realestate test 1 (Real Estate Principles)

the first test in AREA Real Estate School based off of the study guide and answers straight from the AREA Real Estate textbook

Real estate broker

a person who brings buyers sellers (or land lords and tenets) together

Do you need a license to be a real estate broker?

yes

Real estate appraiser

a real estate professional who competently and objectively performs valuation services that are supportable and defensible.

Minimum requirements for a real estate broker

At least 21, highschool graduate or GED, Active salesperson for three of the previous five years, pass 60 hour course, pass state exam

Minimum requirements for a real estate appraiser

at least 18 years old,hold a high school degree,complete 90 hours of state approved course work,no state exam

what is the opposite of a real estate market

an efficient/perfect market

what's the opposite of a efficient/perfect market

a real estate market

what are the characteristics of value

DUST
Demand
Utility
Scarcity
Transferability

what factors affect value

PEGS
Physical
Economical
Governmental
Social

what's the distinction between real estate (land) vs rights

the rights given are as follows 1.The right to possess is the right to occupy the property. 2.The right to control is the right to determine interests and uses for others.3.The right to enjoy is the right to use the property without outside interference.4.The right to exclude is the right to refuse others' interests or uses for the property.5.The right to dispose of is the right to determine how and if the property is sold or given to another party.

what is the legal limitation of land ownership

that land consists of the surface of the earth and everything below the surface only to a reasonable depth; and everything above the surface only to a reasonable height.

what is a fixture

an item originally classified as personal property that for legal purposes has been reclassified as real estate (land and all that was permanently attached to the land).

what is the term "MARIA" used for

to know how the court test for fixtures

what does the term "MARIA" stand for

Method of attachment
Adaptation
Relationship
Intent of the parties
Agreement of the parties

appurtenance

anything tangible or intangible that legally attaches to the land and transfers with the land even if not specified in the deed - appurtenances are said to "run with the land."

One of the three physical characteristics of land is "immobile" what does it mean

Land cannot be moved from one location to another - its location is fixed and cannot be altered.

One of the three physical characteristics of land is "Indestructible" what does it mean?

Land is considered a non-depreciable asset because it does not wear out. Buildings deteriorate (or may be destroyed) and need to be updated or replaced from time to time

One of the three physical characteristics of land is "Non-homogeneity" what does it mean?

Each parcel of land is unique. Even two parcels that are the same in every other respect (size, shape, zoning, etc.) - will have different locations.

What are the three physical characteristics of land?

Immobile
Indestructible
Non-homogeneous

What are the four economic characteristics of land

situs,improvable,scarcity,fixity

There are four economic characteristics of land one of them is "Situs" what does this term mean?

Situs refers to the preference the market may have for one location over another.

There are four economic characteristics of land one of them is "Improvable" what does this term mean?

This characteristic recognizes that land values can be enhanced by improvement made to the land or to other land nearby.

There are four economic characteristics of land one of them is "Scarcity" what does this term mean?

Scarcity is one of the elements necessary for a commodity to have value. Generally speaking, the more limited the supply of an item the greater its value.

There are four economic characteristics of land one of them is "Fixity" what does this term mean?

Fixity refers to the permanence and durability of land (real estate).

What is the rectangular survey system?

the way that we describe large tracts of land (except in the original thirteen colonies including georgia)

what system does georgia use to measure large tracts of land

The georgia system

How many square miles is a township

36 sq miles

how many square miles are in a section

1

How many acres in a section?

640 acres

metes and bounds

Distances and directions, this is a way of describing a parcel of land by describing its boundaries

Variance

the permission by the government to allow a minor deviation or violation of the current zoning requirements

Non-conforming use

land presently used in such a manner that is inconsistent with a newly enacted zoning ordinance.

What are the four powers of government

Police Power, Eminent Domain, Taxation, Escheat

What is the acronym used to remember the four powers of government

Pete

What does the acronym "PETE" stand for

Police Power, Eminent Domain, Taxation, Escheat

what type of estate is a timeshare

fee simple absolute

What is a freehold estate?

ownership for indefinite period (free-hold "forever")

What is a non-freehold estate?

ownership for a periodic time

What signature is required on a valid deed

The only required deed is that of the grantor

list the seven requirements for a deed

writing,competent grantor,grantee,legal consideration,words of convenience,legal description,signature of the grantor

What is a deed required to describe

the land and land only

Between the Grantor and Grantee who is granting

the grantor is granting and the grantee is receiving

What is a warranty deed

contains the maximum protection for grantees

What is a special warranty deed

limits the grantor's warranty forever to title claims arising during the period of time that the grantor owned property.

What is a quit claim deed

provides NO warranties - not even the covenant of seisin.

What is a grant deed

the most common means of transferring property in California.

