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CS 338 > Test 3 Review > Flashcards

Test 3 Review Flashcards

0
Q

Gathering information before actually beginning to interact with sellers

A

Preshopping research

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1
Q

Buying too quickly without fully considering priorities and alternatives

A

Impulse buying

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2
Q

The retail price set by the manufacturer and posted on the federally required side window sticker

A

Manufacturers suggested retail price (MSRP)

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3
Q

The amount the automaker charges the dealership for new vehicles at the time the dealer buys them. It does not reflect some discounts that the dealer gets.

A

Dealer invoice price

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4
Q

Process of comparing products or services to find the best buy

A

Comparison shopping

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5
Q

Product or service that in the buyers opinion represents acceptable quality at a fair or low price for that quality level

A

Best buy

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6
Q

A situation where the owner of a financed asset owes more than it is worth thus creating negative equity.

A

Upside down

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7
Q

Oral commitment from a bank or credit union agreeing to furnish credit for a purchase that lets buyers know how much they can borrow and at what interest rate

A

Loan preapproval

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8
Q

A partial refund of a purchase price offered as an inducement to buy

A

Rebate

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9
Q

Includes vehicle price plus the cost of any extra features such as insurance or maintenance agreements.

A

Gross capitalized cost

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10
Q

Subtracting the capitalized cost reductions from the gross capitalized cost

A

Adjusted capitalized cost

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11
Q

Projected value of a leased asset at the end of the lease time period

A

Residual value

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12
Q

An agreement in which the lessee pays no charge if the end of lease market value of the vehicle is lower than the originally projected residual value

A

Closed end lease or a walk away lease

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13
Q

Fees assessed at the end of a lease if the vehicle was driven more miles than originally specified in the lease contract

A

Excess mileage charge

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14
Q

A loan that has a low monthly payment similar in amount to that required if the vehicle had been leased and with a large final payment similar in amount to the residual value after a lease

A

Balloon automobile loan

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15
Q

A percentage of the total MSRP that the manufacturer holds and then gives back to the dealer often at the end of the year or quarter

A

Dealer holdback or dealer rebate

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16
Q

No fee organizations that arrange discount purchases for new car buyers who are referred to nearby participating automobile dealers that have agreed to charge specific discount prices

A

New vehicle buying service

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17
Q

Sales tactic in which a dealer offers a trade in allowance that is much higher than the vehicle worth.

A

High balling

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18
Q

A sales tactic where the seller quotes an artificially low price to obtain a verbal agreement from a buyer and then attempts to raise the negotiated price when it comes time to finalize the written contract.

A

Low balling

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19
Q

Written offer that names a specific vehicle and all charges. only sign such offers after the sales person and sales manager have signed first.

A

Buyers order

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20
Q

A myth pertaining to the buyers supposed legal right to change his or her mind and return a vehicle after a signing a purchase contract.

A

Buyers remorse

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21
Q

A federal trade commission rule that gives consumers three days to cancel a contract of $25 or more after signing it for a sale made anywhere other than a sellers normal place of business.

A

The cooling off rule

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22
Q

The process of righting a wrong

A

Redress

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23
Q

State laws that provide guidelines for arbitrators to use to order a dealers buyback of a lemon as defined under the law as a car that has been in the shop four or more times for the same problem.

A

Lemon laws

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24
Q

State courts in which civil matters are often resolved without attorney assistance

A

Small claims court

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25
Q

A loan to purchase real estate in which the property itself serves as collateral

A

Mortgage loan

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26
Q

A contract specifying both tenant and landlord legal responsibilities

A

Lease

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27
Q

An arrangement in which the original tenant leases the property to another tenant

A

Subleasing

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28
Q

A housing unit that is detached from other units

A

Single family dwelling

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29
Q

Form of ownership with the owners holding legal title to their own housing unit among many with common grounds and facilities owned by the developer or homeowners association

A

Condominium

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30
Q

A form of ownership in which the owner holds a share of the corporation that owns and manages a group of housing units as well as common grounds and facilities.

A

A cooperative

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31
Q

Fees and charges other than the down payment that may vary from 2-5 percent of the mortgage loan amount.

A

Closing costs

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32
Q

A fee equal to 1 percent of the total mortgage loan amount

A

A point or an interest point

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33
Q

Legal right of ownership interest to real property

A

Title

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34
Q

A written document used to convey real estate ownership

A

Deed

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35
Q

Protects the lenders interest if the title search is later found faulty.

A

Title insurance

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36
Q

Conducted to ensure that the home is physically sound and that all operating systems are in proper order

A

Home inspection

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37
Q

A fee charged for a professionally prepared estimate of the fair market value of the property by an objective party

A

An appraisal fee

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38
Q

Elements of a monthly real estate payment consisting of principal, interest, real estate taxes and home owners insurance.

