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Principles of Real Estate > Part 1: Principles of Real Estate > Flashcards

Part 1: Principles of Real Estate Flashcards

1
Q

7 types of real estate industry

A

1) Brokerage
2) Appraisal
3) Property Development
4) Property Management
5) Rental Finding Services
6) Urban Planning
7) Property Inspection

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2
Q

Class- Where people live

A

Residential

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3
Q

Class- Used for business

A

Commercial

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4
Q

Class- Factories and warehouses

A

Industrial

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5
Q

Class- Where living things are raised, such as farms and ranches

A

Agricultural

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6
Q

Class- churches, schools, and hospitals

A

Special Purpose

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7
Q

The location of the property is always the same; it doesn’t move

A

Immobility (physical characteristic)

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8
Q

The land itself cannot be completely destroyed or worn out

A

Indestructibility (physical characteristic)

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9
Q

Each parcel of real estate is unique, if only due to location

A

Nonhomogeneity (physical characteristic)

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10
Q

There is a fixed supply of land which affects the price of that land

A

Scarcity (economic characteristic)

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11
Q

Intentional changes to a parcel of land that can either increase or decrease its value

A

Modification (economic characteristic)

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12
Q

The actual changes made to a parcel of land, regardless of their impact (eg. landscaping)

A

Improvements

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13
Q

Property owners hold onto their investment/property for a long time

A

Permanence of Investment, or “Fixity” (economic characteristic)

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14
Q

The site (actual location and surroundings) matter to buyers

A

Area Preference, or “Situs” (economic characteristic)

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15
Q

Prices increase (seller’s market) when…

A

a) demand increases
OR
b) supply decreases

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16
Q

Prices decrease (buyer’s market) when…

A

a) demand decreases
OR
b) supply increases

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17
Q

Segments or layers in any area according to price range or type of property; more demand for one price range than another within one class of real estate

A

Market Segmentation

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18
Q

Supply is affected over time by 3 things…

A

1) Supply of construction materials and labor
2) Changes in laws
3) Availability of mortgage money

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19
Q

Demand is driven by 4 things…

A

1) Population density
2) Age groups and family sizes
3) Employment and wages
4) Other factors that affect the desirability of an area

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20
Q

System of property ownership in the US with all the rights of ownership (as opposed to the feudal system)

A

Allodial System

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21
Q

Based on court decisions over many years based on customs and common practices that are considered sensible and fair

A

Common Law

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22
Q

Rights of ownership

A

Bundle of Rights

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23
Q

Right to occupy the property

A

Right of Possession

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24
Q

Right to possess the property without interference

A

Right of Enjoyment

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25
Q

Right to dispose of the property (sell or give it to someone)

A

Right of Disposition

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26
Q

Right to use the property (legally) as desired

A

Right of Control

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27
Q

Right to keep others from using the property

A

Right of Exclusion

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28
Q

Bundle of Rights (5)

A

1) Possession
2) Enjoyment
3) Disposition
4) Control
5) Exclusion

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29
Q

Extent of rights to a parcel of land

A

To center of earth and upwards to infinity, along with naturally growing plants and minerals

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30
Q

Rights that may be purchased for walkways, bridges, etc

A

Air Rights

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31
Q

Landowner can sell the land but retain mineral rights

A

Subsurface Rights

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32
Q

Land and anything man-made that has been permanently attached to the land

A

Real Estate

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33
Q

The actual physical real estate plus the bundle of rights

A

Real Property

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34
Q

Any property that is not real property; property that is moveable

A

Personal Property, or “Chattel” property, or “Personalty”

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35
Q

When real property becomes personal property (eg. tree cut down and turned into lumber)

A

Severance

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36
Q

When personal property becomes real property (eg. lumber is used to build a house)

A

Attachment

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37
Q

Cultivated annual crops are personal property called…

A

Emblements, or Fruits of Industry

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38
Q

An object that was once personal property but is now attached (eg. dishwasher, cabinets)

A

Fixture

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39
Q

Fixture used for a business that can be removed if the tenant leaves, although the tenant is responsible for any damages caused by the removal (eg. shelves, signs, counters)

A

Trade Fixture

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40
Q

4 tests the court uses to determine real vs. personal property

A

1) Agreement of the Parties
2) Intention of the Parties
3) Method of Attachment
4) Adaption of the Item

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41
Q

Something in writing

A

Agreement of the parties

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42
Q

Something is clearly labeled as belonging to one of the parties

A

Intention of the parties

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43
Q

Item is attached in a way suggesting permanence (would cause damage is removed)

A

Method of attachment

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44
Q

Item is clearly customized to fit a specific space

A

Adaption of the item

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45
Q

Purpose of police powers

A

To protect public health and safety

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46
Q

Regulate and control the use of the land

A

Zoning Ordinances

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47
Q

5 things that zoning ordinances regulate and control

A

1) Lot sizes
2) Type/style/appearance of structures
3) Building heights
4) Setbacks
5) Density

