Copyright © 2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
st st st st st st st st st st st st st st st st st st st
18-1
,SOLUTION MANUAL FOR st st
Real Estate Finance And Investments 17th International Edition Jeffrey Fisher Willia
st st st st st st st st st st
m B. Brueggeman
st st
Chapter 1-23 st
Solutions to Questions—Chapter 1 st st st
An Introduction to Real estate Investment: Legal Concepts
st st st st st st st
Question 1-1 st
What is the difference between real property and personal property?
st st st st st st st st st
Real property refers to the ownership rights associated with realty. Realty refers to land and all thing
st st st st st st st st st st st st st st st st
s permanently attached. Personal property refers to ownership rights associated with personalty. Pe
st st st st st st st st st st st st
rsonalty are all things, tangible, intangible that are movable. This includes all things that are not rea
st st st st st st st st st st st st st st st st
lty.
Question 1-2 st
What is meant by an estate? st st st st st
Estate is used to denote a possessory or potentially possessory interest in real estate. However, not al
st st st st st st st st st st st st st st st st
l interests in real property are estates. Ownership can be quite different from possession and a variety
st st st st st st st st st st st st st st st st st
of legal factors affect the ownership rights associated with real estate. The economic benefits expect
st st st st st st st st st st st st st st
ed by lenders, investors, and other parties in a real estate transaction are affected by these legal facto
st st st st st st st st st st st st st st st st st
rs.
Question 1-3 st
How can a leased fee estate have a value that could be transferred to another party?
st st st st st st st st st st st st st st st
The original fee owner can give up some property rights to a lessee. The value of the leased fee estat
st st st st st st st st st st st st st st st st st st st
e will depend on the amount of lease payments expected during the term of the lease plus the value
st st st st st st st st st st st st st st st st st st st
of the property when the lease terminates, and the original owner receives the reversionary interest.
st st st st st st st st st st st st st st
Question 1-4 st
What are title records? What is an abstract of title?
st st st st st st st st st
Title records (sometimes referred to as deeds and conveyances records and/or real property records
st st st st st st st st st st st st st
) are created and maintained usually at the county level. These records identify all properties in a co
st st st st st st st st st st st st st st st st st
unty, including location, present ownership and any liens or encumbrances affecting each property.
st st st st st st st st st st st st
These records are critical to investors who want to identify the owner of specific tracts or land, exist
st st st st st st st st st st st st st st st st st st
ing buildings, etc. These records are also important because they contain evidence of encumbrance
st st st st st st st st st st st st st
s such as mortgage liens, tax liens (to be covered in later chapters), etc. Example: a prospective inve
st st st st st st st st st st st st st st st st st
stor sees a vacant tract of land that he is interested in purchasing. Because there is no signage or any
st st st st st st st st st st st st st st st st st st st st
improvements on the land, how can the land owner be identified and contacted? By going to the co st st st st st st st st st st st st st st st st st
unty records office (deeds and conveyancers department) the investor can use the address to locate
st st st st st st st st st st st st st st st
a property (usually in plat books), then the current owner. These records are used to link a precise pr
st st st st st st st st st st st st st st st st st st
operty to its owner. At some point, if this investor continues to be interested in purchasing the land,
st st st st st st st st st st st st st st st st st st
he will likely retain an attorney or abstractor to do a title search and abstract of title. The latter is don
st st st st st st st st st st st st st st st st st st st st
e to not only st st st
Copyright © 2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
st st st st st st st st st st st st st st st st st st st
18-2
, identify the current owner but to trace all previous owners with commentary on the likelihood of oth
st st st st st st st st st st st st st st st st
er parties who may ownership rights and /or interests in the tract of land.
st st st st st st st st st st st st st
Question 1-5 st
What is a deed? How is it different from the title?
st st st st st st st st st st
The deed is a document usually created by the owner of a property containing the property legal
st st st st st st st st st st st st st st st st
I.D. and location in addition to any improvements that exist on the property. It also describes the ext
st st st st st st st st st st st st st st st st st
ent to which the seller warrants that he is the owner of the property and has the right to convey owne
st st st st st st st st st st st st st st st st st st st st
rship. A deed is used to convey the title from one person (the grantor) to another (the regrantee) by
st st st st st st st st st st st st st st st st st st st
means of a written instrument. The term ―title‖ is an abstract term frequently used to link an indivi
st st st st st st st st st st st st st st st st st
dual or entity who owns property to the property itself. When a person has
st st st st st st st st st st st st st
―title,‖ he is said to have all the elements, including the documents, records, and acts, that prove own
st st st st st st st st st st st st st st st st st
ership. Title establishes the quantity of rights in real estate being conveyed from seller to It differs f
st st st st st st st st st st st st st st st st st
rom title because title provides evidence of ownership based on the collective records that exist per
st st st st st st st st st st st st st st st
taining to a property. st st st
Question 1-6 st
What is meant by a title record? Why are these records so important?
st st st st st st st st st st st st
The title record refers to records on file, usually at the county level, that help to specify tracts of real
st st st st st st st st st st st st st st st st st st st st
estate and determine if a seller has the right to convey ownership of such real property.
