National Flashcards
(168 cards)
1
Q
The owner states the price he/she wants for the property and agrees to pay the broker any amount over that price
A
Net Listing
2
Q
Unilateral contract in which multiple agents can be employed to find a buyer. If the owner finds a buyer no commission is paid
A
Open Listing (non exclusive listing)
3
Q
Employment agreement in which specified agent earns a commission if a property is sold within a specified time frame. The specified agent will generally earn a commission even if another licensee finds a buyer. If two exclusive listings are signed the seller may have to pay two commissions
A
Exclusive Listing
4
Q
Employment contract where the seller agrees to pay a broker commission if any agent/broker finds a buyer but if the owner sells it themselves the broker gets no commission
A
Exclusive Agency Listing
5
Q
Gives the brokerage firm maximum rights to payment and entitles the listing brokerage firm to a commission regardless of who sells the property during the listing period
A
Exclusive Right to Sell Listing
6
Q
Is any fact that is relevant to a person making a decision
A
Material Fact
7
Q
Is a defect concerning a property that a party does not know about, cannot reasonably discover, and would reasonably want to know about before making a decision to buy
A
Material Latent Defect
8
Q
Is a legal relationship created when a person acts on behalf of another in business and legal dealings with others
A
Agency/Fiduciary
9
Q
Is the person who employs an agent to represent him/her
A
Principal/Client
10
Q
Is a party who is not represented by a real estate professional in the transaction
A
Third Party/Customer
11
Q
Involves taking unfair advantage of a position of confidence or authority or of a persons distress or weakness on mind
A
Undue Influence
12
Q
Is a show of an intention to inflict harm
A
Menace
13
Q
Forcing a person to do something against his/her will including using threats to force a person to do something
A
Duress or Coercion
14
Q
Restored to original condition
A
Rescission
15
Q
Amount determined in advance to be paid in the event of a breach
A
Liquidated (Damages)
16
Q
Amount determined by the court or arbitrator to cover the actual amount of the loss suffered as a result of the breach
A
Compensatory (Damages)
17
Q
Occurs when one party takes action through a legal procedure or lawsuit to force the other party to perform
A
Specific Performance (Damages)
18
Q
Have limited authority to conduct a single transaction and have no power to bind the client
A
Special Agent
19
Q
Are authorized to conduct a series of transactions in a specified range and have limited power to bind the client
A
General Agent
20
Q
Are authorized to perform all acts that can lawfully be delegated to a representative including the power to sign contracts
A
Universal Agent
21
Q
Has the same knowledge or notice of facts known by his/her agent or subagent
A
Imputed Knowledge
22
Q
Is liability for the actions of another
A
Vicarious Liability
23
Q
Agent Duties to a Principal: Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable Care
A
OLD CAR
24
Q
Agent Obligations to the Third Party: Disclosure, Accounting, Honesty/Good Faith
A
DAH
25
Missing any of the essential elements of a contract
Void
26
Has all necessary elements of a contract; upheld in court; valid or voidable
Enforceable
27
All elements of a contract; enforceable by both parties
Valid
28
Is enforceable but is subject to rescission by one of the parties taken advantage of in the contract
Voidable
29
If it was valid at the time it was created but for some reason cannot be proven or enforced in court
Unenforceable
30
Defines the time period after the default on a contract in which an injured party can seek justice from the courts
Statue of Limitations
31
Allows the seller to promise that a buyer may have the first right to meet or beat an offer in the future
First Right of Refusal
32
A tenant pays a fixed rent amount and the landlord pays all expenses
Gross Lease
33
A tenant pays a base rent and part of the taxes, insurance, or maintenance
Net Lease
34
A tenant pays a base rent and a percentage of the sales
Percentage Lease
35
Rent payments adjust over time
Graduated/Index Lease
36
Is the transfer of all of ones interest to another
Assignment
37
Is a method by which a party to a contract transfer his/her duties as well as his/her rights to another and by doing so the party is relived of secondary liability (cancels the existing obligations and creates a new one)
Novation
38
Legally Competent Parties, Mutual Agreement, A Legal Objective, Consideration, A Written Contract
Essential Elements of a Contract
39
One side contract, only one party has an obligation to perform under contract
