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Real Estate > The Real Estate Business > Flashcards

The Real Estate Business Flashcards

1
Q

Describe real estate activities

A

Create, improve, manage, maintain, demolish, own, regulate, transfer

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2
Q

Identify property type specializations

A

residential; residential income; office; retail; industry; farm and ranch; special purpose; land

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3
Q

Identify primary brokerage activities

A

Procure opposite party for buyer or tenant, owner or landlord

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4
Q

Identify forms of brokerage specialization

A

By property type; geographical area; transaction type; client type; business type; and form of client relationship

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5
Q

Describe function of major professional organizations

A

Promote interest of practitioners, enhance professional standing

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6
Q

Identify regulated areas

A

All facets are regulated by federal, state, local laws agents must understand laws and adapt practices

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7
Q

List general areas of license law

A

Real estate license laws
Primary body of laws and regulations governing licensure and conduct of brokers and agents
License laws administered and enforced under the jurisdiction of the state real estate commission.

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8
Q

Why do most people entering the real estate profession begin by working with residential properties?

A

Volume of business; familiarity with product; relative simplicity of transactions; availability of employment

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9
Q

Why do brokers and agents often specialize?

A

Size and complexity of markets; competitive factors; difficulty of achieving competence in more than one specialty.

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10
Q

Why is education important in real estate professions, and why do government agencies regulate educational requirements?

A

Complexity of the business; duty to serve the public; legal complexities; pitfalls and liabilities

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11
Q

What is considered land?

What is considered land?

A

The surface area of the earth, all natural things permanently attached to the earth, and everything beneath the surface to the earth’s center and above the surface extending upward to infinity.

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12
Q

What is real estate?

What is real estate?

A

Land and all manmade structures permanently attached to it.

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13
Q

What is an improvement?

What is an improvement?

A

Any manmade structure or item affixed to the land.

This includes such things as fences, streets, buildings, wells, sewers, sidewalks, and piers.

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14
Q

What are the bundle of rights?

What are the bundle of rights?

A

A set of rights associated with ownership of property, including the rights to possess, use, transfer, encumber and exclude

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15
Q

What is real property

What is real property?

A

Real estate and the bundle of rights associated with ownership of real estate.

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16
Q

What is Personal Property

What is Personal Property?

A

All property that is not considered real property; all property that is not land or permanently attached to land, excepting trade fixtures and emblements.

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17
Q

What are Littoral Rights?

What are Littoral Rights?

A

Essentially, if you have properties abutting to non moving bodies of waters such as lakes and seas. Ownership extends to the high-water mark of the body of water.

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18
Q

What are Riparian Rights?

What are Riparian Rights?

A

If a property abuts a stream or river, the owner’s riparian rights are determined by whether the water is navigable or not navigable. If the property abuts a non-navigable stream, the owner enjoys unrestricted use of the water and owns the land beneath the stream to the stream’s midpoint. If the waterway in question is navigable, the waterway is considered to be a public easement. In such a case, the owner’s property extends to the water’s edge as opposed to the midpoint of the waterway. The state owns the land beneath the water.

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19
Q

Define a Fixture

Define what a fixture is.

A

An item permanently attached to land so as to be defined as real property.

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20
Q

Define what conversion means in real estate

Define what conversion means in real estate

A

Changing real property to personal property, and vice versa.

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21
Q

What is Severance?

What is severance?

A

A conversion of real property to personal property through detachment of the item from the land.

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22
Q

What is affixing?

What is Affixing?

A

Affixing, or attachment, is the act of converting personal property to real property by attaching it to the real estate.

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23
Q

What is the important distinction between real estate and real property?

What is the important distinction between real estate and real property?

A

Real estate is essentially a physical item, real property includes both the physical item and all the rights that go with owning the item

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24
Q

What is interest?

What is interested in regards to real estate?

A

A right to real property.

An interest in real estate is ownership of any combination of the bundle of rights to real property.

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25
Q

What is undivided interest?

What is undivided interest?

A

An undivided interest is an owner’s interest in a property in which two or more parties share ownership. The terms “undivided” and “indivisible” signify that the owner’s interest is in a fractional part of the entire estate, not in a physical portion of the real property itself.

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26
Q

Define Estate in Land

Define Estate in land

A

If the interest-holder enjoys the right of possession, the party is considered to have an estate in land, or, familiarly an estate.

An estate in land is an interest that includes the right of possession.

An estate is a freehold or a leasehold estate.

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27
Q

Define Encumrance

Define Encumbrance

A

An interest, right or intrusion that limits the freehold interest of an owner of real property or otherwise adversely affects the marketability of title.

If a private interest-holder does not have the right to possess, the interest is an encumbrance.