st st st st st st st st st st st st st st st
These records are the most important sources of events affecting real estate ownership over time and
st st st st st st st st st st st st st st st
are usually reviewed when trying to identify the ―quality‖ of title that investors will receive if they
st st st st st st st st st st st st st st st st st st
purchase. After a review of these records (usually by an attorney), if in his opinion, they are comple
st st st st st st st st st st st st st st st st st
te, he will indicate that the seller has ownership and title to the property. Most of the instruments th
st st st st st st st st st st st st st st st st st st
at affect title to real estate are recorded, in accordance with the recording acts of the various states,
st st st st st st st st st st st st st st st st st st
at what is typically called the county recorder’s office.
st st st st st st st st
Question 1-7 st
What is a future estate? Give an example? st st st st st st st
We think of most real estate transactions as acquiring ownership at the present time. However, own
st st st st st st st st st st st st st st st
ership can also occur at a later time, say after the current owner dies. The person who becomes the o
st st st st st st st st st st st st st st st st st st st
wner at that time is said to be a ―remainder‖ estate. Future estates include a reversion and remaind
st st st st st st st st st st st st st st st st st
er. A reversion results in the state reverting back to the original possessor whereas the remainder res
st st st st st st st st st st st st st st st st
ults in a third-party obtaining possession at some point in the future.
st st st st st st st st st st st
Question 1-8 st
Name the three general methods of title assurance and briefly describe each. Which would you reco
st st st st st st st st st st st st st st st
mmend to a friend purchasing real estate? Why? st st st st st st st
General Warranty Deed - st st st
the grantor warrants that the title he/she conveys to the property is free and clear of all encumbrance
st st st st st st st st st st st st st st st st st st
s, other than those that are specifically listed in the deed.
st st st st st st st st st st
Special Warranty Deed - st st st
makes the same warranties as a general warranty deed except that it limits their application to defec
st st st st st st st st st st st st st st st st st
ts and encumbrances which occurred only while the grantor held title to the property.
st st st st st st st st st st st st st
Quitclaim Deed - st st
offers the grantee the least protection in that it imply conveys to the grantee whatever rights,, intere
st st st st st st st st st st st st st st st st st
sts,, and title that the grantor may have in the property. No warranties are made about the nature of th
st st st st st st st st st st st st st st st st st st st
Copyright © 2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
st st st st st st st st st st st st st st st st st st st
18-3
, ese rights and interests or of the quality of the grantor’s title to the property.
st st st st st st st st st st st st st st
Copyright © 2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
st st st st st st st st st st st st st st st st st st st
18-4
st st st st st st st st st st st st st st st st st st st
18-1
,SOLUTION MANUAL FOR st st
Real Estate Finance And Investments 17th International Edition Jeffrey Fisher Willia
st st st st st st st st st st
m B. Brueggeman
st st
Chapter 1-23 st
Solutions to Questions—Chapter 1 st st st
An Introduction to Real estate Investment: Legal Concepts
st st st st st st st
Question 1-1 st
What is the difference between real property and personal property?
st st st st st st st st st
Real property refers to the ownership rights associated with realty. Realty refers to land and all thing
st st st st st st st st st st st st st st st st
s permanently attached. Personal property refers to ownership rights associated with personalty. Pe
st st st st st st st st st st st st
rsonalty are all things, tangible, intangible that are movable. This includes all things that are not rea
st st st st st st st st st st st st st st st st
lty.
Question 1-2 st
What is meant by an estate? st st st st st
Estate is used to denote a possessory or potentially possessory interest in real estate. However, not al
st st st st st st st st st st st st st st st st
l interests in real property are estates. Ownership can be quite different from possession and a variety
st st st st st st st st st st st st st st st st st
of legal factors affect the ownership rights associated with real estate. The economic benefits expect
st st st st st st st st st st st st st st
ed by lenders, investors, and other parties in a real estate transaction are affected by these legal facto
st st st st st st st st st st st st st st st st st
rs.
Question 1-3 st
How can a leased fee estate have a value that could be transferred to another party?
st st st st st st st st st st st st st st st
The original fee owner can give up some property rights to a lessee. The value of the leased fee estat
st st st st st st st st st st st st st st st st st st st
e will depend on the amount of lease payments expected during the term of the lease plus the value
st st st st st st st st st st st st st st st st st st st
of the property when the lease terminates, and the original owner receives the reversionary interest.
st st st st st st st st st st st st st st
Question 1-4 st
What are title records? What is an abstract of title?
st st st st st st st st st
Title records (sometimes referred to as deeds and conveyances records and/or real property records
st st st st st st st st st st st st st
) are created and maintained usually at the county level. These records identify all properties in a co
st st st st st st st st st st st st st st st st st
unty, including location, present ownership and any liens or encumbrances affecting each property.
