Real Estate Fundamentals and Principles
Estates and forms of ownership
Start with the bundle of rights - surface, subsurface, air, and the rights to transfer and exclude. A fee simple absolute estate is the largest: perpetual, inheritable, freely transferable. A life estate lasts only for a measuring life and is still an estate in land, not a lease. Leasehold estates are personal property. Washington is a community property state, so property acquired during marriage is presumptively community property, while separately owned property stays separate if it can be traced.
Traps in co-ownership questions
Tenancy in common allows unequal shares and carries no right of survivorship; joint tenancy requires the unities of time, title, interest, and possession and does carry survivorship. If one joint tenant conveys her share to a stranger, the joint tenancy is severed and the parties become tenants in common. Questions also blur an easement and a license, or an encroachment and a setback violation.
Encumbrances and liens
An easement appurtenant benefits a dominant parcel and runs with the land; an easement in gross benefits a person. Lien priority normally follows recording order, but property tax and special assessment liens leapfrog earlier-recorded mortgages.
Valuation
Sales comparison dominates residential; cost approach suits unique or new construction; income approach prices income property. Straight-line depreciation, curable versus incurable obsolescence, and highest and best use all appear. Rule of thumb: Value = Net Operating Income ÷ Capitalization Rate. Example: NOI of $36,000 at a 9% cap rate gives $400,000. Raise the rate and value falls - that inverse relationship is a favorite distractor.