Chapter 2: Value, Theory & Legal / Economic Framework

Question 1

Ownership of Property, bundle of rights

Answer 1

SLUGER

1. Seller
2. Lease or Rent
3. Use
4. Give Away
5. Enter or Leave
6. Refuse to do any of the above

Question 2

Concepts of Property and Property Rights

Answer 2

1. Real Estate
2. Real Property
3. Personal Property
4. Land
5. Improvements
6. Intangible Property

Question 3

What are the four right that can be removed from the bundle of rights?

Answer 3

PETE

1. Police power
2. Eminent domain
3. Taxation
4. Escheat

Question 4

For property to have value it must possess these 4 things

Answer 4

DUST

1. Desirability
2. Utility
3. Scarcity
4. Transferability (effective purchasing power)

Question 5

What are the four types of Estates?

Answer 5

1. Fee Simple Estate
2. Life Estate
3. Leasehold Estate
4. Possessory Interest

Question 6

What is market value?

Answer 6

The most probable price which a property bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeable and assuming the price is not affected by undue stimulus.

Question 7

What are the 14 principles helpful in understanding property valuation?

Answer 7

1. Anticipation
2. Balance
3. Change
4. Competition
5. Conformity
6. Consistent Use
7. Contribution
8. Increasing and Decreasing Returns
9. Progression and Regression
10. Substitution
11. Surplus Productivity
12. Supply and Demand
13. Externalities
14. Highest and Best Use