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509 Cards in this Set

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  • Back
Land and things attached to it.
Real Estate
Things that can be owned or possessed.
Property
Legal interest in land and things attached to it.
Real Property
Anything else, other than real property, than can be owned.
Personal Property
Personal Property
Chattel
Ownership rights to property.
Title
A document that transfers title from one person to another.
Deed
Conveys rights and use of possession, but does not transfer ownership.
Lease
A personal property item that has become a part of the real property.
Fixture
1) Intent of Properties
2) Test of Attachment
3) Test of Adaptability
Tests for Fixture Status
Test Intent of Parties
Evidence, usually written, showing that the parties intended the item of personal property to become a fixture.
Test of Attachment
Is the item physically attached, and, if so, will repairs be necessary if it's removed.
Test of Adaptability
Has the item been physically adapted to the space?
Refers to the legal interests associated with oil, gas, coal, or other minerals that may be located beneath the surface of a parcel of land.
Mineral Rights
Refers to the legal interests associated with the space above the surface of a parcel of land.
Air Rights
Refers to the legal interests associated with water that flows across, touches, or is located in or under a parcel of land.
Water Rights
Landowners whose property adjoins navigatable water.
Littoral Proprietors
Non-Navigable Bodies of Water
1) Riparian rights doctrine
2) Prior appropriation doctrine
All owners have equal rights (eastern US).
Riparian Rights Doctrine
First-come, first-served (western US).
Prior Appropriation Doctrine
_____ conveys ownership by sale or gift to the _____.
Grantor, Grantee
_____ conveys rights by sale or gift to the _____.
Lessor, Lessee
The fullest and most comlete set of ownership right one can possess in real property.
Fee Simple Absolute Estate
Owner can transfer any interest in the property while living.
Alienable
Ownership rights can be transferred by will at death of owner.
Devisable
Ownership interests pass to legal heirs even in the absence of a will.
Descindible
Ownership rights are "qualified" by a stated event or condition. Ownership interests will revert to the former owner if the condistion(s) stated in the deed is (are) breached.
Qualified Fee Estate
An ownership interest in real property that normally ends upon the death of a named person.
Life Estate
The future interest associated with a life estate held by someone other than the grantor.
Remainder
The party who holds the remainder interest associated with a life estate.
Remainderman
A remainder interest that has conditions attached that can prevent the remaindermand from receiving a present interest in the property.
Contingent Reminder
A remainder interest when the remainderman is guaranteed ownership of the property at some time in the future.
Vested Remainder
The lessee has rights of use of possession but not ownership.
Leasehold Estate
The landlord's reversionary right to reoccupy the property at the expiration of the lease.
Right of Reentry
The property owner's interest when the property is leased.
Leased Fee Estate
A leasehold estate that has definite starting and ending dates.
Tenancy for a Stated Period
The lelase will stand ad infititum unless terminated by one of the parties with proper notice.
Tenancy from Period to Period
An informal leasehold estate of indeterminable length that may last as long as the parties agree.
Tenancy at Will
A leasehold estate that defines a tenant's rights to occupy the property against the wishes of the lessor.
Tenancy at Sufferance
When a tenant is forced to vacate the premises for failing to adhere to the terms of the rental agreement.
Eviction
Term used to describe ownership interests without regard ot the number of owners.
Estates in Severalty
Ownership intersts held jointly by two or more owners.
Concurrent Estate
An undivided, proportional ownership interest.
Tenancy in Common
Joint ownership in which all owners have an equal, but undivided, interest in a property.
Joint Tenancy
The right of surviving joint owners to automatically divide the share owned by a deceased owner.
Right of Survivorship
A form of concurrent estate in which a husband and wife can own property jointly.
Tenancy by the Entirety
The theory under which all property acquired during a marriage is considered to be equally owned by the husbband and wife, regardless of the financial contribution each spouse actually made to the property's acquisition.
Community Property
Community property states include:
Louisiana, Arizona, California, Idaho, Nevada, New Mexico, Texas, Washington, and Wisconsin
Money either spouse earns during marriage.
Community Property
Things bought with money either spouse earns during marriage.
Community Property
Separate property that has become so mixed with community property that it can't be identified.
Community Property
Property owned by one spouse before marriage.
Separate Property
Property given to just one spouse.
Separate Property
Property inherited by just one spouse.
Separate Property
A computer your spouse inherited during marriage is considered what and why?
What? Your spouse's separate property.
Why? Property inherited by one spouse alone is separate property
A car you owned before marriage is considered who's and why?
Who's? Your separate property.
Why? Property owned by one spouse before marriage is separate property.
A boat, owned and registered in your name, which you bought during your marriage with your income is considered who's and why?
Who's? Community Property.
Why? It was bought with community property income (income earned during the marriage).
A family home, titled jointly as "husband and wife," which was bought with your earnings is considered who's and why?
Who's? Community Property.
Why? It was bought with community income (income earned during the marriage) and is owned as "husband and wife"
A camera you received as a gift is considered who's and why?
Who's? Your separate property.
Why? Gifts made to one spouse are that spouse's separate property.
A checking account owned jointly, into which you put a $5,000 inheritance 20 years ago is considered who's and why?
Who's? Community property.
Why? The $5,000 (which was your separate property) has become so inexorably mixed that it has become community property.
The _____ unit owner usually has a fee simple ownership of her unit, but common areas are owned in a concurrent arrangement (e.g., tenancy in common).
Condominium
The property is usually owned by a non-profit corporation, shares of which are owned by the residents.
Cooperative (“co-op”)
The shares give the residents the right to live in a particular unit, which is called a _____.
Proprietary Lease
A form of concurrent estate that splits ownership of a property across owners and across time.
Time-Share
The property is divided into (typically) 52 weekly, fee simple ownership "slices."
Fee Interest
A lease arrangement with a leasehold interest for a specific period of time; can be resold, but frequently with more restrictions than "fee interest" time-shares.
Right to Use
A legal method for describing the exact boundaries of a property.
Metes-and-Bounds
_____ refers to the distances.
Metes
_____ refers to the directions of the property's boundaries.
Bounds
Distances are measured in _____.
Feet
Directions are measured in _____, _____, and _____.
Degrees, minutes, seconds
Property corners are marked by _____.
Reference Points
North/south lines
Principal Meridians
East/west lines
Base Lines
North/south lines between principal meridians (6 miles apart).
Range Lines
Restrictions or limitations on the owner's ability to use a property.
