Mason RE Flashcards
Study (326 cards)
1
Q
Loan correspondent
A
One who originates the loan
2
Q
Promissory note
A
Promissory note- a signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or on demand.
(EVIDENCE OF A DEBT)
3
Q
Earnest money
A
money paid to confirm a contract.
4
Q
Commingling
A
the practice of mixing client’s money with agents personal money
5
Q
Conversion
A
the unlawful misappropriation and use of a clients funds. For example, the broker spends the principals deposit, CONVERTING the funds to his own.
6
Q
Trust funds
A
are money or other things of value that are received by the broker on the part of another person —cash and non cash items, Cash, check, personal note made payable to seller, pink-slip. A fund consisting of assets belonging to a trust, held by the trustees for the beneficiaries
7
Q
Non trust funds
A
are money or other things of value that are received by a broker or salesperson on behalf of a principal or any other person, and which are held for the benefit of others in the performance of any acts for which a real estate license is required. Trust funds may be cash or non-cash items. Real estate commissions, general operating funds, rent/deposit broker owned real estate
8
Q
Principal Broker
A
person in office who supervises all agents
9
Q
Encumbrances
A
A claim against, limitation on or liability against real estate. Encumbrances include liens, deed restrictions, easements, encroachments, and licenses. An encumbrance can restrict the owner’s ability to transfer title to the property or lessen its value
if a property sells a lease is valid until it expires. Property must be sold “subject to the lease”
10
Q
Lien
A
(owe money) is a claim against property made by someone in order to secure payment of a debt. The lien essentially makes the property collateral against monies or services owed to the other person or entity. Collateral is an asset that has been pledged by the recipient of a loan as security on the value of the loan.
11
Q
Real property
A
is composed of any designated portion of land and anything permanently placed on or under it. The elements on or under the land can include natural resources and/or human-made structures.
12
Q
Fiduciary relationship
A
When a real estate agent or broker is acting in an agency capacity for a buyer or seller client in a transaction, they have certain legally mandated duties that are called fiduciary duties. The position of the agent or broker is a fiduciary capacity, acting in the best interests of the client
13
Q
Lessor
A
Landlord
14
Q
Lessee
A
tenant
15
Q
Estate for years
A
Lease for a definite period of time. Most common commercial lease. When over its over, no need to give notice.
16
Q
Period to period tenancy
A
a lease that continues for a specific period of time or until proper notice is given to cancel. If tenant does not give notice it will renew or become month-month
17
Q
Escalator clause
A
contract provision permitting adjustment to rent — based on increase in tax, insurance, maintenance, and other operating costs.
18
Q
Bill of sale
A
written instrument that passes title of personal property
19
Q
Balance sheet
A
shows financial status of a business at a particular date
20
Q
Mortgage
A
is a loan in which property or real estate is used as collateral. The borrower enters into an agreement with the lender (usually a bank) wherein the borrower receives cash upfront then makes payments over a set time span until he pays back the lender in full.
21
Q
Deed of trust
A
an agreement between a lender and a borrower to give the property to a neutral third party who will serve as a trustee. The trustee holds the property until the borrower pays off the debt. During the period of repayment, the borrower keeps the actual or equitable title to the property and maintains full responsibility for the premises, unless expressly stated otherwise in the Deed of Trust. The trustee, however, holds the legal title to the property.
22
Q
Covered loan
A
a consumer loan in which the original principal balance of the loan does not exceed the most current conforming loan limit for a single-family first mortgage loan
23
Q
Annual percentage rate
A
the annual percentage rate for the loan calculated according to the provisions of the federal Truth in Lending Act and the regulations adopted under the Federal Reserve Board
24
Q
Points and fees
A
All items required to be disclosed as finance charges - not including interest, all compensation/fees paid to mortgage brokers in connection with loan transaction, if the person originating in the covered loan receives direct compensation
25
Consumer Loan
a consumer credit transaction that is secured by real property, which is intended to be used as the principal dwelling of the consumer that is improved by a 1-4 unit residential unit.
26
Original Principle Balance
the total initial amount the consumer is obligated to repay on the loan
27
Escheat-
is a method by which the state may acquire title to property owned by one who died intestate (no will)
28
Estates in Remainder/Reversion
refer to the right to an estate, after a life estate ends by the death of the life tenant
29
Certified general real estate appraiser
- can appraise strip mall
30
Sales comparison approach - (most frequently used)
- this approach to value bases its opinion of value with similar properties in the vicinity that have recently sold.
31
Cost approach -
This approach seeks to determine how much a property would cost to replace (meaning, to rebuild) after subtracting accrued depreciation.
32
Income approach -
When a property generates income for it’s owner, that income, or potential for income, helps to substantiate, calculate or identify the market value of the property.
