Chapter 2

Question 1

Real Estate

Answer 1

1. a market
2. defined as land at, above, and below the earth’s surface, plus all things permanently attached to it.
3. natural lands along with all human-made improvements (an addition to lands such as a building, fence)

Question 2

Real Property

Answer 2

1. includes both land and real estate
2. the interests, benefits, and rights that are automatically included in the ownership of land and real estate.
3. includes the surface, subsurface, airspace,. any improvements, and the bundle of legal rights

Question 3

Appurtenance

Answer 3

1. appendix
2. is associated with the property, not necessarily a direct part of it.
3. includes parking spaces in multi-unit buildings, easements, water rights, and other improvement
4. an owner may transfer to the new owner when sold

Question 4

Surface and subsurface rights

Answer 4

An owner may transfer surface rights without transferring the subsurface rights.

Question 5

Economic characteristics of Real Estate

Answer 5

will affect the value of investment

1. Scarcity: lands are not inhabited, used..
2. Improvement: shopping malls, toxic waste dump, a nuclear power plant
3. Permanence of investment: The capital and labor used to build an improvement represent a large fixed investment
4. Location (situs): people’s reference for given areas.

Question 6

Physical characteristics of Real Estate

Answer 6

1. Immobility: location cannot be changed, ,it’s fixed
2. Indestructibility:
3. Uniqueness: No two parcels of land are ever exactly the same.

Question 7

Difference between Real Estate and Real Property

Answer 7

Real estate is simply a piece of land plus any natural or artificial—man-made—improvements that are attached or have been added. Natural attachments are part of the land and include trees, water, valuable mineral deposits, and oil. Artificial improvements include buildings, sidewalks, and fences. Real estate can be split into two broad categories: residential and commercial.

Real property is a less commonly used term and as such, is a less commonly understood concept. Real property, is a broader term and includes the land itself and also any buildings and other improvements attached to the land. It also encompasses the rights of use and enjoyment of certain land, as well as any of its improvements.

Renters and leaseholders may have the right to inhabit land or buildings, a real property consideration, but those things are not considered real estate.

In general, the difference between real estate and real property boils down to the inclusion of the bundle of rights. The real property consists of both physical objects and common law rights whereas real estate consists only of physical objects

Real property is conveyed by a deed
Personal property is conveyed by a bill of sale..

Question 8

Residential Property

Answer 8

is property intended for human habitation by a single family or multiple families. Real estate may be leased or owner-occupied, but the term residential real estate most often refers to leased property.

Question 9

Commercial Property

Answer 9

Commercial real estate has a business use and focus. This property type includes office buildings, malls, restaurants, and other such activities. Commercial real estate may be owner-occupied or leased. Industrial real estate is a subdivision of commercial real estate and includes property where manufacturing, warehousing, production, and assembly take place.

Question 10

Bundle of Legal Rights

Answer 10

1. The right to possess: is the right to occupy the property.
2. The right to control: is the right to determine interests and uses for others.
3. The right to enjoy: is the right to use the property without outside interference.
4. The right to exclude: is the right to refuse others’ interests or uses for the property.
5. The right to dispose of: is the right to determine how and if the property is sold or given to another party such as will, sell, transfer….

Question 11

Personal property

Answer 11

is movable and not affixed to or associated with the land, which includes all property except real property

Question 12

Chattels

Answer 12

are items of personal property such as tangibles as chairs, tables, clothing, money, bonds and bank accounts

Question 13

Manufactured housing

Answer 13

dwellings that are built off site and trucked to a building lot where they are installed or assembled

Question 14

Mobile home

Answer 14

refers to factory-built housing constructed before 1976.
personal property: move for single trip
real property: affixed to the land

Question 15

Emblement (Plants)

Answer 15

Annually cultivated crops, such as wheat, corn, vegetables, and fruit commonly regards as personal property until they are growing, they will stay with real property

Question 16

Severance

Answer 16

refers to real property can become personal property
a growing tree (real estate), cut down (personal property)
an apple on a tree (real property), pick up (personal property)

Question 17

Annexation

Answer 17

cement, sand, stone (personal property) to make sidewalk (real property)

Question 18

Fixtures

Answer 18

A fixture is a personal property that has been so affixed to land or a building that, by law, it becomes part of the real property such as heating system, AC, elevator equipment, radiators, random systems, kitchen cabinets, light fixtures, plumbing fixtures.

Added and Affixed

Question 19

Legal tests of FixturesEstate License Ac

Answer 19

An intent to recognize personal property or fixtures
(removable or permanently affixed?)
A court takes three methods to determine..
Method of attachment: movable or affixed/cause damage or not
Adaptation to real estate: is being used as ..
Agreement: in a written contract

Sellers should clarify what to sell in the beginning of the sales process.

Question 20

Trade fixtures

Answer 20

are usually owned and installed by a tenant for the tenant’s use and are movable.
Tenants should removed the trade fixtures by the last day of the lease term unless it will turn to the real property of the landlord, (Accession)

Question 21

Real Estate License Act of 200

Answer 21

governs the practice of real estate in Illinois, rules amended and established in 2010 by the Illinois Department of Financial and Professional Regulation (IDFPR)