Posted by admin on May 26, 2010 under Real Estate License Basics | 
In this Real Estate Basics installment we will review what the many type of estates there are when studying for a real estate license. Any real estate school that you attend in the country will have real estate courses that cover these types of estates.
When we refer to estates in real estate we are referring to the private rights of a property or interest in a property. When one has ownership of a property it is known as freehold estates. One thing all types of freehold estate have in common is that there is no end date specified. Freehold estates can last for a lifetime and be passed to ones heirs through a will. Beyond that, there are four different types of freehold estate.
Fee Simple is owning the bundle of rights and is the highest degree of ownership that there is. It is also known as Fee Simple Absolute, as in absolute ownership. A Fee Simple estate is an inheritable estate of unlimited duration and is only subject to government powers .
Fee Simple Defeasible is a Fee Simple estate with conditions placed upon it based upon an event that does or does not happen. This type of estate must clearly dictate the conditions upon the ownership and provide for a right to re-enter the property should the conditions not be met. For example, a person that holds Fee Simple Estate to a property sells to another individual stating that the property is not to raise animals on the property. This would be a Fee Simple Defeasible and should the current owners have a litter of puppies born, the property then revert to the previous owner.
Life Estates are also referred to as estates in reversion or in remainder. There are no inheritable rights to this type of estate. With a Life Estate, an owner grants title to the life tenant who owns the property for the duration of their lifetime. Once the life tenant dies the Life Estate either reverts back to the grantor who will once again have own the complete bundle of rights, or transfers to the remainderman who will then hold the complete bundle of rights.
There is also a type of Life Estate known as Pur Autre Vie, which translates to “for another life”. This type of Life Estate is dependent upon the life of someone other than the property grantor; once the named party dies the property transfers in reversion or remainder. A life tenant is not permitted to will the property to anyone, nor can they damage, waste or destroy the property, because they own an incomplete bundle of rights.
Legal or Involuntary Life Estates are also called marital right. This estate requires the consent of the partner in order to sell the property. This type of Life Estate falls into three categories. Dower refers to the wife’s interest in her husband’s property while Curtesy is the husband’s interest in his wife’s property.
Fee Tail Estates are important to know for one simple reason; it is illegal in the United States. Fee Tail Estate is property that is only inheritable by the “heirs of the body”, or the monarchy. When taking for your real estate examination it is helpful to remember that Fee Tail is never the correct answer for the type of estate owned.
Posted by admin on May 29, 2010 under Real Estate News |
According to a recent survey by the National Association of Realtors (NAR), a quarter of those individuals making their living with a real estate license believe that the market is improving. Although the number of agents and brokers with a real estate license decreased by just over seven percent last year, those who are still working in the real estate industry believe that the market is not only showing improvement, but will continue to get better over the next couple of years.
Largely in part to the improvement in the real estate market the majority of agents and brokers currently working in real estate say they will continue to do so in the coming years. The NAR also suggests that diversity in real estate helps sustain your career in real estate during this time of financial crisis. While 80% of real estate agents and brokers specialize in residential real estate, 97% of those who earn a living with a real estate license have other areas of focus.
With unemployment still a big issue across the country, there are more promising statistics in real estate careers. The Bureau of Labor Statistics believes that job opportunities for those with their real estate license will increase 14% over the course of the next eight years. In most states you can complete the real estate courses that are required to take the real estate license exam in just a few weeks. Real estate schools offer online real estate training at a fraction of the cost of traditional college classes. The ease of the process to earning a real estate license along with the encouraging information from the Bureau of Labor Statistics is making real estate a great opportunity for anyone looking for a new career path.
Even as the federal tax credit expires the incentives to get into the real estate market continue. Affordability is at an all time high while interest rates are at historic lows. There has never been a better time for buyers to find the home they have always dreamed of or for investors to find the most unbelievable real estate deals that anyone has seen in decades. Seller incentives and state rebate programs also continue to be available.
The real estate market is showing no sign of slowing as it makes its steady climb to recovery. An increasing level of market confidence by both real estate agents and consumers is further indication of the strengthening housing market. Whether you are looking for a career filled with opportunity for prosperity or you currently have a real estate license, 2010 is looking like it is going to be a great year in real estate.
Posted by admin on under Real Estate License Basics |
This installment of the Real Estate Basics series will review what you need to understand about property valuation to earn your real estate license. The real estate courses that you complete to prepare you for your real estate license exam will teach you how to calculate these values, however for the purposes of our explanation we will concentrate on defining each of the three approaches.
The first approach is the Sales Comparison Approach or the Market Data Approach. This approach to value takes the subject property and compares it to other sales of similar properties in the same area. When the subject property has more features than a property it is being compared to, than the value of these features is added to the comparable property. For example, an appraiser is given a three bedroom, two bathroom subject property to appraise and wants to you a three bedroom comparable property with only one bathroom. The value of the bathroom will be added to the comparable property. If the comparable property has features the subject does not, then the value should be subtracted from the comparable property. In a Sales Comparison Approach, the value should always be added or subtracted from the comparable property, never from the subject property.
Next there is the Cost Approach, also referred to as the Summation Approach. This approach to value is used mainly on properties that are difficult to find comparables for due to a lack of market data. With the Cost Approach the value is based upon what it would cost to replace it. The cost to reproduce a building with all original materials that is as close as possible to the original form and function is the reproduction cost. The cost to rebuild something with available materials using current methods replacement cost.
Finally there is the Income Capitalization Approach to value. This approach is based upon the property’s ability to generate income. The current value of the property and the projected income that it can bring in are considered when calculating the value. This approach takes the projected annual income of a property and making the appropriate deductions for expenses and depreciation to come up with the annual net operating income. In order to calculate the property value, the income is divided by the Capitalization Rate, or the estimated rate of return that an investor would expect to see.
A great deal of the real estate training that you will receive in any real estate school will have several sections concentrating on the essentials of assessing a property value. In order to be successful with your real estate license you must completely understand the concept of how to accurately value a property.
Posted by admin on May 13, 2010 under Real Estate Careers |
Why in the world would anyone even suggest that real estate could offer a great career opportunity today? Unemployment skyrocketed in 2009 and although improvement is expected in 2010, no one believes it’s going to happen fast. In the mean time, millions of people are out of work and looking new careers. With the downturn in the housing market you might think getting your real estate license would be one of the last things you’d want to consider, but this couldn’t be further from the truth. Although the housing and lending markets helped lead us into our economic downturn we are seeing some very positive signs that things are turning around. Making a decision to invest in something (especially your career) when it is “down” is very difficult. It goes against our basic instincts. We’d rather look for the “hot” field and go into that. The truth is that once something is “hot” it’s usually too late. Take the real estate market as an example. We all remember what it was like just a few years ago. Everyone was buying homes and prices were going up dramatically every month. Things were very, very HOT! And then what happened? The real estate market bubble burst. So why would a real estate career be a good choice today? The real estate market is stabilizing and many areas are already seeing home prices rise. This blog is filled with articles that discuss this very issue. We’ll add fresh perspective, news and real estate career information just about everyday so check back often or subscribe to our RSS feed for fast breaking news!
