General concepts Flashcards
What are the four economic characteristics of real estate? (DUST)
Demand, utility, scarcity, transferability
These are the four things that test to see if something is a fixture (MARIA)
Method of attachment, adaptability, relationship of parties, intended use, agreement
These are the four government powers of real estate (PETE)
Police power, Eminent domain, taxation, Escheat
What are the five bundle of rights you get when you acquire property?
Possessed, control, exclude, enjoy, disposition (conveyance)
What are the four essential elements of a contract?
Offer an acceptance, consideration, lawful object, capable parties
What are the essential elements of deed?
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
What are the four unities of joint tenancy? (T.T.I.P) this is where it’s not passed to the heirs
Time: receive title at the same time
Title: must receive title on the same deed
Interest: equal share
Possession : identical right possession
What is a Tennancy in common?
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.
What are the three physical characteristics of land?
Immobility, indestructibility, and uniqueness
Book definition of economic characteristics of real estate
Scarcity, improvements, performance of investment, area preference SIPA (I made that acronym up)
The term non-homogeny refers to
Uniqueness
Pur Autre Vie
For the life of another. Literally means for the life of another. It is a life estate. It is not an estate of inheritance.
Lis pendens
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.
Common law duties of an agent (C.O.L.D. A.C.) means
C- Care, O - Obedience, L - Loyalty, D - disclosure, A - accounting, C - confidentiality.
The C in COLD AC (common law duties of an agent stands for)
Care - the agents obligation to use skill and expertise on behalf of the principal
The O in COLD AC (common law duties of an agent) means what?
O - obedience - following lawful instructions
The L in COLD AC (common law duties of an agent) means what?
L - Loyalty, putting the clients interest above the agents
The D in COLD AC (common law duties of an agent) means what?
D - disclosure, disclosure of material defects in the property
D - Disclosure: The agent must disclose all relevant and material information to the client.
The A in COLD AC (common law duties of an agent) means what?
A - Accounting: The agent must properly account for all funds and property of the client.
The 2nd C COLD AC (common law duties of an agent) means what?
2nd C - C - Confidentiality: The agent must keep the client’s personal information confidential, even after the agency relationship ends.
What are three different kinds of depreciation?
Physical obsolescence - bad roof
Economic obsolescence - airport nearby. Bad neighborhood.
Functional obsolescence - outdated / poor design
The forces that influence value are (PEGS)
Physical, economic, government, social
How is the gross rent multiplier calculated? (GRM)
By dividing sell price by gross monthly rent
GRM = Sales Price / Gross Annual Rental
Income
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?
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
Each unit in a duplex rents for $1,000 per month. With a price of $240,000, what is the monthly gross multiplier?
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.
What are the four essential elements of value?
Demand, utility, scarcity, and transfer ability
What are the four essential elements of value?
Demand, utility, scarcity, and transfer ability
What are the five forces that influence value?
Physical, economic, political, social, situs
When an appraiser determines value, here, she must look at the property for three separate approaches. What are they?
Sales comp comparison approach (market comparison approach), the cost approach, the income (or capitalization) approach
