SOLUTION MANUAL FOR Real Estate Finance 17th Edition by Jeffrey Fisher William Brueggeman COMPLETE GUIDE WITH RATIONALES 100% VERIFIED A+ GRADE ASSURED!!!!!!NEW LATEST UPDATE!!!!!

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, Solutions to Questions—Chapter 1 IP IP IP


An Introduction to Real estate Investment: Legal Concepts
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Question 1-1 IP


What is the difference between real property and personal property?
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Real property refers to the ownership rights associated with realty. Realty refers to land and all t
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hings permanently attached. Personal property refers to ownership rights associated with perso
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nalty. Personalty are all things, tangible, intangible that are movable. This includes all things th
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at are not realty.
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Question 1-2 IP


What is meant by an estate? IP IP IP IP IP


Estate is used to denote a possessory or potentially possessory interest in real estate. However,
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not all interests in real property are estates. Ownership can be quite different from possession an
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d a variety of legal factors affect the ownership rights associated with real estate. The economi
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c benefits expected by lenders, investors, and other parties in a real estate transaction are affect
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ed by these legal factors.
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Question 1-3 IP


How can a leased fee estate have a value that could be transferred to another party?
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The original fee owner can give up some property rights to a lessee. The value of the leased fee
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estate will depend on the amount of lease payments expected during the term of the lease plu
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s the value of the property when the lease terminates, and the original owner receives the reve
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rsionary interest. IP




Question 1-4 IP


What are title records? What is an abstract of title?
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Title records (sometimes referred to as deeds and conveyances records and/or real property rec
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ords) are created and maintained usually at the county level. These records identify all properti
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es in a county, including location, present ownership and any liens or encumbrances affecting e
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ach property. These records are critical to investors who want to identify the owner of specific tr
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acts or land, existing buildings, etc. These records are also important because they contain evid
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ence of encumbrances such as mortgage liens, tax liens (to be covered in later chapters), etc. E
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xample: a prospective investor sees a vacant tract of land that he is interested in purchasing. B
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ecause there is no signage or any improvements on the land, how can the land owner be identif
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ied and contacted? By going to the county records office (deeds and conveyancers department)
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the investor can use the address to locate a property (usually in plat books), then the current o
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wner. These records are used to link a precise property to its owner. At some point, if this invest
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or continues to be interested in purchasing the land, he will likely retain an attorney or abstracto
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r to do a title search and abstract of title. The latter is done to not only
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, identify the current owner but to trace all previous owners with commentary on the likelihood of
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Pother parties who may ownership rights and /or interests in the tract of land.
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Question 1-5 IP


What is a deed? How is it different from the title?
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The deed is a document usually created by the owner of a property containing the property legal
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I.D. and location in addition to any improvements that exist on the property. It also describes th
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e extent to which the seller warrants that he is the owner of the property and has the right to c
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onvey ownership. A deed is used to convey the title from one person (the grantor) to another (
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the regrantee) by means of a written instrument. The term ―title‖ is an abstract term frequentl
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y used to link an individual or entity who owns property to the property itself. When a person
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has
―title,‖ he is said to have all the elements, including the documents, records, and acts, that prove
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ownership. Title establishes the quantity of rights in real estate being conveyed from seller to It
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differs from title because title provides evidence of ownership based on the collective records t
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hat exist pertaining to a property.
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Question 1-6 IP


What is meant by a title record? Why are these records so important?
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The title record refers to records on file, usually at the county level, that help to specify tracts of
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real estate and determine if a seller has the right to convey ownership of such real property.
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These records are the most important sources of events affecting real estate ownership over tim
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e and are usually reviewed when trying to identify the ―quality‖ of title that investors will recei
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ve if they purchase. After a review of these records (usually by an attorney), if in his opinion,
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they are complete, he will indicate that the seller has ownership and title to the property. Most
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of the instruments that affect title to real estate are recorded, in accordance with the recording
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acts of the various states, at what is typically called the county recorder’s office.
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Question 1-7 IP


What is a future estate? Give an example?
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We think of most real estate transactions as acquiring ownership at the present time. However,
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ownership can also occur at a later time, say after the current owner dies. The person who bec
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omes the owner at that time is said to be a ―remainder‖ estate. Future estates include a reversi
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on and remainder. A reversion results in the state reverting back to the original possessor wherea
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s the remainder results in a third-party obtaining possession at some point in the future.
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Question 1-8 IP


Name the three general methods of title assurance and briefly describe each. Which would you
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recommend to a friend purchasing real estate? Why? IP IP IP IP IP IP IP


General Warranty Deed - IP IP IP


the grantor warrants that the title he/she conveys to the property is free and clear of all encumbr
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ances, other than those that are specifically listed in the deed.
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Special Warranty Deed - IP IP IP


makes the same warranties as a general warranty deed except that it limits their application to
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defects and encumbrances which occurred only while the grantor held title to the property.
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Quitclaim Deed - IP IP


offers the grantee the least protection in that it imply conveys to the grantee whatever rights,, i
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, nterests,, and title that the grantor may have in the property. No warranties are made about the n
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ature of these rights and interests or of the quality of the grantor’s title to the property.
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