Exam 1 - Chapter 1

Question 1

What is Real Estate?

Answer 1

An identified parcel or tract of land, including any improvement. “Tangible Sticks & Bricks”

Question 2

What is Real Property?

Answer 2

All interest, benefits and rights inherent in the ownership of physical real estate. Also referred to as an estate.

Question 3

What are the four Powers of the Government

Answer 3

Taxation: property taxes.

Eminent Domain: Condemnation (Gov’t takes property for the good of the community.

Police Power: Zoning and building codes.

Escheat: Gov’t get the property with the death of an owner with no heirs.

Question 4

Personal Property

Answer 4

Movable Item (e.g. fridge, portable book shelves, trampoline)

Question 5

Intangible Assets

Answer 5

e.g. business enterprise (blue sky), goodwill, skilled labor force, or franchises and licenses

Question 6

4 tests of a Fixture

Answer 6

• Manner of Attachment - Manner in which the item is affixed
• Adaptation - Character of the item and its adaption to the real estate
• Intent of the party who attached the item
• Mutual agreement of both parties

*** trade fixtures (chattel) are personal property regardless of how they are affixed (e.g. unharvested corn)

Question 7

Types of valuation:

Answer 7

Market Value (focus of course)
Use Value
Investment Value (focus of course)
Assessed Value
Business Value

Question 8

Market Value (focus of course)

Answer 8

Based on typical market participants with no abnormal influences

Question 9

Use Value

Answer 9

For a specific user or purpose

Question 10

Investment Value

Answer 10

For a specific investor based on specific returns

Question 11

Assessed Value

Answer 11

Used by a County within a State to aid in property tax assessments

Question 12

Business Value

Answer 12

The intangible assets

Question 13

Define “appraisal”

Answer 13

The “act” or process of developing an opinion of value.