Encumbrances
Lines-> Real Estate Taxes, Mechanic's Liens, Mortgage Liens, Judgment
Deed Restrictions
Nonphysical Engumbrances
Encroachments
License
Easements -> Appurtenant, In Gross, By Necessity, By Prescription, Party Walls
Physical Encumbrances
Private techniques for restricting land use.
Covenants, Conditions, and Restrictions (CC&Rs)
Private encumbrances that limit the way a property owner can use a property
Recorded in public record
Enforceable by parties who benefit from the limitations
Generally “run with the land,” i.e., they are perpetual (and thus apply to all current and future owners, unless terminated by some contractual condition)
Covenants, Conditions, and Restrictions (CC&Rs)
A financial security interest in a property.
Lien
A pledge of real property as collateral for a debt or obligation.
Mortgage
The borrower, who gives the property as collateral.
Mortgagor
The lender, who receives the property as collateral.
Morgagee
a claim on property held by a supplier of materials or labor for non payment for a debt.
Mechanic's Lien (aka, "Construciton Lien")
Usually filed by subcontractors who aren’t paid by the general contractor
Will (or should be) discovered by a title search of the property, which is what one receives in a Title Insurance policy (i.e., a “clear” title)
Mechanic's Lien (aka, "Construction Lien")
A lien placed on property to settle a judgment from a lawsuit.
Judgment Lien
The right to use a property in a specified manner; it is _____, meaning that the easement holder cannot possess the property, as he or she could if she owned it.
Nonpossessory
As with CC&Rs, _____ "run with the land."
Easements
The estate that is served or benefits from the easement.
Dominant Estate or Tenement
The estate that is burdened by the easement.
Servient Estate or Tenement
Allows a non-owner the right to use the property in some manner.
Positive Easement
Prevents the owner from using the property in some manner (e.g., erecting a tall structure that would block another's view).
Negative Easement
Legally, pertains to an adjoining property owned by another party; primarily applies to access-related issues (e.g., lake access).
Easement Appurtenant
Includes only a servient estate(s); these easements are given to individuals or corporations, e.g., in the case of a utility easement.
Easement in Gross
Created by law over an adjoining property (e.g., land-locked property)
Easement by Necessity
When a wall of a building straddles the boundary line of two separate properties.
Party Wall
An easement that is contractually granted or reserved by the seller.
Express Grant or Reservation
An easement that is not contractually granted or reserved, but is implied by the circumstances or usage.
Implication
An easement caused by someone other than the owner who uses the land "openly, hostilely, and continuously."
Perscription (e.g., and "Easement by Prescription")
Acts as though he or she "owns the place;" the usage is "visible, open, and notorious," ie, it would be easy for the owner to learn of the adverse use.
Openly
Treats the property as if the owner, without permission of the owner.
Hostilely
Continuous use for a statutory period of time (perhaps 7 to 20 years).
Continuously
Termination of Easement by:
1) Agreement
2) Merger
3) Abandonment
Both the dominant and servient estate owners agree, and publicly make record that the easement no longer exists.
Agreement
When the dominant servient estates become owned by the same owner.
Merger
The easement isn’t used for an extended period of time (which is determined by State law)
Abandonment
A personal privilege to use land for a particular purpose, revocable at the owner’s discretion
License
A nonpossessory interest (easement in gross) that permits the holder to remove specified resources from the land (e.g., timber, produce, etc.).
Profit, aka Profit a Prendre
A "negative" easement increasingly used for historical preservation or environmental protection.
Conservation Easement
Process by which title to land is transferred from its legal owner to someone who openly possesses the land for a statutory time period without the permission of the owner.
Adverse Possession
Requirements to obtain title by Adverse Possession:
1) Actual and exclusive (Does not require the “squatter” to occupy the land at all times. Examples: Building a residence, Clearing the land, Farming the land)
2) Open and notorious
3) Hostile
4) Continuous
5) Under a claim of right (the adverse possessor has some basis for believing that s/he has a basis in ownership)
6) Statutory period (typically from 7-20 years)
_____ most often occurs today because of boundary disputes
Adverse Possession
An unauthorized invasion or intrusion of a fixture, building, or other improvement onto another owner’s property.
Encroachments
_____ usually occurs because of carelessness, not malice aforethought.
Encroachments
_____ can lead to “adverse possession” issues if left unattended
Encroachments
Four Basic Powers of Government Over Real Estate
1) Taxation
2) Escheat
3) Eminent Domain
4) Police Power
A tax that is levied based on a percentage of value
“Ad Valorem” Tax
One “mill” = $1 of tax for every $1,000 of value; stated another way, one mill = 1/1000 of a dollar.
Millage rate
What the property is deemed to be worth (often the subject of dispute between the owner and the taxing authorities).
Market Value
The value upon which the property tax is levied.
Assessed Value
The “assessed” value of the property divided by the “market value” of the property (often less than 1.00).
Assessment Ratio
Amounts that are subtracted from the assessed value prior to the tax levy (allows political authorities to provide tax relief to particular taxpayers - e.g., low-income homeowners).
Exemptions
Tax Bill Calculation
Market Value x Assessment Ratio = Assessed Value - Exemptions (if any) = Taxable Value ∻ 1000 x Millage Rate = Property Tax
Administering the Property Tax
1) First step, identify all properties and estimate their values.
2) Second step, develop a budget and tax rate.
3) Third step, bill the property owners and collect the taxes.
Developing a Budget and Tax Rate
1) The budget is determined by the appropriate government officials based on the costs of providing government services to the community (police and fire protection, schools, libraries, street, etc.)
2) Dividing the budget amount by the tax digest (total value of properties in the jurisdiction) yields the tax rate necessary to generate the budget amount.
Government’s right to acquire ownership of land when the landowner dies without an heir or a valid will.
Power of Escheat
This governmental power is a carryover from Feudal times, wherein the King could claim property left by lower royalty with no male heirs.
Power of Escheat
This power doesn’t amount to much today because most people have at least one surviving heir, even if it is that nasty fifth cousin on your mother’s side.
Power of Escheat
The rationale for this power is that no property should be “unowned."
Power of Escheat
Right of the government to take private property for public use upon the payment of just compensation.
Power of Eminent Domain
Must be a “valid public use,” but as the textbook indicates, that phrase has proven quite broad in practice.
Power of Eminent Domain
Initially was a Federal government power, but, by virtue of the 14th Amendment to the Constitution, it was extended to lower level government.
