FINC 371-Exam 1 Questions & Answers
100% Correct
real estate - ANSWERLand and things attached to it such as buildings and other
improvements to the land
- immobile and intangible
- natural part of land
six most important things in RE - ANSWERlocation (x3)
timing (x3)
real property - ANSWERconsists of the legal interests associated with ownership of the
physical real estate; estate is a right or interest in RE
personal property - ANSWERlegal interests in all other types of properties, so movable items
such as automobiles, furnitures, boats, clothing
aka chattel
characteristics of real estate - ANSWERfixed location, uniqueness (heterogeneous) ,
interdependence of land uses, long life, long-term commitments, large transactions, long
gestation period (makes the supply of RE slow to respond to increases in demand)
gestation period - ANSWERthe time between the conception of a development project and
its actual completion and subsequent entry into available supply may be several years.
careers in RE - ANSWER* RE brkg
* property mgmt
* RE finc
* appraisal
* consulting
* development and construction
* corporate AM
* legal experts
,* land planners
mineral rights - ANSWER- Real property rights to the minerals and other useful materials
that exist below the surface
- Transferable
water rights - ANSWERwho has the right to withdraw water from the land
rights relating to navigable bodies of water - ANSWERowner aka littoral proprietor generally
owns the land to the high-water mark (the government usually owns the land underneath the
water); owners are called littoral proprietors;
5 principal classifications of RE in private mkt place - ANSWER1. owner-occupied residential
2. renter-occupied residential
3. commercial
4. industrial
5. farm/agricultural
use of land depends on - ANSWER1. provision of public services
2. nearby land uses
3. general economic vitality of neighborhood and community
lower interest rates --> - ANSWERreal estate prices go up
4 factors of production - ANSWERland, labor, capital, entrepreneurship
economic attributes of land - ANSWERis durable, supply is finite, is useful to people
title - ANSWERownership rights to real property
property - ANSWERany objects that can be owned or possessed - RE, vehicles, books,
clothing
, deed - ANSWERdocument used to convey the rights from one party to another; when
ownership rights to real property are transferred
lease - ANSWERdocument used to convey the rights from the property owner to the tenant;
conveys the rights of use and possession of real property under agreed on-terms but DOES
NOT transfer ownership rights to the property
fixture - ANSWERpersonal property that becomes real property when it is attached to the
land or a building
tests for fixture status - ANSWER1. test of intent of the parties
2. test of attachment
3. test of adaptability
trade fixtures - ANSWERpersonal property used in a trade or business such as machinery,
office equipment and office cubicles to the building without losing the right to remove these
items at the termination of the lease - aka chattel fixture
test of intent of the parties - ANSWERbest way is by a written agreement that states clearly
which items are to be considered part of the real estate and which are to be considered
personal property
test of attachment - ANSWERwould it cause damage to the land or building if was removed
test of adaptability - ANSWERitems that have been specifically adapted to the real estate;
issue considered in this test is whether removal of the item would substantially alter the
usefulness of the remaining RE
air rights - ANSWERreal property rights to the space above the earth's surface; pie-shaped
beginning at the earth's center and extending through the surface to a reasonable distance
-transferable
residential real estate - ANSWER- single family attached
- duplex/quadplex
- apt complex
- rowhouse (homes that share wall)
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