Chapter 1 Concepts

Question 1

What are two major classifications of property?

Answer 1

Real Property and Personal Property

Question 2

What is Real Property defined as?

Answer 2

is defined as the land, everything that is permanently attached to the land, and everything that is appurtenant to the land

Question 3

What is appurtenant?

Answer 3

attached or goes with (the land)

Question 4

Q
The primary characteristic of personal property is

Answer 4

Movability

Question 5

What is a Chattel?

Answer 5

is an item of movable personal property

Question 6

What is land?

Answer 6

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

Question 7

The surface, subsurface, and airspace can be owned separately as surface rights, subsurface rights, and air rights and can be severed by separate

Answer 7

conveyance

Question 8

A specific tract of land is commonly referred to as a

Answer 8

parcel

Question 9

A) Real estate, or realty, is defined as

B) How does the definition make it somewhat broader than land?

Answer 9

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.

Question 10

Land is referred to as improved when

Answer 10

streets, utilities, sewers, and other improvements are brought to the land, making the land suitable for building.

Question 11

The broader term real property includes

Answer 11

the bundle of rights

Question 12

What are tenements and hereditaments

Answer 12

tenements are any structures attached to the land

Hereditaments are any interests in real estate capable of being inherited

Question 13

Seven characteristics define the nature of real property and affect its use. These characteristics fall into two broad categories:

Answer 13

physical characteristics and economic characteristics

Question 14

Physical Characteristics of land are:

Answer 14

Immobility

Indestructibility

Uniqueness

Question 15

What is highest and best use?

Answer 15

the use that will give the owners the greatest actual return on their investment

Question 16

What are the advantages of real estate as an investment?

Answer 16

-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

Question 17

What are the disadvantages of real estate as an investment?

Answer 17

-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.

Question 18

The business of bringing together people interested in completing a real estate transaction is called

Answer 18

brokerage

Question 19

Real estate sales professionals in North Carolina usually begin their career in apprenticeship roles as

Answer 19

provisional brokers

Question 20

Real estate can generally be classified into one of the following five categories:

Answer 20

1. Residential—all property used for housing, from acreage to small city lots, both single-family and multifamily, in urban, suburban, and rural areas
2. Commercial—business property, including offices, shopping centers, stores, theaters, hotels, and parking facilities
3. Industrial—warehouses, factories, land in industrial districts, and power plants
4. Agricultural—farms, timberland, ranches, and orchards
5. Special-purpose—churches, schools, cemeteries, and government-held lands

Question 21

A market is

Answer 21

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.

Question 22

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.

Answer 22

Drop -Rise

Question 23

What factors affect supply?

Answer 23

the labor force, construction costs, government controls, and monetary or financial policies

Question 24

What factors affect demand?

Answer 24

population, demographics, and employment and wage levels.