REAL 4000 Test 1 - UGA Dr. Martin
Questions and Answers
1. mortgage
2. financial crisis
3. recession
✓ ~~~ 3 phases of 2007 collapse
3 ways to describe "Real Estate"
✓ ~~~ 1. identify the tangible assets of land and buildings
2. denote the bundle of rights associated with the ownership of property
3. activities related to the acquisition, operation, disposition of physical assets
durability
✓ ~~~ poorly built real estate and the effects of decisions in real estate last a long time
lumpiness
✓ ~~~ real estate gets added to the market in relatively large chunks, hard to determine
when to start a big development project
imperfect information
✓ ~~~ impossible to know the value of real estate, seller typically knows more about a
property than the buyer does
price dispersion
, ✓ ~~~ range of potential values for a property, no single known value
high transaction costs
✓ ~~~ brokerage fees (5-10%), search costs, reduces the return of flipping houses
immobility
✓ ~~~ supply cannot be shifted to another market = surpluses and shortages can co-exist
consume a product, consume the location (unavoidable)
perfect heterogeneity
✓ ~~~ impossible for two locations to have the same location, every property has a
location monopoly, no perfect substitutes
1. user market
2. financial/capital market
3. government sector
✓ ~~~ Which markets is real estate influenced by?
basic rights
✓ ~~~ government is expected to support you in your claims
non-revocable and enduring
, personal rights
✓ ~~~ derive from the Constitution and Bill of Rights
property rights
✓ ~~~ oldest notion of the law
includes:
1. exclusive possession
2. use and enjoyment
3. dispostion
surface rights
✓ ~~~ rights to the land and everything permanently attached to it, includes raw land,
improvements to the land (clearing, rezoning), and improvements on the land (buildings)
subsurface rights
✓ ~~~ rights to the ground below the the surface of the property
air rights
✓ ~~~ rights to the reasonable distance above the surface of your property, relates to the
interference of enjoyment (drones)
fixtures
✓ ~~~ an object formerly personal property, but becomes real property through attachment
freehold interests
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