What is a bargain and sale deed

the basic essentials of a deed but offers NO warranties to the grantee

What is a guardian's deed

contains the covenant against encumbrances and no other warranties.

What is a sheriff's deed

used to convey title to property after a foreclosure sale.

What is a gift deed

Any deed can be a gift deed if the consideration shown is "for love and affection."

What is a correction deed

used to correct errors in a previous deed.

What is a tax deed

when the government sells property because of tax delinquency

What is a executors deed

used for transfers of real property out of the estate to the recipients according to the will.

What is an administrator's deed

used for transfers to inheriting heirs according to the laws of descent.

What is a seisin clause?

the assertion and promise that the grantor is in possession of the property and its rightful owner.

What is a Quiet enjoyment clause

the grantor's promise that the grantee will be able to possess the property free of interference from the grantor or any other third parties.

What is Against encumbrances clause

the grantor's promise that the property is free and clear of encumbrances except for those enumerated in the deed.

What is Further assurance clause

the grantor's promise to perform acts in the future that may be necessary for the grantee to maintain his rightful claim.

What is Warranty forever clause

the grantor's promise to defend the grantee's title from the claims of all others.

Where are deeds recorded?

deeds are recorded in the county where the property is located

What is the only signature required for recording a deed?

A notary signature

Does a notary signature make make a deed valid?

No it does not make it valid or legal

When does title pass?

Upon delivery and acceptance of the deed

does a title need to be recorded

no

What is a grant

the transfer of government owned(public) land to private ownership

What is the functional opposite of a grant

dedication

What is dedication

the process to transfer ownership of land from a private owner to the government

What is accession

acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.

What is adverse possession?

acquiring title to the land of another by occupying the property

What is a chain of title?

each property's history of ownership.

What are the four unities of joint tenancy?

Possession,Interest,Time,Title

What does the acronym "PITT" stand for

Possession,Interest,Time,Title

What is joint tenancy?

the co-owners inherit property from each owner upon the death of a joint tenant - not their heirs or recipients mentioned in a will.

What does the term severalty mean

Ownership of real estate by one party

What is tenacy in common?

When two or more people own property

What benefits does tenancy in common have

co-ownership fewest restrictions, separate title, interests inheritable and does not have to be equal

What is tenancy by entireties

a special ownership created for husband and wife.

is tenancy by entireties recognized in georgia?

no

What is a condominium?

property ownership whereby each owner of a single unit also owns some common area jointly (as tenants in common) with the other unit owners.

What is a planned unit development (pud)

a new zoning category that would encourage more creative and imaginative design in land developments.

What is cooperative

a group of individuals who unite in some common business endeavor

how are puds distinguishable from condominiums

only in a PUD does the owners' association own the common area

What are the classifications of contracts

1. Express or Implied
2. Bilateral or Unilateral
3. Valid, Void, Voidable, or Unenforceable
4. Executed or Executory

in an option contract who must act the optionee or the optionor

the optionor

How do you bind an offeror

To bind an offeror, the offeree must accept unconditionally and communicate acceptance.

What is the statue of frauds?

real estate contracts must be in writing to be enforceable, limited exceptions

What is a lease

bilateral contract between landlord (lessor holds leased fee estate) and tenant (lessee has leasehold estate)

what are the appraisal principles

Anticipation, Balance, Change, Competition, Conformity, Consistent Use, Contribution, Externalities, Increasing and Decreasing Returns, Progression, Regression, Substitution, Supply and Demand

What is an appraisal

supportable opinion of value

what are the six steps in the appraisal process

1. Identify the problem to be solved 2. Plan the appraisal (scope of work) 3. Collect and analyze relevant data 4. Apply the relevant approaches to value 5. Final reconciliation 6. Prepare the report

What does market value mean

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.

what are the three approaches to value and different applicability

Sales comparison Cost Approach - separate site valuation Income approach (V\= I ÷ R and know what letters stand for)

how are adjustments made in the sales comparison approach

A simple way to remember the adjustment process is if the comparable is superior - subtract (CSS); if the comparable is inferior - add (CIA)

what are the differences in accrued depreciation

Physical Deterioration (maintenance type issues), Functional Obsolescence (outdated floor plans or functionality - house with no shower only baths); and Economic Obsolescence (living next to the new runway at Hartsfield!)

Which items are not deducted from Effective Gross Income

vacancy and credit costs of an investment property.

What is an encumbrance?

a right or interest in real estate held by someone other than the owner

what is a special assessment

A tax or levy customarily imposed against only those specific parcels of real estate that will benefit form a proposed public improvement like a street or sewer.

what is an easment?

the right that a party or parcel of real estate has to cross or use the land of another.

what is an encroachment

unauthorized extension of one property onto another property's land or into its air space

How can an easement be created?

Agreement,condemnation,prescription