Includes all testable terms, concepts, persons, places, and events. This item is printed on demand. Cram Textbook Outlines gives all of the outlines, highlights, notes for your textbook with optional online practice tests.
Only Cram Outlines are Textbook Specific. Cram is NOT the Textbook. It is uniquely organized and follows the natural sequence of events in a real estate transaction, allowing the reader to more easily understand not only the terminology of real estate, but also how a real estate transaction transpires.
In a fully evolved market, in fact, the adherence by professionals to a specific code of conduct and the spread of shared procedures acknowledged as standards, represent a guarantee for quality. The experts must be able to compete on international markets in the field of technical and of economic management of existing buildings and urban environments.
The main scope of this text is to provide methods and tools to be used for technical-economic evaluation on purchase or managing and valorize of building and property.
In particular, it is addressed to those profiles in the real estate market and to the students that aim at a potential employment gravitating around the economic-financial management.
This scope is achieved through formative procedures that include the description of the main processes and instruments that characterized the real estate operations worldwide. The main methodologies refer to the ones adopted by the operators of this sector and to the most common texts that include scientific publications, rule and codes widespread on a national and international scale. A market leader in the field, this text introduces major issues of concern to all investors and placesemphasis on asset allocation.
It gives students the skills to conduct a sophisticated assessment of watershed current issuesand debates. Bodie Investments' blend of practical and theoretical coverage combines with a complete digital solution tohelp your students achieve higher outcomes in the course.
We are pleased to present this Global Edition, which has been developed specifically to meet the needs of international Investment students. A market leader in the field, this text emphasizes asset allocation while presenting the practical applications of investment theory without unnecessary mathematical detail. This enables the instructor to choose when and how these concepts will be put before the student—whether before, parallel with, or after the student is introduced to the real estate content.
Indeed, one option is for the student to complete Chapters 1—13 without interjection of formal time-value instruction. Further, this nontechnical approach can be extended to Chapters 16—18, as noted below. In Part 6, we introduce the formal applications of compound interest and present value that are often key to a deeper understanding of mortgage calculations and the valuation of income-producing properties, such as office buildings and shopping centers.
For students who have had basic economics and business finance courses, Chapters 14 and 15 of Part 6 may contain substantial review. For others, these chapters contain new concepts that will require study and practice to master. Instructors wishing to bypass Part 6 can move directly from Part 5 to Chapters 16— However, instructors wishing to dig more deeply into com- mercial real estate financing and investing should review or cover in detail Chapters 14 and 15 before proceeding with coverage of Part 7.
We note that the three chapters contained in Part 8 also do not assume knowledge of time-value-of-money techniques. Although we recommend the material be covered in the order presented in the text, Parts 2 through 8 can generally be covered in any order, depending on the preferences of the instructor and the primary focus of the course.
For example, instructors who prefer to cover the investment material first may elect to move directly to Parts 6 and 7 immediately after Part 1. Regardless of the emphasis placed on the various chapters and materials, we believe strongly that an introductory course in real estate should be as substantive and challenging as beginning courses in fields such as accounting, economics, and finance.
The course should go beyond definitions and the discussion of current professional practice. More- over, its focus should be on real estate principles and decision tools, not simply the current rules and practice for transactions that are so important to real estate sales licensing and brokerage.
We have included many pedagogical features in this book that will be valuable learning tools for your students. This overview walks through some of the most important elements.
Each outline lists the chap- urbanMarket Minimizing form. If real estate markets ansportation worked well, this should allow market forces to determine land uses quite effectively. But this does not completely happen for several reasons. One of the reasons is on because of externalities: the unintended and unaccounted for consequences of one land user provides links between the different upon others.
For example, the creation of a shopping center on a site may cause harm to neighbors through increased traffic delays, noise, increased storm runoff across neighboring concepts. Another problem that r urban arises is that buyers of property suffer from incomplete information. Once a structure is built it is very difficult, and often impossible, to determine the sturdiness and safety of the struc- ture, a problem that all too frequently has led to tragic fires or building collapses in places where building regulation is weak.
Still another kind of problem that arises in a totally cale and private land market is locational monopoly. For example, when land is needed for a road, ale, and offer certain specific parcels are required, for which there is no substitute. The owner of these critical parcels, in effect, has a monopoly on the supply and can extract unreasonable prices from other tax-paying citizens.
In summary, an unregulated private market for land would be fraught with problems resulting from externalities, from incomplete information, and from locational monopolies. These kinds of problems have persuaded most persons that government must intervene in xiii the use of land.
