General concepts

Question 1

What are the four economic characteristics of real estate? (DUST)

Answer 1

Demand, utility, scarcity, transferability

Question 2

These are the four things that test to see if something is a fixture (MARIA)

Answer 2

Method of attachment, adaptability, relationship of parties, intended use, agreement

Question 3

These are the four government powers of real estate (PETE)

Answer 3

Police power, Eminent domain, taxation, Escheat

Question 4

What are the five bundle of rights you get when you acquire property?

Answer 4

Possessed, control, exclude, enjoy, disposition (conveyance)

Question 5

What are the four essential elements of a contract?

Answer 5

Offer an acceptance, consideration, lawful object, capable parties

Question 6

What are the essential elements of deed?

Answer 6

Parties : the legally competent to a definite person
Words of conveyance: some states have something known as a Habendum Clause “ to have to hold”
Reticle of Consideration: consider consideration required, but not in Nebraska
Signature of grantor acknowledgment : signs in front of a notary
Delivery and acceptance : must be delivered to the grantee during the lifetime of the granto
Legal description : you know what this is brah

Question 7

What are the four unities of joint tenancy? (T.T.I.P) this is where it’s not passed to the heirs

Answer 7

Time: receive title at the same time
Title: must receive title on the same deed
Interest: equal share
Possession : identical right possession

Question 8

What is a Tennancy in common?

Answer 8

Interest in the property is passed to the heirs can own unequal shares. I’ll have the right to possess. I’ll have the right to occupy and can’t exclude.

Question 9

What are the three physical characteristics of land?

Answer 9

Immobility, indestructibility, and uniqueness

Question 10

Book definition of economic characteristics of real estate

Answer 10

Scarcity, improvements, performance of investment, area preference SIPA (I made that acronym up)

Question 11

The term non-homogeny refers to

Answer 11

Uniqueness

Question 12

Pur Autre Vie

Answer 12

For the life of another. Literally means for the life of another. It is a life estate. It is not an estate of inheritance.

Question 13

Lis pendens

Answer 13

Latin for litigation pending. Is a notice filed in public record of pending legal action affecting the title or possession of property. It doesn’t have a physical effect on the property, but creates a cloud on the title.

Question 14

Answer 14

Question 15

Answer 15

Question 16

Common law duties of an agent (C.O.L.D. A.C.) means

Answer 16

C- Care, O - Obedience, L - Loyalty, D - disclosure, A - accounting, C - confidentiality.

Question 17

The C in COLD AC (common law duties of an agent stands for)

Answer 17

Care - the agents obligation to use skill and expertise on behalf of the principal

Question 18

The O in COLD AC (common law duties of an agent) means what?

Answer 18

O - obedience - following lawful instructions

Question 19

The L in COLD AC (common law duties of an agent) means what?

Answer 19

L - Loyalty, putting the clients interest above the agents

Question 20

The D in COLD AC (common law duties of an agent) means what?

Answer 20

D - disclosure, disclosure of material defects in the property

D - Disclosure: The agent must disclose all relevant and material information to the client.

Question 21

The A in COLD AC (common law duties of an agent) means what?

Answer 21

A - Accounting: The agent must properly account for all funds and property of the client.

Question 22

The 2nd C COLD AC (common law duties of an agent) means what?

Answer 22

2nd C - C - Confidentiality: The agent must keep the client’s personal information confidential, even after the agency relationship ends.

Question 23

What are three different kinds of depreciation?

Answer 23

Physical obsolescence - bad roof
Economic obsolescence - airport nearby. Bad neighborhood.
Functional obsolescence - outdated / poor design

Question 24

The forces that influence value are (PEGS)

Answer 24

Physical, economic, government, social

Question 25

How is the gross rent multiplier calculated? (GRM)

Answer 25

By dividing sell price by gross monthly rent

GRM = Sales Price / Gross Annual Rental
Income

Question 26

A property is valued at $300,000 with a 5% capitalization rate (cap rate). What would the property’s valued be if the potential buyer wants an 8% return on their money?

Answer 26

The value will move in the opposite direction as the capitalization rate (cap rate). $300,000 x 0.05 = $15,000 (net income) $15,000 ÷ 0.08 =
$187,500

Question 27

Each unit in a duplex rents for $1,000 per month. With a price of $240,000, what is the monthly gross multiplier?

Answer 27

To calculate the monthly gross multiplier, we need to divide the price of the duplex by the monthly rental income.
In this case, the price of the duplex is $240,000 and each unit rents for $1,000 per month. Since it is a duplex, we can multiply the rent of one unit by 2 to get the total monthly rental income for the duplex.
Total monthly rental income = $1,000 × 2 = 2,000
Now we can calculate the monthly gross multiplier.
Monthly gross multiplier = Price of the duplex
Total monthly rental income
Monthly gross multiplier = $240,000 ÷ 2,000
Monthly gross multiplier = 120
Therefore, the monthly gross multiplier for this duplex is 120.

Question 28

What are the four essential elements of value?

Answer 28

Demand, utility, scarcity, and transfer ability

Question 29

What are the four essential elements of value?

Answer 29

Demand, utility, scarcity, and transfer ability

Question 30

What are the five forces that influence value?

Answer 30

Physical, economic, political, social, situs

Question 31

When an appraiser determines value, here, she must look at the property for three separate approaches. What are they?

Answer 31

Sales comp comparison approach (market comparison approach), the cost approach, the income (or capitalization) approach