8/13/2019 Unit 1 BASIC REAL ESTATE CONCEPTS by Michaele Ann Molloy for Dream Weaver School of Real Estate 1
8/13/2019 Why? Unit 1 Preview • Terminology and Definitions • Characteristic of Land • Real Property vs Personal Property • Real Estate Careers • Supply and Demand in Real Estate Market Real Property aka Real Estate, Realty or Lands Land Real Property Real Estate • Air • Permanently • Interests • Surface Attached • Benefits • Subsurface • Human-made • Rights Additions (Improvements) Bundle of Rights 2
8/13/2019 • Tenements – Permanent structure attached to the land • Hereditaments – Any interest in real estate that can be inherited Characteristics of Real Estate Physical Economic Characteristics of Real Estate Immobility Physical Indestructibility Uniqueness** 3
8/13/2019 Characteristics of Real Estate Scarcity Location Economic Improvements Permanence of Investment S L I P Highest and Best Use • Greatest actual return on their investment • Maximizes the value of the land • Changes with time Real Estate as Investment Must have a Basic Knowledge Steady Income • Rate of Return • Long Term Financial Security • Hedge against Inflation • Keep Up with Inflation Rates • Tax advantages (more in Unit 13) • You’re the boss • 4
8/13/2019 Real Estate as Investment Always Consult Accountant, Lawyer and/or Investment Specialist Time-consuming • Not Liquid vs Stocks/Bonds • Tenants and maintenance issues • Extra mortgage to purchase a property • Risks • Increased liability • Real Estate Brokerage • Appraisal • Property Management • Financing • Property development • Counseling • Education • Other Areas • Professional • Organizations 5
8/13/2019 Professional Organizations Uses of Real Property Commercial Residential Special Use Agricultural Industrial Market – • A place where goods are bought & sold • Where value for these goods is established • Where it is advantageous for buyers & sellers to trade. 6
8/13/2019 Supply vs. Demand Factors Affecting Factors Affecting Supply Demand Labor Force/Construction • Population Costs • Demographics Gov’t Controls & Financial • • Policies Employment & Wage • Levels Business Cycle Expansion Revival Recession Depression *Gradual & Indistinct *Gov’t Attempts to Curb Fluctuations 2 Major Classifications of Property Personal Property Real Property (aka Personality) aka Real Estate, Realty or Lands Anything that is moveable [chattel] and does not qualify as real property 7
8/13/2019 Do I Really Need a License? State law stipulates that a person must hold a real estate license to Sell, buy, auction, negotiate, • leases, rents for another person Services are compensated by a • commission or bonus. Parcels Numbers: APN = Assessors Parcel Number • AIN = Assessors Identification Number • PIN = Property Identification Number • PID = Property ID • Property Account Number • Tax Account Number • Rarely used: Sidwell Number • Questions 8
8/13/2019 The “bundle of rights” refers to a set of rights: a) enjoyed by the owner of the property b) that is synonymous with the Bill of Rights c) guaranteed to citizens by the national statute of rights d) specified in a deed or land contract The “bundle of rights” refers to a set of rights: a). enjoyed by the owner of the property A homeowner is very upset over a drone that a neighbor flies over his house. He takes his case to court to end this possible violation of rights. Does he have a case, and on what basis? a. No. The neighbor is not physically on his property b. No. The drone is in the air, so he cannot exercise any surface rights. c. Yes. The drone infringes on his air rights. 9
8/13/2019 A homeowner is very upset over a drone that a neighbor flies over his house. He takes his case to court to end this possible violation of rights. Does he have a case, and on what basis? c). Yes. The drone infringes on his air rights. 10
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