In this chapter we survey three basic powers of government that limit private property use and affect property value. Main Features www. We next discuss the relationships among market value, investment value, and transac- tion prices. This is followed by an overview of the real estate appraisal process, including the three conventional approaches used to estimate the market value of real estate. The income approach to valuation is the focus of Chapter 8.
Key Terms www. A nonprofit, educational, and research tant to distinguish among the concepts of market value, investment value, and transaction price. Real estate appraisers generally define the market value of a property as its most text for easy reference. A list of key terms association. The concept of market from each chapter plus page references can value rests upon the presence of willing buyers and sellers freely bidding in competition with be found in the end-of-chapter material.
It is the result of the interacting forces of supply and demand. If real estate mar- kets were perfectly competitive, market value would equal the most recent transaction price. The glossary contains the definitions of all key terms.
In professional appraisal practice, market value definitions may vary as to the precise motivations, terms, and conditions specified. Because of the wide variety of laws governing the sale of real complete the transaction.
The buyer and seller must get together to consummate the deal. You do not have is provided by the National Association of applications of the concepts discussed in offers to buy and sell. When a to be a professional real estate agent to use this category, although that kind of pro Realtors: www. Selling Real Estate the chapters. John Wiley Real Estate Applications The Role of Government Government affects real estate markets, and therefore values, in a host of ways.
Local government has perhaps the largest influence on real estate. It affects the supply and cost of real estate through zoning codes and other land use regulations, fees on new land development, and building codes that restrict methods of construction.
Further, These boxes, located in select chapters, offer local government affects rental rates in user markets through property taxes. Finally, it profoundly affects the supply and quality of real estate by its provision of roads, case applications of key topics.
The influence of local government on real estate values through land use controls, property tax policy, and services is expanded upon in Chapter 4. State government has perhaps the least effect on real estate values, although it still is important. Through the licensing of professionals and agents, states constrain entry into real estate—related occupations. See Chapter Through statewide building codes, they can affect building design and cost. Through disclosure laws and fair hous- ing laws, states affect the operation of housing markets.
In addition, states typically set the basic framework of requirements for local government land use controls, and even intervene in the realm of land use controls for special purposes such as protection of environmentally sensitive lands. Finally, states affect the provision of public services important to a community, including schools, transportation systems, social services, law enforcement, and others. Career Focus officials make decisions ranging from broad to explain and defend their proposals.
Source: Summarized from. These boxed readings provide students tion of ecologically sensitive regions. Plan- ners also may be involved with drafting Most entry-level jobs in federal, state, and local government agencies require a The Occupatoinal Outlook Handbook.
Department of Labor. Urban and Regional ferent career options available to them, and Urban and regional planners often confer with land developers, civic leaders, course of study. Planners must be able to think in terms of spatial relationships Planners what those positions entail.
They may function as mediators in community disputes and and visualize the effects of their plans and designs. They should be flexible and able to present alternatives acceptable to oppos- reconcile different viewpoints and to make ing parties. Planners may prepare material constructive policy recommendations. Industry Economies of Scale. Economists have long recognized that the growth of an xiv industry within a city can create special resources and cost advantages for that industry.
This phenomenon is called industry economies of scale. In Wichita, for example, the establishment of Beech and Cessna created an infrastructure of management and produc- tion knowledge, parts vendors, a strong aeronautical engineering program at the local uni- versity, and other resources.
Such resulting resources apparently were material in attracting other aircraft companies to the city. Thus, formerly Seattle-based Boeing placed its largest plant outside the state of Washington in Wichita, and Lear Jet was launched in the city several decades after the beginning of Beech and Cessna.
Investment value, discussed in detailMinimum in Chapters floor18 andarea. ItNo is based on the unique freestanding expectations of garage. It may differ between a buyer and a seller. No freestanding utility building. Investment values generally differ No from market valuesvehicles or boats parked because individual in view of the street. Although the methods used to estimate investment value and market value are No external antennae, satellite dishes, or clotheslines.
Why is assumptions of a particular investor, not the market. Theythatarethe lawndeposit initial dif- service. Websites are called the of an isolated margins in deed estimateAn the market value of similar unusually descriptive local gov- restriction, properties. Such individual restrictions is an estimate of the most probable selling price in a com- usually must be enforced promptly.
For example, if a ment These transaction will you tions can replace zoning. Concept Check should be productive, with less restriction being better. When restrictions are ambiguous, the court is likely to interpret in favor of the current owner. Solutions period against to violation each Concept of a restriction. Check are will increase. The taskFinancial of examining the calculators evidence in the public readily Whetherpermit records is called the the a title search.