33
Compensating balance -
provision in a loan that requires the borrower to keep a certain amount of money on deposit with the lender in return for getting the loan. Lender can use this account if buyer defaults
34
Eminent domain -
refers to the power of the government to take private land for public use under certain circumstances. It requires compensation to the owner. (enhance the public good - with the use of the land)
-condemned
35
Capitalization rate -
Are a function of risk. The higher the risk, the higher the expected return.
Government building = low risk
**risk is the primary factor
36
Capitalization approach to appraise -
Dividing net income by the desired rate of return = value
37
Civil code
Law of Agency - License can not cannot engage in any acts of fraud against principal.
38
Novation -
substitute old contract for new contract - broker is replace by new broker
39
Cooperative Apartment Building (stock cooperative/co-op) -
building owned by purchasing shares of stock in the corporation. Only one owner (the corporation) therefore only 1 mortgage, tax bill, or insurance bill. Entire property can foreclose if someone doesn’t pay their share.
40
Natural Hazard Area
- Obligation of seller/seller agent to find out if the property is in a natural hazard area — use 3rd party if needed — special flood hazard, high fire hazard, seismic hazard and earthquake fault
** required for most residential property
41
Percolating water -
water below the ground, but not restricted to a bed or well defined channel
ability of soil to absorb water
42
Potable water
- drink able water
43
Intestate Succession (dies without will)-
estate goes to Probate court and is distributed by laws of ^
44
Short rate -
a higher periodic rate charged for a shorter term than that originally contracted - Increased premium charged by insurance company for for early cancellation
45
Commercial acre
- An acre minus space for street and parking
46
RE commish / Appraiser background check -
Checks late child support
47
Lead based paint -
must be disclosed on single family residence
48
pectrometer
detects radon gas
49
Severalty
sole owner
50
Joint tenancy -
If one joint tenant dies, the survivor becomes sole owner and is not liable for the deceased lien’s
51
Gross income -
individual's total pay before taxes or other deductions
52
Net income -
is the residual amount of earnings after all expenses have been deducted from sales
53
Gross Lease
- The tenant pays a set sum or “gross” amount for rent and the landlord pays all real estate expenses.
54
Net Lease -
a lease in which the tenant pays for utilities, and property taxes in addition to rent or insurance.
55
Equal credit opportunity act -
Forbids discrimination based off sex and martial status
56
Down zoning -
is the process by which an area of land is rezoned to a usage that is less dense and less developed than its previous usage. This is typically done to limit sprawl and overgrowth of cities, and to help concentrate areas of development into smaller sections to prevent over zoning a community.
57
Partition action -
court action to break up joint tenants
58
Functional obsolescence -
Occurs inside property lines; usually from poor design (ex: 1 car garage for a house - not convenient)
59
Economic obsolescence -
(EX: new zoning laws, incompatible land use in a community)
60
Americas Disabilities Act
- public access to buildings code
61
Interim occupancy agreement
- when transfer of title and possession happen at different times. (Agent have buyer and sell sign document)
62
Subdivision map act -
Under the jurisdiction of local government, The map act is concerned with the physical aspects of the subdivision and how it well affect the existing community. The map act controls begin at two or more parcels
63
Construction loans -
is a short-term, interim loan to pay for the building of a house. As work progresses, the lender pays out the money in stages.
the date of the note, determines the maturity of the loan
64
Lender funds the balance of construction loan -
when a notice of completion in filled
65
Tenant improvement allowance (commercial lease) -
when a landlord allows a certain sum of money for improvements within rental space
66
Watershed -
region draining into river system or body of water
67
Unruh Civil rights Act
all persons are free/equal based off : sex, race, color, religion, martial status, sexual orientation, disability, medical condition, et
68
Subdivided Lands Public Record:
“Notice of intention” - must include:
Owners name/address, subdividers name/address, legal description of lands, condition of the title to land, terms/conditions with copies of any contract, provisions that have been made for public utilities in subdivisions, proposed use of subdivision, amount of indebtedness that is a lien on subdivision
statement of school district, airport in vicinity,
69
Condominium project
consists of an undivided interest in common in partition of real property coupled with a separate interest in space called a unit
70
Community apartment project
development in which undivided interest in land is coupled with the right of exclusive occupancy of any apartment
71
Stock cooperative (co-op)
apartment owned by a corporation
72
Planned development:
Judicial or Nonjudicial foreclosure
If HOA fees are not paid in excess of $1,800 after 12 months - property sold to satisfy linens such as; attorney fees, reasonable cost of collection, late charges, interest. Association may not use nonjudicial to collect fines or penalties, except for costs of repairs this member/members guest damaged.
