RE Questions and Answers Flashcards

Question

2nd requirement of aa contractis Acceptance what is it?

Answer 1

An acceptanceis the offeree agreeing to the exact terms and conditions of the proposed offer. One an offer accepted, the terms of the contract are CERTAIN AND DEFINITE.

Answer 2

Mutual agreement consists of an offer and acceptance. This occurs when an offereeagrees to the EXACT terms of the proposed offer, a 'MEETING OF THE MINDS". Acceptancr is not the same as ratification. Ratification is formally validating a propose law.

Answer 3

An inducement to a contract that must be provided by BOTH parties.Consideratin is what a party is willing to give up, that in which he is not legally obligated to give up. Consideration for seller is the property. Consideration for Buyer is the sales price.

Answer 4

No, it is not essential to a valid and binding contract. Though it makes the offer stronger it does not affect the validity.

Answer 5

sales agreement real estate contract Purchase Contract by HAR

Answer 6

A sales contract is used to purchase real property. In mainland, the term agreement of sale is used. In HI, agreement of sale has a different meaning. The sales contract must be in writing.

Answer 7

Yes, even if the seller dies during escrow period, the buyer can force thr seller's estate to continue with the sale. However if the buyer dies during escroe, the contract is terminated.

Answer 8

It is failure of a party to perform a contractual promise. Occurrs when a party defaults under the terms of the ontract. If a party breaches a contract, the opposing party has a LEGAL remedy.

Answer 9

Buyer 1. Action for Damages: Winner of Civil Lawsuit Awarded Amt.is difference between contract and market value at time of breach plus incidental damages 2. Specific Performance: A court order requiring contract to be carried out according to its terms. Specific performance is specifically enforcing the contract as written. Specific performnce allows the buyer to force the seller to sell the property. This remedy is usually only available for the buyer and not the seller and only for breaching contract terms. Seller 1. Action for Damages 2. Retaining the Deposits as Liquidated Damages

Answer 10

A non-breaching party ALWAYS has the right, if he chooses. Even though entitled to an equitable remedy, he cannot seek both. A party cannot seek both asd the court wishes to make the non-breaching party whole, not more than whole.

Answer 11

A contingency is an allowable way for a party to terminate a contract without any penalty. During contract negotiations, one or both but usually the buyer has written into the contract that the finalized sale is conditioned upon certain criteria (such as prop. inspection or loan pproval) . If the conditions are not met during the negotiated time-frame, then the contract is void and buyer retains the deposit money.

Answer 12

Revocation is when an offeror wthdraws an offer, prior to acceptance. Once a contract is formed, it cannot be revoked.

Answer 13

Rescission is cancelling a contract, usually by mutual agreement, or byone of the partieshaving legally sufficient ground to cancel (rescind).

Answer 14

Under HAR's Purchase Contracttermination is used insteadof rescission.

Answer 15

1. By mutual agreement. 2. When 1 party defaults and doesn't meet a condition of the contract. 3. if the subject matter of the contract is destroyed or subject to eminent domain. 4. When a contract expire.

Answer 16

A condition to the contract when time is crucial. As used in HAR's Purchase Contract, if the parties do not close by the contract or extension date. A REAL ESTATE AGENT MUST ENSURE HIS CLIENT IS ALWAYS under a validand enforceable contract.

Answer 17

Ways in which a party can legally avoid an obligation to be contractually bound. 1. Statute of Limitations. In HI, allowable time to file a lawsuit is 6 years. 2. Mutual Mistake 3. Misrepresentation: untrue statement of fact or a false representation which is material to the contract. 4. Duress: an unlawful threat or coercion to induce another to act or not to act resulting from a person being in a position of power or authority over another. 5. Undue Influence 6. Fraud: An intentional misstatement of truth. 7. Incapacity 8. Legal Imposibility. when a contract cannot be enforced 9. Statute of Fraud (HRS656-1)

Answer 18

1. any contract involving the purchase of the property 2. Any contract that cannot be performed within a 1 year period. 3. A listing agreement. 4. A buyer representation agreement.

Answer 19

this includes agreements for sale of any interest in real property and other agreements pertaining to real property such as 1. leases for more than 1 year. 2. easements of more than 1 year. 3. fixtures 4. mortgages 5. agreements of sale

Answer 20

The licensee has to make sure the property management agreements and financial obligations regarding real estate transactions are in writing.

