1. Introduction to Real Estate
Why Study Real Estate ?
Many occupational opportunities
Broker / Agent / Property Mgmt
Banks / Mortgage Lender / Title Insurer
Home Inspector / Appraiser
Developer / Investor
Real Estate Attorney
Federal Agencies (HUD, GSA, DFIC, Bureau of Land Mgmt, Forest Service, etc…)
Home Ownership (Pride of Ownership)
2/3 of all Americans own at least 1 home

2. Some Statistics
In 2001 the number of billionaires dropped from 538 in 2000 to 497 in 2001.
However those billionaires who attribute their wealth to Real Estate went from 32 to 33. Fifteen of them were from the US.
Big Names
Donald Trump (1.8 Billion)
Leona Helmsley (1.9 Billion)
Sam Zell (2.1 Billion)

3. Statistics Cont. Sector Dollar Output % of GDP Gross Domestic Product
$9,872.9
100.0
Real Estate
$1,116.3
11.3
Finance & Insurance
$819.9
8.3
Manufacturing: Durable Goods
$901.7
9.1

4. One of the Best Investments You Can Make
Real Estate Prices have gone up in recent years while the stock market dropped. It is better to buy a first home before putting money in the market.
- Peter Lynch
Vice Chairman of Fidelity Management and Research Co. former manager of Fidelity’s flagship Magellan Fund

5. One of the Best Investments You Can Make
Beyond the beneficial economics of home ownership such as low down payments, capital appreciation, and tax deductions, there are key psychological reasons a home is a great investment: you aren’t inclined to sell the roof over your head to satisfy a whim or escape a bear market. Also there is no stock ticker for real estate investments or TV Commentators mentioning that the house next to you declined 10%.
Also the average price increase nationally has been about 5% for the past 10 years. It does not sound like much, but if you buy a $100,000 house and you put 20% down, and it goes up 5% a year, you’re getting $5,000 on your $20,000 down payment.
That’s a 25% return on your investment!

6. Objectives Define Real Property vs. Personal Property
Define Property Rights and Estates
Define types of Deeds and Titles
Methods of Title Assurance
Understand the purpose of a Mortgage and a Note

7. Definition
Real Estate is land at, above and below the earth’s surface, plus everything permanently attached to it. This includes: Buildings, Trees, Fences, etc…

8. Types of Real Estate Residential Commercial Industrial Agricultural
Special Purpose

9. Supply and Demand Market Value Uniqueness Immobility Demand Supply
Population
Demographics
Employment/Wages
Supply
Labor Force
Material Costs
Gov’t Finance Policies

10. Real Property Descriptions
Legal descriptions for real estate must be written and accurate.
3 ways to describe property
Metes and Bounds (Oldest Type)
POB (Point of Beginning) Must start and return at POB
Monuments (Natural Object, Tree, Lake, Stream etc..)
Rectangular
Principle Meridian / Range Lines
Base Line / Township Lines
Lot and Block
Plat map
Lot (numerical designation of parcel)
Block (Subdivision plat map is filed under)

11. Property Rights
Legal descriptions only identify the surface of the land.
Air Rights
Fly Over Rights
Surface Rights
Sub-Surface Rights
Bundle of Rights
Possession
Control
Enjoyment
Exclusion
Disposition

12. Real vs. Personal
Personal property is anything that does not fit the definition of real property.
Severance
Real property becoming personal property by severing it from the land.
Annexation
-Personal property becoming real property.

13. Definition of a Fixture
When an item of personal property is so affixed to real property that it is deemed a part of the real property, it is known as a fixture.

14. Legal Tests of Fixture
Fixtures become real property and are included in the sale and mortgage.
Fixtures
Method of Annexation
Adaptation to Real Estate
Agreement
Trade Fixtures
Special Category of fixtures used in business
Belong to the tenant
Considered permanent part of the building

15. Economic Characteristics of Real Estate
Scarcity
Supply in a given location
Improvements
Building, Drainage, Sewer, Electrical
Permanence
Large fixed investment
Return is long term
Location
Based on Area, Crime Rate etc…

16. Physical Characteristics of Real Estate
Immobility
Can never be changed or moved
Indestructibility
Stabilizes Investment
Tear Down and Rebuilds
Uniqueness
Never exactly the same

17. TITLE WORK Transferring Title Title – Right to land, shows ownership
Grantor – (Seller) Conveys property to a grantee
Grantee – (Buyer) Receives property from grantee
Deed – Legal document which shows evidence of ownership and is used to transfer title to someone else.

18. Types of Deed General Warranty Deed Quit Claim Deed
Special Warranty Deed
Bargain and Sale Deed
Trustee and Court Ordered Deeds

19. Ways of Giving Notice Physically occupy the property
Provides actual notice
Record the documents in the public record
Best way of doing it
Recorder of Deeds

20. Document Recording 2 Major Purposes Protect existing interest.
Protect future purchases against secret, unrecorded interests.

21. Docs that can be recorded
Land Contracts
Mortgages
Leases
Deeds
Power of Attorney to sell
Mortgage Release
Easements
Mortgage Assignments
Purchase options.

22. Protecting Titles Attorney’s Title Opinion Title Insurance
Torrens System

23. Attorney’s Title Opinion
Lawyer reviews the chain of title and renders and opinion that you have clear marketable title.
Advantages
Abstract Review
Cheaper Option
Insured multiple parties

24. Title Insurance
Definition: Insures against financial losses caused by existing title defects.
Insures against existing hazards not future
One single premium not periodic payments.
Lenders Policy
Owners Policy

25. Policies Protect Both Parties
Forged Documents
Grantors lack of capacity to sign
A lien remains after transfer
Title not marketable
Mortgage not enforceable (Lender)
Priority of liens was incorrect

26. Estates In Land Titles and Ownership
Title - Right of ownership of the property
Deed – Written Document that conveys title to Real Estate

27. Estates In Land Cont. Present Interest Future Interest
Tenancies(manner of holding current estates)
Fee simple absolute
Absolute
Inheritance or Gift
With right of inheritance
Determinable (automatic termination)
Defeasible fee (restricted)
Possible reversion to original grantor or heirs
Freehold Estates (Ownership)
Conditional (not automatic)
Interest in
Real Property
Dower (Wife)
Legal
life estate
Without right of inheritance
Curtesy (husband)
Homestead right
Remainderman
Conventional
life estate
Life tenancy
Tenancy for life of another
(pour autre vie)
Non-Freehold Estates (lease or rental interests)

28. Limitations on Property Rights
Encumbrance - Claim against the title of the property which prevents the passing of full and complete title.
Easement – The right to use another persons property for a specific purpose.
By Express Grant
By Necessity
By Reservation
Implied Easement
Easement by Prescription
Adverse Possession
Profit Easement
License Easement

29. Limitations on Property Rights
Encroachments – Occur when a building or other improvement illegally intrudes into the property of another.
Lien – Charge or claim against a persons property, made to enforce the payment of money.
Does not prevent the transfer/sale of property.
Mortgage Lien
Mechanics Lien
Judgment Lien
Tax Lien

30. Govt. Limitations on Rights
Ownership of land is subject to other interests. The enjoyment of land must not interfere with others.
Government Regulations
Police Powers
Eminent Domain
Taxation
Escheat