Power of Eminent Domain
Property owner must be compensated “fairly” (according to the 5th Amendment); disputes, which are frequent, often end up in court.
Power of Eminent Domain
When a property owner sues the government to force a condemnation (and, thus, “fair compensation”).
Inverse Condemnation
A new roadway is announced (thus rendering the property in its path unsaleable), but the government makes no move to condemn (“take”) the property. Until it does so, the property owner is stuck; she has neither been fairly compensated by the government, nor is she able to sell her property except at a great loss.
This is an example of _____.
Inverse Condemnation
Kelo vs. New London
A very controversial Supreme Court decision that allowed New London, CT, to use Eminent Domain to take private property for a new private use
Why did New London want to do this? The project would replace lower income housing with a new industrial development. The upshot? A larger property tax base, i.e., more money for New London.
Meanwhile, Susan Kelo and the other plaintiffs would have to move, after being “fairly” compensated for their property
The concern? That private property rights have been severely compromised if ED can be used to seize property for some other, private, use
Consider the implications for graft and corruption
A counter-argument: The Kelo decision gives Gov’t greater power to improve blighted property
Power to regulate use of private property to protect public health, safety, morals, and general welfare.
Land uses are interdependent, meaning that the way one property is used affects other nearby properties.
Police Power
Comprehensive General Plan
1) Projected economic development
2) Transportation plan to provide for necessary circulation
3) Public-facilities plan that identifies such needed facilities as schools, parks, civic centers, water, and sewage disposal plants
4) Land-use plan
5) Official map
Division of a community’s land into districts to regulate the use of land and buildings and the intensity of various uses.
Zoning
Residential, commercial, industrial (also, special purpose categories such as “agricultural,” “floodplain,” and “historic preservation.”
Zoning- Type of Use
Developmental density
1) Height and bulk limitations
2) Bulk regulations
3) Floor-area ratio
4) Minimum lot size and setback regulations
Zoning- Intensity of Use
Zoning regulations can frequently be controversial, seemingly random and arbitrary, even nonsensical.
Innovative Zoning
Usually through the local zoning authority (via public hearings); can often be quite controversial.
Legislative Relief
usually for minor zoning changes, frequently done by way of zoning variances (“slight” deviations from the “norm” of the zoning regulations) or special use permits (exceptions to the norm).
Administrative Relief
“Slight” deviations from the “norm” of the zoning regulations
Zoning Variances
Zoning Changes
1) Legislative relief
2) Administrative relief
3) Judicial relief (last resort)
Uses that deviate from current regulations, but were okay in the past; usually will last only a limited time (not indefinitely).
Nonconforming Uses
Regulations dictating building construction requirements, usually for health and safety reasons.
Building Codes
Died without a valid will.
Intestate
Establishes consistent development of subdivisions.
Subdivision Regulations (“Subdivision Approval Process”)
Requiring portions of the development to be set aside for a public use.
Mandatory Dedication
Special assessments (i.e., money!) used to pay for new development (e.g., putting in sidewalks).
Impact Fees
Involuntary Methods of Transferring Title (6)
1) Descent (without a will)
2) Eminent Domain
3) Enforcing Liens
4) Adverse Possession
5) Escheat
6) Erosion/Accretion (loss by natural causes)
Voluntary Methods of Transferring Title (3)
1) Will
2) Gift
3) Sale
Written document that transfers title (ownership) to real estate from the grantor to the grantee.
Deed
Necessary Elements of a Deed
1) Designation of the Parties
2) Consideration Given by Grantee
3) Legal Description
4) Specific Interest Conveyed
5) Signature of the Grantor and Witnesses
Designation of the Parties
Who's who
Consideration Given by Grantee
The stated consideration is frequently very small to protect the privacy of the grantor and the grantee (since deeds are public documents, the parties may not wish for the actual amount paid to be part of the public record).
Once the necessary elements of a deed are in place, the deed is said to have been _____.
Executed
The right to convey (sell) the property.
Covenant of Seisin
No disturbances from persons claiming a lien against the property.
Covenant of Quiet Enjoyment
The grantor will provide any future documents necessary to protect the grantee’s interest.
Covenant of Further Assurances
A promise by the grantor to always defend the title conveyed to the grantee.
Warranty Forever
Provides greatest title protection to grantee.
General Warranty Deed
Provides least title protection to grantee; often useful, however, particularly to “clean up” title.
Quitclaim Deed
Agreement between a property owner and tenant that transfers the rights of use and possession, but not ownership.
Leases
Requirements of a Properly Prepared Lease
1) Names of the lessor and lessee
2) Conveyance of the premises (Formally declares what is being conveyed)
3) Description of the premises
4) Term or duration of the lease
5) Amount of rent and manner of payment
6) Duties and obligations of parties
7) Signatures of the parties (both parties)
Ground Lease
1) Usually a long-term lease involving unimproved land
2) Allows the separation of ownership of the land from the improvements
3) Generally, however, at the end of the lease, control (ownership) of the property (with the improvements) reverts to the land owner.
Property leased to those who will live on the property.
Residential Lease
Property leased to those who will run a business on the property.
Commercial Lease
Lessee pays rent; lessor pays everything else.
Gross Lease
Lessee pays rent AND operating expenses; lessor pays everything else.
Net Lease
Lessee pays rent AND operating expenses AND insurance premiums; lessor pays everything else.
Net Net Lease
Lessee pays rent AND operating expenses AND insurance premiums AND real estate taxes; lessor pays everything else.
Net Net Net (“Triple Net”) Lease
Fixed for the initial term, but then “stepped up” at designated intervals (e.g., every year) by a specified amount or percentage.
Step-Up (or “Graduated-Rent”) Lease
Fixed for the initial term, but then “stepped up” at designated intervals (e.g., every year) by a specified index (usually by the CPI).
Index Lease
Similar to the Step-up Lease, where the step-up is established by a new appraisal.
Reappraisal Lease
Often a flat lease rate per term (per month, typically) PLUS a percentage of sales sold during that term (month).
Percentage Lease
Specifies what the rent will be if the lease is renewed (protects the renter/lessee from a large rental increase).
Renewal Option
The landlord/lessor agrees to pay expenses only up to a certain point; the lessee picks up the rest.
Expense Stops
the lessee assigns all of her rights to another; however, she is not released of her liability to the lessor automatically!
Assignment
the lessee assigns only part of her rights to another; usually contingent upon the approval of the landlord.