Answer 21

1. Bilateral contains mutual promises between parties or when both parties have an oblication to perform. 2. Unilateral Contract: A PROMISE is exchanged for _Performance,_ Performance constitutes acceptance of the contract. Once the act is completed the contract is formed. Usually occur a) . where there is an offer to the public i.e. reward offer. b) . where offeror clearly indicates completion of performance is the only manner of acceptance.( an option contract, right of first refusal or a bonus.

Answer 22

An agreement giving the optionee thepower to accept an offer for a limited time from the optionor.

Answer 23

Used in a market where property values are stable or slightly down. This is usually when supply is greater than deman (Buyer's market). In a seller's market, the seller ill not likely want to agree to an otion contract.

Answer 24

A right of a third party to have the first opportunity to purchaser real property when it becomes available. The holder of the right has the right to MATCH a buyer's accepted offer regarding the seller's property.

Answer 25

It is an ineffective contract.

Answer 26

A voidable contract is a Contract that is valid unless voided by one of the parties. That party must have the LEGAL RIGHT to be able to void the contract.

Answer 27

Hawaii Condo. Statute. (HRS514B). Law states that a sale is VOIDABLE by purchaser within 2 (two) years of the date of sale if false statements, representations or information regarding the project have been made by anyone involved in the sale and not revealing material facts

Answer 28

Hawaii Time Sharing Law. (HRS514E) The law states that every sale or transfer made in violation of the time Sharing law is voidable at the election of the purchaser

Answer 29

5. Unenforceable Contract: this contract is valid, but unenforceable due to a defense under the law such as violating the Statue of Fraud or Statute of Limitations. 6. Executory Contract: when one or both parties hasn't performed at time of contract info. i.e. signing a sales contract, the buyer does not receive title and the seller does not receive payment until closing. 7. Expressed Contract. is actual agreement of parties which "implies" a WRITTEN contract 8. Implied Contracr: inferred by conduct or verbal 9. Commercial Contract: Used for income producing properties. Many times to provide an overview ofthe purchase details in advance of a binding agreement, parties will execute a LETTER OF INTENT

Answer 30

Generally an agreement to agree. It resembles a written contract but usually not binding. Allows the seller to evaluate options before agreeing to the terms with a buyer and savess the parties the costs involved with negotiation and due diligence.

Answer 31

Parties are usually more business savvy. Negotiations and escrow period usually take longer.

Answer 32

1. Tenant List 2. Copies of Tenant's Leases 3. Estoppel certificates a signed statement certifying facts for the benefit of another party as of the date of the statement 4. Operating statements (income and expenses) 5. Service contracts

Answer 33

Listing agreements are WRITTEN employment agreements whereby the seller employs the brokerage firm (principal broker) to represent him. All listing agreements are bilateral contracts, except OPEN LISTINGS, since both parties are EXCHANGING PROMISE.S

Answer 34

Under the open listing, the seller PROMISES to pay a commission to whatever principal broker finds a buyer (whoever PERFORMS) If seller finds own buyer, no commission is necessary. Any brokerage firm can list the property. This listing is not found on MLS In Hawaii, except for commercial properties, open listings are seldom used.

Answer 35

1. Net Listing where seller sets a net price he wants after the commission is paid. Any amount above the price is the commission paid to seller's broker. A net listing may not be profitable to a real estate agent. The seller may counter the listing price with an amount marginally above net price which the seller wants. Net listings are usually used for most commercial property transactions.

Answer 36

An exclusive agency listing agreement gives exclusive rights to a brokerage firm to sell the seller's property. BUT the seller reserves the right to sell the properties themselves, without having to pay commission. Therefore the brokerage firm receives commission no matter who obtains the buyer , except if the seller, themselve, obtains the buyer.

Answer 37

Gives excusive right-to-sell listin to an exclusive right to a brokerage firm to sell a clients' property.. This allows the broker to receive commission even if the seller finds a buyer himself. This is the most common listing agreement used in Hawaii since the broker is guaranteed a commission when a buyer is obtained.

