Terms and Principles

Question 1

Real Estate

Answer 1

the physical land and everything attached to it; tangible; immovable; unique.

Question 2

Real property

Answer 2

rights, benefits, and interests inherent in ownership of real estate; conveyed by deed.

Question 3

4 powers of government

Answer 3

• escheat
• police power
• eminent domain
• taxation

Question 4

Escheat

Answer 4

gives government title to a property if the owner dies without a will or heirs.

Question 5

Police power

Answer 5

the right of government to regulate property to protect public health and safety, morals and the general welfare

Question 6

taxation

Answer 6

allows state and local governments to raise revenue through assessments

Question 7

eminent domain

Answer 7

the right of government to take private property for public use upon the payment of just compensation

Question 8

fee simple

Answer 8

absolute ownership unencumbered by any other interest or estate

Question 9

Leased fee

Answer 9

ownership interest held by landlord

Question 10

leasehold

Answer 10

possessory interest held by tenant

Question 11

Easement

Answer 11

the right to use another land for a stated purpose; conveys use, but not ownership.

Question 12

realty

Answer 12

a term used to distinguish either real property or real estate from items of personal property

Question 13

personal property (personalty)

Answer 13

moveable items of property that are not permanently affixed to real estate.

Question 14

fixture

Answer 14

item of personal property permanently installed or affixed to real estate

Question 15

trade fixture

Answer 15

personal property brought on a property by a tenant for use in conducting business

Question 16

improvements pertaining to realty

Answer 16

personal property that cannot be removed without substantial physical damage or economic loss.

Question 17

Historical cost

Answer 17

the actual cost to create something

Question 18

replacement cost

Answer 18

the estimated to construct, at current prices as of a specific date, a substitute for a building

Question 19

reproduction cost

Answer 19

the estimated cost to construct at current prices as of effective date of the appraisal, and exact duplicate or replica.

Question 20

price

Answer 20

the sum of money or goods asked or given for something

Question 21

value

Answer 21

the monetary worth of something to a buyer or seller at a given time

Question 22

value in use

Answer 22

the value a specific property has for a specific use or to a specific person

Question 23

value in exchange

Answer 23

the value a property has to a persons generally.

Question 24

fair market value

Answer 24

highest price, date of valuation, seller, being willing to sell, ready, willing and able to buy, full knowledge of all the uses

Question 25

Most probable selling price

Answer 25

the price at which a property would most probably sell if exposed on the market for a reasonable time under the market condition

Question 26

Highest price

Answer 26

the highest price is the basis of establishing the fair market value of property taken under eminent domain law in california

Question 27

Demand

Answer 27

reflects the needs of consumers

Question 28

utility

Answer 28

the ability of a product to satisfy a human want, need, or desire

Question 29

scarcity

Answer 29

the present or anticipated supply of an item relative to the demand for it

Question 30

transferability

Answer 30

effective purchasing power

Question 31

Factors that affect value (PEPS)

Answer 31

• physical
• economical
• political
• social

Question 32

substitution

Answer 32

a buyer will not pay more for one property than for another that is equally desirable

Question 33

supply and demand

Answer 33

value increases as supply decreases or demand increases

Question 34

contribution

Answer 34

the value that an item contributes to the overall value of the property

Question 35

anticipation

Answer 35

prospective future benefits

Question 36

conformity

Answer 36

result of a reasonable degree of architectural sameness

Question 37

progression

Answer 37

concept that a lower priced property will be worth more in a higher priced neighborhood than it would in a hood of comparable properties

Question 38

regression

Answer 38

the concept that a higher priced property will be worth less in a lower priced hood than it would in hood of comparable properties.

Question 39

competition

Answer 39

each property competes with all other properties suitable for the same use

Question 40

balance

Answer 40

max value is reached at equilibrium

Question 41

externality

Answer 41

value can be affected positively or negatively by factors external to a property