Metro Brokers Real Estate Sect. 1

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Real Estate

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Refers to to the physical land and permanent, man-made improvement improvements on the land

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Real Property

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Includes land and improvements as well as certain legal rights of ownership.

Commonly called the Bundle of Rights

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6 Bundle of Rights

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Right to possess the property

Right to control the property within legal limits

Right to enjoy the property and use it in any legal manner

Right to exclude others from entering or using the property

Right to encumber the property, as with mortgage

Right to Dispose of the property by sale, will, or other transfer

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True or False:

"Real Estate" extends from the center of the earth upwards to the sky.

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False: Real Property (Referring to the Bundle of Rights

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Real Property Consists of:

Surface Rights

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the legal right to control, occupy, and use the surface area of a parcel of real estate

Including the building of Improvements (real property) and growing of crops

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Real Property Consists of:

Air Rights

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The legal right to control , occupy, and use the surface are of a parcel of real estate.

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Real Property Consists of:

Subsurface Rights

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the right to explore, drill, or dig below the surface for minerals and water

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Real Property Consists of:

Improvements

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additions made to the property that are intended to enhance it's value

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Real Property Consists of:

Fixtures

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Articles that were once personal property but have been affixed to real estate so as to become real property.

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Fixtures:

4 Tests to Classify Intention in order to decide if an object is considered a Fixture

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Method of Attachment

Constructive Annexation (Adaptability)

Agreement

Relationship

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Classification of Intention:

Method of Attachment

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Before a Tree is planted it is personal property but after planting, it becomes real property

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Classification of Intention:

Constructive Annexation (Adaptability)

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If an object was specifically adapted or made to suit a particular or unique feature o a building.

ex/ House Keys, track lighting, custom made drapes.

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Classification of Intention:

Agreement

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a written agreement between parties concerning questionable items is always the best route.

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Classification of Intention:

Relationship of the Parties

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A renter replaces a ceiling fan of his own, the fan would remain personal property of the renter; however, upon leaving the renter must return the landlord's to it's right place

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Real Property Consists of:

Fructus Naturales

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Permanent plantings such as flowers, trees, and bushes that are classified as real property

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Real Property Consists of:

Water occurring naturally

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Such as water in streams, ponds, lakes, oceans, and seas. These are classified as real property

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Water Rights are Appurtenant meaning?

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Meaning, they are attached to the land not the landowner

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Appurtenant Rights of Water:

Navigable Waters

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refer to a body of water that is used for commerce or transportation.

The jurisdiction of these waters belongs to the federal government

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Appurtenant Rights of Water:

Littoral Land

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property that borders on the shores of a lake, sea, of ocean which is affected by tidal currents.

Most state laws establish the landowner's boundaries at the point of high tide

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Appurtenant Rights of Water:

Riparian Land

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land bordering a moving watercourse such as a stream or river

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Appurtenant Rights of Water:

Prior Appropriation

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a Doctrine of water allocation that is very different from the principles establishing riparian rights

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Real Property Consists of:

Appurtenances

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all the rights, privileges, and improvements that belong to , and pass with, the transfer of property but are not necessarily a physical part of the actual Property.

ex/ of an appurtenance would be a parking space or water rights

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Real Property Consists of:

Easements

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Other interests, benefits, and ownership rights that are discussed fully in the Title and Ownership Section

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Physical Characteristics of Land:

Immobility

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It cannot be moved from own geographical location to another

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Physical Characteristics of Land:

Indestructiblity

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Land cannot be destroyed

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Physical Characteristics of Land:

Nonhomogeneic

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Every property is unique.

Parcels of land differ in size, shape, location, and appearance

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Economic Characteristics of Land:

Scarcity

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is a limited supply of land

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Economic Characteristics of Land:

Area Preference or Situs

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Location, Location, Location

refers to the economic quality of a parcel of real estate

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2 Situs Factors:

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1. Certain locations are more preferable than others.

2. Real estate is immobile - it cannot be moved.

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Economic Characteristics of Land:

Permanence of Improvements

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Investments in land, and improvements to land, tend to be long term

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Economic Characteristics of Land:

Production

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the development of land and the construction of improvements

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Economic Characteristics of Land:

Assemblage

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the concept of combining two or more contiguous parcels of real estate into a single parcel under one ownership.

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Plottage Value

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Any increase in value resulting from assemblage

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Bill of Sale

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used to transfer Personal Property

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Deed

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Used to transfer Real Property

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Types of Personal Property:

Chattel

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Personal: boats, cars, livestock, furniture

Real: interests in the property other than ownership (leases)

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Chattel Mortgage:

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mortgage secured by personal property such as a lien on an automobile or item of farm equipment

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Types of Personal Property

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Tangible: cars, boats, jewelry, horses and cattle

Intangible: stocks, bonds, notes, mortgages

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Types of Personal Property:

Trade Fixtures

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articles of personal property that are necessary parts of tenant's trade or business.

even if they are firmly affixed to the real estate like a bar at a tavern

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Types of Personal Property:

Fructus Industriales (or Emblements)

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are growing crops that are produced annually through labor and industry

Even if the tenant is terminated from the property, The right to re-enter to harvest their crop is still awarded to them

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Types of Personal Property:

Severance

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the act of removing something attached to land

