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Supply & Demand
When supply increase and demand is stable, prices go down. When Demand increases and supply remains stable, prices go up.
No matter how similar two parcels of real state may appear, they are never EXACTLY alike. Characteristic of real estate that governs the way market reacts to supply and demand.
Property cannot be relocated to satisfy demand where supply is low. Characteristic of real estate that governs the way market reacts to supply and demand.
Market where real estate professionals practice. Expanded with technology.
Factors Affecting Supply
- Labor Force
- Availability of skilled labor to build.
- Low = Higher Price Construction Costs
- Materials, fees, labor costs, etc.
- Government Controls
- Fees, Taxes, Regulation Government Financial Policies
Financial controls (Federal Reserve, Prime Rate, etc.)
Federal Reserve Board
Establishes DISCOUNT RATE, which is the rate of interest for the money it lends to banks. Affects lending interest rates.
Federal Housing Administration, which insures and guarantees loans.
Department of Veteran Affairs, which insures and guarantees loans.
Factors Affecting Demand
- Total population density of an area.
- Family size, age, income, lifestyle, etc. Employment and Wage Levels
Economic factors, etc.
The business of bringing people together in a real estate transaction.
The process of estimating a property's market value based on established methods and the appraiser's professional judgment.
A person or company hired to maintain and manage property on behalf of its owner.
The business of providing the funds that make real estate transactions possible.
The splitting of a single property into smaller parcels.
Involves the construction of improvements on the land.
A profession that conducts a thorough visual survey of a property's structure, systems, and site conditions and prepares an analytical report that is valuable to both purchasers and homeowners. Must be licensed.
Buying or selling real estate using an open and competitive bidding process to transfer property.
A member of the Association of Realtors.
National Association of Realtors
Real Estate Buyer's Agent Council - Professional Association
National Association of Exclusive Buyers Agents - Professional Association
Building Owners and Managers Association - Professional Association
Five Categories of Real Property
1.) Residential - All property used for single-family or multifamily housing, weather in urban, suburban, or rural areas.
2.) Commercial - Business property, including office space, shopping centers, stores, theaters, hotels, and parking facilities.
3.) Industrial - Warehouses, factories, land in industrial districts, and power plants.
4.) Agricultural - Farms, timberland, ranches, and orchards.
5.) Special Purpose - Churches, schools, cemeteries, and government-held lands.
A right, privilege, or improvement belonging to and passing with, the land, such as a parking space or lake access rights.
Bundle of Legal Rights
The concept of land ownership that includes all legal rights to the land.
- These rights include:
- - Right to Possession
- - Right to Control the Property
- - Right of Enjoyment
- - Right of Exclusion
- - Right of Disposition
Personal property that has been so affixed to the land or building that by law, it becomes part of the real property.
Three Legal Tests for Fixtures
Method of Attachment, Adaptation to Real Estate, Agreement
The earth's surface extending downward to the center of the earth and upward to infinity. Includes permanent natural objects such as trees.
All property that can be owned and that does not fit the definition of real property. Typically movable.
Another term for Personal Property.
Another term for Personal Property.
Annually cultivated crops. Generally considered Personal Property.
Land at, above, and below the earth's surface, plus all things permanently attached to it. Attachments may be natural or artificial, such as buildings.
Four Economic Characteristics of Real Estate
- 1.) Scarcity
- 2.) Improvements
- 3.) Permanence of Investment
- 4.) Location (most important)
Three Physical Characteristics of Land
- 1.) Immobility
- 2.) Indestructibility
- 3.) Uniqueness
Economic Characteristics of Land
Scarcity, Improvements, Permanence of Investment, Location/Area Preference/Situs
The interests, benefits and rights that are automatically included in the ownership of land and real estate.
Transferring Real Property into Personal Property (cutting down a tree for firewood).
Changing Personal Property into Real Property, such as pouring concrete and it dries into a walkway.
A written instrument that, when executed and delivered, conveys title to or an interest in real estate.
Bill of Sale
A legal document that transfers personal property.
The personal preference of people for one area over another.
An article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires. An example might be an oven in a leased restaurant space.
Acquiring title to additions or improvement to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams.