Michigan Real Estate Ch. 1 - Introduction
to Real Estate Principles
Allodial System - correct answer ✔✔- system of ownership
- individual or private ownership of land
- Individuals may hold title to real property
1785 in the US
Association of Real Estate License Law Officials (ARELLO) - correct answer ✔✔- Founded in 1929
- A group of real Estate License law officials that regulates more than 2 million real estate licensees
- each state no has licensing laws
Feudal system - correct answer ✔✔Land that was owned or controlled by the king
Free market - correct answer ✔✔provides ample time for the buyer and seller to negotiate a beneficial
purchase and sale without undue pressure or urgency
Heterogeneity (non-homogeneity) - correct answer ✔✔- uniqueness
- a variety of dissimilar uses of property
- no two parcels of land are identical
ie. in agriculture land - fertility varies
in urban real estate - accessibility and zoning vary; each parcel of land has unique topography, soil type,
zoning, size, shape, etc
Highest & Best Use - correct answer ✔✔Use of land that will preserve the land utility, provide the
greatest income & result in the greatest value of land
Homogeneity - correct answer ✔✔Neighborhoods made up of similar and compatible properties
, Immobility - correct answer ✔✔- important physical characteristic of land
- incapable of being moved; in a fixed location
- the reason why location of real estate is so important & a major factor affecting land value
Indestructibility - correct answer ✔✔- physical characteristic of land
- land is a permanent commodity that cannot be destroyed
- permanence makes it wanted as a long term investment
Investment - correct answer ✔✔The outlay of money expecting income or profit OR the acquisition of
property expecting income or profit
Land use controls - correct answer ✔✔Government restrictions on land use
i.e. Zoning laws, building codes, city planning, state & regional planning, environmental control, suitable-
for-occupancy requirements
Leverage - correct answer ✔✔Use of someone else's money to enhance your own
Listing contract - correct answer ✔✔A contract where a property owner employs a real estate broker to
market the property described in the contract for a period of time at a prescribed price and terms
- the real estate firm now becomes the agent of the seller
Location - correct answer ✔✔- economic characteristic of land
- has the greatest effect on property value
National association of realtors (NAR) - correct answer ✔✔- largest real estate association in the US est
1908
- dedicated to the preservation of private property rights
- to be a member, must be licenses and join the state &/or local board/association of NAR
to Real Estate Principles
Allodial System - correct answer ✔✔- system of ownership
- individual or private ownership of land
- Individuals may hold title to real property
1785 in the US
Association of Real Estate License Law Officials (ARELLO) - correct answer ✔✔- Founded in 1929
- A group of real Estate License law officials that regulates more than 2 million real estate licensees
- each state no has licensing laws
Feudal system - correct answer ✔✔Land that was owned or controlled by the king
Free market - correct answer ✔✔provides ample time for the buyer and seller to negotiate a beneficial
purchase and sale without undue pressure or urgency
Heterogeneity (non-homogeneity) - correct answer ✔✔- uniqueness
- a variety of dissimilar uses of property
- no two parcels of land are identical
ie. in agriculture land - fertility varies
in urban real estate - accessibility and zoning vary; each parcel of land has unique topography, soil type,
zoning, size, shape, etc
Highest & Best Use - correct answer ✔✔Use of land that will preserve the land utility, provide the
greatest income & result in the greatest value of land
Homogeneity - correct answer ✔✔Neighborhoods made up of similar and compatible properties
, Immobility - correct answer ✔✔- important physical characteristic of land
- incapable of being moved; in a fixed location
- the reason why location of real estate is so important & a major factor affecting land value
Indestructibility - correct answer ✔✔- physical characteristic of land
- land is a permanent commodity that cannot be destroyed
- permanence makes it wanted as a long term investment
Investment - correct answer ✔✔The outlay of money expecting income or profit OR the acquisition of
property expecting income or profit
Land use controls - correct answer ✔✔Government restrictions on land use
i.e. Zoning laws, building codes, city planning, state & regional planning, environmental control, suitable-
for-occupancy requirements
Leverage - correct answer ✔✔Use of someone else's money to enhance your own
Listing contract - correct answer ✔✔A contract where a property owner employs a real estate broker to
market the property described in the contract for a period of time at a prescribed price and terms
- the real estate firm now becomes the agent of the seller
Location - correct answer ✔✔- economic characteristic of land
- has the greatest effect on property value
National association of realtors (NAR) - correct answer ✔✔- largest real estate association in the US est
1908
- dedicated to the preservation of private property rights
- to be a member, must be licenses and join the state &/or local board/association of NAR
