National Chapter 5 Flashcards
(115 cards)
1
Q
intentional misrepresentation of a material facts for the purpose of gaining an unfair or dishonest advantage over another person
A
active fraud
2
Q
intentional nondisclosure of a material fact
A
passive fraud
3
Q
3 types of agency relationship
A
express, implied, agency ratification and estoppel (ostensible)
4
Q
what is the essence of agency relationship?
A
trust, confidence, and mutual good faith
5
Q
what is an agency relationship based on?
A
authorization and mutual consent
6
Q
When is commissioned earned?
A
- broker has produced a ready, willing, able buyer
- buyer has signed an offer to purchase
- seller has accepted the offer
- both buyer and seller have received signed copies of the agreement
7
Q
principal federal statute that covers competition and is one of the most important pieces of antitrust legislation
A
Sherman Antitrust Act
8
Q
collusion between or among members of a particular trade to maintain prices at a set level
A
price fixing
9
Q
agreements between or among members of a particular trade that would prevent other members from fair participation in the trade’s activities
A
group boycotting
10
Q
agreements between or among members of a trade to avoid doing business in specific market areas
A
market allocation
11
Q
arrangement that requires a buyer to purchase additional or unrelated products or services when making a product purchase
A
tie-in arrangements
12
Q
made both substantive and procedural modifications to the federal antitrust law
A
Clayton Antitrust Act
13
Q
under the Clayton Act, private individuals are permitted to sue antitrust violators and, if successful, can recover _x the damages incurred plus court costs and fees
A
3
14
Q
has the power to judge whether particular trade practices are unfair
A
FTC
15
Q
most common form of the agency relationship
A
seller agency
16
Q
may be created by a written agreement or it may be created by words/actions
A
subagency
17
Q
exists when a real estate firm or licensee represents both the seller and the buyer or the landlord and the tenant in the same transaction
A
dual agency
18
Q
broker may designate 1+ licensees to act exclusively as the agent of the seller/landlord, and designate 1+ licensees to act exclusively as the agent of the buyer/tenant
A
designated agency
19
Q
agent can represent only 1 party in a single transaction, but never both - all other parties to the transaction are customers
A
single agency relationship
20
Q
if the agent enters into an agency with the seller
A
seller’s agent
21
Q
if the agent enters into an agency with a buyer
A
buyer’s agent
22
Q
legally binding contract that creates and agency relationship authorizing a broker to serve as the agent for a principal in a real estate transaction
A
listing agreement
23
Q
3 common types of listings
A
open, exclusive right to sell, exclusive agency
24
Q
3 types of buyer agency agreements
A
exclusive buyer agency, exclusive-agency buyer agency, open buyer agency
25
the 2 most common changes in a listing agreement are
price changes and listing period extensions
26
only the _ can initiate an action or file a suit against a seller or buyer to receive a commission -
broker
27
clause in a listing agreement that says that the broker is still entitled to a commission for a set period of time after the listing expires, if the property is sold to a prospect that the broker introduced to the property
carryover or safety clause
28
agreement between 2+ parties who, in a "meeting of the minds" have pledged to perform or refrain from performing some act
contract
29
meets the legal requirements for validity
valid contract
30
agreement that does not meet the tests for validity and therefore is no contract at all
void contract
31
one which initially appears to be valid, but is subject to cancellation by a party to the contract who is believed to have acted under some kind of disability
voidable
32
requires that certain contracts must be in writing to be enforceable
statute of frauds
33
termination of a contract may occur for any of what reasons
performance, infeasibility, mutual agreement, operation of law
34
restricts the time period for which an injured party in a contract has the right to bring a lawsuit against the other party
statute of limitations
35
breach of contract gives the damaged party the right to take legal action in one of which ways
rescission, forfeiture, suit for damages, suit for specific purpose
36
contract in which the buyers agree to purchase a property for a certain price and the sellers agree to convey title to the buyers using a deed or an assignment of lease
purchase and sale agreements
37
bilateral agreement between a seller, the vendor, and a buyer, the vendee, in which the vendor defers receipt of some or the entire purchase price of a property over a specified period of time
installment sales contract
38
enforceable contract in which a potential seller, optionor, grants a potential buyer, optionee, the right to purchase a property before a stated time for a stated price and terms
option to buy
39
right of a person to have the first opportunity to purchase or lease a property
right of first refusal
40
both an instrument of conveyance and a contract between parties to uphold certain covenants and obligations
lease
41
transfer by a tenant of a portion of the leasehold interest to another party
sublease
42
transfer of the entire leasehold interest by a tenant to a third party
assignment of the lease
43
requires the landlord to pay the property's operating expenses, including utilities, repairs, and maintenance while the tenants only pay rent
gross lease
44
tenant pays rent and maintenance and operating expenses, such as taxes, insurance, utilities and repairs
net lease
45
rent payments start at affixed amount but increase as the lease term matures
graduated lease
46
concerns the land portion of a real property - owner grants the tenant a leasehold interest in the land only, in exchange for rent
ground of land lease
47
lease whose rental is based on a percentage of the monthly or annual gross sales made on the site
percentage lease
48
conveys a leasehold interest to an owner of a co-op
proprietary lease
49
provides for the adjustment of rent according to changes in a price index
index lease
50
hired to perform certain acts, but the broker cannot control how the salesperson performs those acts
independent contractor
51
real estate firms engage in 2 types of advertising
institutional and product
52
attempts to establish a positive image of the company, its services and its reputation in the minds of the public - sometimes called corporate ads
institutional ads
53
directed toward the particular properties a company has for sale
product ads
54
time-tested method for writing good ads
```
AIDA
A - attention
I - interest
D - desire
A - action
```
55
what is the main purpose of real estate advertising?