Answer 38

Exclusive Listings must have a definite termination date. This law applies to any Exclusive Listing, a one-time listing, exclusive right-to-sell listing, a net listing. This law does NOT APPLY to Open Listings.

Answer 39

It is a term used to indicate that a listing agreement is never advertisied or entered into MLS. Thus no agreement to work cooperatively with other brokers. Reasons for such listing: seller may not want others to know. Possible seller wants to discriminate. Pocket Listings more commonly used in commercial transactions since they do not have to use MLS

Answer 40

1. If parties agree to dual agency . Dual agency agreement must be signed by seller. 2. A Warranty that seller has authority to sell 3. the agreement that this contract is an exclusive right-to-sell. 4. The listing period 5. THE PROTECTION PERIOD: this protects agent beyond the listing expiration. if agent introduced buyer during the term of the listing. 6. List of Fixtures that are included, personal property is not. 7. Listing Price 8. Compensation to be paid to the brokerage 9. An agreement that escrow to be used. 10. Brokerage firm's obligations 11. Seller's representations 12. Seller's authorizations 13. Seller's authorization:about mortgage loan balance 14. Seller affirmations. The seller will not discriminate 15. the FIRPTA withholding requirements. 16. The HARPTA withholding requirements 17. Conflict in terms in the contract, thefollowing will prevail a). handwritten prevails over typed or printed. b). type prevails over printed and c) special terms prevail over standard terms 18. Indemnification to brokerage firm from seller if seller provides false information

Answer 41

In Exclusive right-to-sell listing there is no termination provision except the contract expiration date and either party being allowed to end the agreement upon required notice to the other party.

Answer 42

1. By fulfilling the agreement. 2. By mutual agreement between parties. 3. When either party defaults or doesn't meet the condition in the contract 4. When a contract cannot be fulfilled. This occurs if the property is destroyed or condemned or if the principal or agent dies or is incapacitated. 5. When listing property is foreclosed. 6. When listing property is subject to bankruptcy.

Answer 43

An assignment of right occurs when a party to a transction (assignor) GIVES All her rights and interests to a 3rd party. . Unless agreed otherwise, generally all contractual rights may beassigned (since courts favor assignments). An HAR Purchase Contract is silent regarding assignment; therefore both parties can assign, though the buyer is more likely to assign than seller. If a contract has a clause prohibiting assignment then assignment will not be allowed. Should assignee or assignor default then assignee is primarily liable and assignor is secondary liability though ultimates both have 100% liability. Only way for assignor to be released from contractual liability is if ALL partiies agree to a NOVATION.

Answer 44

It is a substitution of a new party for one of the original parties to a contract. The new party receives benefits and assumes the duties that had originally belonged to the discharged party. Therefore, a novation discharge the old contract and results in a new contract.

Answer 45

Elements for novation are: 1. a previous valid contract 2. an agreement among ALL parties including the new party to a new contract 3. An immediate release of contractual duties as between the original contracting parties 4. a valid and enforceable new contract

Answer 46

Yes. However, most contracts s will not allow for novation. If, HOWEVER, a FHA or VA loan is assumed, then a novation is required.

Answer 47

Note: Sales Contract or sales agreement is used universally for both Hawaii and General portions of the real estate examination. In Hawaii, remmber that HAR's Purchase Cpntract is more commonly used. Other States it is called Agreement of Sale

Answer 48

Agreement of Sale

Answer 49

1. Land Contract 2. Installment Sales Contract 3. Installment Sales Agreement Contract for Deed.

Answer 50

must identify the property with reasonable certainty

Answer 51

These forms provide document consistency within Hawaii's real restate industry.what are some of the forms? 1.Purchase Contract is a sales contract. Licensees should note that this is frequently updated and to make sure they are using the most currant form. 2. Residential Leasehold Property Addendum includes definitions of leasehold property and Hawaii leasehold disclosure requirements. Seller must deliver residential leashold property addendum WITHIN 10 CALENDAR days after acceptance of purchase contract. The buyer has A 10 CALENDAR DAYS from receiving the lease documents to review, rejet or accept.