Sublease
Provide some security to the landlord/lessor if the tenant/lessee moves out early, doesn’t pay the rent, or trashes the place. In a sense, the security deposit is like equity in a home: the renter wants to get it back so she keeps the place up.
Security Deposits
Issues in the Landlord-Tenant Relationship (9)
1) Renewal Option
2) Expense Stops
3) Assignment and Subleasing
4) Security Deposits
5) Improvements
6) Covenant of quiet enjoyment
7) Implied Warranty of Habitability
8) Maintenance of Common Areas
9) Protection Against Criminal Acts
The tenant may be allowed to make improvements to the property, but will frequently not be able/allowed to take them with her (esp. if damage to the unit will result).
Improvements
The landlord agrees to maintain the property to a livable standard.
Implied Warranty of Habitability
Murky according to legal precedent, but landlords must be diligent (but reasonably so) in protecting their tenants and property.
Protection Against Criminal Acts
State Statutes Affecting Landlord-Tenant Relationship
Each state has enacted laws that regulate the behavior and relationship between landlords and tenants.
An exchange of promises between parties, conditioned on certain events and enforceable by law.
Contracts
A contract establishes the _____ for the conveyance of title
Terms
A deed actually conveys _____ to the property
Title
Necessary Elements of a Contract
1) Offer and acceptance
2) Consideration
3) Capacity of parties
4) Lawful purpose
5) Writing requirement (Statute of Frauds)
An _____ establishes the terms acceptable to the “offeror” (in real estate, the one selling – i.e., offering - the property).
Offer
An _____ occurs when the “offeree” accepts the expressed terms of the offeror without change.
Acceptance
If the offeree makes any changes, it would be considered a _____.
Counteroffer
Anything that incurs a legal detriment or the forgoing of a legal benefit (i.e., you’ve got to give something to get something).
Consideration
Persons that have the ability to understand the contract and what it represents are said to have _____.
Capacity
Two exceptions of capacity of parties
1) Persons declared “mentally incompetent”
2) Minors (under the age of 18)
Writing requirement (Statute of Frauds)
1) In order for real estate contracts to be enforced, they must be in writing
2) This rule may be excepted if there is partial performance of a non-written (“oral”) contract.
The parties show their intentions by words (spoken or written).
Express Contract
The parties show their intentions by their actions (e.g., getting into a cab).
Implied Contract
Where one party makes a promise that persuades another party to act (“a promise for an act”).
Unilateral Contract
Where one party makes a promise in exchange for another party’s promise (“a promise for a promise”).
Bilateral Contract
A contract in which one or more of the required elements are missing.
Void Contract
Where at least one of the parties has the power to rescind (cancel) or enforce the contract, at will.
Voidable Contract
Appears to be valid, but not legally enforceable in a court of law (e.g., an oral contract for real estate).
Unenforceable Contract
As a matter of law, oral contracts are dangerous for both parties, as there is too much of an “I said, he said” component if the contract is breached.
Oral Contracts
When either party to a contract fails to perform some aspect of the contract, they are said to have “breached” the contract.
Breach of Contract
The aggrieved party may sue for specific performance, i.e., that the contract breach be redressed by the aggrieving party.
Specific Performance
When one party to an alleged oral contract has actually physically performed some aspect of that agreement, the court may well rule that the oral contract is valid and enforce it (see p. 113 for a counter example, however).
Partial Performance
Specified conditions in a contract that relieve the parties of their promises to perform (these tend to protect the buyer more than the seller).
Contract Contingencies
If the buyer is unable to arrange financing for the purchase, the contract is voided.
Financing Contingency
If clear title is not produced, the buyer is relieved of having to purchase the property.
Title Contingency
If a property inspection reveals serious structural issues with the property, the contract is void.
Inspection and Repair Contingency
Allows the owner to continue marketing the property while the contingencies of a contingent offer are being fulfilled.
Escape Clause
Gives the buyer the right to drop his contingencies (ie, so he doesn’t lose the property).
Kick-Out Clause
Real Estate Sales Contract
1) Almost always a standardized form, especially for residential properties.
2) Contracts are contracts…the fine print counts!
3) Cautious parties should have a lawyer review the contract; most people don’t, but probably should.
Option-to-Buy Contract
1) An agreement between a property owner and a potential buyer where the property owner agrees to keep an offer open for acceptance during a stated period of time
2) The owner is almost always given consideration (above and beyond the sale price) for offering such an option
Contract for Deed (or, “Installment Sale”)
1) Under such, a property is purchased after a series of payments.
2) Note that actual title doesn’t pass until the last payment is made; the seller continues to be the owner during the installment period.
The process of verifying the ownership rights being offered by the seller of a property.
Title Examination
Title that is free and clear of all past, present, and future claims; no reasonable buyer would reject it.
Marketable Title
Title that a reasonable title insurer would insure.
Insurable Title
Title that shows no defects whatsoever.
Title Perfect of Record
Detailed examination of all public records that reveals the ownership history of a property (usually covers no more than 40-60 years).
Title Search
Any document that affects title to a property must be recorded.
Recording Requirement
Each county in the US keeps one of these on each property (see next slide).
Grantor and Grantee Indexes
Are any taxes delinquent?
Tax Records Search
Are there any other liens of record?
Lien Search
A written summary of the chain of title for a given parcel of real estate.
Title Abstract
An opinion to the buyer as to the validity or defectiveness of the title.
Title Opinion
Title Insurance
1) Typically is required in order to obtain financing
2) Typically is the preferred method of protecting title (as title opinions are often more expensive and less protective)
3) Paid for in full at the time the policy is issued
4) Not transferable
5) Protects only against past events that were in existence but undiscovered at the time the policy was issued
Torrens System
1) The owner receives a “title certificate” much like she would with a car
2) To get one, she must go before a judge for a legal registration proceeding
3) Once she has the “title certificate,” it becomes very easy to transfer title (as with a car)
4) Why hasn’t the Torrens system become more widespread?
The final step in the process of transferring title from grantor to grantee.
Title Closing
Buyer’s responsibilities before closing
1) Obtaining financing
2) Examining the title evidence
3) Having the property surveyed
4) Obtaining property insurance
5) Having the property formally inspected
Seller’s responsibilities before closing
1) Prepare the deed
2) Remove encumbrances
3) Cooperate with inspectors
HUD Settlement Statement
The “HUD-1” settlement statement is effectively a summary snapshot” of the financial transaction between the buyer and the seller.