Events that must 4 owner then aremain complete chainthe same. In Texas, where deed restrictions have appraisal groups jointly be carriedpromulgated multiplyingthethe out by a knowledgeableuniform solution toto interpretation, the regular appraisal annuity standards, since many of now recognized by pro- problem of public land use controls, interest by 1 plus the periodic state lawrate person with local expertise.
Further, documents can be subject been only a usedwas competent inconstructed legal place and expert can draw has been enacted to allow local government to enforce fessional appraisal [i. With deed electronic documentrestrictions storage and see Industry Issues The action still is by civil suit, through the courts. Foundation, the Uniform Standards title abstractof has Professional electronic equiva- Practice USPAP are largely been replaced by Appraisal keys areisshown formallywith values to help guide retrieval, the customary lents.
Exhibit summarizes the laws and processes that This combine culpable to establish evi- negligence in delaying enforcement known as laches. USPAP imposes both students through numerical calculations. Market and investment five years. Other valuesyear and of each that sometimes must be estimated include the placedassessed value, the value assigned to the property for property tax in public records will earn 5 percent interest, compounded annually, what will be This the text makes extensive use of real data calculations; insurable value, the Publicvalue records of the insurable portion under the provisions of an insurance contract;.
Inspection of. The concept underlying these operations is extremely important for Evidence of Title. Ownership Benefits and Value: Market Research This operation is used to calculate the present value of future lump sum i. Airport Disney World. From this, Sarah was able to create a map approximating where people work in Orlando Exhibit Sarah xv walked up to Alex with the map in hand.
Now the apartment clusters began to make some sense because jobs were tremendously concentrated just as the apartments were. One apartment cluster seemed to be just northwest of downtown, apparently serving the downtown employment. Another corresponded exactly with the apparent concentrations of jobs in south Orlando, and the third clustered around the explod- ing, and already huge University of Central Florida UCF.
Chapter Summary Summary This chapter surveys three basic powers of government: its right to regulate land use, its right to take private property for public use, and its right to tax property. The power of Each chapter ends with a short section that federal, state, and local governments to regulate land use through planning, zoning, build- highlights the important points of the chap- ing codes, and other means is vested in their police power.
Communities use these tools to limit the negative effects of market failures such as monopolies, externalities, and incom- ter.
This provides a handy study tool for stu- plete structure information, thus attempting to increase market efficiency and equity. Zoning assigns specific Summary permitted uses to individual parcels of land to carry out the comprehensive plan. States andislocal Appraisal jurisdictions the process of developingexperiencing an opinion of the rapid valuegrowth haveThe of real estate.
Professional appraisers and counties to develop comprehensive plans, require economic and environmental impact use three general methods, or approaches: sales comparison, cost, and income the topic of Chapter 8. However, the developments. Additionally, some states give local communities the right to establish appraisal of small residential properties is becoming increasingly computerized, and the traditional sales comparison approach is being augmented, urban service areas, or iftonotplan andbycontrol replaced, urbanstatistical computer-aided development outside their analyses.
Nevertheless, boundaries. They follow a sequence of and comprehensive. The proper selection of compa- Environmental hazards haveis essential rable sales become ansuccessful to the important consideration implementation in comparison of the sales land use approach. Asbestos, fiberglass, LUSTs, lead paint, radon gas, and mold are some of. Three types of accrued depreciation may the most common threats. Real exist: estate physical investors deterioration, face large functional risks from obsolescence, theseobsolescence.
The estimated site value plus the current value of site improvements is then added mental inspections and by requiring to obtain written the indicated statements property value by the ofcost indemnification approach. KeyThe Termspower of government to acquire private property for public use in exchange for just compensation Accrued depreciation is referred to as eminent Indicated valuedomain.
Just Restrictedcompensationappraisal is the market report value of the property. Physical deterioration Uniform Standards of Profes- TestThe power Problems Elements of of government comparison toProperty tax real property adjustments owners is a major c. Presence of any sionalsource industry AppraisalofPractice economies of revenue for scale.
Labor force characteristics. USPAP jurisdiction, local governments. External Answer theobsolescence The taxproblems: following multiple-choice is levied on the value Reconciliation of all property in e. Education system. HighestCommon and bestlaws useand regulations.
Replacement cost a. They result from demand created by multiple industries. Common market value. They create a readily available supply of highly special-. Test Problems c. Demand for access or proximity. Cost Test of land. Problems c. They tend to reduce risks in real estate. Answer 2. Spatialthe or following distancemultiple-choice relationships thatproblems: are important to a land c.
They d. Marketoccur in larger cities. Theare 1. All e. Indicated opinion of value. Because solving problems is so critical Key to a all Linkages.