28
Q

Define Police Power

Define Police Power

A

A state’s or local government’s legal authority to create, regulate, tax, and condemn real property in the interest of the public’s health, safety, and welfare. Public entities may own or lease real estate, in which case they enjoy an estate in land. However, government entities also have non-possessory interests in real estate which act to control land use for the public good within the entity’s jurisdiction. The prime example of public interest is police power, or the right of the local or county government to zone.

29
Q

Define freehold

Define freehold

A

An ownership estate of indeterminable duration.

30
Q

Define Leasehold

Define Leasehold

A

Simple: non-ownership possessory estates of limited duration.

An estate that entails temporary rights of use, possession, and to an extent, exclusion, but not legal ownership. A leasehold estate is distinguished by its specific duration, as represented by the lease term.

Ownership of a leasehold estate is not so considered because the leaseholder’s rights are temporary.

31
Q

Define Tenancy

What is Tenancy?

A

A freehold or leasehold estate is held by a tenant. Both leasehold and freehold estates are referred to as tenancies. The owner of the freehold estate is the freehold tenant, and the renter, or lessee, is the leasehold tenant.

32
Q

Fee Simple

What is fee simple?

A

The fee simple freehold estate is the highest form of ownership interest one can acquire in real estate. It includes the complete bundle of rights, and the tenancy is unlimited, with certain exceptions.

33
Q

Life Estate

What is life estate?

A

A life estate is a freehold estate that is limited in duration to the life of the owner or other named person. Upon the death of the owner or other named individual, the estate passes to the original owner or another named party. The holder of a life estate is called the life tenant.

34
Q

Define Reversion

What is Reversion?

A

A transfer of title from a life estate tenant back to the grantor.

35
Q

Define Remainder.

What is the remainder?

A

A future freehold interest in a life estate held by a third party remainderman named by the grantor. When the life tenant dies, the estate passes to the remainderman. If a life estate names a third party to receive title to the property upon termination of the life estate, the party enjoys a future interest called a remainder interest or a remainder estate. The holder of a remainder interest is called a remainderman.

36
Q

Homestead

What is a homestead?

A

A homestead is one’s principal residence. Homestead laws protect family members against losing their homes to general creditors attempting to collect on debts.

37
Q

Define Dower

What is a dower?

A

A widow’s life estate interest in portions of her deceased spouse’s real property.

38
Q

Define Curtesy

What is Curtesy?

A

A widower’s life estate claim to portions of his deceased spouse’s real property. Curtesy is the identical right of dower enjoyed by the husband in a deceased wife’s property. Property acquired under dower laws is owned by the surviving spouse for the duration of his or her lifetime.

39
Q

Define Elective Share

What is Elective Share?

A

A right of a surviving spouse to claim a prescribed portion of the decedent’s real and personal property in place of the provisions of the decedent’s will.

40
Q

Describe types of fee simple estate

Describe types of fee simple estate

A

fee simple absolute: The highest form of ownership interest

defeasible: can revert to the previous owner for violation of conditions.

41
Q

Describe types of life estate

Describe types of life estate

A

Conventional life estate

Legal life estate

42
Q

Why are other estates less desirable than fee simple freehold estates.

Why are other estates less desirable than fee simple freehold estates?

A

With all other estates, the holder of the estate cannot control what happens to the estate in the future. The life estate reverts or is remaindered; the leasehold terminates when the lease expires

43
Q

Dower & Curtesy

What must both spouses sign for Dow & Curtesy to take effect.

A

Conveyance

44
Q

Estate at will termination

When does an estate at will terminate?

A

The estate at will is terminated by proper notice, or by the death of either party.

45
Q

What is Tenancy in Severalty

A

An estate in real property owned by a single party.

If a single party owns the fee or life estate, the ownership is a tenancy in severalty. Synonyms are sole ownership, ownership in severalty, and estate in severalty. When the would-be sole owner is a husband or wife, state laws may require homestead, dower or elective share rights to be released to allow ownership free and clear of any marriage-related claims.

The estate of a deceased tenant in severalty passes to heirs by probate.

46
Q

What is Tenancy in Common?

A

An estate where each co-owner owns an electable share of the property and can transfer this share to any other party. Does not include right of survivorship; interests of deceased owners pass to heirs;

47
Q

What is Joint Tenancy

A

A form of real property ownership in which co-owners share all rights and interests equally and indivisibly; entails right of survivorship. Parties must establish tenancy at the same time and with a single deed.

48
Q

What are the Four Unities?

A

Time, Title, Interest, Possession
To create a joint tenancy, all owners must acquire the property at the same time, use the same deed, acquire equal interests, and share in equal rights of possession. These are referred to as the four unities:
1. Unity of time: all parties must acquire the joint interest at the same time
2. Unity of title: all parties must acquire the property in the same deed of conveyance
3. Unity of interest: all parties must receive equal undivided interests
4. Unity of possession: all parties must receive the same rights of possession

49
Q

What is a Partition?