Answer 52

1, The property could be in a SMA ( Special Management Area). 2. the boundary may change 3. property is subject to shoreline setback requirements 4. the seller or brokerage doesn't make any claim where the exact shoreline boundary is 5. the seller or agent doesn't make any representations about seawalls. 6. Only a state certified Shoreline Survey can determinethe exact square footage and 7. building permit may require a shoreline survey though they are valid for a limited time,.

Answer 53

States that the seller's brokerage agrees to split the commission for the stated amount withthe buyer's brokerage firm. Though this contract is typically in writing, it _is not required_ under the Statute of Fraud.

Answer 54

States that the seller transfers the property without any warrenties or representations expressed or implied. essentially means," what you see is what you get!" selling a property "as-is" reflects the principle 'CAVET EMPTOR" ( let the buyer beware). The seller is _not responsible_ 1. to make any repairs or upgrades to the property. 2. to make sure the structure complies with building codes, permitting regulation or laws 3. to disclose unknown latent defects such as mold growing inthe walls unknown to seller. The seller is required to 1. disclose material facts, to provide a termite inspection, staking or survey 2. Most residential transactions have an "as-is" addendum.

Answer 55

A distressed property is residential real property : 1. that is in foreclosure or mortgage loan is deliquent for more than 60 days 2. tha is liened because of nonpayment of taxes, assessments, association fees, or maintenance fees 3. that is at risk of being liened because of taxes, assessments, association fees, maintenance fees or are morer than 90 days delinquent 4. that secures a loan for which notice of default has been given 5. that secures a loan that's been accelerated.

Answer 56

A person who helps a seller mitigate or resolve a distressed property situation. This includes the consultant helping the seller to stop or postpone a foreclosure sale or the charging of the lien, a real estate licensee is EXEMPT from being a distressed property consultant as long as the licensee doesnt acquire an ownership interested in the distressed property, directly or indirectly , _within 365 days after termination or expiration_ of the listing agreement. If seller retains a consultant then additional requirements must be met as set forth in the Mortgage Rescue Fraud Prevention Act.

Answer 57

The Purchase contract must be amended to include: 1. the Distressed Property Addendum to the Exclusive-Right-To-Sell Listing Agreement 2. and the Distressed Property Addendum to the Purchase Contract

Answer 58

The purpose is to protect Hawaii Consumers from persons who prey on homeowners of distressed properties. These consumers are vulnerable since they face the possibility of a property forelosure. This Act compels a person who offers assistance to fully and completely disclose his services in a written contract. It also gives the homeowner the right to cancel at any time PRIOR to the consultant performung the services stipulated in the contract!

Answer 59

HRS 487A-1. a written residential lease for a property that is occupied for a period of 5 years or less with total rent to be paid during the lease is less than $25,000.00 ( $417.00 /mo) must be written in plain language. Plain language is language written in everyday terms (laymen's terms) Failure to abide by this law results in the consumer being acle to receive actual damages plus a $50.00 penalty. This law applies to personal property.

Answer 60

Escrow shall prorate the following, if applicable as of date of closing: real property tax, lease rents, interest on assumed obligations, mortgage, other insurance premiums, tenants rents, maintenance, private sewer, marina, association fees. and when applicable Escrow charge to Seller and credit to Buyer the amount of any tenant's security deposit.

Answer 61

1. 40% of the premium for standard coverage title insurance and additional costs for any extended coverage policy including lender's policy 2. Cost of drafting mortgage and note or agreement of sale 3. Costs of obtaining Buyer's consent 4. Buyer's notary fees 5. All recording fees except documents to clear Seller's Title 6. 50% of Escrow Fee 7. Condo and AOAO ownership transfer fees 8. FHA or VA discount points and any mortgage fees. 9. all fees and/or deposits for keys to property, if needed

Answer 62

1. 60% of premium for standard coverage title insurance 2. Cost of drafting conveyance documents and bill of sale 3. Cost of obtaining Seller's consents 4. 50% of Escrow Fees 5. Seller's Notary fees 6. Costs of required staking or survey 7. Recording fees to clear Seller's title 8. FHA or VA mandatory closing fees 9. Conveyance tax ( subject to F-7). 10. FIRPTA (Federal withholding tax)/ HARPTA (State witholding tax).

Answer 63

An assessment is any obligation levied vs. a property by a AOAO, governmental body, or any other entity with a legal right to assess.

