Chapters 1-5 Flashcards
Real Estate Broker
A person or an organization acting as the agent for others in negotiating the purchase and sale of real property for a fee.
Real Estate Salesperson
An individual who is licensed to negotiate and arrange real estate sales; works for a real estate broker
Appraisers
One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience judgement, fact, and use of formal appraisal processes
Property Managers
a person who manages properties for an owner as the owner’s agent
Home inspectors
a qualified professional trained and experienced in evaluating buildings and their components
Mortgage Brokers
a broker who arranges a loan between a lender and a borrower for a fee
Architects
a licensed professional who designs buildings with construction documents and specifications
General contractors
contractor whose principle business is in connection with any structure being build, requiring in its construction the use of at least two unrelated building trades of crafts
Real estate cycle
Recovery - Expansion - Hyper Supply - Recession
Recovery
when there is low demand, which is indicated by declining vacancies in properties, and no new construction is happening. Demand is balanced with supply
Expansion
activity resumes. Vacancies are still down, implying a market for property, new construction is going on to meet anticipated need.
Hyper Supply
New construction but vacancies are increasing, indicating there might be an oversupply developing
Recession
supply has reaches\d point where it tips the seesaw, with an excess of units available, more than demand requires. Results in increase inventory.
brokerage engagements
each brokerage agreement has to include the terms of the agreement and an expiration date. When the engagement is entered into, the licensee is obligated to provide original copies of the agreement to all parties involved.
Management agreements
involve licensees with property management relationships with their clients. Any written property management agreement must identify the property being managed and list the terms and conditions of the manager’s responsibilities.
Appreciation
Monetary gain resulting from the increase in the market value of an investment, excluding additions of capital. For example, a house which is sold five years after it was purchased for 50% more than the purchase price.
Capital Gains
At resale of a capital item, the amount by which the net sale proceeds exceed the adjusted cost basis (book value). Used for income tax computations. Gains are called short or long based upon the length of the holding period after acquisition. Usually taxed at lower rates than ordinary income.
Straight Line Depreciation
A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement.
Tax-Deferred Exchange
The trade or exchange of one real property for another without the need to pay income taxes on the gain at the time of trade.
Property Insurance
Provides protection against most risks to property, such as fire, theft and some weather damage.
Land
The materials of the earth, whatever may be the ingredients of which it is composed, whether soil, rock, or other substance, and includes free or unoccupied space for an indefinite distance upwards as well as downwards. Land just means raw land. Does not include man-mad structures on the surface or below.
Real estate
Land plus anything permanently attached to land. House, building, fence, or anything else a person permanently installs on their land – fixtures or appurtenances. Mobile home, trailer, or wagon not included in real estate ownership. Owners of mobile homes rent the land where it rests.
Real Property
Land, things affixed to land, appurtenances, plus the bundle of rights. Rights depend on prior owner and what was conveyed to current owner. Bundle of rights.
Personal Property
everything that is not property – moveable property or chattel.
Fixtures
Appurtenances attached to the land or improvements, which usually cannot be removed without agreement as they become real property; Examples – plumbing fixtures, store fixtures built into the property, wiring, sometimes appliances, wells underground storage tanks, sewer systems, and mines.
Method of Attachment
if an item is attached using bolts, screws, nails, glue, cement, or another permanent method, it if considered a fixture, therfore real property
Adaptability
items that were custom built to fit in a particular room will most likely be a fixture
Relationship of Parties
if the parties went to court to determine if an item is a fixture, the courts typically favor the buyer over the seller, and tenant over the landlord
Intentions of parties
what was the intention of the seller when they installed the item? if the seller installed an item with the intention of making it permanent, its considered a fixture
Agreement between parties
most purchase contracts will expressly define which items are included in the sale. Fixtures that will be personal property should be state in writing
Air rights
The rights in real property to the reasonable use of the air space above the surface of the land.
Bundle of Rights
all legal rights associated with the ownership of property. Include right to use, possession, encumbering, and dispositions
Right of Possession
Owner exclusively owns the property
Owner can opt to share their right of possession to the property with another person or other legal entity
Right to Dispose
owner has the right to sell or transfer all or part of the property
Right to use
owner can use the property in any legal manner
right to encumber
owner may place a lien on the property, meaning owner can take out a mortgage on the property
right of quiet enjoyment
owner can possess and use the property in peace, without outside disturbances
Mineral Rights
A landowner’s right to receive a portion of the profits of any minerals that are extracted from the land
Chattel
Goods or every species of property movable or immovable which are not real property. Personal property.
Emblements
The crops and other annual plantings considered to be personal property of the cultivator.
Personal Property
Any property which is not real property.
Trade Fixture
Articles of personal property annexed by a business tenant to real property which are necessary to the carrying on of a trade and are removable by the tenant. Examples: Display counters, computers, sale racks, registers. Often have liens on them.
