Questions and Answers
Easements are a type of financial encumbrance.
False
Private restrictions can limit the size and style of buildings on a property.
True
CC&Rs are created by homeowners associations.
False
The government can take private property without paying just compensation.
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General property taxes are based on the value of the property.
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Easement appurtenant is a type of easement that benefits a specific individual.
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Private restrictions can affect the resale value of a property.
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Government restrictions can only be enforced through taxation.
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Special assessments are used to pay for public improvements within a specific area.
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Liens are a type of nonfinancial encumbrance.
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Study Notes
Introduction to Appraisal
- Appraisal is an opinion of value, relying significantly on the appraiser's judgment and expertise
- Appraisal practice includes appraisal and appraisal review
- The history of appraisal profession began in 1929 with the first professional standards for appraisals, grew in response to appraisal requirements from the FHA, VA, and Fannie Mae, and was further shaped by the savings and loan crisis in the 1980s
Purpose and Use of an Appraisal
- The purpose of an appraisal is to estimate a type of value
- The intended use of an appraisal is the reason the client wants to know the information
- Appraisers may be staff appraisers for a business or government agency, or independent fee appraisers
Real Estate Financing Industry
- Depository institutions are chartered by federal or state government
- Primary market: Lenders make loans to home buyers
- Secondary market: Loans are sold as investments, often after being packaged as mortgage-backed securities by Fannie Mae or Freddie Mac
Real Estate
- Real estate is defined as an identified parcel or tract of land, including improvements, if any (USPAP)
- Fixtures are man-made attachments to real property, which were once personal property but are now attached to or connected with real property in such a way that they have become part of real property
- Four common tests to distinguish a fixture from personal property are:
- Method of attachment
- Adaptation of the item
- Intention of the parties
- Relationship of the parties
Real Property Interests
- Real property is defined in Uniform Standards of Professional Appraisal Practice as the interests, benefits, and rights inherent in the ownership of real estate
- Real estate refers to land itself (plus improvements)
- A complete bundle of rights in real property includes:
- Right to possess
- Right to use
- Right to enjoy
- Right to encumber
- Right to will
- Right to sell or transfer
Types of Estates
- Two main categories of interests in land are:
- Estate: Real property interest that includes possession
- Encumbrance: Real property interest that doesn't include possession
- Freehold estates include title to property and consist of:
- Fee simple estates
- Life estates
Encumbrances
- Encumbrances are real property interests that don't include possession
- Types of encumbrances include:
- Financial encumbrances
- Nonfinancial encumbrances
Government Restrictions on Property Rights
- Government may affect private ownership through:
- Eminent domain
- Taxation
- Police power
- Eminent domain is the power to take private property for public use, with just compensation paid to the property owner
- Common taxes that affect real estate are general property taxes and special assessments
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Description
Learn about the basics of real estate appraisal, including key terms, services provided, and major tests. Understand the purpose and use of an appraisal, and define real estate and real property.
