Term
| true or false: The right of egress is the legal right to exit or leave a property while the right of ingress is the legal right to enter a property. |
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Definition
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Term
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Definition
| The presence or absence of physical systems such as roads, sewers, utilities, postal systems, rail networks and airports may suggest or limit the types of use for a site. |
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Term
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Definition
| Area amenities make one site more agreeable than another and can be critical determinants for some users. Important amenities include restaurants, public parking, parks, hotels, athletic facilities, business support industries, street lighting, sidewalks, and suitable residential areas for employees. |
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Term
| What are the primary physical features of land that determine its utility? |
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Definition
| water availability, soil quality, terrain, topography, climate, vegetation, elevation, minerals, configuration |
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Term
| What are some of the primary locational factors that determine or influence the value of a particular site or tract of land? |
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Definition
Community—base industries, local economy, attitudes, ethnic composition, social classes.
Demographics—population, age, income, education, household size.
Linkages and access—connections to surrounding area, site access, ingress and egress.
Transportation systems—public transportation systems, rail, air
Infrastructure—road system, utilities, postal system
Utilities—type, capacity, cost
Amenities—parking, hotels, parks, restaurants, residential areas |
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Term
| Describe the major governmental influences on land use and value. |
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Definition
Power to zone, control construction quality, and take by eminent domain give government ultimate control over type of use; value grows out of use or potential use.
Taxes—property, income, gains, sales, etc.—contribute to cost of ownership, cost of operations; encourage or discourage types of use; tax incentives also influence use.
Environmental regulations influence value by allowing only certain types of activities and imposing penalties for violation.
Title restrictions such as liens, easements, covenants influence value by restricting ownership and use. |
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Term
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Definition
| If the transaction is primarily motivated by investment concerns, the most likely transaction is a straight cash or cash-to-loan sale of the fee simple interest. |
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Term
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Definition
| In return for incremental payments, the fee interest is transferred incrementally across several tax years. This type is used when the seller wants to spread taxable gain over several years, and the buyer wants to reduce the amount of capital investment per year. |
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Term
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Definition
| A Section 1031 exchange allows a principal to defer tax obligations resulting from the sale. A "like-kind" property is traded in lieu of other consideration, and liability for taxable gain is transferred from one property to another. |
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Term
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Definition
| A landowner leases land to a tenant, who typically builds and owns the improvements. The landowner retains ownership and receives income. The tenant deducts lease expenses, depreciates the improvements, and can sell the improvements at the end of the lease term. |
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Term
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Definition
| An owner/user sells undeveloped land to a landlord/developer who develops it and leases it back to the user. The user gains the tax advantage of being able to expense the lease payments. |
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Term
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Definition
| An owner/builder leases land-and-improvements to a user and uses the lease as security to finance and construct the improvements to the user's specifications. The lease is structured to return the capital investment, with interest, to the builder. |
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Term
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Definition
| Interests and rights, such as water rights, air rights, mineral rights, and farming rights, are unbundled from the fee simple interest in the land and leased separately. The buyer typically pays less than the market value of the fee interest and can pay in the form of fees, royalties, or lease payments. |
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Term
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Definition
| An option contract gives the optionee the right to lease or buy a property or a right within a certain period of time. This type of transaction is often used when a development or a change of use is planned, and when a developer needs to assemble a single property from a number of separately owned parcels. For a relatively small capital outlay, the developer gains a measure of control over the land while arranging for financing, permitting, and zoning changes. If the project fails, the optionee’s losses are limited. |
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Term
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Definition
| the broker lists and sells a fee simple interest in a parcel of land to a suitable buyer. The normal marketing activities are carried out: signs, advertisements, word of mouth, brokerage cooperation, showings. In this situation, the prospective buyer knows the property’s highest and best use and its investment possibilities. |
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Term
| Development land brokerage |
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Definition
| the broker participates more actively in the development of the property to achieve its potential. In addition to carrying out marketing activities, the broker helps identify what kind of improvements would be best and assists in realizing those improvements. |
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Term
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Definition
| instead of marketing the whole property with a complete bundle of rights, the broker markets single rights or groups of rights, such as air rights, mineral rights, water rights, easement rights, and options. |
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Term
| Subdivision and lot wholesaling |
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Definition
| some developers stop at purchasing undeveloped land, obtaining approvals, subdividing, and installing utilities, roads and other infrastructure. They give the task of wholesaling the lots to builders to a land broker. |
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Term
| Site Location and parcel assembly |
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Definition
| the land broker locates parcels for a specific buyer or purpose; this may require working with a number of owners to acquire enough adjacent land for the proposed development. |
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Term
| Describe the different types of sale transaction. |
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Definition
Straight—cash or cash-to-loan sale and direct transfer of fee simple interest.
Installment—incremental transfer of fee interest over a period in return for incremental payments.
Exchange—instead of cash, a property of like kind to the land parcel is traded; tax liability on the sale is transferred from one property to the other. |
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Term
| How do sale/leaseback and build-to-suit transactions work? |
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Definition
Sale/leaseback— an owner–user sells undeveloped land to a developer who develops the land leases it back to the original owner.
Build-to-suit—user leases land and to-be-developed improvements from an owner-builder, who uses the lease to finance building the improvements to the lessee’s specifications. |
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