The 10 Most Important Real Estate Definitions are essential for people trying to make a career in the Real Estate Industry. In order to become a Real Estate Professional, you need to pass the Licensing Exams for Real Estate. And if you want to pass the real estate exams, then it is very important to understand and learn the terminology of that industry.
Every industry has a specific group of jargons and terms that define a particular state to that specific industry. For Eg, medical jargons including Hypertension, Malignant, etc. are used by medical professionals that a person from a non-medical background might not understand. Another example can be – Due Diligence. In general terms, it refers to a pre-performed investigation and research done before taking the final decision. Real Estate definitions like Due Diligence refers to a process that has some specific steps that needs to be taken. It’s the same term but with slightly different specifications.
We have therefore chosen 10 Most Important Real Estate Definitions from the Fundamentals Real Estate Course to make others understand their actual concept in real estate terms. Have a look –
LAND
Land refers to the ground and that which is beneath it and above it. Land includes the surface resources ( For example – soil, sand, gravel). It may or may not include the deep resources (For example – coal, gas, oil), depending on the description of the ownership rights and any exclusions found on the Certificate of Title. Learn more about the Concept of Land here.
REAL ESTATE
Real estate includes the unimproved (raw) land plus buildings, and other fixed improvements to the land. Fixed improvements are items permanently attached to the land. Examples of fixed improvements to the land include a house, garage, barn, shed, shop, fence, landscaping, or a pool. Therefore, real estate is the land as well as the improvement to the land. Real Estate is a broad and very important concept. Learn more about the term Here.
REAL PROPERTY
Real property is the land, any permanent (fixed) improvements to the land, and the property rights that go with the ownership of the land. Real property includes the tangible attributes of real estate plus the intangible attributes of property ownership. Learn in-depth about the concept of Real Property Here.
INCENTIVE
Anything that is advertised or offered by a brokerage to attract business to the brokerage. It can include a promise, good, service, game of chance, contest, or anything else of value. It can only be offered by a brokerage and not by a real estate professional.
INDUCEMENT
Anything offered by a brokerage to persuade a person to enter into a particular real estate or mortgage transaction. It can include a promise, good, service, game of chance, contest, or anything else of value. An Inducement can also be offered by a brokerage only and not a real estate professional.
MONEY LAUNDERING
Money Laundering is the process of taking money from illegal sources (like selling drugs) and making it appear as if it’s coming from a legitimate source. It normally involves organized crimes and terrorist groups. Try out some Sample Questions on Money Laundering here.
The Goals of the money include:
- Converting the proceeds of a crime into less suspicious forms
- Concealing the criminal origins and the ownership of the funds
- Creating legitimate explanations for the source of the funds
ETHICS
Ethics are voluntary set of conduct rules, values and beliefs held by an individual that guide his or her behaviour.
There are 2 types of ethics:
- Utilitarian Ethics: Promote conduct that maximizes others’ welfare while reducing harm or injury
- Duty-based Ethics: Focuses on the intention behind an individual’s actions as opposed to the consequences of the actions
STATUTE OF FRAUDS
According to the Statute of Frauds, certain contracts must be in writing and be signed by all parties who will be bound by that contract.
For example:
- Contracts for the sale of an interest in land
- Contracts for debt or duty
- Contracts that cannot be performed within one year
SURFACE RIGHTS
Surface rights include the rights to the physical ground, the air space above the ground, and any materials from the top layer of land. This includes materials that can be excavated from the ground, such as sand or gravel. However, Surface rights do not typically include rights to minerals below the ground. For example – coal, oil etc.
MINERAL RIGHTS
Mineral rights include the natural resources below the top layer of land. For example – coal, oil, gold, silver, diamonds etc. Most land titles exclude to the mineral’s rights.
These were some important real estate definitions for the Real Estate Exam. There are other important topics for the course from each unit. Connect with us for more of such important updates.
Have a look at the Exam Weightings for the Fundamentals of Real Estate Course – by none other than Alberta Real Estate School
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