Category: Real Estate

Absorption in real estate is the rate at which sold or leased properties are removed from the market over a designated period. It is calculated by dividing the number of properties sold or leased by the total number of available properties. A high absorption rate indicates strong market demand, often leading to potential price increases.…

A Delaware Statutory Trust (DST) is a legal entity that enables multiple investors to pool their resources for real estate investments. This structure allows individual investors to access diversified property portfolios while benefiting from professional management. A DST qualifies for 1031 exchange treatment, enabling the deferral of capital gains taxes. Investors earn passive income through…

A real estate listing is a formal agreement between a property owner and a real estate agent, granting the agent permission to market and sell the property. This agreement defines the roles and responsibilities of both parties and includes important details such as property location, description, and pricing. Various types of listings exist, such as…

A rescission in real estate refers to the legal cancellation of a contract, effectively returning all parties to their original positions, as if the agreement never existed. This process aims to prevent unjust enrichment and guarantee fairness in transactions. Rescission can occur for several reasons, including fraud, misrepresentation, or mutual mistake. It requires formal notification…

The national average pass rate for first-time candidates taking the real estate exam typically ranges from 50% to 60%. This variation is influenced by factors such as the complexity of the exam, the quality of preparatory courses, and the specific state regulations. States with extensive pre-licensing programs, like Texas, often report higher pass rates, while…

Price fixing in real estate is an illegal practice where competing parties collude to set fixed property prices. This undermines fair market competition, leading to artificially inflated prices that violate antitrust laws. Such agreements limit consumer choices and distort the natural dynamics of supply and demand, often resulting in higher costs for buyers. For instance,…

'Active Under Contract' in real estate refers to a property that has an accepted offer but remains on the market for potential backup offers. This status implies that negotiations may still be ongoing, often dependent on contingencies such as financing or inspections. Sellers maintain the ability to accept other offers while buyers can investigate these…

Annexation in real estate is the legal process of integrating adjacent land into an existing property or jurisdiction, primarily executed by municipalities to expand their boundaries. This process can occur through voluntary or involuntary methods and typically aims to improve service delivery, increase the tax base, and enhance property value. Annexation often involves changes in…

To underwrite a real estate deal, begin by evaluating key financial, property, and market factors. Assess the property's condition, location, and appreciation potential. Analyze cash flow by identifying all revenue streams and itemizing operating expenses, including contingency reserves. Use multiple valuation approaches, such as comparable sales and income analysis, to assess property value. Evaluate market…

A general agency in real estate is a representation model where agents act on behalf of clients throughout various property transactions, including buying, selling, leasing, and managing. This arrangement establishes a fiduciary relationship, ensuring loyalty and trust between the agent and client. General agents possess broad authority, allowing them to negotiate contracts and adjust to…