CHP 54 - Land Brokerage

Question 1

Primary Features that determine land utilitly

Answer 1

water availability
Soil quality
Terrain
Topography
Climate
Vegetation
Elevation
Minerals
Configuration

Question 2

Primary locational factors that determine the value of a particular site

Answer 2

Community
Demographics
Linkages and Access
Transportation Systems
Infrastructure
Utilties
Amenities

Question 3

Major governmental influence on land use and value

Answer 3

Power to zone

Taxes

Environmental regs

Title restrictions

Question 4

Land trasaction types

Answer 4

Straight Sale
Installment Sale
Exhange

Question 5

Land Lease transaction types

Answer 5

Land lease

Sale/leaseback

Question 6

Straigth sale

Answer 6

motivated by investments concerns usually cash or cash-to-loan sale of fee simple interest

Question 7

Installment sale

Answer 7

In return for incremental pymts, fee interest is transferred across several tax years

Question 8

Exchange

Answer 8

A section 1031 exchange allows principal to defer tax obligations resulting from sale

Question 9

Land lease

Answer 9

Land owner laeses land and tenant builds and owns their improvements

Landowner keeps ownership and receives income

Tenant deducts las expenses, depreciates improvements and can sell improvements at end of lease

Question 10

Sale/Leaseback

Answer 10

Owner/User sells undeveloped land to landlord/developer who develops it and leases it back

User gains tax advantage of being able to expense lease payments

Question 11

Rights leases

Answer 11

Interests and rights (water, mineral, farming) are unbundled from fee simple interest in land and leased separately.

Buyer typically pays less than mkt value and pays in fees, royalties or lease pymnts

Question 12

GOv’t use falls within this category of land use….

Answer 12

Commercial and industrial

Question 13

How does option contract benefit a land developer

Answer 13

It allows option holder to control a parcel for minimum cost and risk while putting project together