Real Estate License Prep CHAPTER 1

Residential Real Estate specialties

Houses, Apartment leasing, Multi-family residences

Commercial real estate

primarily made up of property that is used for business

Industrial Real Estate

property used for making, storing, and moving goods rather than for selling products or office work

Duplex, triplex, or fourplex residences are all considered:

multi-family residences

___________is the occupation of renting or leasing someone else's real property on their behalf in exchange for compensation and in accordance with a _______ employee contract.

Property management

___________ isthe process of purchasing land, securing approvals, and building or renovating structures to increase their value and use

Property development

A ________ is a company that helps make sure a house can safely change owners, handles important paperwork/money during the transaction, and often helps arrange title insurance.

Title company

What is title insurance?

protects a homebuyer or lender from financial loss caused by certain hidden problems with the legal ownership (title) of a property.

________ is a neutral middleman that holds money and documents until everyone does what they agreed to do

Escrow

A_______ is a person who helps landlords find renters and helps renters find and rent a property.

leasing agent

What type of real estate is primarily made up of property that is used for business?

Commercial real estate

When a person acquires ______, it is possible to acquire all that lies below and above it, as well – literally infinity and beyond.

land

An _____ is any non-natural structure built on or affixed to land.

improvement

Explain to me PUTEE when it comes to the bundle of rights

The right of possession, right to use, right to transfer, right of exclusion, & right to encumber

Land + improvements =

Real estate

Land + improvements + bundle of rights

Real property

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___________: possessions that physically exist, such as a house or a bagel

Tangible property

___________: stocks, patents, and other incorporeal things

Intangible property:

__________ is the complete legal ownership of real property and the bundle of associated rights

Legal title

A house______is a physical, legal document that officially transfers the ownership of a property from a seller to a buyer

Deed

________ is an unattached, moveable asset not considered real estate.

Personal property

A _____ is an object that was once personal property but is now firmly attached to the land in such a way that it is considered to be real property.

fixture

A _________ isa piece of equipment or item of personal property installed by a commercial tenant in a rented space to conduct their business, and which the tenant is legally allowed to remove when the lease ends

trade fixture

__________ is the act of converting real property into personal property

Severance

________ in real estate is the process of attaching or incorporating personal property so that it permanently becomes part of the real property as a fixture.

Annexation

___________ is the right to all that one's own property produces, including that which is added, either naturally or by human action, to the property already owned. This often comes into play when dealing with crops.

Accession

________ in real estate is the gradual and permanent recession of a body of water—such as a lake, river, or ocean—that exposes new, dry land

Reliction

__________ in real estate is the gradual, natural wearing away of land by water, wind, or other environmental elements, which permanently reduces the size and usable area of a property

Erosion

__________ in real estate is the sudden, violent tearing away or removal of land by natural forces like a flood, hurricane, or a river rapidly changing its course

Avulsion

The cost of real estate in a metropolitan area has gone up dramatically over the past year because an increasing number of people have been moving to that area, and there are only a finite number of parcels of land that are close to the downtown area. This is an example of:

scarcity

The relative difficulty of converting an asset to cash without loss of value is known as:

Illiquidity

_________ are rights that run with real property ownership, most often transferred with the property, but possible to sell separately.

Appurtenances

__________ are the rights to access the surface area of a parcel of real property. They govern both natural elements and structures (or improvements) built on or attached to the highest layer of the land.

Surface rights

_________ are ownership rights to everything underneath a piece of land, extending downward to the center of the earth.

Subsurface rights

_______ is funds held by a third party, such as a lawyer, real estate agent, or trustee, on behalf of a client or beneficiary

Trust money

An example of ________ would be if a broker deposited their personal paycheck in the same account they deposited a client's earnest money.

commingling

A _______ is a dedicated bank account used to securely hold funds that belong to others—such as tenant security deposits, rent payments, and maintenance reserves—completely separate from a company's operating funds

property management trust account