In real estate, you’re going to hear a lot of various acronyms throughout your career and the industry you work in. They are used in day-to-day communications as well as legal documents to simplify contracts, agreements, and day-to-day discussions.
However, many of these acronyms are confusing, particularly when you’re new to the industry.
When you take your real estate exam, there are four commonly used acronyms that you must know, and which will help with your recall of different concepts.
- And T.T.I.P
Let’s go through them together.
First up is S.T.U.D, which is used to remember the four elements of value: scarcity, transferability, utility, and demand.
- Scarcity has to do with the number of properties available in the market. The fewer comparable properties, the higher the value of a subject property will be.
- Transferability means that a property needs to be able to be transferred with clear title.
- Utility is how the property can be used and how many potential uses it has such as residential and agriculture use.
- Demand is the amount of demand in the market. When demand is high, values go up.
This next acronym, M.A.R.I.A, is used to help in determining if an object is a fixture and a part of the real property or if it is personal property. M.A.R.I.A stands for method, adaptability, relationships, intention and agreement.
- Method, meaning method of attachment. An object that is physically or permanently attached to a property either by glue, screw nail or otherwise, it’s usually considered a fixture.
- Adaptability, meaning how the fixture is adapted to the property. When an object isn’t screwed or nailed but has still become a part of the property, such as a floating floor, it is considered a fixture.
- Relationships is for relationships of the parties. In a dispute over fixture, typically the buyer ends up having the upper hand because it is assumed that anything that the seller would have attached to the property was meant to be a permanent fixture.
- Intention, similar to relationships, takes into consideration what the property owner’s instalment intention was.
- Agreement has to do with what has been written in the contract. This is what becomes the deciding factor.
See our video in our real estate exam preparation course, What are fixtures in Real Estate for more information on fixtures.
The third acronym is P.E.T.E, which stands for Police Power, Eminent Domain, Taxation, and Escheat. These are the government powers that can affect real estate. Let’s go over the four government powers.
- Police power is the state's right to control property use to protect the health, safety, welfare, and morals of the community. Examples are zoning and building codes.
- Eminent domain is the state’s power to appropriate property for public use and for the greater good of the community.
- Taxation is a tax charged on real estate to pay for services provided by the government.
- Escheat happens when a property owner passes away without heirs, the ownership then reverts to state ownership. It ensures that a property always has an owner.
Lastly, we have T.T.I.P which stands for time, title interest and possession, the four unities that must exist in order for a joint tenancy to be created
- Time – each owner must get on title at the same time.
- Title means that each owner must have their name on the title.
- Interest is that each owner must have an equal share of ownership.
- Possession means that each owner has an equal right to possession of the property.
While there are many acronyms that you will use in your real estate career, these are the four acronyms you must know to pass your real estate license exam. We recommend using flashcards to get comfortable with each.
If you want to see some examples of questions that will be on the actual real estate exam, check out our free real estate practice exam. We have been named as the best real estate exam practice for 7 years in a row!
If you need to get your required educational hours done, check out our partners for online real estate education that can be done at your own pace from home or where ever you have internet access.
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