st st st st st st st st st st st st
These records are critical to investors who want to identify the owner of specific tracts or land, exist
st st st st st st st st st st st st st st st st st st
ing buildings, etc. These records are also important because they contain evidence of encumbrance
st st st st st st st st st st st st st
s such as mortgage liens, tax liens (to be covered in later chapters), etc. Example: a prospective inve
st st st st st st st st st st st st st st st st st
stor sees a vacant tract of land that he is interested in purchasing. Because there is no signage or any
st st st st st st st st st st st st st st st st st st st st
improvements on the land, how can the land owner be identified and contacted? By going to the co st st st st st st st st st st st st st st st st st
unty records office (deeds and conveyancers department) the investor can use the address to locate
st st st st st st st st st st st st st st st
a property (usually in plat books), then the current owner. These records are used to link a precise pr
st st st st st st st st st st st st st st st st st st
operty to its owner. At some point, if this investor continues to be interested in purchasing the land,
st st st st st st st st st st st st st st st st st st
he will likely retain an attorney or abstractor to do a title search and abstract of title. The latter is don
st st st st st st st st st st st st st st st st st st st st
e to not only st st st
Copyright © 2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
st st st st st st st st st st st st st st st st st st st
18-2
, identify the current owner but to trace all previous owners with commentary on the likelihood of oth
st st st st st st st st st st st st st st st st
er parties who may ownership rights and /or interests in the tract of land.
st st st st st st st st st st st st st
Question 1-5 st
What is a deed? How is it different from the title?
st st st st st st st st st st
The deed is a document usually created by the owner of a property containing the property legal
st st st st st st st st st st st st st st st st
I.D. and location in addition to any improvements that exist on the property. It also describes the ext
st st st st st st st st st st st st st st st st st
ent to which the seller warrants that he is the owner of the property and has the right to convey owne
st st st st st st st st st st st st st st st st st st st st
rship. A deed is used to convey the title from one person (the grantor) to another (the regrantee) by
st st st st st st st st st st st st st st st st st st st
means of a written instrument. The term ―title‖ is an abstract term frequently used to link an indivi
st st st st st st st st st st st st st st st st st
dual or entity who owns property to the property itself. When a person has
st st st st st st st st st st st st st
―title,‖ he is said to have all the elements, including the documents, records, and acts, that prove own
st st st st st st st st st st st st st st st st st
ership. Title establishes the quantity of rights in real estate being conveyed from seller to It differs f
st st st st st st st st st st st st st st st st st
rom title because title provides evidence of ownership based on the collective records that exist per
st st st st st st st st st st st st st st st
taining to a property. st st st
Question 1-6 st
What is meant by a title record? Why are these records so important?
st st st st st st st st st st st st
The title record refers to records on file, usually at the county level, that help to specify tracts of real
st st st st st st st st st st st st st st st st st st st st
estate and determine if a seller has the right to convey ownership of such real property.
st st st st st st st st st st st st st st st
These records are the most important sources of events affecting real estate ownership over time and
st st st st st st st st st st st st st st st
are usually reviewed when trying to identify the ―quality‖ of title that investors will receive if they
st st st st st st st st st st st st st st st st st st
purchase. After a review of these records (usually by an attorney), if in his opinion, they are comple
st st st st st st st st st st st st st st st st st
te, he will indicate that the seller has ownership and title to the property. Most of the instruments th
st st st st st st st st st st st st st st st st st st
at affect title to real estate are recorded, in accordance with the recording acts of the various states,
st st st st st st st st st st st st st st st st st st
at what is typically called the county recorder’s office.
st st st st st st st st
Question 1-7 st
What is a future estate? Give an example? st st st st st st st
We think of most real estate transactions as acquiring ownership at the present time. However, own
st st st st st st st st st st st st st st st
ership can also occur at a later time, say after the current owner dies. The person who becomes the o
st st st st st st st st st st st st st st st st st st st
wner at that time is said to be a ―remainder‖ estate. Future estates include a reversion and remaind
st st st st st st st st st st st st st st st st st
er. A reversion results in the state reverting back to the original possessor whereas the remainder res
st st st st st st st st st st st st st st st st
ults in a third-party obtaining possession at some point in the future.
st st st st st st st st st st st
Question 1-8 st
Name the three general methods of title assurance and briefly describe each. Which would you reco
st st st st st st st st st st st st st st st
mmend to a friend purchasing real estate? Why? st st st st st st st
General Warranty Deed - st st st
the grantor warrants that the title he/she conveys to the property is free and clear of all encumbrance
st st st st st st st st st st st st st st st st st st
s, other than those that are specifically listed in the deed.
st st st st st st st st st st
Special Warranty Deed - st st st
makes the same warranties as a general warranty deed except that it limits their application to defec
st st st st st st st st st st st st st st st st st
ts and encumbrances which occurred only while the grantor held title to the property.
st st st st st st st st st st st st st
Quitclaim Deed - st st
offers the grantee the least protection in that it imply conveys to the grantee whatever rights,, intere
st st st st st st st st st st st st st st st st st
sts,, and title that the grantor may have in the property. No warranties are made about the nature of th
st st st st st st st st st st st st st st st st st st st
Copyright © 2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
st st st st st st st st st st st st st st st st st st st
18-3
, ese rights and interests or of the quality of the grantor’s title to the property.
st st st st st st st st st st st st st st
Copyright © 2022 McGraw Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill.
st st st st st st st st st st st st st st st st st st st
18-4