Prorated Expenses
1) Real estate taxes
2) Hazard insurance premium, if assigned to the buyer
3) Mortgage payment paid, if the loan is assumed by the buyer
4) Rents that have been paid
5) Other, less frequent, items (e.g., a pest-control contract)
1. Suppose a lender is providing a mortgage loan of $150,000 at 6% annual interest to a buyer in a transactio that will close on October 13th. The first mortgage payment will be due from the borrower on December 1st. This first payment will include the interest due for the month of November, but not October. How much prepaid interest will be charged to the buyer at the closing to cover the October interest?
$459.68
2. Suppose a property has estimated real estate taxes for the current year of $3,568 and that taxes are paid at the end of the year. If the property is being sold on October 13th (in a year with 365 days) and the buyer is responsible for the date of closing, what amount will be charged to the seller on the HUD-1?
$2,785.97
3. Suppose a property owner paid real estate taxes of $3,568 in advance for the current year. If the property is being sold on October 13th (in a year wil 365 days) and the buyer is responsible for the date of closing, what amount will be charged to the seller on the HUD-1?
Nothing, he will be credited for the taxes he has already paid.
Marketing
300
Why do we buy Real Estate?
1. To live in or on it - RESIDENTIAL
2. To do something with or on it - BUSINESS
3. To use it as a “store of value” - INVESTMENT
Physical Real Estate Characteristics
1. Immobility
2. Indestructibility (aka, durability)
3. Nonhomogeneity (aka, uniqueness or heterogeneity)
The geographic location of real estate doesn’t change.
1. Thus the phrase: “Location, location, location!”
2. Real estate markets are, by definition, local
3. Land is easily regulated and taxed (it can’t run away!)
4. Value is heavily influenced by the surrounding area
5. Exact legal descriptions are required
Immobility
1. Real estate investments tend to be stable & long-term
2. Land can’t be depreciated, as it “doesn’t wear out”
3. Land isn’t (or shouldn’t be) insured
Indestructibility (aka, durability)
No two parcels of land are exactly alike.
1. Buyers with unique needs frequently need unique properties
2. Real estate purchases take time
3. Real estate is nonsubstitutable (aka, nonfungible)
Nonhomogeneity (aka, uniqueness or heterogeneity)
Economic Real Estate Characteristics
1. Scarcity
2. Modification
3. Permanence of Investment (Fixity)
4. Area Preference (Situs)
The supply of usable land is limited (ie, “God isn’t making any more of it”).
Scarcity
Changes to a parcel of land affect its value (for good or for ill).
Modification
The physical characteristics of real estate and other factors strongly indicate a long-term investment perspective for real estate investments
Real estate is illiquid.
Permanence of Investment (Fixity)
It can’t readily be “turned into cash” without loss of principle.
Illiquid
People’s preference for particular locations.
Considered the most important economic of real estate
Area Preference (Situs)
Major Categories of Real Estate
1. Residential
2. Industrial
3. Retail
4. Office
5. Agricultural
6. Lodging
Where we live
Residential
Where we make things to sell.
Industrial
Where we buy things.
Retail
Where we conduct business.
Office
Where we grow things.
Agricultural
Where we stay temporarily while traveling.
Lodging
Residential Real Estate
1. Single-family detached
2. Single-family attached (condos, co-ops, townhouses, etc)
3. Manufactured homes (e.g., house trailers, double-wides, etc)
4. Multi-family apartments
Industrial Real Estate
1. Warehouse
2. Manufacturing/production
3. Materials processing (e.g., refineries)
Where goods are stored temporarily.
Warehouse
Retail Real Estate
1. Freestanding retail
2. Neighborhood center (aka, convenience center, strip mall)
3. Community center
4. Regional center
5. Superregional center
Single tenant buildings.
Freestanding retail
1. Serves 1.5 mile radius
2. Population between 2,500 and 40,000
Neighborhood center (aka, convenience center, strip mall)
_____ is frequently a grocery.
Anchor tenant
1. Serves 3-5 mile radius
2. Wider variety of merchandise
3. Anchor is frequently a discount store (in which case the community center may be called a “discount center”) or a “junior” department store
Community center
1. Serves 7-12 mile radius
2. Offers a full-range of goods and services
3. Often has more than one anchor, which are most often full-line department stores
Regional center
1. Serves 50+ mile radius
2. Often exceed 1 million square feet of space
3. Offer a tremendously wide variety of goods & services
4. May often be “destinations” for travelers
Superregional center
High quality construction, prime location, premium rental rates.
Class A
Desirable properties, but lacking certain attributes that bring top rental rates.
Class B
Offer few amenities, but are otherwise physically acceptable.
Class C
Have few amenities, poor locations, and/or poor physical conditions.
Class D
Agricultural Real Estate
1. Annual (seasonal) cropland
2. Perennial cropland
3. Livestock facilities and grazing land
Lodging Real Estate
1. Highway motels
2. Convention/business hotels
3. Luxury hotels
4. Resort (destination) hotels
5. Extended stay hotels/motels
_____ involve transactions for the rights to use land and buildings.
Real Estate Space Markets
_____ involve transactions for the cash-flow rights to real estate.
Real Estate Asset Markets
Stocks, Mutual funds, REITs
Public Markets and Equity Assets
Real property, Private firms, Partnerships
Private Markets and Equity Assets
Bonds, MBSs, Money instruments
Debt Assets and Public Markets
A _____ results when buyers and sellers come together to buy or sell goods and services.
Market
Law of Demand
1. At lower prices, demanders (aka, buyers, consumers) will demand more of a given good or service
2. At higher prices, consumers will demand less of a given good or service
3. Summary: The quantity demanded of a given good or service is inversely related to its price
Law of Supply
1. At lower prices, suppliers (aka, sellers, producers) will supply less of a given good or service
2. At higher prices, suppliers will supply more of a given good or service
3. Summary: The quantity supplied of a given good or service is directly related to its price
Law of Supply and Demand
1. The dynamic interaction between suppliers and demanders as they haggle over the price of a given good or service will eventually lead to an equilibrium condition, where the quantity demanded equals the quantity supplied
2. This dynamic interaction, viewed in the aggregate, is what Adam Smith coined “The Invisible Hand”
3. Equilibrium should never be viewed as static; markets are constantly seeking it because economic/market conditions constantly change
_____ is a measure of how much the quantity demanded (or supplied) will change with a given change in price.
Elasticity
If the percentage change in quantity demanded (or supplied) is greater than the percentage change in the price, the demand (or supply) is said to be _____.