A

PITI

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39
Q

The original or current outstanding loan balance divided by the home value

A

Loan to value ratio

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40
Q

Insures the difference between the amount of down payment required by an 80 percent loan to value ratio and the actual lower down payment

A

Mortgage insurance

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41
Q

Mortgage insurance obtained from a private company

A

Private mortgage insurance

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42
Q

An arm of the U.S. Department of housing and urban development that insures loans that meet its standards to encourage home ownership.

A

Federal housing administration

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43
Q

A special reserve account at a financial institution in which funds are held until they are paid to a third party for things like home insurance and property taxes

A

Escrow account

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44
Q

Compares the total annual PITI expenditures for housing with the loan applicants gross annual income to assess the borrowers ability to pay the mortgage

A

Front end ratio

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45
Q

Compares the total of all monthly PITI expenditures plus auto loans and other debts with gross monthly income

A

Back end ratio

46
Q

Individual or company that acts as an intermediary between borrowers and lenders.

A

Mortgage broker

47
Q

Written offer to purchase real estate

A

Purchase offer

48
Q

Funds given to the seller as a deposit to hold the property until a purchase contract can be negotiated

A

Earnest money

49
Q

Formal legal document that outlines the actual agreement that results from real estate negotiations

A

Purchase contract

50
Q

A person licensed by a state to provide advice and assistance for a fee to buyers or sellers of real estate.

A

Real estate broker

51
Q

A Clause that specifying that certain conditions must be satisfied before a contract is binding

A

A contingency clause

52
Q

Lenders list of all the costs associated with the loan including the annual percentage rate application and processing fees closing costs and any other charges that must be paid when the deal is legally consummated

A

Good faith estimate

53
Q

Lists all of the costs and fees to be paid at the closing

A

Uniform settlement statement

54
Q

A list that shows all the monthly payments and the portion that will go toward interest and the portion that goes toward principal and the debt remaining after each payment is made throughout the life of the loan

A

Amortization schedule

55
Q

Dollar value of the home in excess of the amount owed on it

A

Homeowners equity

56
Q

A fixed rate fixed term and fixed payment mortgage loan

A

Conventional mortgage

57
Q

Low interest rate that lenders sometimes use to lure buyers. these rates will be low for the first year and then rise to realistic levels

A

Teaser rate

58
Q

Occurs when monthly payments are actually smaller than necessary to pay interest on the loan which will result in a rising principal balance

A

Negative amortization

59
Q

A mortgage in which the borrower pays smaller than normal payments in the early years but payments gradually increase to larger than normal payments

A

Graduated payment mortgage

60
Q

A form of growing equity mortgage that calls for payments of half of the normal payment to be made every two weeks the borrower thus makes 26 payments a year and reduces the principal amount by one full payment each year this reduces the mortgage term to about 20 years on a 30 year mortgage.

A

Biweekly mortgage

61
Q

Where the buyer pays the seller a down payment generally equal to the sellers equity in the home and takes responsibility for the mortgage loan payments for the remaining term of the sellers existing mortgage

A

An assumable loan

62
Q

A clause that requires that the mortgage loan be fully paid off if the home is sold.

A

A due on sale clause

63
Q

A contract that brings greater risk for the buyer because all the terms in the contract must be satisfied before the transfer of the title will occur

A

A land contract or a contract for deed

64
Q

A type of mortgage that allows people older than 61 to borrow against the equity in their home and continue living in it

A

Reverse mortgage

65
Q

FSBO

A

For sale by owner

66
Q

An agreement that brokers require homeowners to sign that permits the broker to list the property exclusively or with a multiple listing service.

A

Listing agreement

67
Q

The largest selling cost when you sell a home is

A

The brokers commission

68
Q

Community assessed taxes paid by the seller and also sometimes the buyer based on the purchase price of the home or the equity the seller has in the home

A

Real estate transfer taxes

69
Q

Protection from financial losses resulting from the damage to or destruction of your property or possessions

A

Property insurance

70
Q

Protection from financial losses suffered when you are held liable for others losses

A

Liability insurance

71
Q

The process of identifying and evaluating purely risky situations to determined and implement appropriate management

A

Risk management

72
Q

Any event that can cause a financial loss

A

A peril

73
Q

Excepting that some risks simply arise in the course of one’s life and consciously retaining that risk

A

Risk retention

74
Q

A clause that requires that the policyholder pays an initial portion of any loss

A

Deductible clause

75
Q

Designing specific mechanisms to reduce loss frequency and loss severity

A

Loss control

76
Q

Includes mechanisms such as insurance that reduce overall uncertainty about the magnitude of loss