Unilateral Contract
40
Each party makes promises obligated to perform
Bilateral Contract
41
Is in the process of being performed; something remains to be done by one or both parties
Executory Contract
42
Both parties to the contract have fully performed the terms
Executed Contract
43
Created by either written or oral agreement
Express Contract
44
An agreement created by actions of the parties involved but there is no written record or actual verbal agreement
Implied Contract
45
Is the practice of representing only one principal in a transaction
Single Agency
46
When a agent represents both the buyer and seller in the same transaction
Dual Agency
47
When the agent for the buyer and the agent for the seller in a single transaction work for the same broker
Designated Agency
48
When a licensee acts as a facilitator in a transaction instead of as an agent
Non-agency or Transactional Brokerage
49
Is authority given after an act has already been performed
Ratification
50
Created in an emergency situation when the agent doesn't have time to obtain instructions from the client
Agency by Necessity
51
Created when a court stops a client from denying that an agency relationship exists, after the client has allowed another person to believe that an agency relationship exists
Agency by Estoppel
52
Created when a person has acted in a manner that implies representation without informed consent
Agency by Implication
53
Is property that is legally or physically immovable; person who owns the land owns its surface, subsurface, and airspace; real estate consist of land, improvements, and rights
Real Property
54
Is property that is not real property; It is mobile and belongs to the seller
Personal Property
55
Personal property can be converted to real property by being attached to the real property
Fixtures
56
Anything attached to the land that will be conveyed
Appurtenance
57
Transfer or Sold
Convey
58
Used to covey title to personal property
Bill of Sale
59
Determines if an item is a fixture: Method, Adaptation, Relationship, Intent, Agreement
MARIA
60
Measurements/Boundaries
Metes and Bounds
61
Government Survey (Rectangular)
62
Lot and Block
63
Tied to flowing water like rivers/streams; Right to use; Moveable
Riparian Rights
64
Tied to standing water like lakes/sea; Non navigable, Center
Littoral Rights
65
Immobile, Indestructible, and Unique (Non homogeneous)
Physical Characteristics of Land
66
Scarcity (Supply/Demand), Improvability, Situs (Location), Fixity (Investment)
Economic Characteristics of Land
67
Special permission to allow a land use that would normally be a violation of current zoning
Variance
68
A promise not to violate the restrictions
Covenant
69
Used to privet a violation or to remedy a violation
Injunction
70
Grandfathering Clause
NonConforming Use
71
The holder of mineral rights or other rights beneath the land has duty to support the surface owners land in its natural state
Subjacent Support
72
That an adjoining landowner has duty to support his/her neighbors land in its natural state
Lateral Support
73
Transfer real estate or real property
Deed
74
Rights granted to others in return for services
Feudal System
75
Is the system of ownership that allow land to be owned and combined by individuals
Allodial System
76
Is the right of the government to enact legislation dealing with land use an the health, safety, and general welfare of the public
Police Power
77
Is the right of a government agency or private entity to take private land for public use
Eminent Domain
78
Is the process used to obtain the property (owner receives compensation)
Condemnation
79
Is the right to raise money to support itself through taxes
Taxation
80
The government has the right to take back property when it has been abandoned; owner dies without a will or no heirs
Escheat
81
Sole ownership by one person
Tenancy in Severalty
82
Two or more people that own real estate passable to heirs or devisees; No right of survivorship
Tenancy in Common
83
Two or more individuals a joint; Same interest, possession, time, title; Right of survivorship
Joint Tenancy
84
Married Spouses; Dower=wife rights; Curtesy=husband rights; Right of survivorship
Tenant by the Entirety
85
Created when a trustor conveys title to real property to one or more trustees
Trust
86
Ownership rights are conveyed with the title and how fees and common elements will be divided in the owners association
Condominium
87
Is a common interest community where ownership is held for a specific time each year
Timeshare
88
Owned by a corporation; a person would purchase shares of stock in the corporation that owns the building
Cooperatives
89
