hi this is joe from prep agent and today i'm going to go over 10 concepts you must know if you want to pass your real estate exam if you don't know them don't even bother showing up if you do know them you're on the path towards passing your exam getting a real estate state license and enjoying an awesome real estate career so without further ado let's begin top 10 most important concepts to know to pass your real estate exam so the first concept is real versus personal property you absolutely must know the difference between real and personal property very often you hear the term real properties immovable personal properties movable real property immovable personal property movable now what they mean by that is when you sell the property what moves with you what goes with you what goes with the person another way to remember this is real property goes to the real estate personal property goes with the person so what are some examples well the example of real property is the house itself and anything that's attached to that house personal property are things that go with the person like a set of keys a lease is actually considered personal property as well because it's a contract with the person not with the real estate but where do you begin begin with the concept of real property goes to the real estate personal property goes to the person real property immovable personal property movable gotta know that concept it's a doozy the second concept i want you to know is about estates and property there's two types of estates you're going to learn freehold estates and less than freehold estates freehold estates tend to be indefinite in duration less than field estates are for a more limited amount of time freehold estates basically insinuate ownership less than free old estates are leases so what are the different types the different types of less than free old estates are as follows the state for years periodic tenancy estate at will and stated suffering so it's four of them a state for years periodic tenancy state at will and its stated sufferings the state for years is when there's a defined period of time like may 1st to august 8th a summer rental would be a good example of an estate for years periodic tenancy is when it's a reoccurring time frame like week to week month to month year to year whatever it will be a state at will means it could end at any time it's stated sufferance means they're staying too long you could say the landlord's suffering i often refer to this as having a deadbeat tenant the freehold estate i want you to know is fee symbol absolute fee symbol to feasible and a life estate fee symbol absolute is the highest degree of ownership it's not absolute as there's always encumbrances such as taxes fee symbol to feasible means you could have the estate but you could lose it upon the happening of a certain event like selling alcohol that would be a condition put on your title to the property and a life estate is when you owe the property based upon somebody else's life the next concept i want you guys to understand is government powers there are four government powers you need to know to pass the real estate exam and we remember the acronym pete pete stands for police power eminent domain taxation and as cheap police power eminent domain taxation and is cheat police power is a government power where they don't take the property away from you but they tell you how to use it examples of these are things like building codes rent control things of that name zoning's another one things of that nature would be police power eminent domain they do take the property away from you they take the property away from you and just compensation is paid through a process known as condemnation okay think of condemnation when a property is condemned you can't use it anymore so condemnation is when the government says you can't use the property more but they pay you for that property if they make your property unusable and they don't pay you you could file for what's called inverse condemnation next up is taxation we all know what that is gotta pay the man and his cheat is when the government takes your property because you got no errors they can't find who to give it to you after you pass it away so the property is cheats to the state so now we've covered three concepts let's go to the fourth types of ownership so when you talk about types of ownership there's two ways you can own property in severalty or concurrently several team means you own it by yourself concurrent is when you own it with others okay concurrent estates when you own it with others several t's by yourself there's two types of concurrent estates i want you to know when studying for your real estate exam joint tenancy and tenancy in common joint tenancy and tenancy in common joint tenancy follows the acronym to tip which stands for time title interest and possession you got everything unified the time the title the interest and possession and there's a right of survivorship with it meaning if i take property with a joint tenant and i die you get the property i cannot will it to my heirs as opposed to a tenancy in common where there's only unity of possession but there's no right of survivorship so therefore if i die i could will it to my heirs because you don't have the writer's survivorship so that's difference between joint tenancy and tenancy in common and those are types of concurrent estates as opposed to owning a property in severalt the next concept you absolutely must know if you want to pass your real estate exam is the essential element of value i like to remember the acronym stud studs stands for scarcity transferability utility and demand some people remember the acronym dust demand utility scarcity transferability does stud dizzida i don't care as long as you remember the four essential elements of value stud scarcity how much of there is it transferability can you sell it utility can you use it in demand do people even want it those are the four essential elements of value you absolutely must know next up is types of depreciation so you have the four essential elements of value and there's three ways that your property could depreciate it all falls under these three categories these categories are economic obsolescence functional obsolescence and physical deterioration all depreciation falls under one of these three categories economic obsolescence is when your property loses value due to causes outside the property that would be something like an airport being built in your neighborhood train tracks being laid down or crime in the neighborhood that's the most difficult one to cure functional obsolescence is when there's poor design like you have a five bedroom house with one bathroom and physical deterioration is just simply your home falling apart those are the three types of depreciation you need to know to pass your real estate exam next up we got the three appraisal methods that you need to know and they are as follows the market data approach the cost replacement approach and the capitalization income approach the market data approach simply uses comps if one item is a hundred thousand dollars and the one next to it is very similar that one's gonna be about a hundred thousand dollars too that's the basic one most real estate agents use and frankly it's the one you probably use when you go buy shoes you like one pair of shoes how much is it worth well how much does it sell everywhere else okay so that's the market data approach very often referred to as using comps the cost replacement approach finds value by looking at how much would it cost or place this building brand new this is typically used for special purpose properties for things such as library schools and police stations and the capitalization approach says how much does the income of that property contribute to the value you see in the cost replacement approach those buildings don't have income and there's no comps so they just see how much you cost to replace a brand new but with a capitalization income approach there is some income and if that building draws a lot of income well obviously that building has more value how much more value well that's what this approach calculates next concept you absolutely must know if you want to pass your real estate exam is the difference between deeds and title a deed is evidence of the transfer title is ownership you must know that obviously that subject goes in a lot more detail but you don't need to know anything else if you don't understand that a deed is evidence of a transfer and title is ownership liens lean means you owe money say to yourself lean money lean money lean money keep saying until you turn blue in the face liens fall into two categories specific liens and general liens a specific lien means if you don't pay that money they could go after one thing specifically naming namely your house a general lien means if you don't pay it they could take everything what are some examples of this well examples of a specific lien could include your mortgage property taxes or mechanics liens examples of general liens would be things like not paying your income tax or if you lose a judgment in court a judgment lien would be a general lien meaning if you lose it they come after everything you need to know fair housing laws not only for passing a real estate exam but also to be a good real estate agent fair housing laws deal with the discrimination and it was enacted in 1968 a good year to know examples of fair housing violations you should know are steering block busting panic pedaling panic selling and redlining steering has to do with when you have buyers and you're telling them you should live in that neighborhood your people live over there or your people shouldn't live by those people over there that would be an example of steering just think you're steering a car and you're driving the buyers to an area you believe they should go based upon their racial or ethnic makeup which is a violation of the fair housing act blockbusting panic pedaling and panic selling have to as sellers they have differences between them but you don't need to know them just yet for now you should know the deal with sellers and it's basically saying you better sell your house because those people are moving to town you don't want to live by those people do you that's a fair housing violation and redlining has to do with loans redlining is when they say hey those people live in that area i'm going to circle that area on a map with a red line and those people who live in that area don't lend to them don't lend to those people that would be redlining and that's a fair housing violation so the fair housing violations you must know is steering blockbusting panic panic selling and redlining and fair housing was enacted in 1968 so this is joe from prep agent i hope this helped you these are 10 concepts you absolutely must know to pass your real estate exam and i sincerely hope your studying doesn't end there many of these concepts can go in much more detail but this is a great place to start and it's 10 concepts you absolutely must know which will form the foundation of everything else so don't move on to anything else if you don't understand these 10 concepts go to prepaigent.com for more information on how to pass the real estate exam and i hope everybody has a great day thanks bye