Elastic
If the percentage change in quantity demanded (or supplied) is less than the percentage change in the price, the demand (or supply) is said to be _____.
Inelastic
A _____ is an examination of the supply and demand sides of a real estate space market and their interaction.
Market Analysis
_____ indicates new supply that will be coming into the market.
Quantity of New Construction Started
_____ indicates new supply that is just arriving in the market.
Quantity of new Construction Completed
_____ indicates the rate at which new supply is becoming occupied in the market.
Absorption of New Space
Months Supply Formula
(vacant space + space in construction)/net absorption per month
If months supply is _____ than construction time for new projects, then the new project will likely hit the market at a time when supply exceeds demand.
Greater
If months supply is _____ than construction time for new projects, then a new project will likely be well-received by the market.
Equal To or Less
Because _____ real estate supply curves are effectively vertical (“perfectly inelastic”), the _____ RE market is almost entirely demand driven.
Short-Run
Almost always relevant because of the scale of the transaction (i.e., debt financing is required for purchase).
Interest Rates
The _____ of a local economy is that which exports goods outside the local economy in exchange for money.
Export Sector
The _____ of a local economy supports the export economy; indeed, the service sector cannot exist without the export sector.
Service Sector
A positive employment trend in the export sector will have a _____ on the local economy; sadly, the converse is also true.
Multiplier Effect
Demographic Trends
Birth rates Death rates
Household size
Aging patterns
Wealth
Gender mix
Education
Migration
Ethnicity
National origin
Supply Constraints
1. Natural – lakes, oceans, mountains, etc
2. Encumbrances – fewer will attract development, more will repel
Transportation Costs
1. High transportation costs will tend to keep people close to their places of employment and essential services
2. Low transportation costs will encourage people to “spread out,” a phenomenon known as “sprawl”
The amount or quantity of the good or service that will be desired at various prices.
Demand
When the price negotiated between demanders and suppliers results in the quantity of the good or service offered by suppliers equaling the quantity of the good or service as desired by the demanders.
Equilibrium
Set of circumstances and arrangement through which buyers and sellers exchange goods and services.
Market
Land and structures that are attached to it.
Real Estate
The amount or quantity of the good or service that will be offered at various prices.
Supply
Property that does not actually touch the ground
Air Lot
Property rights associated with the space above the surface of the earth.
Air Rights
East-west lines used as reference points in the rectangular survey system.
Base Line
Personal property.
Chattel
Theory under which all property acquired during a marriage is considered to be equally owned by the husband and wife, regardless of the financial contribution each spouse actually made to the property's acquisition.
Community Property
Ownership interests held jointly by two or more owners.
Concurrent Estates
A form of joint ownership wherebuy the property owners own their individual units separately but share ownship of common areas; a building owned in this manner.
Condominium
A remainder interest that has conditions attached that can prevent the remainderman from receiving a present interest in the property.
Contingent Remainder
A for of joint ownership whereby the property owners own shares of stock in a corporation that owns the property and are entitled to occupy space within the building.
Cooperative
A written document that evidences ownership.
Deed
When a life tenant is someone other than the person whose life the life estate is tied to.
Estate Pur Autre Vie
Ownership interests in real property.
Estates in Land
Term used to describe ownership interests withough regard to the number of owners.
Estates in Severalty
When a tenant is forced to vacate the premises for failing to adhere to the terms of the rental agreement.
Eviction
A type of concurrent estate that splits ownership of a property over time across joint owners.
Fee Interest Time-Share
The fullest and most completee set of ownerhip rights one can possess in real property.
Fee Simple Absolute Estate
An item that was once personal property but has become part of the real estate.
Fixture
Ownership interests in real property.
Freehold Estates
The party who receives a freehold estate in real property to a grantor.
Grantee
The party who transfers a freehold estate in real property to a grantee.
Grantor
Joint ownership in which all owners have an equal, but undivided, interest in a property.
Joint Tenancy
A legal agreement between lessor and lessee.
Lease
The property owner's interest when the property is leased.
Leased Fee Estate
A tenant's rights to use and possess (but not own) a property as defined in a lease agreement.
Leasehold Estates
The person who receives a leasehold interest in a property from the lessor.
Lessee
The person who gives a leasehold interest in a property to a lessee.
Lessor
An ownership interest in real property that normally ends upon the death of a named person.
Life Estate
A legal method for describing the exact boundaries of a property.
Metes-and-Bounds Description
Ownership rights associated with minerals that may be located below the surface of the earth.
Mineral Rights
Moveable items such as cars, clothing, books, and so on.
Personal Property
_____ refers to the distances.
Metes
_____ refers to the directions of the property's boundaries.
Boudns
A detailed land survey drawing, usually prepared by a professional suveyor, that shows the features of a property and its legal description.
Plat
North-south lines used as reference points in the rectangular survey system.
Primcipal Meridian
Theory that states that the first person to use a body of water for some beneficial economic purpose has the right to use all the water needed, even though land owners who later find a use for the water may be precluded from using it.
Prior Appropriation Doctrine
An object that can be owned or possessed.
Property
A co-op lease that gives the owner the right to occupy a specific unit.
Proprietary Lease
Type of ownership in which the owner's rights can be lost in the future.
Qualified Fee Estate
North-south lines that run parallel to t principal meridians in the rectangular survey system.
Range Line
Land and structure that are attached to it.
Real Estate
The legal interests associated with the ownership of real estate.
Real Property
A grid-based sytem used to legally describe the location of a property.
Rectangular Survey System
The future interest associated with a life estate held by someon other than the grantor.
Remainder
The party who holds the remainder interest associated with a life estate.
Remainderman
The future interest associated with a life estate held by the grantor.
Reversion
The right of a person to have the first opportunity to either purchase or lease real property.
Right of FIrst Refusal
The landlord's reversionary right to reoccupy th eproperty at the expiration of the lease.
Right of Reentry
The right of surviving joint owners to automatically divide the share owned by a deceased owner.
Right os Survivorship
A form of leasehold estate that permits the holder to use a property for a certain period each year.
Right to Use Time-Share
Theory that permits landowners whose land underlies or borders nonavigable bodies of water to use all the water needed as long as the use does not deprive other landowners who are also entitled to use some of the water.
Riparian Rights Doctrine Section
A leasehold estates that defines a tenant's rights to occupy the property against the wishes of the lessor.
Tenancy at Sufferance
An informal leasehold estate of indeterminable length that may last as long as the parties agree.
Tenancy at Will
A form of concurrent estate in which a husband and wife can own property jointly.