Is any interest or right to land held by third persons that affects the title and possibly the value of the property; Affecting the physical condition of the property include deeds restrictions, easements, and encroachments
Encumbrance
90
A written right to use all or portion of another's land for specific purpose (not a right to possess)
Easement
91
Owner of the land
Servient Tenement
92
Owns the right to use the land
Dominant Tenement
93
Owner of land gives permission to use
Easement Appurtenant
94
Owner does not give permission to use the land; If the property is landlocked and the owner needs access her adjacent property
Easement by Necessity
95
Formed by statutory law
Prescriptive Easement
96
Giving a person the right to use another's land; City's right to use
Gross Easement
97
Acquiring title when the occupant of the land has been in (OCEAN) open, continuous, exclusive, actual, notorious possession of the property for a required statutory period of time
Adverse Possession
98
To trespass onto someone's property (Unintentionally building a fence)
Encroachment
99
Is a security interest of the creditor in the property of another
Lien
100
An encumbrance against one or more specified parcels of real estate; Mechanics lien, Property tax lien; Special assessment
Specific Lien
101
Applies against a person and all his/her real and personal property, except property exempted by statue; Judgement lien, debt of a decedent, income tax lie, estate tax lien
General Lien
102
In the transfer or separation of the title to real estate from one party to another
Alienation
103
Competent Grantor, Signature of the Grantor, Identification of the Parties, Deliver to Acceptance by Grantee, Legal Description of the Property, Consideration, Words of Conveyance
Essential Elements of a Deed
104
Provides the greatest protection for a grantee and creates the greatest liability for the grantor
General Warranty Deed
105
Limits the warranty against encumbrances to only those defects arising from actions by through or under the grantor
Special Warranty Deed
106
Conveys title without any warranties or covenants
Bargain and Sale Deed
107
Releases any claims of the grantor to rights in the property
Quitclaim Deed
108
A person who dies with a will
Testate
109
A person who dies without a will
Intestate
110
An encumbrance, charge, or claim against the property which could make it legally impossible for the owner to convey marketable title
Cloud on the title
111
Requires that contracts involving transfers of interest in real estate be in writing and signed to be enforceable 12 months or less
Statue of Frauds
112
The act or process of estimating or creating an opinion of value
Valuation
113
Determined by buyers and sellers
Market Value
114
Is the actual sold price
Market Price
115
Holds that the value of over improved property will suffer if it is in an area of lesser valued homes
Regression
116
Holds that the value of smaller property will increase if it is in an area of bigger homes
Progession
117
Is the use that will create the greatest return on investment and is not necessarily the current use
Highest and Best Use
118
Gives an estimate or opinion of value in the completed appraisal report
Appraiser
119
Is an agreement between competent parties based upon legal consideration creating legally enforceable duties and obligations and granting the exclusive right to buy, sell, lease, property at a given price within a stated period of time
Option
120
The property owner who gives the option
Optionor
121
The purchaser on tenant who receives the option
Optionee
122
Performed by specified dates
Time is of the essence
123
Requires a real estate appraisal to be used with any federally related loan transaction
Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989
124
Is an opinion of value based on the principles of value; requires the completion of a highest and best use analysis
Appraisal
125
Is the primary form used by appraisers for residential properties
Uniform Residential Appraisal Report (URAR)
126
Approach for residential properties
Sales Comparison
127
Approach for churches and libraries
Replacement Cost - Depreciation + Value of Land = Estimated Value
Cost Approach
128
Approach for p=any property that generates income such as office buildings, shopping centers, apartment buildings
Value - I/R=V
Rate - I/V=R
Income - RxV=I
Income Approach
129
Is the wear and tear or breaking down of the physical structure which takes place over time
Physical Deterioration
130
Is the loss in the usefulness of structures that causes them to become less desirable or less useful
Obsolescence
131
Is the loss of value due to factors of inadequacy or over-adequacy within the property itself
Functional Obsolescence
132
Is a loss in value resulting from conditions outside the property
External Obsolescence (Economic Obsolescence)