A

A lawsuit requesting the court to alter or cancel the interests of a co-owner in a parcel of real property. Initiated when co-owners do not agree to make the change voluntarily.

50
Q

What is Tenancy by the Entireties

A

Tenancy by the entireties is a form of ownership reserved exclusively for husband and wife. It features survivorship, equal interests, and limited exposure to foreclosure.

51
Q

What is community Property

A

Generally, property acquired during the marriage with jointly held funds is community property.

A system of property ownership established by law generally defines rights of property ownership of spouses; community property is co-owned by spouses, and separate property is owned by a single spouse.

52
Q

Define Tenancy in Partnership

A

Tenancy in partnership is a form of ownership held by business partners, as provided by the Uniform Partnership Act. The partnership tenancy grants equal rights to all partners, but the property must be used in connection with the partnership’s business. Individual rights are not assignable.

53
Q

What is a Trust

A

A fiduciary relationship between a trustor and trustee. The trustor conveys legal title to property to the trustee, who holds and manages the estate for the benefit of another party, the beneficiary ( in a land trust, trustor and beneficiary are the same person).

54
Q

Define Trustor

A

The trustor conveys legal title to property to the trustee.

In an estate in trust, a fee owner– the grantor or trustor– transfers legal title to a fiduciary– the trustee– who holds and manages the estate for the benefit of another party, the beneficiary. The trust may be created by a deed, will, or trust agreement.

55
Q

What is a Trustee?

A

The trustee has fiduciary duties to the trustor and the beneficiary to maintain the condition and value of the property. The specific responsibilities and authorities are set forth in the trust agreement. In an estate in trust, a fee owner– the grantor or trustor– transfers legal title to a fiduciary– the trustee– who holds and manages the estate for the benefit of another party, the beneficiary. The trust may be created by a deed, will, or trust agreement.

56
Q

Define Beneficiary

A

A party named to benefit from the yield or disposition of an asset identified in a trust, insurance policy, or will.

57
Q

What is a Living Trust?

A

A trust established during one’s lifetime in which the trustor conveys legal title to property to a trustee and names another party as beneficiary. The trustee discharges management duties and the beneficiary receives all profit and gain net of the trustee’s fees.

58
Q

What is a Land Trust

A

A trust in which a trustor conveys a fee estate to a trustee and names himself or herself as beneficiary. The beneficiary in turn controls the property and the actions of the trustee.

59
Q

What is a Condominium?

A

An estate distinguished by fee simple ownership of the airspace of a unit plus an undivided interest with the other unit owners in the overall property’s common elements.

60
Q

With Condominiums, what is Airspace?

A

A condominium is a hybrid form of ownership of multi-unit residential or commercial properties. It combines ownership of a fee simple interest in the airspace within a unit with ownership of an undivided share, as a tenant in common, of the entire property’s common elements, such as lobbies, swimming pools, and hallways.

A condominium unit is one airspace unit together with the associated interest in the common elements.

61
Q

What are Common Elements?

A

Common elements are all portions of the property that are necessary for the existence, operation, and maintenance of the condominium units. Common elements include:

the land (if not leased)
structural components of the building, such as exterior windows, roof, and foundation
physical operating systems supporting all units, such as plumbing, power, communications installations, and central air conditioning
recreational facilities
building and ground areas used non-exclusively, such as stairways, elevators, hallways, and laundry rooms

62
Q

What is Cooperative ownership?

A

Ownership of shares in a cooperative association that acquires a multi-unit dwelling as its primary asset. Shareholders also receive a proprietary lease on a unit for the duration of their share ownership.

63
Q

What is a Proprietary Lease?

A

A cooperative owner’s lease on a unit in the cooperative building. The lease runs concurrently with the owner’s ownership interest in the cooperative.

64
Q

What is a Time-Share

A

A fee or leasehold interest in a property that is shared by owners who have use of the property at different times.

65
Q

What are different forms of co-ownership?

A

Co-Ownership, Tenancy in common, Joint Tenancy, Tenancy by the entireties, community property, tenancy in partnership

66
Q

What are the primary differences between a condominium and a cooperative as a form of ownership?

A

Condo owner actually owns real property – airspace and share in common elements.
Co-op owner owns shares in a corporation and proprietary lease; condo unit can be transferred, encumbered or foreclosed as an entity, while co-op interest cannot be so handled, but only as an interest in the corporation; entire property is endangered by default of co-op shareholder, but only individual unit endangered by default of a condo owner.

Real Estate (1 decks)

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