Tenancy by the Entirety
A leasehold estate that has definite starting and ending dates.
Tenancy for a Stated Period
A leasehold estate that continues to automatically renew each period unless terminated by either party.
Tenancy From Period to Period
A form of concurrent estate in which each owner has an undivided interest in the property.
Tenancy in Common
Test to determine whether an item of personal property has become a fixutre. An item that has been specifically adapted to the real estate is generally considered a fixture.
Test of Adaptability
Test to determine whether an item of personal property has become a fixture. An item that has been permanently attached to the real property and could not be removed wihtout damage ot the land or building is generally considered a fixxture.
Test of Attachment
A form of concurrent estate that splits ownership of a property across owners and across time.
Time-Share
The legal right o ownership.
Title
A 36-square-mile area formed by township and range lines in the rectangular survey system.
Township
East-west lines that run parallel to base lines in the rectangular survey system.
Township Line
Personal property used in a trade or business.
Trade Fixtures
A remainder interest when the remainderman is guarangeed ownerhship of the property at some time in the future.
Vested Remainder
The right to withdraw water from the land.
Water Rights
The acquisition of property as a result of "actual and exclusive, open and notorious, hostile and continuous" possession under a claim of right for a statutory period of time.
Adverse Possession
Covenants, conditions, and restrictions.
CC&Rs
A type of negative easement that pervents specific uses of the real estate by the owner, generally used to protect open space.
Conservation Easement
Private techniques for rrestricting land use.
Covenants, Conditions, and Restrictions (CC&Rs)
The property benefited by the existence of an easement appurtenant.
Dominant Estate
A right given to another party by a landowner to use property in a specified manner.
Easement
An easement with clearly identifiable dominant and servient estates.
Easement Appurtenant
An easement created from the factual circumstances even though an easement is not expressly created.
Easement by Implication
A method of creating an easement as a result of "actual and exlusive, open and notorious, hostile and continuous" use for a statutory period of time.
Easement by Prescription
An easement with only a servient estate.
Easement in Gross
An unauthorized invasion or intrusion of a fixture, building, or another improvement onto another person's property.
Encroachment
Restriction or limitation on ownership rights.
Encumbrance
Method of expressly creating an easement on a grantor's property.
Express Grant
Method of expressly creating an easement on a grantee's property.
Express Reservation
The process of seizing control of the collateral for a loan and using the proceeds from its sale to satisfy a defaulted debt.
Foreclosure
A security interest on all property owned by an individual.
General Lien
A method of implicitly creating an easement on a grantor's property.
Implied Grant
A method of implicitly creating an easement on a grantee's property.
Implied Reservation
A lien placed on property to settle a judgment from a lawsuit.
Judgment Lien
A revocable personal privilege to use land for a particular purpose.
License
A claim on a property as security for a debt or fulfillment of some monetary charge or obligation
Lien
A claim on a property held by a supplier of materials or labor for nonpayment of a debt.
Mechanic's Lien
A contract by which real property is pledged as security for a loan.
Mortgage
The lender in a mortgage loan transaction.
Morgagee
The borrower in a mortgage loan transaction.
Morgagor
A nonpossessory interest in real property that permits the holder to remove specified natural resources from a property.
Profit a Prendre
The property burdended by the existence of an easement appurtenant or easement in gross.
Servient Estate
A security interest that relates only to a specific parcel of real estate.
Specific Lien
A tax levied as percentage of the value of the taxed item.
Ad Valorem Tax
The estimated value of a property for tax purposes.
Assessed Value
The process of estimating the market value for all properties within a property tax jurisdiction.
Assessment
The fraction used to determine assessed value from market value.
Assessment Ratio
Regulations that establish standards for the construction of new buildings and the alteration of existing ones.
Building Codes
Zoning regulations that control the percentage of lot area that may be occupied by buildings.
Bulk Limitation
A statement of land-use policies that shape the future development of a community.
Comprehensive General Plan
The government's power to take private property for public use upon payment of just compensation.
Eminent Domain
The government's right to own real estate following the owner's death in the absence of a valid will or legal heirs.
Escheat
An amount that is subtracted from taxable value to provide tax relief for certain types of property owners.
Exemption
Relationship between the total floor area of a bilding and the total area of a site.
Floor-Area Ratio
Regulations governing the maximum hight of a building in feet or stories.
Height Limitation
Fees charged to developers to raise funds for expansion of public facilities needed as a result of the new development.
Impact Fee
A technique to relate permitted uses of land to certain performance standards.
Impact Zoning
A practive used by communities to encourage developers to provide certain publicly desired features in their developments in exchange for relaxed enforcement of the zoning code.
Incentive Zoning
Extent to which land in a particular zone may be used for its permitted purposes.
Intensity of Use
A lawsuit initiated by a property owner to force the government to purchase a property whose value has been diminished by a governmental action.
Inverse Condemnation
The amount that must be paid a landowner when property is taken under eminent domain.
Just Copmensation
A requirement that developers donate property to the community for public use as a condition for obtaining development approval.
Mandatory Dedication
The most probable price that 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 and knowledgeably, and assuming the price is not affected by undue stimulus.
Market Value
The tax rate imposed on property owners, expressed as the dollars of tax for each $1,000 of property value.
Millage Rate
A use of land that does not conform ot the current land-use controls imposed by the government.
Nonconforming Uses
Regulations that restrict land-use based on the environmental carrying capacity of the site.
Performance Zoning
A type of zoning that may allow waivers of certain bulk and use regulations.
Planned Unit Development
The government's power to regulate the way private property is used to protect the health, safety, morals, and general welfare of the public use.
Police Power
A common land-use regulation that requires a certain amount of space between improvements on a property and the property lines.
Setback Requirement
The standards and procedures that regulate the subdividsion of land for development and sale.
Subdivision Regulation
Assessed value for property taxes less exemptions.
Taxable Value
A system whereby landowners can sell their development rights to other property owners to the other property owners can use their property more intensely.
Transferable Development Rights
The process of dividing a community's land into districts in which only certain uses of the land are allowed.
Zoning
Administrative relief that allows an owner to deviate slightly from a strict interpretation of the zoning ordinance.
Zoning Variance
The act of passing all of one's rights and responsibilities under a legal agreement to a thrid party.
Assignment
A deed that simply states that the grantor has title to the property and the right to convey it but does not contain any express covenants or warranties to the title's validity.
Bargain and Sale Deed
An assurance made by the grantor that no liens or encumbrances other than those of public record exist against the property.
