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Solution Manual for Real Estate Finance And Investments 17th International Edition
by Jeffrey Fisher & William B. Brueggeman
All Chapters | Expert Verified Answers with Rationales |Grade A+
1|Page
, TESTBANKS BY TESTBANKSNERD
Solutions to Question s—Chapter 1 An Introduction to Real estate Investment: Legal
Concepts
Question 1-1
What is the difference between real property and personal property?
Real property refers to the ownership rights associated with realty. Realty refers to land and all
things permanently attached. Personal property refers to ownership rights associated with
personalty. Personalty are all things, tangible, intangible that are movable. This includes all things
that are not realty.
Question 1-2
What is meant by an estate?
Estate is used to denote a possessory or potentially possessory interest in real estate. However, not
all interests in real property are estates. Ownership can be quite different from possession and a
variety of legal factors affect the ownership rights associated with real estate. The economic
benefits expected by lenders, investors, and other parties in a real estate transaction are affected by
these legal factors.
Question 1-3
How can a leased fee estate have a value that could be transferred to another party?
The original fee owner can give up some property rights to a lessee. The value of the leased fee
estate will depend on the amount of lease payments expected during the term of the lease plus the
value of the property when the lease terminates, and the original owner receives the reversionary
interest.
Question 1-4
What are title records? What is an abstract of title?
Title records (sometimes referred to as deeds and conveyances records and/or real property
records) are created and maintained usually at the county level. These records identify all
properties in a county, including location, present ownership and any liens or encumbrances
affecting each property. These records are critical to investors who want to identify the owner of
specific tracts or land, existing buildings, etc. These records are also important because they contain
evidence of encumbrances such as mortgage liens, tax liens (to be covered in later chapters), etc.
2|Page
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instruments that affect title to real estate are recorded, in accordance with the recording acts of the
3|Page
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various states, at what is typically called the county recorder’s office.
Question 1-7
What is a future estate? Give an example?
We think of most real estate transactions as acquiring ownership at the present time. However,
ownership can also occur at a later time, say after the current owner dies. The person who becomes
the owner at that time is said to be a ―remainder estate. Future estates include a reversion and
remainder. A reversion results in the state reverting back to the original possessor whereas the
remainder results in a third-party obtaining possession at some point in the future.
Question 1-8
Name the three general methods of title assurance and briefly describe each. Which would you
recommend to a friend purchasing real estate? Why?
General Warranty Deed - the grantor warrants that the title he/she conveys to the property is free
and clear of all encumbrances, other than those that are specifically listed in the deed.
Special Warranty Deed - makes the same warranties as a general warranty deed except that it limits
their application to defects and encumbrances which occurred only while the grantor held title to
the property.
Quitclaim Deed - offers the grantee the least protection in that it imply conveys to the grantee
whatever rights,, interests,, and title that the grantor may have in the property. No warranties are
made about the nature of these rights and interests or of the quality of the grantor’s title to the
property.
Would recommend the General Warranty Deed, because it offers the most comprehensive
warranties about the quality of the title.
Question 1-9
Would it be legal for you to give a quitclaim deed for the Statue of Liberty to your friend? Yes, the
quitclaim deed simply says that the grantor ―quits whatever claim he has in the property (which
may well be none) in favor of the grantee.
4|Page
Solution Manual for Real Estate Finance And Investments 17th International Edition
by Jeffrey Fisher & William B. Brueggeman
All Chapters | Expert Verified Answers with Rationales |Grade A+
1|Page
, TESTBANKS BY TESTBANKSNERD
Solutions to Question s—Chapter 1 An Introduction to Real estate Investment: Legal
Concepts
Question 1-1
What is the difference between real property and personal property?
Real property refers to the ownership rights associated with realty. Realty refers to land and all
things permanently attached. Personal property refers to ownership rights associated with
personalty. Personalty are all things, tangible, intangible that are movable. This includes all things
that are not realty.
Question 1-2
What is meant by an estate?
Estate is used to denote a possessory or potentially possessory interest in real estate. However, not
all interests in real property are estates. Ownership can be quite different from possession and a
variety of legal factors affect the ownership rights associated with real estate. The economic
benefits expected by lenders, investors, and other parties in a real estate transaction are affected by
these legal factors.
Question 1-3
How can a leased fee estate have a value that could be transferred to another party?
The original fee owner can give up some property rights to a lessee. The value of the leased fee
estate will depend on the amount of lease payments expected during the term of the lease plus the
value of the property when the lease terminates, and the original owner receives the reversionary
interest.
Question 1-4
What are title records? What is an abstract of title?
Title records (sometimes referred to as deeds and conveyances records and/or real property
records) are created and maintained usually at the county level. These records identify all
properties in a county, including location, present ownership and any liens or encumbrances
affecting each property. These records are critical to investors who want to identify the owner of
specific tracts or land, existing buildings, etc. These records are also important because they contain
evidence of encumbrances such as mortgage liens, tax liens (to be covered in later chapters), etc.
2|Page
, TESTBANKS BY TESTBANKSNERD
instruments that affect title to real estate are recorded, in accordance with the recording acts of the
3|Page
, TESTBANKS BY TESTBANKSNERD
various states, at what is typically called the county recorder’s office.
Question 1-7
What is a future estate? Give an example?
We think of most real estate transactions as acquiring ownership at the present time. However,
ownership can also occur at a later time, say after the current owner dies. The person who becomes
the owner at that time is said to be a ―remainder estate. Future estates include a reversion and
remainder. A reversion results in the state reverting back to the original possessor whereas the
remainder results in a third-party obtaining possession at some point in the future.
Question 1-8
Name the three general methods of title assurance and briefly describe each. Which would you
recommend to a friend purchasing real estate? Why?
General Warranty Deed - the grantor warrants that the title he/she conveys to the property is free
and clear of all encumbrances, other than those that are specifically listed in the deed.
Special Warranty Deed - makes the same warranties as a general warranty deed except that it limits
their application to defects and encumbrances which occurred only while the grantor held title to
the property.
Quitclaim Deed - offers the grantee the least protection in that it imply conveys to the grantee
whatever rights,, interests,, and title that the grantor may have in the property. No warranties are
made about the nature of these rights and interests or of the quality of the grantor’s title to the
property.
Would recommend the General Warranty Deed, because it offers the most comprehensive
warranties about the quality of the title.
Question 1-9
Would it be legal for you to give a quitclaim deed for the Statue of Liberty to your friend? Yes, the
quitclaim deed simply says that the grantor ―quits whatever claim he has in the property (which
may well be none) in favor of the grantee.
4|Page