133
Total Gross Income - Effective Gross Income - Operating Expenses = Net Operating Income
Net Operating Income (NOI) Formula
134
Is a rate of return that converts net income to value
Capitalization Rate
135
Sales Price/Gross Rent = Multiplier
Value = Gross Rent x GRM
Gross Rent Multiplier (GRM)
136
Using financing to allow payment of a small amount of cash down to purchase a large property investment
Leverage
137
Converting an assest to cash
Liquidity
138
Is a written contract pledging real property the borrower owns or will own to secure the debt
Mortgage/Deed of Trust
139
Allows the property to be sold without going to court
Power of Sale Clause
140
Allows the lender to declare the entire unpaid loan balance due upon a default of any of the terms or conditions of the document
Acceleration Clause
141
Once a loan is paid according to the terms of the note and the other covenants are fulfilled the lender will release the lien so the borrower will regain clear title and free title to the property
Defeasance Clause
142
When a mortgage is paid off
Satisfaction
143
Allows the borrower under state law a period of time after the foreclosure sale to buy back the property
Statutory Right of Redemption
144
Is the amount of a loan a lender will provide based upon the property's value
Loan-to-value ration (LTV) or Mortgage Rate
145
Is the difference between the market value of a property and the balance of the owner's debt against the property
Market Value Today - Total Debt Today = Equity
Equity
146
Points charged to raise a lenders return on a loan
loan x number of points in percentage = dollars in points
Discount Points
147
Smaller payments but the loan has the full principal payment due at the end
Interest-Only Loan
148
Has a larger payment then the term loan which makes the final balloon payment smaller
Partially Amortized Loan
149
Allows the borrower to know what their payment will be each month and to pay the loan in full with the last payment
Fully Amortized Loan
150
Rate x Loan Balance = Annual Interest / 12 to get monthly interest
Interest Formula
151
Is to ensure that applicants for consumer credit are given sufficient information and disclosures about the cost and conditions of the credit so they can easily compare credit terms offered by various lenders
Truth in Lending Act (TILA) administered by the Consumer Financial Protection Bureau (CFPB)
152
Allows lenders to collect no more than two months of cushion in their escrow accounts to pay borrowers tax and insurance bills; prohibits kickbacks in real estate transactions
Real Estate Settlement Procedures Act (RESPA)
153
Requires the lender to give a borrower a Loan Estimate within three days after application; must also receive a Closing Disclosure form three days prior to closing
TRID (TILA/RESPA Integrated Disclosures)
154
Prohibits creditors from discriminating against a loan applicant based on race, creed, color, religion, national origin, sex, martial status, age, etc
Equal Credit Opportunity Act
155
The maximum rate of interest that may be charged for various types of loans in the state
Usury Laws
156
Regulates the supply of money and interest rates in the US
Federal Reserve System
157
The rate of interest stated in the loan document
Nominal Interest Rate
158
A form of revolving credit in which a persons home serves as collateral
Appraised Value x Percentage - Less Mortgage Debt = Potential Loan or Credit Line
Home Equity Line of Credit (HELOC)
159
Is inducing or attempting to indue, for profit, owners of housing to sell or rent by representing that persons of a certain race, color etc are or may be entering into the neighborhood
Blockbusting
160
Is restricting or attempting to restrict the choices of a person
Steering
161
Occurs when a lender refuses to make or provide information on a loans
Redlining
162
sales price paid x percentage of commission = commission
Commission Split = Subtract by 100%
Commission Formula
163
sales price x percentage to seller = net dollars to seller
Percentage to the seller is 100% minus the rate of commission
Estimating Net to Seller
164
property value x percentage of increase = appreciated value
Appreciation Formula
165
original value x percentage of value NOT lost = present value
Solve before proceeding with original formula:
100% divide by years = yearly depreciation rate
numbers of years divided by depreciation rate = depreciation to date
100% minus depreciation to date = value not lost
Depreciation Formula
166
monthly payment x 12 = annual debt service
Annual debt service
167
sales price - loan assumed / $ x rate = transfer tax
Transer tax
168
assessed value x mill rate = annual taxes
or
(assessed value/$100) x tax rate = annual taxes
Property tax