Covenant Against Encumbrances
An assurance made by the grantor that the grantor will execute any future documents needed to perfect the grantee's title.
Covenant of Further Assurances
An assurance made by the grantor that he or she is in full possession of the interest being conveyed by a deed and thus has the right to convey it.
Covenant of Seisin
A written document that evidences ownership.
Deed
A lease contract that stipulates a fixed rent amount for the period of the lease.
Fixed-Rent Lease
The deed that offers the most propetection to the grantee, complete with all relevant convenants and warranties.
General Warranty Deed
A lease contract that stipulates scheduled rent increases over the period of the lease.
Graduated-Rent Lease
A lease contract stipulating that the landlord will pay all operating expenses, taxes, and insurance for the propoerty during the period of the lease.
Gross Lease
A long-term lease for vacant land.
Ground Lease
A lease in which jrent payments are adjusted based on changes in the cost of living.
Index Lease
A legal Agreement between lessor and lessee.
Lease
The person who receives a leasehold interest in a property from the lessor.
Lessee
The person who gives a leasehold interest in a property to a lessee.
Lessor
A lease that stipulates that the lessee will pay operating expenses for a property during the leased period.
Net Lease
A lease that stipulates that the lessee will pay operating expenses and insurance for the property during the lease period.
Net-Net Lease
A lease that stipulates that the lessee will pay operating expenses, insurance and property taxes for the property during the lease period.
Net-Net-Net Lease
A lease for a property used for commercial purposes under which the rental payments are based on some percentage of sales made on the premises.
Percentage Lease
A deed used to transfer any interest a grantor may or may not have in a property, without implying tha tthe grantor has a valid interest to convey.
Quitclaim Deed
A lease that stipulates that the rent will be adjusted periodically as the value of the building changes, as determined by an appraisal.
Reappraisal Lease
A cause in a lease agreement that defines the parties' agreement regarding renewal of the lease upon termination.
Renewal Option
An amount requried by a lessor in advance of occupancy as security against potential damages caused by the lessee.
Security Deposit
Similar to a general warranty deed, except the covenants and warranties apply only to events that occurred during the grantor's period of ownership.
Special Warranty Deed
The act of transferring a portion of the leasehold estate to a third party.
Subleasing
A leasehold estate that defines a tenant's rights to occupy the property against the wishes of the lessor.
Tenancy at Sufferance
An informal leasehold estate of indeterminable length that may last as long as the parties agree.
Tenancy at Will
A leasehold estate that has definite starting and ending dates.
Tenancy for a Stated Period
A leasehodl estate that continues to automatically renew each period unless terminated by either party.
Tenancy from Period to Period
An assurance made by the grantor to always defend the title conveyed to the grantee.
Warranty Forever
An assurance made by a lessor that the property is fit for its intended use.
Warranty of Habitability
An expression of satisfaction with an offer.
Acceptance
Failure to perform a required contracttual obligation.
Breach of Contract
Anything that incurs legal detriment or the forgoing of a legal benefit.
Consideration
A legal device used by two or more persons to indicate they have reached an agreement.
Contract
The mental ability to understand what a contract represents and the meaning of its terms.
Contractual Capacity
A response to an offer that represents a new offer.
Counteroffer
Clause in a real estate contract that permits the buyer to have a qualified inspector examine that property for any physical defects which the seller may be obligated to make repairs.
Inspection and Repair Contingency
A contrarct that establishes an obligation to transfer title from seller to a buyer ato some future date based on an agreed-upon payment schedule.
Land Contract
A statement that specifies the position of its maker (offeror) and indicates that the offeror is willing to be bound by the conditions stated.
Offer
The receiving party in a contract.
Offeree
The party making the offer in a contract.
Offeror
A contract that gives one party to the right, but not an obligation, to purchase a property within a specified time horizon at a specified price.
Option-to-Buy Contract
Fulfillment of the terms of an agreement to such an extent that the existence of the agreement may be reasonable inferred.
Partial Performance
A contract providing for the transfer of property.
Sales Contract
A requirement that the terms of a contract be exactly complied with.
Specific Performance
A law designed to prevent fraudulent practices involving ontracts.
Statute of Fruads
Ownership history of a specific property.
Chain of Title
The settlement of a real estate transaction.
Closing
A third party who faciflitates a real estate closing.
Escrow Agent
A closing using an escrow agent.
Escrow Closing
An index of grantors who have given an interest in real estate to another and people who have received such an interest (grantees).
Grantor and Grantee Indexes
A settlement form approved by the Department of Housing and Urban Development.
HUD-1 Uniform Settlement Statement
A title in real estate that a reputable title insurance company is willing to insure. An insurable title most frequently is one without major defect.
Insurable Title
A title free and clear of all past, present, and future claims that would cause a reasonable purchaser to reject such title.
Marketable Title
Closing of a real estate transaction.
Settlement
The legal right to ownership.
Title
A written history of a property's chain of title.
Title Abstract
An insurance policy that protects property owners and lenders against undiscovered defects in a property's chain of title.
Title Insurance
An attorney's opinion of the quality of title for a specific property.
Title Opinion
A property for which there are no defects.
Title Perfect of Record
The process of verifying the quality of title.
Title Search
A system of land registration used by a few states as an alternative to grantor/grantee indexes.
Torrens System
The number of units capable of being absorbed by the market over a given time period.
Absorption Rate
The market for capital assets of all types.
Capital Market
Designed to serve 3 to 5 miles radius with a wider variety of merchandise than a neighborhood center.
Community Center
The amount or quantity of the good or service that will be desired at various prices.
Demand
When the price negotiated between demanders and suppliers results in the quantity of the good or service offered by suppliers equaling the quantity of the good or service as desired by the demanders.
Equilibrium
A retail building not located in a shopping center.
Freestanding Retail
The total number of units or square footage absorbed by the market in a spcified period of time.
Gross Absorption
Set of circumstances and arrangement through which buyers and sellers exchange goods and services.
Market
Vacant space plus space in construction divided by net absorption per month.
Market Analysis
The number of nomths required to absorb the current supply.
Months Supply
A shopping center that contains between 300,000 and 750,000 square feet in gross leasable area and contains at least one full-line department store.
Regional Center
A shopping center that exceeds 750,000 square feet of gross leasable area and includes at least three department stores.
Superregional Center
The amount or quantity of the good or service that will be offered at various prices.
Supply
The percentage of units vacant in a property.
Vacancy Rate