73
Feasible
capable of being accomplished in a successful manner within a reasonable period of time, taking into account economical, social and environmental factors
74
Deeds of trust
In California, deeds of trust are used rather than mortgages. When mortgages are used instead of Deeds of Trust, it allows borrowers greater flexibility and protection
75
When a property has been foreclosed:
and sold by the lender, the debts associated with the foreclosure and the property must be paid in a particular order. First paid is the lender's cost of the sale, with special assessments and general taxes being paid next. Then the first mortgage is paid, with subsequently recorded mortgages or other debts being paid after that. -
76
Order of payments in foreclosure:
Cost of Sale; Special Assessment Taxes and General Taxes; the First Mortgage which is determined by the order of recording; and whatever is recoded next would be paid.
77
Subdivision loans
The annual and quarterly process is Threshold Reporting. Additionally, if a broker negotiates more than $1,000,000.00 in loans annually, he must take part in Threshold Reporting.
78
Mobile homes
All mobile homes manufactured after June 15, 1976 must have tags issued by HUD.
79
Sherman Antitrust Act and other anti-trust legislation
were designed to protect competitive trade. When businesses agree to divide a market and have each company only do business in one section of the market, this is a Sherman Antitrust Act division of markets violation.
80
Attestation
When a notary verifies the signing of the deed, the notary is declaring that an instrument has been executed in his or her presence according to the formalities required by law. It is not the same as an Acknowledgment, a statement by the maker of a document that verifies its authenticity
81
Listing contract
Once a listing contract is signed, the seller becomes a client. With no contract, the buyer is a customer.
82
Agency relationship disclosure requirements
state that the listing agent must disclose to the customer his or her agency relationship with the potential buyer
83
A Point of Beginning
A description starting at a designated place on a parcel using the Metes and Bounds System.
84
Reversionary right
The return of the rights of possession and quiet enjoyment to the lessor at the expiration of a lease.
85
Ostensible Agency
Occurs when an agent is perceived as the principal’s fiduciary by a third party and the principal does not declare otherwise.
86
Bridge loan
Bridge loans are temporary loans that bridge the gap between the sales price of a new home and the homebuyer's new mortgage in the event the buyer's existing home hasn't yet sold before closing. In other words, you're effectively borrowing your down payment on the new home. A bridge loan is secured by your existing home.
87
What are the parts of a mortgage loan? -
A Pledge and Collateral. A Pledge is a promise to pay; and Collateral allows a lender the right to foreclose if the borrower does not pay.
88
Universal agent
Handles all delegated business of principal.
89
Easton v. Strassburger
State the case that is responsible for broker's conducting a diligent inspection of properties they are listing or selling.
90
Civil Rights Act of 1866
Which act is known as the original fair housing statute
91
When your license expires
two years after the license expires, all license rights lapse. You must re-qualify through the examination process before being licensed in real estate once again.
92
Fourfold unity - (joint estate) include:
Unity of Interest, Time, Title, and Possession
93
Syndication
is an effective way for investors to pool their financial and intellectual resources to invest in properties and projects much bigger than they could afford or manage on their own.
the ones that are a form of syndication are: The Corporate Form, The General Partnership and the Limited Liability.
94
Qualify a property
Type of property and area zoning. Value range and condition.
95
Police Power
The constitutional right of the government to regulate private activity to promote the general safety, health, and welfare of society. Police power controls and directs land use regarding subdivisions.
96
Truth in lending
Ensuring consumers are fully informed of all finance changes and aware of the true annual interest rate
total finance charge, amount of loan, name of lender
Disclosure statement would include: list of items included on finance charge, description of security interest held by lender, and the annual percentage rate.
Buyer has the right to the 3-day right of recession (applies to a refinance of owner residence)
97
Statute of Limitations
Prevents action from being taken against an individual after a prescribed period of time
98
In southern California, the bilateral escrow instructions
are signed by the buyer and seller shortly after they've signed their purchase agreement, just after the start of escrow, which is approximately 30-60 days prior to the close of escrow.
99
Valid contract (4 essentials)
Legally Competent Parties; Offer and Acceptance; Consideration; and Legality of Object
100
Riparian Right
"pertaining to, or situated on, the bank of a river”, an owner cannot interfere with the natural flow of the body of water.
101
Riparian owner
Owns the land to the middle of the river/stream - only to waters edge if navigable
102
The continuing education requirement in California
is (45) hours every (4) years.
103
Joint tenancy
the holding of an estate or property jointly by two or more parties, the share of each passing to the other or others on death. Equal rights in possession
104
Tenancy in common
Equal rights in possession
105
Net listing
A listing based on the net price the seller will receive if the property is sold. Under a net listing the broker can offer the property for sale at the highest price obtainable to increase the commission
106
Private mortgage insurance
is required for all loans with less than 20% down payment.
107
Real and personal property
A trade fixture is personal property and can be removed by the tenant any time before the end of the lease term. Annexation changes personal property to real property; severance changes real property to personal property.
108
Fair market value
Amount paid
109
Less-than-freehold estate
estate held by a person who leases. Beginning and end date
110
A fee simple interest
sole ownership of the land and can do with it how you want
111
Estate of inheritance-
is all or part of a person's estate and/or assets that is given to an heir once the person is deceased
112
Negative Declaration
indicated the subdivision does not harm the environment
113
Mechanic liens
lien on behalf of those who have supplied labor or materials that improve property
gain priority according to the beginning of any work or material being delivered to the job.
114
1/2 by 1/2 square mile =
1/4th of a section
1 section = acres so, 1/4(640 miles) = 160 acres
115
Contract of sale-
a legally binding agreement between two parties concerning the terms of purchase or transfer of real property
116
Bill of sale
a legal document made by the seller to a purchaser, reporting that on a specific date at a specific locality and for a particular sum of money or other value received, the seller sold to the purchaser a specific item of personal property, or parcel of real property of which he had
117
Trust deed
a deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender
118
Mobile home park
- 2 or more lots offered for rent or lease as mobile home sites
— broker must give notice to DMV/Housing and community development no later than the tenth calendar day after sale
119
Net listing
allows the agent to keep any amount over what the seller has agreed that he must net at the conclusion of the sale.
120
Open listing
lets an owner sell their home by themselves as a "For Sale By Owner." It is a non-exclusive agreement, meaning the owner may execute open listings with more than one real estate broker and pay only the broker who brings an able buyer whose offer is accepted by the owner.
121
Exclusive right to sell
- During this period the seller cannot list the property with any other agent and must pay the agent's commission even if he or she finds a buyer.
122
Exclusive agency listing
- an agreement between a seller and a real estate firm or agent granting the firm or agent the right to be the only firm or agent to market and sell a property, except the seller retains the right to market and sell the home to a buyer without having to pay a commission to the listing agent
123
Liquidated damages clause
- specifies a predetermined amount of money that must be paid as damages for failure to perform under a contract. The amount of the liquidated damages is supposed to be the parties' best estimate at the time they sign the contract of the damages that would be caused by a breach.
124
Appurtenant-
when the attachment becomes part of the property
| runs with the land
125
Mello-Roos Act-
provides for a wider variety of facilities and services than other improvement bond acts and has no requirement that such improvements will specifically benefit individual properties. The seller of a 1-4 dwelling units subject to Mello-Roos lien must make a good faith effort to obtain a disclosure notice concerning the special tax
126
Gross rent multiplier =
(Sale price) x (gross month rent) = (gross rent multiplier) x (new rent) = Value of comparison property
127
Documentary Transfer Tax -
Is NOT charged on the assumed loan, Documentary transfer tax is $1.10 per thousand $.
128
Corporate seal on deed-
corporation gave authorization for this person to sign
129
Date of contract -
date the buyer receives written communication of sellers acceptance
130
Public Report on subdivision -
Real Estate Commissioner administers the Subdivided Lands Act and issues the final report on subdivision.
131
What is/how to obtain fictitious name -
a name under which a corporation conducts business that is not the legal name of the corporation as shown in its articles of incorporation
file name with county recorder in the county in place of business, publish name in newspaper, have a license issued by the DRE after name is approved by commissioner.
132
Listing Agreement -
An agent becomes the sellers agent; when the seller and agent sign the agreement
Promise for promise, bilateral contract, employment contract
133
Buyer agency -
“only” represent buyers
134
Advance fee contract (must be approved by DRE) -
complete description of services rendered, total amount of fee, the date fee is to be paid
135
Inverse condemnation -
government must purchase the property
136
Federal land bank
- loan for purchasing land
137
Types of legal estates
- Dower, a wife's interest in the husband's property; Curtesy, a husband's interest in a wife's property; and Homestead, protection against unsecured debts for the party who did not sign for the loan.
138
How many owners could own land?
Three owners: One could own the subsurface rights, one the surface rights, and another the air rights.
139
Amortized loan
a loan with scheduled periodic payments that consist of both principal and interest. An amortized loan payment pays the relevant interest expense for the period before any principal is paid and reduced.
140
Block busting
is an illegal practice where someone convinces homeowners to quickly sell their property below fair market value by scaring them into believing that their home values are about to plummet because a group of people of a certain race, religion, or national origin are moving into the neighborhood.
141
Part-Whole Rate
Part - is always a “part” or piece of something, such as a commission is always part of the sales price
Whole - is always the complete unit such as sale price, market value, or loan balance
Rate - is always percentage
142
District attorney
processes violations in Real Estate Law, RE Commish disciplines
143
Estate at will
Estate at will means that it can be ended at any time. An estate at will gives the lessee the right to possession until the estate is terminated by either party; the term of this estate is indefinite. This is not allowed in many states.
144
Estate at sufferance
An estate at sufferance arises when the tenant wrongfully holds over after the expiration of his term. This is often called a tenancy at sufferance. An example of an estate at sufferance would be a tenant who does not pay rent. In simple terms, the landlord is suffering. This is not a form of trespass, as at one point the tenant had the right to be on the property. The landlord would have to legally evict the tenant when a tenancy at sufferance is created.
145
Periodic tenancy
- Periodic tenancy, which is also known as an estate from years to years, is a tenancy that is not bound to a lease with a fixed period like an estate for years. A periodic tenancy follows a period such as month-to-month, week-to-week, or year to year. Proper notice must be given to terminate this lease.
146
Estate for years
An estate for years is a leasehold interest in land for a fixed period of time. It is often called a tenancy for years. An example of an estate for years would be a summer rental, as it has a defined beginning and end date. No notice to be terminated is needed, as the end of the lease is established at the conception of the rental. Therefore a lease for 6 months would be an estate for years, and a lease with a given beginning and end date would be an estate for years as well.
147
Less than free hold estate
an estate held by one who rents or leases property
148
Capital gain exemption
the capital gains on the sale are exempt from capital gains tax. Based on the Taxpayer Relief Act of 1997, if you are single, you will pay no capital gains tax on the first $250,000 you make when you sell your home. Married couples enjoy a $500,000 exemption ( Tax exemption of the gain can only be done on principal place of residence)
Owner must have lived in his residence 24 out of last 60 months -- 2 of the last 5 years
149
Interest = IS ALWAYS _ _ _ _ _ _
Interest = IS ALWAYS ANNUAL
150
Real estate recovery funds
funds used for the reimbursement of unfairly treated persons who suffer monetary damages due to acts committed by licensed real estate brokers or salesmen.
151
Real property =
not moveable
152
Alienation clause (Due on Sale)
clause in a financial contract that comes into effect when ownership of a specified asset is transferred or a collateral property is sold. Alienation clauses are common in mortgage contracts providing full repayment if real estate property ownership changes (NEVER FOR FHA OR VA )
153
Home owner failed to make payments on trust deed and a notice of default has been recorded, right of reinstatements states- one can reinstate a trust deed up to 5 business days prior to trustee sale
one can reinstate a trust deed up to 5 business days prior to trustee sale
154
Ostensible agent
one who appears to have the authority to act for the principal, when in reality does NOT have a agency relationship
155
Broker may charge 15% commission on a junior loan
when the loan is less than 20k and with a term of 3 years or longer
156
First step in foreclosure
filing the notice of default. Trustee must wait 3 months before advertising notice of sale
157
Bilateral contract
defined as a promise for a promise. In the listing the seller promises to pay a commission and the broker promises to use diligence
158
Mechanics lien
someone must verify the work was done, usually the general contractor
159
Gross easement
utility easement, residential owners may have
160
Contract rent
rent the tenant pays
161
Economic rent
rent the market will support. It is found by comparison of rents of other similar properties.
162
Earnest money
is a deposit made to a seller that represents a buyer's good faith to buy a home. The money gives the buyer extra time to get financing and conduct the title search, property appraisal and inspections before closing. ... Earnest money is also known as an escrow deposit or good faith money
163
Subordination clause
allows a future loan (recorded second) to have priority over it. The first loan recorded “slips” into the second position
164
Injunction
to enforce private private deed restriction (EX: court order from neighbors to get neighbor Charles to stop burning trash on his property)
165
Mortgage yield
The effective yield received by the investor based on the nominal rate of the note and any discount or premium paid at time of purchase
166
Footing
Heavy concrete course placed in ground upon which the concrete foundation is set
167
Special assessments
provide for local improvements
168
Depreciation
loss in value from any cause
169
Majority of money used for home loan comes from
Individual savings account
170
Sample Question: A woman purchased a property at 20% less than the listed price and sold it for the original price. The percentage of profit was: 25%
- 100 (listed price) x 80% = 80 (paid) 100 - 80 = 20 (profit)
- 20/80 = .25 (rate of profit) or 25%
171
Revocation
When someone who granted or offered something withdraws it
172
Dominant tenement
land that benefits from an easement
173
RESPA
provide loan applicant with a good faith estimate, furnish a uniform settlement statement, furnish all applicants for loans with a copy of specific information packet no later than 3 business days following loan application
Lenders whose deposits are insured by an agency of the federal government
174
Avulsion
sudden perceptible loss of land by water or wind
175
Accretion
gradual accumulation of land deposited by shifting river or ocean action
176
Erosion
wearing away land by the action of water or wind
177
Alluvion
land increased by the build up of settlement
178
Appropriation
gain rights to use excess water in stream from State Division of Water Resources
179
Littoral rights
(not moving water) landowners claim to use water in large navigable lakes and rivers up to his property up to the high-water mark
180
Real estate recovery account
will pay to up to 50k per license
181
Broker servicing a loan by collecting payment for lender -
may not retain funds for more than 25 days
182
Function of mortgage companies
Participating in the money market basically as correspondents for other lenders, originating and servicing loans but not intending to hold them in their own portfolio
- Mortgage brokers are basically loan correspondents, they arrange loans between buyer and other lenders usually sold on the secondary market
183
Blanket loan
a borrower puts up several parcels of real estate to be used as security for debt
184
Abrogation
rescission or annulling a contract, revocation or repealing a contract by mutual consent, revocation by either party for cause.