Removes it from Real property and becomes personal property

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The Real Estate Business

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Consists of people whose activities and interactions involve buying, selling, exchanging, leasing, renting, improving, and using REAL Property

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Components of the Business of Real Estate:

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Real Estate Professionals

State Regulatory boards/commissions

Real Estates Markets

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Real Estate Professionals

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consists of licenses real estate brokerage firms, and licensed brokers and salespeople

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Brokerage Firm

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is employed by the public to perform acts of brokerage, often referred to as "The Broker"

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Principle Broker

or

Employing Broker

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is in charge of and responsible for all real estate operations conducted by a real estate brokerage firm

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Salesperson

and

Associate Broker

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employs salespersons and associate brokers and acts as the broker's agent in conducting real estate transactions

Can NOT be employed by the public

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Client

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the party who employs the broker to conduct one or more of the services of real state for compensation

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Prospect, Consumer, and Third Parties

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people with whom the broker hopes to be successful in accomplishing the object of his employment

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Components of the Business of Real Estate:

State Regulatory Boards

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are regulatory boards that act pursuant to state laws.

duties include licensing and regulating real estate professionals for the employment

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Components of the Business of Real Estate:

The Real Estate Market

(3 Components)

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1. The market itself in which real property is bought and sold

2. Price is the amount paid for a particular parcel of land

3. Supply and demand is the mechanism that largely determines the price of the land

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7 Types of Real Estate

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1. Residential

2. Commercial

3. Industrial

4. Agricultural

5. Recreational

6. Special Purpose

7. Public

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Types of Property:

Residential Property

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primary composed of single-family homes, but can include smaller mulit-family units, trailers, cooperatives, condominiums, etc.

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Types of Property:

Commercial and Investment Poperty

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Real Estate that includes income producing property such as large apartments, office buildings, restaurants, shopping centers, hotels, parking lots, as well as vacant lots and tract of land suitable for construction of commercial property

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Commercial Investment Property

Ownership

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Owner-users : Business Purposes

Owner-Investors : Production of Income

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Types of Property:

Industrial Property

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Includes warehouses, plants, factories, utilities, mines, etc., as well as lands suitable and available for industrial construction

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Industrial Park

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Made up of several separate Industrial Properties and is developed and managed as a unit.

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Types of Property:

Agricultural Property

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Farms, orchards, groves, ranches, etc.

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Types of Property:

Recreational Property

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campgrounds, recreational vehicle parks, resort properties, time-share units, and other leisure-time property

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Types of Property:

Special Purpose Property

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Churches, hospitals, nursing homes, colleges, cemeteries, and other properties that generally must comply with governmental zoning and use regulations

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Types of Property:

Public Properties

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real estate acquired b municipal, county, state and federal governments for a variety of public purposes. Includes: parks, schools, libraries, offices, post offices, and highways.

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Legal Descriptions

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a description of a particular piece of property needs to be a distinct and explicitly singular description acceptable in a court of law.

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Description in the case of a sales contract

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need only be sufficient to identify the property such as a street address

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6 Methods of Descriptions in use

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Monuments method

Metes and Bounds method

Government Survey method

Lot, Block, Subdivision method (recorded plat)

Vertical Land Description

Reference to other recorded documents

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Methods of Descriptions:

Monuments Method

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This method uses naturally occurring physical features of the land only to determine the boundaries of a parcel of real property in order to legally describe it.

Now described as the LEAST Accurate methods

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Methods of Descriptions:

Metes and Bounds

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Used to describe property by specifying it's shape and dimensions.

Used for unsubdivided, unimproved real estate, as well as irregular shaped parcels.

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Terms of Descriptions:

P.O.B

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Point of Beginnings

Any legal description that does not lead back to the POB is considered defective

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Terms of Descriptions:

Courses and Metes

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Length in inches, feet, yards, and miles

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Terms of Descriptions:

Bounds

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Directions based on landmarks, monuments, angles

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A Surveyor

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Uses both precision instruments and known natural and artificial bounds to measure the exact angles and distances in order to establish the boundaries of a piece of real estate.

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Methods of Descriptions:

Government Survey

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Employs the use of imaginary lines running north and south (meridians) and east and west (parallels) 6 miles apart to form a checkered pattern.

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Terms of Government Survey:

Check

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a 24 mile square formed by intersecting meridians and base lines

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Terms of Government Survey:

Standard Parallels

&

Guide Meridians

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East-West lines

North-South Lines

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Terms of Government Survey:

Township

&

Township Lines

&

Range Lines

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6 mile square, divided into 36 squares

East-West lines in a Township

North-South Lines in a Township

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Terms of Government Survey:

Section

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Each Square mile within a Township (640 Acres)

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Terms of Government Survey:

Survey Monument

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a marker located at each section corner

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Identifying Townships

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Further divided into 36 numbered sections beginning in the top left (north east corner)

Sections may be further broken down into halves, quarters, and so on.k

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Methods of Descriptions:

Recorded Plat

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Lot, Block, and Subdivision

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Lot and Block

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Lots- an individual parcel of land intended to be conveyed in its entirety

Blocks- a group of contiguous lots. Seperated by roads

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Methods of Descriptions:

Vertical Land Descriptions

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necessary when air rights or subsurface rights need to be described

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Datum

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the point, line, or surface from which a vertical height or depth is measured

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Land Descriptions NOT in use

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Street addresses are informal and can only be used in rental agreements