Kap Real Estate Chapter 1: Basic Real Estate Concepts Flashcards
There are two major classifications of property:
Real Property and Personal Property
What is Real Property defined as?
is defined as the land, everything that is permanently attached to the land, and everything that is appurtenant to (or goes with) the land
What is Personal property defined as?
is considered to be all property that does not fit the definition of real property
The primary characteristic of personal property is
movability
What is a Chattel?
is an item of movable personal property
include such tangibles as furniture, clothing, money, bonds, and bank accounts.
1) Define Land
2) What else is included in the description of land?
is defined as the earth’s surface extending downward to the center of the earth and upward to infinity, including things permanently attached by nature, such as trees and water
includes the minerals and substances below the earth’s surface together with the airspace above the land up to infinity.
The surface, subsurface, and airspace can be owned separately as surface rights, subsurface rights, and air rights and can be severed by separate
Conveyance
A specific tract of land is commonly referred to as a
parcel
Real estate, or realty, is defined as
land at, above, and below the earth’s surface, including all things permanently attached to it, whether natural or artificial
The term real estate is therefore somewhat broader than the term land and includes
not only the physical components of the land provided by nature but also all human-made permanent improvements on and to the land.
Land is referred to as improved when
streets, utilities, sewers, and other improvements are brought to the land, making the land suitable for building.
The broader term real property includes
the physical surface of the land, what lies below it, what lies above it, and what is permanently attached to it, as well as all the rights of ownership that are usually referred to as the bundle of legal rights, including the right to possession and use, the right to exclude others, the right to profit from the land, and the right to dispose of or encumber the land.
______________ are any structures attached to the land, and __________ are any interests in real estate capable of being inherited.
Tenements
Hereditaments
Seven characteristics define the nature of real property and affect its use. These characteristics fall into two broad categories:
physical characteristics and economic characteristics
Physical Characteristics of land are:
Immobility, Indestructibility, Uniqueness
Situs is
a related term regarding location that takes into consideration social factors in addition to economic factors.
highest and best use is
the use that will give the owners the greatest actual return on their investment
Advantages of real estate investment
- good rate of return
- Most real estate values tend to keep pace with the rate of inflation
- real estate entrepreneurs may enjoy various tax advantages
Disadvantages of real estate investment
- Unlike stocks and bonds, real estate is not a liquid asset
- it is difficult to invest in real estate without some degree of expert advice.
- Rarely can a real estate investor sit idly by and watch the invested money grow. Management decisions must be made.
- a high degree of risk often is involved in real estate investment.
The business of bringing together people interested in completing a real estate transaction is called
brokerage
Real estate sales professionals in North Carolina usually begin their career in apprenticeship roles as
provisional brokers
real estate can generally be classified into one of the following five categories:
- Residential—all property used for housing, from acreage to small city lots, both single-family and multifamily, in urban, suburban, and rural areas
- Commercial—business property, including offices, shopping centers, stores, theaters, hotels, and parking facilities
- Industrial—warehouses, factories, land in industrial districts, and power plants
- Agricultural—farms, timberland, ranches, and orchards
- Special-purpose—churches, schools, cemeteries, and government-held lands
A market is
a place where goods are bought and sold, where value for those goods is established, and where it is advantageous for buyers and sellers to trade.
The function of the market is to facilitate this exchange by providing a setting in which the _________________ forces of the economy can establish market value
-supply and demand
Essentially, when supply increases, prices ______ as more producers compete for buyers; when demand increases, prices _____ as more buyers compete for the product.
- drop
- rise
Factors that tend to affect supply in the real estate market include
the labor force, construction costs, government controls, and monetary or financial policies
Factors that tend to affect demand in the real estate market include
population, demographics, and employment and wage levels.