185
Examples of changing title to create Joint tenancy
joint tenants to themselves and others as joint tenants, tenants in common to themselves as joint tenants, a husband to himself and his wife as joint tenants
186
Tenancy for years
when expires no need to tell landlord you will leave
187
Valid contract
becomes invalid upon death or incapacity of the one party
188
Conventional loans
always permit a deficiency judgement
189
A buyer on a land contract defaulted. The sellers recourse would be
to file a suit for possession and rents
190
How much of a brokers personal funds may be contributed to a client trust fund
$200 to offset any bank service charges
191
In order to perfect title in acquired by adverse possession
Quiet title action is required (court action to remove cloud from the title)
192
Graduated lease
scheduled rent increases on specific dates
193
Index lease -
lease tied to a index, such as the consumer price index (CPI)
Consumer price index - usually used in commercial lease as method of increasing rent annually.
194
Land contract -
a form of seller financing. It is similar to a mortgage, but rather than borrowing money from a lender or bank to buy real estate, the buyer makes payments to the real estate owner, or seller, until the purchase price is paid in full.
195
Condemnation
- when the government exercises their power to take property for public use
196
Inverse condemnation -
when the individual brings action against the city to purchase the property
197
Lien
- use property as collateral for payment of debt
198
Estate at sufferance -
the hold over tenant has no right to the property, so the landlord can sue for possession
199
Offer to purchase contract states -
liquidated damages on the sale of residential property can not exceed 3% of the sale price.Any excess must be returned to buyer
200
What is HUD and what is its purpose?
Housing and Urban Development
is the principal federal agency responsible for programs concerned with housing needs, fair housing opportunities, and improving and developing U.S. communities.
201
Servient tenement
land that suffers from a burden of a easement
202
Easement cannot be terminated by
Revocation by the owner of the servient tenement
203
In order for a deed to transfer title and be effective
Must have an adequate description
204
Residential property is considered depreciable over (x) years
27.5 years
205
Homestead
exemption protects the value of a home from property taxes and creditors following the death of a homeowner spouse. Giving reduced tax treatment
206
Gross easement -
goes to a person (once someone moves the easement ends)
207
Survivorship
When jointly owned property includes a right of survivorship, the surviving owner automatically absorbs a dying owner's share of the property. “Time, title, interest,
208
Appurtenance-
when the attachment becomes part of the property
209
Private mortgage companies
are really mortgage bankers. They fund loans themselves through a contract with an insurance company
210
VA loan -
No maximum loan amount, however VA does have a limit that cannot exceed the appraise value of property (Certificate of Reasonable value)
- VA loan does not allow loan for rental property
211
Estoppel
document confirming tenants rights and landlord responsibilities
212
Contract where one party holds an offer for a definite period of time
“An option”
213
CC&Rs
a written document to record land restrictions imposed on a subdivision for the benefit of landowners
covenants, conditions and restrictions
214
Person responsible for routine maintenance in a apartment building
property manager
215
Agency disclosure law
requires Agency Disclosure statements be signed by both seller and buyer in the sale of 1-4 units
216
The conditions of sale will affect -
the price of subject property
217
Sublease -
original lessee maintains an interest in the lease (less than a assignment)
218
Assignment -
the entire lease hold transfers to the assignee
219
Pest control reports are kept on file with -
The Structural Pest Control Board
Buyer can sue the seller of a single family dwelling for something that was not disclosed - 2 years after move in
220
5 tests of a fixture -
When personal property becomes "real property"
- method of attachment
- adaptability
- relationship of the parties
- intentions of the parties
- agreements of the parties
221
RE license facts -
person who does not renew on time has a ‘2 year grace’ period in which you can renew without taking state exam, after 2 years must take the exam, licensee good for 4 years
222
Reconciliation of values -
last step in appeasing process. The appraiser correlates the values, giving greatest weight to the value indication arrived at from the approach to value which would give the most accurate picture of value
223
Maximum the recover amount can pay for a single agent -
$250,000
224
Chain of events for Agency disclosure law -
disclose, elect, confirm
225
Condemnation
Condemnation occurs when a local, state, or federal government seizes private property and compensates the owner.
