1. The term real estate can be used in three fundamental ways. List these three alternative uses or definitions.

2. Real estate assets and markets are unique when compared to other assets or markets. Discuss the primary ways that real estate markets are different from the markets for other asset that trade in well-developed public markets. HINT: Real estate is unlike other asset classes because it is heterogeneous and immobile.

3. Real estate construction is a volatile process determined by the interaction of the user and capital markets. What signals do real estate producers use to manage this process? What factors affect the volatility of real estate construction and commercial and residential real estate development?

4. Explain how rights differ from power or force, and from permission.

5. Why are restrictive covenants a good idea for a subdivision?  Can they have any detrimental effects on the subdivision or its residents?  For example are there any listed in the chapter that might have questionable effects on value of a residence?

6. In the United States, the bundle of rights called real property seems to have gotten smaller in recent decades.  Explain what has caused this.  What type of governmental powers, such as safety regulations on the use of real estate, may have been invoked? Why is it good?  Why may these be bad? What effect might these have on property values?

7. Why might it be advisable to require a survey in purchasing a 20-year-old home in an urban subdivision?

8. Some real estate industry persons have suggested that it is good to require a title Insurance commitment as evidence of title for rural property, but that it is satisfactory to use the less costly abstract and attorney's opinion as evidence of title for a residence in an urban subdivision.  Discuss the merits or risks of this policy.

9. Discuss three features of real property that introduce special challenges for the orderly transfer of ownership. As a hint, one of these is that real property interests can be very complex. What are two others?

10. What is the "gravity" that is needed to draw economic activity into forming cities? Considering your answer, what is it that has historically brought economic activity together to form cities?

11. Identify at least five locational attributes that are important in the location of a fast-food restaurant.  Compare these with these with what might be the same attributes for a bank branch.

12. Why is it that in a simple bid-rent model (gradient with drivers and walkers) a person who commutes on foot will outbid one who commutes by car for space closest to downtown?

13. What is the most profound force that has brought about urban change since the end of World War I? What about since the end of World War II?

14. What is the essential feature of a convenience good or central place activity that households, in acquiring it, look to?

15. Dr. Bob Jackson owns a parcel of land that a local farmer has offered to rent for the next 10 years.  The farmer has offered to pay $20,000 today or an annuity of $3,200 at the end of each of the next 10 years.  Which payment method should Dr. Jackson accept if his required rate of return is 10 percent?

16. How much would you pay for an investment that provides $1,000 at the end of the first year if your required rate of return is 10 percent?  Now compute how much you would pay at 8 percent and 12 percent rates of return.

17. If you purchase a parcel of land today for $25,000 and you expect it to appreciate 10 percent per year in value, how much will your land be worth 10 years from now?

18. You are planning to buy a house appraised for $350,000 and finance it through a mortgage of $250,000. You would then have a loan-to-value ratio of 0.714, safely below the cutoff by your lender of 0.80. Being securely employed, your take-home pay is $2,500 per month and have no substantial other debts. Your lender has offered you a 5.0 percent 30 year mortgage. What is the amount that you will pay per month if the mortgage payments are treated as an ordinary annuity with 12 payments per year for 30 years? For the first payment, how much is interest and how much is principal?