Which A new house ininfluences of these will decrease good condition that hasthe levelfloor a poor of a bid- plan Terms a. Final estimate of value. Faster a. Final adjusted sale price. Extraterritorial jurisdiction 74 Market value. Short-lived Public Higher use average wage 86rate. Long-lived incurable physical deterioration.
Affordable housing allocation 74e. Weighted Form-based price. Increased c. Regulatory Curable number ofobsolescence. Cities 3. Larger d. Smart number Incurable of households functional growth 75 bidding.
None e. External obsolescence. In Board of adjustment 80 PhysicalImpact fee 81 9. Toareflect systemaof Special bid-rent curves,conditions assuming that households the dateare except assessments 92between a. Transportation b. People obsolescence. Comprehensive plan 74 d. External c. There isInverse landcondemnation obsolescence.
There and energy. In the 3. The salesJust is demand compensation comparison for economic goods. Tax a. Householdsassessor Conditions ofwith 91 number of commuting sale. Tax base Market conditions. Households b. Dedicated property 79 Adjusted a. Mills price. Tax-exempt d. Households Financing properties with superior terms. Finalisolated adjustedfrom sale other price. Households d. None of the that arrive in the city last. Economic and environmental impact New urbanism 76 b.
Less c. Tax raterequiring e. Households 90 more land. Less diversified. Toxic A large waste university 82 of what kind of economic is an example phenomenon? Effective tax rate 92 Performance 5.
The best example standard of a base economic 81 be a: activity would Urban service a. Convenience activity. Comparison activity.
Eminent domain 86 Planned b. Department store. Industry economies 78of scale. Fire department. Exclusionary zoning 78 PUD 80 d. Large apartment complex. Secondary or local economic activity. Quality of life activity. Externalities 70 e. Unemployment rate. Business leadership. Study Questions 1. List five major economic base activities for your city of 4. Identify at least five locational attributes that you believe are.
Study Questions residence. Compare 2. Find the historical population figures for your community for notes with someone in the industry such as a local restaurant the 20th century. Create a chart with year intervals.
Deter- manager or owner. Perfect Population Projections Inc. One source of the necessary population contract with the city of Popular, Pennsylvania, to project Each chapter contains 10—20 study questions numbers is the U. Census home page, www. Look for QuickFacts, and select your state. At the top of the the future population of the city. In recent years, Popular has become a desirable place to live and work, as indicated by.
The ratio of population to 3. On the U. Census website, use the approach shown in total employment is 2. Explore the Web next page to access the American Com- munity Survey. For your county and for your state find the Your help is needed!
Graph the distri- butions using percentage for each income interval. Which is higher, county or state? Leasehold interest.
Explain how rights differ from power or force, and from the opportunity to obtain her house for its use. She would permission. A developer of a subdivision wants to preserve the open to move and feels strongly about owning her own home. On space and natural habitat that runs along the back portion of the other hand, your friend knows that she will not be able to a series of large lots in the proposed subdivision.
He is remain in the house many more years, and will be faced with debating whether to use restrictive covenants to accomplish moving and selling within a few years. What options can. What you suggest as possible plans to explore? A friend has owned and operated a small recreational vehi- 3. Why are restrictive covenants a good idea for a subdivision?
It is close to Can they have any detrimental effects on the subdivision or the ocean and close to the Daytona Speedway, home of the its residents? For example, are there any listed in the chapter Daytona and a host of other prominent races. The occu- that might have questionable effects on the value of a pants are very loyal, making reservations far in advance, and residence? She is asking your thoughts on 4. Project management a managerial approach 5th by merdedith 0. Instructors: choose ebook for fast access or receive a print copy.
Still Have Questions? Contact your Rep s. Nobody seems ever to have met her. He has a middle-aged Asian man living out there with him. I reached down and wiped it away, but she smiled at my touch and more milk trickled out of the corner of her mouth.
Her dark Lavender eyes looked at me and through me, and for a second he was there, like any moment his cello voice would fill the room.
Subscribe to this RSS feed. Our advantages:. There has been change with profound and far-reaching implications in a world where it is understandable that property values can go down as well as up. This realization will color every aspect of real estate investment, finance and transactions for the foreseeable future.
Real estate salespersons can lose their licenses for: a. Using aggressive sales techniques. Not showing buyers all available properties in an area. Commingling escrow trust money with personal funds. Not using modern sales methods. All of the above. New urbanism is a term used to describe: a. Growth management laws enacted by state governments.
The requirement that infrastructure be available concurrently with new development. The theory that residential and commercial uses should be integrated, streets and parking should discourage through traffic, and neighborhoods should be pedestrian oriented.
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