226
Parcel
a lot or plot is a tract or parcel of land
227
Inclusions; in the sale of property
personal property which have become attached to real property
228
Desist and Refrain Order ( EX: resend approval for new subdivision)
The Department of Real Estate issues a Desist and Refrain Order when it believes there has been a violation of the California real estate laws.
229
deed of trust or trust deed: Who are the Trustor, Trustee and beneficiary?
is a deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender. ... The borrower is referred to as the trustor, while the lender is referred to as the beneficiary.
230
(COST) Sample: Investor purchased 3 homes for $360,000, then resold them for $600,000. Based on cost, what was the percentage of gross profit?
600-360=240
Made/Paid = Rate
240,000 / 360,000 = 66.67%
231
1 point on the sale of a house refers to:
1% of the loan amount
232
Zoning
Zoning refers to government laws that dictate how real property can/cannot be used in certain areas. Zoning laws can limit commercial use of land in order to prevent oil, manufacturing or other types of businesses from building in residential neighborhoods.
Zoning is police power
233
Highest and best use - on a investment
greatest NET return over period of time
234
A land owners, property line in the sky is:
As high as they can build with connection to the land
235
Acceleration clause
contract provision that allows a lender to require a borrower to repay all of an outstanding loan if certain requirements are not met.
Foreclosure if buyer fails to make payments
236
Offeror
Offeree
offeror -is the person making the offer
offeree - is the person who receives the offer.
237
Tenants in common:
Have a undivided interest in all of the property. They do not own a specific part. Shares can be equal or unequal.
238
Negative Amortization
(debt goes up) monthly payment on a loan is not sufficient enough to cover the monthly interest being charged on the loan
239
Federal Reserve lowering the reserve requirement will
increases the money available for loan
240
Title insurance/policy in a sale of property
Title insurance is a policy issued by an insurance company guaranteeing that the title to a parcel of real property is clear of any claims or liens and properly in the name of the title owner and that the owner has the right to sell or otherwise transfer the property to another.
241
Straight note
A straight note is also known as an “interest only” note, wherein the borrower pays only the interest on the note every month but then pays off the entire principal on the very last payment
242
Cal-Vet loan benefits
Equitable title in a CalVet-procured home still gives you many ownership rights, including to property tax and mortgage interest deductions. Because CalVet holds legal title to the home you bought using its mortgage, it can obtain an inexpensive group rate for the homeowners insurance you'll carry. CalVet allows veterans to finance the funding fee charged for their loans and also offers 100 percent, no-down-payment financing
Lending program uses a adjustable rate loan -- interest rates go up and down
243
Fee simle defeasible condition
conditions which can cause forfeiture of title if violated
244
OR rule
suffix implying giving ie. grantor, option, vendor
245
EE rule
suffix implying receiving ie. grantee, optionee, vendee
246
Bundle of rights
rights that are inherent in property ownership
247
"chattel"
legal term for personal property
248
freehold estate
unlimited in duration/ownership
249
Quit claim deed
immediate transfer ownership
250
Warranty deed
Grantor guarantees clear title and right to sell
251
Abstract of title
summary of title
252
R3
Multi family residential
253
Fair housing act -- Jones vs Mayor
1968 prevents discrimination
254
Sherman Anti Trust Act
Promotes free market competition
255
Statute of limitations
time
256
ratification
signing or giving formal consent to agreement -- making officially valid
257
Principle of substitution
the basis for the market data approach. The max value of a property usually is established by the cost of acquiring an equivalent substitute property that has the same use, design and income
258
Principle of contribution
value contributed by a component or part to the total value of the whole
259
Principle of regression
value goes down when close to lesser properties
260
Principle of progression
value goes up when closer to more valuable properties
261
assemblage
joining several parcels to form larger parcel
262
acre
43,560 sq feet
263
amortization
spreading payments over time
264
ballon loan
large final payment before loan is fully amortized
265
interim loan
short term loan (construction loan)
266
obligatory advances
AKA DRAWS -- disbursement of money over the period of a contraction loan
267
take out loan
long term loan
268
subject to
seller liable
269
assume =
buyer liable
270
hypothecate
putting up collateral to secure the debt of another
271
FHA
insures loan
272
VA loan
no down payment needed
273
Freddie Mac
buys mortgages on the 2nd market, pools them, and sells them
274
subleases
grants possession but not responsibility
275
assignments (sublease that)
grants possession and responsibility
276
percentage lease
based on percentage of gross receipts
277
deeds
evidence of transfer
278
alienation of title
capacity of property or a property right to be sold or transferred
279
ALTA Policy -- title insurance
protects real property owners and mortgage lenders against losses from defects in title
280
easement
right to cross
281
encumbrances
limitation
282
Government powers (PETE)
police power, escheat, taxation, eminent domain