A

Risk reduction

77
Q

A basic rule of risk management that encourages us to ensure the risks that we cannot afford and retain the risks that we can reasonably afford

A

Large loss principal

78
Q

A mechanism for transferring and reducing your risk through which a large number of individuals share and the financial losses suffered by members of the group as a whole

A

Insurance

79
Q

Comparatively small predictable fee with which individuals or companies can replace an uncertain and possibly large financial loss

A

Insurance premium

80
Q

A contract between the person buying insurance and the insurance company

A

Insurance policy

81
Q

Any condition that increases the probability that a peril will occur

A

A hazard

82
Q

Insurance will pay no more than the actual financial loss suffered

A

The principle of indemnity

83
Q

A limit that specifies the maximum dollar amount that will be paid under the policy

A

Policy limits

84
Q

The method by which the insured and the insurer share proportionally in the payment for the loss

A

Coinsurance

85
Q

As the number of members in a group increases predictions about the groups behavior become increasingly accurate

A

Law of large numbers

86
Q

A representative of an insurance company authorized to sell modify service and terminate insurance contracts

A

An insurance agent

87
Q

Companies that market insurance policies through salaried employees, mail-order promotions, newspapers, Internet, and even vending machines

A

Direct sellers

88
Q

Combines liability and property insurance coverages that homeowners and renters typically need and single package policies

A

Homeowners insurance

89
Q

Covers only losses caused by parols that the policy specifically mentions

A

Named perils policies

90
Q

Covers losses caused by all perils other than those that the policy specifically excludes

A

All risk open perils policies

91
Q

Applies when you are legally liable for another person’s losses, other than those that arise out of the use of vehicles or your professional duties

A

Homeowners general liability protection

92
Q

A named perils policy that covers 11 property damage causing perils and provides three areas of liability related protection which include personal liability, property damage liability, and medical payments

A

Basic form homeowners insurance HO-1

93
Q

Insurance that provides open perils of protection for four types of property losses

A

Special form homeowners insurance

HO-3

94
Q

A named perils policy that protects the insured from losses to the contents of a rented dwelling rather then to the dwelling itself.

A

Renters contents broad form HO-4

95
Q

Stipulates that a home must be insured for 80% of its replacement value in order for any loss to be fully covered

A

Replacement cost requirement

96
Q

Represents the purchase price of the property minus depreciation

A

Actual cash value

97
Q

An option sometimes available and homeowners insurance policies that pays the full replacement cost of any personal property

A

Content replacement cost protection

98
Q

An insurance policy that combines the liability and property insurance coverages the most car owners and drivers need into a single package policy

A

Automobile insurance

99
Q

Occurs when a driver or car owner is held legally responsible for bodily injury losses that other people, including pedestrians, suffer

A

Automobile bodily injury liability

100
Q

Occurs when a driver or car owners held legally responsible for damage to others property

A

Automobile property damage liability

101
Q

Insurance that covers bodily injury losses suffered by the driver of the insured vehicle and any passengers regardless of who is at fault

A

Automobile medical payments insurance

102
Q

Medical payments coverage for the driver and any passengers for bodily injury losses as well as possibly lost wages and rehabilitation expenses common in no-fault accident states

A

Personal injury protection

103
Q

Allows an insurer to take action against a negligent third-party to obtain reimbursement for payments made to an insured

A

Subrogation rights

104
Q

Coverage that an insured can purchase as part of automobile insurance that covers the insured in an accident when an uninsured or underinsured driver is at fault

A

Coverage C – uninsured and underinsured motorist insurance

105
Q

Reimburses insureds for losses to their vehicles resulting from a collision with another car or object or from a rollover

A

Collision insurance

106
Q

Protects against property damage losses to an insured vehicle caused by perils other than collision and roll over

A

Comprehensive automobile insurance

107
Q

An addition to standard insurance policies designed to expand coverage for a special area of need

A

Endorsement

108
Q

Protects individuals and organizations that provide professional services when they are held liable for their clients losses

A

Professional liability insurance or malpractice insurance

109
Q

Catastrophic liability policy that covers liability losses in excess of those covered by any underlying homeowners, automobile, or professional liability policy

A

Umbrella liability insurance

110
Q

Provides all risk protection for an accident and theft losses to movable property regardless of where the loss occurs

A

Floater policies

111
Q

A formal request to the insurance company for reimbursement for a covered loss

A

An insurance claim

112
Q

A person designated by the insurance company to assess whether the loss is covered and to determine the dollar amount that the company will pay

A

Claims adjuster

113
Q

An insurance document affirming that the dollar amount of the loss settlement is accepted as full and complete reimbursement

A

Release

CS 338 (4 decks)

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