- Residential—all property used for housing, from acreage to small city lots, both single-family and multifamily, in urban, suburban, and rural areas
- Commercial—business property, including offices, shopping centers, stores, theaters, hotels, and parking facilities
- Industrial—warehouses, factories, land in industrial districts, and power plants
- Agricultural—farms, timberland, ranches, and orchards
- Special-purpose—churches, schools, cemeteries, and government-held lands
A market is
a place where goods are bought and sold, where value for those goods is established, and where it is advantageous for buyers and sellers to trade.
Supply and demand
Essentially, when supply increases, prices ______ as more producers compete for buyers; when demand increases, prices _____ as more buyers compete for the product.
Drop -Rise
What factors affect supply?
the labor force, construction costs, government controls, and monetary or financial policies
What factors affect demand?
population, demographics, and employment and wage levels.