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48
Q

Distance from the lot line to the building line

A

Setback

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49
Q

of building in an area

A

Density

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50
Q

Determines the purpose(s) for which land can be used

A

Zoning Classifications

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51
Q

4 Zoning Classifications

A

1) R- Residential
2) C- Commercial
3) I- Industrial
4) A- Agricultural

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52
Q

Zoning powers are conferred on municipal governments in this way…

A

State enabling acts/legislation

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53
Q

Automatic local governing zoning powers

A

Home Rule Powers

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54
Q

A new, preplanned area of a city with mixed-use zoning; specific and predetermined portion of a city

A

Planned Unit Development (PUD)

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55
Q

An area between a residential and commercial zone (or any two classifications of zones)- often parks and playgrounds

A

Buffer Zone

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56
Q

If the property existed before zoning rules changed, an exception can be made called…

A

Nonconforming Use, or “Grandfathered Use”

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57
Q

Reducing density in an area; reducing the number of units per building or number of buildings

A

Downzoning

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58
Q

Increasing density in an area

A

Upzoning

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59
Q

When a specific property is rezoned to permit use different from other properties in the area to benefit area residents

A

Spot Zoning

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60
Q

When a property owner appeals to a local zoning appeals board for a variance

A

Zoning Appeal

61
Q

An exception given by a local zoning appeals board

A

Variance

62
Q

A special-use permit

A

Conditional-Use Permit

63
Q

Standards regarding building safety

A

Building codes

64
Q

Granted for new construction if building complies with zoning laws and building codes

A

Building permit

65
Q

Given after inspection and required for occupation

A

Certificate of Occupancy

66
Q

Someone who buys undeveloped land and divides it into smaller lots for sale

A

Subdivider

67
Q

A map created by a subdivider showing boundaries

A

Plat

68
Q

Putting housing units on smaller lots to create open space in an area

A

Clustering

69
Q

Someone who improves the land, constructs buildings, and sells them

A

Developer

70
Q

Agency that regulates land sales and requires developers to provide buyers with a comprehensive property report with disclosures

A

Housing and Urban Development (HUD)

71
Q

If given a comprehensive property report, length of time the buyer has to revoke the contract

A

7 days

72
Q

If not given a comprehensive property report, length of time the buyer has to revoke the contract

A

2 years

73
Q

Charge on real estate to meet financial needs of the government

A

Taxation

74
Q

Power of the government to seize private land for public good without the owner’s permission

A

Eminent domain

75
Q

The process of seizing land through eminent domain

A

Condemnation

76
Q

The process of property owners forcing the government to buy their property because a government project has caused significant loss of value

A

Inverse Condemndation

77
Q

When a property is reverted to the state and auctioned off due to the owner dying without a will or heir

A

Escheat

78
Q

Substance that was used as insulation and material for flooring, roofing, etc but was banned in 1978

A

Asbestos

79
Q

Substance that was used in paint but was banned in 1978

A

Lead

80
Q

Legislation that requires all prior knowledge of lead/asbestos to be disclosed before a sale

A

Residential Lead-Based Paint Hazard Act (1978)

81
Q

Exemptions to the Residential Lead-Based Paint Hazard Act focus on…

A

Homes that house the elderly; children are most at risk from lead poisoning

82
Q

Colorless, odorless, tasteless gas produced by decay of radioactive substances

A

Radon

83
Q

Substance that can grow anywhere with sufficient moisture

A

Mold

84
Q

Legislation that allows states to get financing to clean up industrial sites with toxic waste and protects developers from liability

A

Brownfields Legislation

85
Q

Industrial sites with toxic waste

A

Brownfield

86
Q

An agreement or circumstance that places restriction of how a property can be used

A

Encumbrance

87
Q

Makes something easier or better for someone

A

Easement

88
Q

Type of easement that allows something

A

Positive easement

89
Q

Type of easement that prevents something

A

Negative easement

90
Q

Easement that is in effect between properties next to each other where one is landlocked; about the positions of the properties, not the people; belongs to the land and transfers with the title

A

Appurtenant Easement

91
Q

The property that benefits from an appurtenant easement

A

Dominant Tenement

92
Q

The property that serves the need of the dominant in an appurtenant easement

A

Servient Tenement

93
Q

Easement allowing someone to do something necessary

A

Easement by Necessity

94
Q

Easement that is personal/between people and ends when a party dies or the property is sold

A

Personal Easement in Gross

95
Q

A temporary agreement to use a property for a specific purpose and time

A

License to use

96
Q

Most common type of easement given to railroads, utility companies, etc to maintain their equipment

A

Commercial Easement in Gross

97
Q

When another person’s property has been used for 5 or more years, a permanent easement can be given called…