283
variance
exception to the rule
284
grandfather clause
exempt from new rule
285
building code
for public safety, health, and general welfare
286
intestate
no will
287
testate
has will
288
marginal tax rate
percentage taken from your next dollar of taxable income
289
encroachment
when a structure is built in part on a neighbors property
290
general liens
lien against all property
291
specific liens
lien that is on one property
292
voluntary liens
lien that exists because of an action taken by debtor
293
involuntary liens
liens that were imposed on a individual i.e. .. taxes judgements
294
judgement liens
lien placed by court
295
lis pendis
lawsuit pending involving either title to the property or a claimed ownership interest in it
296
redlining
denying services such as a loan through selective racing prices to certain residents based on race and ethnicities
297
executed contract
contract that has been fully performed
298
excretory contract
a contract that has not been fully performed
299
codicil
amendment
300
Mortgage brokers
intermediary between consumer and lender
mortgage broker originates loans, while mortgage lender funds loan
301
mortgage banker
a direct mortgage lender
302
FHA (Long)
- small down payment
- insures the lender
- unconventional loan because backed backed by government
303
GNMA
a governmental part of the 2nd market that deals primarily in recycling VA and FHA mortgage
304
FNMA
federally sponsored private corporation which provide a secondary market for housing mortgages
305
Blind advertising
No broker number name/info
306
During escrow if buyer want to work on home:
buyer and seller execute a amendment to the escrow instructions
307
deficiency judgement
A deficiency judgment enables the lender to attach and foreclose a judgment lien on other real or personal property the borrower owns.The lender's ability to pursue such a judgment may be limited, however.
308
Most comprehensive appraisal report
Narrative report
A summary report is a written narrative which provides a moderate level of detailed information and analysis, greater detail than the restricted-use report but less than the self-contained. The summary report states all of the pertinent information but additionally summarizes details, analysis and conclusions that are not included in the restricted-use report.
309
Four elements of value:
Demand, Scarcity, Transferability, utility
310
Tax free exchange of property requires
Property to be like for like
311
Deed
Does not need to be recorded to transfer title
312
Court foreclosure "equity of of redemption"
the latter could retain possession within 1 year
313
Real property taxes have priority over
trust deeds
There for property tax liens will be paid first
314
Allodial system
Legal system that governs the real estate property ownership rights in the US. Allodial system allows 'fee simple absolute in possession' ownership that is free from all restrictions except those imposed by a government's powers of eminent domain, police action, and taxation.
315
Covenant of seisin
"seisen" derives from the French meaning to "sit upon or own" and gives owners the right to sell or transfer property at will.
316
Emblements and Fructus industriales
refer to profit from crops that are grown as a result of a person's labor, such as corn, as opposed to those that occur naturally, such as grass or minerals. By the custom of English common law, they are considered personal property.
317
"Defeasible estates"
give a person or entity control over a property only so long as certain conditions are met or avoided. For example, a community might be deeded a property on the condition that it be used only for building a school, or land willed to a child on the condition it never be used for commercial development. If the community tries to use the property for a recreation complex or the heir tries to sell to a retail developer, control would automatically revert to another party and the deed would become void.
318
Short sale the property
Short sales avoid the delay and expense of a foreclosure sale. The lender usually forgives the mortgage balance owed after the sale.
319
Appurtenant easements
Appurtenant easements afford the most protection since they are generally a permanent feature of the property.
320
"easement in gross"
is between two individuals, which would severely limit the attractiveness and value of the property if the original owner wished to sell.
321
statutory lien
A "statutory lien" is one that arises out of specific law (otherwise known as statutes).
322
"equitable lien"
has its roots in common law or custom.
323
"voluntary lien"
is one entered with the property owner's knowledge and consent, such as a mortgage.
324
"general lien"
grants a creditor the right to file a claim against all of a debtor's assets, not just a particular property.
325
primary purpose of a deed is to
A deed is the instrument by which ownership of a property is transferred from one person to another, while a title is evidence of that ownership.
326
A special warranty deed differs from a general warranty deed in that the grantor's covenant in the special warranty deed
The more common deed in most states is the general warranty, because it establishes the ownership trail and validity of title going back to the original recorded ownership (for example, the purchase of Manhattan Island and all subsequent divisions, subdivisions and resales). Under a special warranty deed, an owner transfers property guaranteeing the quality of title only during the period of his or her ownership, leaving subsequent buyers vulnerable to prior claims
