FBLA REAL ESTATE

Real Property

Property consisting of land, buildings, and the rights associated with ownership (immovable).

Personal Property

Movable items not permanently attached to land (e.g., furniture, vehicles).

Fixture

A personal property item permanently attached to real property (becomes part of real estate).

Trade Fixture

Personal property used in business that can be removed by tenant before lease ends.

Appurtenance

A right or privilege associated with property that transfers with ownership (e.g., easement).

Hereditaments

All inheritable property, both tangible and intangible.

Lien

A legal claim or charge on property as security for a debt or obligation.

Easement

A legal right to use another's land for a specific purpose.

Encumbrance

Any claim or liability that affects the title to property (e.g., lien, easement, mortgage).

Bundle of Rights

Possession, Control, Enjoyment, Exclusion, and Disposition.

Real Estate Agent

A person licensed to represent buyers or sellers under a broker.

Real Estate Broker

A licensed professional who may own a brokerage and supervise agents.

REALTOR®

A real estate professional who is a member of the National Association of REALTORS® (NAR).

NAR Benefits

Access to MLS, legal support, networking, training, and ethical standards.

Property Manager

Manages property operations, maintenance, and tenant relations for owners.

Leasing Agent

Assists landlords in finding and signing tenants for rental properties.

Mortgage Banker

Originates, sells, and services real estate loans.

Real Estate Entrepreneur

Identifies, finances, and manages real estate investments for profit.

Residential Real Estate

Single-family homes, condos, duplexes, and apartments.

Commercial Real Estate

Office, retail, industrial, and investment properties.

Industrial Property

Property used for manufacturing, production, or storage.

Land

Raw, undeveloped property without improvements.

Zoning

Regulations governing land use (residential, commercial, industrial, agricultural).

Licensing Process

Pre-license education → exam → background check → license issuance → renewal.

Valuation

Estimation of property worth by an appraiser.

Appraiser

Provides independent valuation of property following USPAP standards.

Cost Approach

Value based on cost to build new minus depreciation.

Sales Comparison Approach

Value based on recent sales of similar properties.

Income Approach

Value based on income property produces (NOI ÷ Cap Rate).

Highest and Best Use

Most profitable and legal use of a property.

LAWS AND REGULATIONS

Fair Housing Act

Prohibits discrimination in housing based on protected classes.

Protected Classes

Race, Color, Religion, Sex, National Origin, Familial Status, Disability.

Steering

Directing buyers toward or away from areas based on protected class.

Blockbusting

Encouraging sales by suggesting a neighborhood's racial composition is changing.

Redlining

Refusing loans or insurance in certain areas based on demographics.

Reasonable Accommodation

Change allowing a person with a disability equal housing opportunity.

Equal Credit Opportunity Act (ECOA)

Prohibits discrimination in lending.

Truth in Lending Act (TILA)

Requires disclosure of loan costs and APR to borrowers.

Real Estate Settlement Procedures Act (RESPA)

Requires disclosure of closing costs and prohibits kickbacks.

Lead-Based Paint Disclosure

Required for homes built before 1978.

Asbestos Disclosure

Required if known asbestos is present.

Flood Zone Disclosure

Sellers must disclose flood risk or insurance requirements.

HUD

U.S. Department of Housing and Urban Development; enforces Fair Housing.

Fiduciary Duty

Legal obligation of agent to act in client's best interest.

Loyalty

Agent must prioritize client's interests above all others.

Confidentiality

Agent must not reveal client's private information.

Disclosure

Agent must inform client of all material facts.

Obedience

Agent must follow lawful instructions of client.

Accounting

Agent must properly handle client funds.

Reasonable Care

Agent must act with skill and diligence.

Zoning Ordinance

Local law regulating land use and building standards.

Variance

Permission to deviate from zoning rules.

Nonconforming Use

Property use that existed before zoning change and is allowed to continue.

Land Use Control

Government regulation of how land can be used.

Lease

A contract granting use of property for a specified time in exchange for rent.

Tenancy at Will

Tenant occupies with permission but no fixed term.

Tenancy at Sufferance

Tenant remains after lease expiration without consent.

Eviction

Legal process of removing a tenant.

Real Estate Commission

State agency regulating licensing and practice.

Building Code

Local laws setting construction and safety standards.

REAL ESTATE TRANSACTIONS & FINANCE

Real Estate Transaction

Process of buying or selling real property.

Listing Agreement

Contract between seller and broker to market property.

Offer

Buyer's proposal to purchase property.

Purchase Contract

Binding agreement between buyer and seller.

Earnest Money

Deposit showing buyer's good faith.

Title

Legal right of ownership of property.

Deed

Document transferring title from seller to buyer.

Warranty Deed

Provides full guarantees of clear title.

Special Warranty Deed

Guarantees title only during grantor's ownership.

Quitclaim Deed

Transfers interest without any title guarantees.

Recording

Entering documents into public record to give notice of ownership.

Mortgage

Loan secured by real property.

Loan-to-Value (LTV) Ratio

Loan amount divided by property value.

Amortization

Scheduled loan repayment reducing both principal and interest.

Fixed-Rate Mortgage

Loan with constant interest rate and payment amount.

Adjustable-Rate Mortgage (ARM)

Interest rate periodically changes based on index.

FHA Loan

Government-insured loan with low down payment.

VA Loan

Loan guaranteed by U.S. Department of Veterans Affairs for eligible veterans.

Secondary Mortgage Market

Where loans are sold to investors (e.g., Fannie Mae, Freddie Mac).

Fannie Mae

Government-sponsored enterprise buying mortgages from lenders.

Freddie Mac

Secondary market corporation purchasing mortgages.

Closing

Final stage of real estate transaction transferring ownership.

Settlement Statement

Document detailing all financial transactions at closing.

Escrow

Account held by neutral third party for funds until closing.

Proration

Dividing costs (taxes, insurance) between buyer and seller at closing.

Title Insurance

Protects buyer/lender from losses due to title defects.

Capitalization Rate (Cap Rate)

Net Operating Income ÷ Property Value.

Cash Flow

Net income after expenses and financing costs.

Appreciation

Increase in property value over time.

Depreciation

Decrease in value due to wear, age, or obsolescence.

REIT (Real Estate Investment Trust)

Company owning or financing income-producing real estate.

ETHICS

Truth in Advertising

Ads must be honest, factual, and not misleading.

Misrepresentation

False or misleading statement about property condition or features.

Dual Agency

Representing both buyer and seller in the same transaction (requires disclosure).

Conflict of Interest

Situation where agent's interests may oppose client's.

Code of Ethics

Standards of conduct for REALTORS® emphasizing honesty and integrity.

Client vs Customer

Client has agency relationship; customer does not but must be treated fairly.