A

Easement by Prescription, or Prescriptive Easement

98
Q

3 requirements for an Easement by Prescription

A

1) Uninterrupted, continuous use of the property
2) Use without the owner’s consent
3) Use was open, visible, and notorious (the property owner was aware of it)

99
Q

Allows successive owners to use the previous owner’s years of use for easement by prescription

A

Tacking On

100
Q

Unauthorized physical intrusion of some type of real property onto an adjoining property (eg. a fence)

A

Encroachment

101
Q

Conditions or limitations placed on a property by the owner of the property when transferred to another party- often enforced by 3rd parties like HOA

A

Deed Restrictions

102
Q

Residential Lead-Based Paint Hazard Act (1978)

A

1) Applies to property before 1978
2) Buyers have the right of inspection within 10 days
3) Disclosures must be kept for 3 years

103
Q

A lender’s claim against a collateral asset which gives the lender the right to sell the home (with a court order) if the borrower fails to repay the loan

A

Lien

104
Q

The holder of the loan; the lender

A

Leinor

105
Q

The borrower of the loan

A

Leinee

106
Q

Classification of lien that refers to a claim against specific property

A

Specific lien

107
Q

Classification of lien that refers to a claim against all of a person’s real and personal property

A

General lien

108
Q

A general lien resulting from a lawsuit against the owner

A

Judgment lien

109
Q

A lien created knowingly and voluntarily by an owner

A

Voluntary lien

110
Q

A lien placed on a property without the owner’s consent

A

Involuntary lien

111
Q

An involuntary lien created by law

A

Statutory lien

112
Q

An involuntary lien created by the court

A

Equitable lien

113
Q

If property must be sold to satisfy one or more liens, how are liens prioritized?

A

1) Real Estate Tax liens and special assessments

2) Other liens are prioritized by date/time they were filed with the county

114
Q

When the holder of a lien agrees to move it to a lower priority because it will be to their advantage

A

Subordination Agreement

115
Q

Assessed value used for real estate taxes

A

Ad Valorem

116
Q

3 Exemptions from ad valorem taxes

A

Government, school, and hospital property

117
Q

A factor that is multiplied by the assessed value to raise or lower a community’s overall assessed value so it is in line with the entire state

A

Equalizer

118
Q

Occurs when taxes on a property have not been paid for a period of time specified by law

A

Tax sale

119
Q

When the owner gets a chance to pay what is owed & retain the property BEFORE it goes to auction

A

Equitable redemption

120
Q

When the owner gets a chance to pay what is owed & retain the property AFTER it goes to auction

A

Statutory redemption

121
Q

Taxes for improvements made in a specific area or neighborhood

A

Special Assessments

122
Q

Protections for contractors when they’re not paid for work done or materials supplied

A

Mechanics lien

123
Q

A notice in the public records that informs if there is a pending lawsuit involving a property

A

Lis Pendens

124
Q

An exact way to describe the location and boundaries of a real estate property

A

Legal Descriptions

125
Q

Type of legal description using monuments, degrees, and measurements around the perimeter of a property in a clockwise manner

A

Metes and Bounds Method

126
Q

North/South lines in Rectangular Survey System

A

Principal Meridians

127
Q

East/West lines in Rectangular Survey System

A

Baselines

128
Q

Vertical rows measured from principal meridians

A

Ranges

129
Q

Horizontal rows measured from baselines

A

Townships

130
Q

Townships- how many square miles? How many sections?

A

1) 36 square miles

2) 36 sections

131
Q

of acres in a section

A

640

132
Q

Systematic adjustments to every 4th township line (every 24 miles) to compensate for the curvature of the earth

A

Correction lines

133
Q

Systematic adjustments to every 4th range line (every 24 miles) to compensate for the curvature of the earth

A

Guide meridians

134
Q

Sections in a township that are oversized or undersized to adjust for surveying errors

A

Fractional sections

135
Q

Areas of land that are less than a full quarter section in a fractional section (not owned by the government)

A

Government lots

136
Q

Used in conjunction with mete and bounds or rectangular survey descriptions that number lots in an urban area

A

Plat-of-survey method, or “Lot-block-tract method”

137
Q

An official point (a level surface) in every city from which elevations are measured

A

Datum

138
Q

Bronze markers placed throughout the US indicating elevation

A

Benchmarks

139
Q

Square miles in a township

A

36

140
Q

Square miles in a section

A

1

141
Q

Acres in a section

A

640

142
Q

Feet in a mile

A

5,280

143
Q

Rods in a mile

A

320

144
Q

Square feet in an acre

A

43,560

145
Q

Square rods in an acre

A

160

146
Q

Feet in a rod

A

16 1/2

147
Q

Yards in a rod

A

5 1/2

148
Q

Feet in a chain

A

66

149
Q

Rods in a chain

A

4

Principles of Real Estate (3 decks)

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