reach the largest number of probable prospects
56
What does truth in lending prohibit?
bait and switch ads
57
advertising property or credit terms for a property that an agent does not intend to sell or that is actually not available just to attract buyers for other properties the agent has for sale
bait and switch ads
58
what is the single most important decision to make when listing a home for sale?
the listing price
59
a listing agent helps the seller set a realistic selling price by considering
seller's wishes, market conditions and timing of the sale
60
what is one of the most important tasks a licensee needs to perform with the seller-client?
market analysis of what the property is worth
61
earnest money is AKA
trust account money
62
deposit usually made in the form of a check, to show evidence of the buyer's intention to carry out the terms of the contract in good faith
earnest money
63
when is earnest money provided?
the offer to purchase real estate is made
64
requirements for an escrow account
1. must be non-intreat bearing
2. sponsoring broker may maintain 1+ escrow accounts
3. must be maintained at a federally-insured depository
4. all licensees should give earnest money checks to their sponsoring brokers immediately
5. earnest money must be deposited by the next business day of contract acceptance
65
illegal act when a real ersatz licensee places client or customer funds with their own personal funds
commingling
66
once the purchase offer has been accepted, what process begins?
closing
67
seller is required to deliver what at closing?
marketable title
68
who should have title insurance?
buyer and lender
69
insurance policy may be issued to a lender only, a buyer only or jointly to lender and buyer
standard title insurance
70
insures against many of the items excluded in the standard policy
extended coverage
71
process in which a disinterested third party holds all money and docs relating to the transaction until all of the terms and conditions of the escrow instructions have been satisfied
escrow
72
oversees the prep and recording of all the legal docs, prorates the settlement costs, preps the settlement statements and does various other tasks
closing agent
73
what is the most common type of property insurance?
homeowner's
74
clause that requires the homeowner has insurance that is equal to 80% of the home's replacement value
coinsurance clause
75
what is not inlaced in a basic homeowner's policy
flood insurance
76
requires that the parties to certain transactions receive the correct figures pertaining to their closing costs
RESPA
77
what purchases does RESPA apply to?
residential property, involving 1st or 2nd mortgages, and financed by a federally related loan
78
What does RESPA specially prohibit?
kickbacks
79
What does RESPA require lenders to use?
closing disclosure
80
details the costs that the buyer and seller will pay at closing
closing disclosure
81
debit
money buyer/seller need to pay
82
credit
money buyer/seller will receive
83
when did fair housing laws begin?
with the civil rights act of 1866
84
list of protected classes of the federal fair housing act
race, religion, color, sex, national origin, handicap, familial status
85
How long does someone have to file a complaint with HUD if they believe they have been discriminated against
1 year from the alleged act
86
in addition to or instead of filing a complaint with HUD, a person may file in a state or federal court within how many years of the alleged violation?
2 years
87
mandates that a person with disabilities have equal access to jobs, public accommodations, government services, public transportation and telecommunications
ADA - Americans with Disability Act
88
making a profit by inducing owners to sell by telling them that persons of a protected class are moving into the neighborhood which will have detrimental results
blockbusting
89
channeling homebuyers toward to away from homes in certain neighborhoods in order to preserve or alter the makeup of that neighborhood
steering
90
restricting the number of loans in certain areas of a community because of its racial or ethnic makeup
redlining
91
administration of rental or other property by a person or a team of people who are acting for the owner
property management
92
a PM has dual responsibility to whom?
the owner and the tenants
93
real estate broker who manages properties for one owner or a number of owners
individual property manager
94
manages a singel large property
individual building manager
95
manages and lives on property
resident manager
96
acts as the property owners' agent and adviser for the property
real estate asset manager
97
employment contract for a PM
management agreement
98
what is the PM's first responsibility?
to realize max profit on the property that is consistent with the owner's instructions
99
3 types of budgets for each rental project a PM should establish
operating, capital reserve, and stabilized budget
100
3 types of maintenance
preventative, corrective, construction
101
schedule of planned maintenance actions aimed at the prevention of breakdowns and failures
preventative maintenance
102
repair or replacement of compounds which have failed or broken
corrective maintenance
103
remodeling, interior redecorating, or new capital improvements
construction maintenance
104
It is critical for a PM to know how to market what effectively?
the space available for rent
105
PM report should include
monthly and annual account statements and delinquent account reports
106
what are the 2 major classes of property?
residential and nonresidential
107
include single-family homes and multiple -family properties such as apartments, condos, and co-ops
residential properties
108
broken down into 5 major subcategories
nonresidential properties
109
5 major categories of nonresidential properties
commercial, industrial, agricultural, recreational, and institutional
110
commercial real estate can br broken down into what subcategories?
office buildings, retail space, hotels/motels
111
commercial buildings can contain both office and retail space and some can contain residential space - this is known as
mixed use development
112
important reasons why. business would choose to lease space instead of purchase
1. leasing can be more cost effective
2. owning a building would reduce the flexibility of the business
3. engaging in leasing, repairing, and maintaining extra building space could cause the business to lose focus on its major business activities
4. if the business wanted to downsize, the building owner would have to find someone to use or purchase the excess space
113
a particular building's potential for generating income depends on what 2 factors?
ability to attract tenants to rent space and expense involved with the building's operation
114
term used to the net income produced by a specific property after all expenses have been deducted from the gross receipts
NOI
115
what affects NOI?
market rent, vacancies and both fixed and variable operating expenses