Answer 64

Seller shall use reasonable efforts to cure. If Buyer elects not to accept Property with title defects, either Buyer or Seller can terminate the Purchase Contract

Answer 65

Seller must disclose within 10 days after acceptance date

Answer 66

by noon of the last business day prior to the recorded sale

Answer 67

15 days to examine either or both the disclosure statement and amendment and rescind Purchase Contract. Buyer must give Seller or Sellers agent written no tice of recisission and the termination provisions.

Answer 68

Buyer may elect to complete the Property Purchase. Buyer may rescind the Purchase Contract entitled to return of all deposits immediately If Seller fails to provide the required Disclosure Statement, Documents or Amended Disclosure Statement, Seller shall be liable to Buyer for amount of actual damages suffered

Answer 69

Conveyance, Mortgage and other RECORDABLE documents must be executed, acknowledged and delivered in original form and is not acceptable if signed electronically only.

Answer 70

passes to buyer upon closing or upon possession, whichever come first

Answer 71

It may or may not

Answer 72

Based upon the intended occupancy of the buyer and the sales price being sold

Answer 73

Terminate the contract by providing written termination notice within the time period specified in the H4 of the contract

Answer 74

You can terminate the contract under O-3, termination after specified contingency/condition time period.

Answer 75

An agreement between parties to a real estate transaction and a neutral 3rd party known as an escrow agent. Escrow cannot advance the interest of one party over another. An escrow company is not a title company

Answer 76

Prior to closing, an escrow agent must collect the remaining funds due from the purchaser before disbursements to parties therefore Require funds be provided via a Hawaii's bank cashier's check or certified check at least 2 business days prior to recording. If electronic funds are used, they must be available by noon of the business day prior to recordation

Answer 77

Usually the buyer and seller each pay 50% of escrow fees, unless negotiated otherwise.

Answer 78

For a residential property Seller, it is mandatory to include a disclosurestatement within 10 calendar days after acceptance of the sales contract. A different-time-frame may be negotiated in the agreement.

Answer 79

1) . 1-4 family dwelling unit 2) a residential condo or coop used primarily as a residence

Answer 80

1. vacant property 2. a 5 or more family dwelling 3. Commercial Property 4. Industrial Property

Answer 81

1. Notice to buyer that buyer may obtain professional advice and inspections 2. Notice to the buyer that representations are that of the seller and not the seller's agent unless shown as being disclosed by the seller's agent 3. Notice of the buyer's right to rescind

Answer 82

The disclosures must be a written statement prepared by the seller disclosing all MATERIAL FACTS ( any fact,past or present that measureable affects the properties' value) relating to the residential property being offered for sale that: 1. the seller knows about even if latent (hidden) 2. are visible 3. are required by law to be disclosed

Answer 83

1. In Hawaii, AIDS is not a material fact 2. The seller des not have to disclose an _unknown latent defect_ _3._ Seller does not have to disclose if property was the site of an act or occurrance that had no effect to the physical structure, physical environment or improvements. I.E. murder, suicide, ghosts and most criminal acts 4. Seller is not required to provide condo docs until 10 calendar days after seller and buyer receive the current title report

Answer 84

Seller must sign and date a disclosure statement within 6 months before or 10 calendar days after acceptance of a real property sales contract. Upon receipt , the BUYER has 15 calendar days to examine and if desired, can choose to rescind The BUYER is required to acknowledge to the seller in writing receipt of the statement.the contract

Answer 85

If later discovered informtion is contradictory to the disclosed info such that value of property is substantially and adversely affected, the BUYer can choose within that 15 calendar days to rescind the sales contract upon 1. the discovery of the inaccuracy or 2. receipt of the amended disclosure statement correcting the inaccuracy.

Answer 86

The seller must provide to the buyer an amended disclosure statement within 10 calendar days after discovery of the neglected fact and in any event , it must be no later that noon of the last businesd day prior to recording. The BUYER then has 15 calendar days to examine the disclosure statement ,and if the buyer is not aware of the new info then the buyer can rescind the contract within that 15 day period.

Answer 87

Buyer/Owner can only sue for monetary damages.

Answer 88

Appraisal is an estimation of value based on the property inspection date., performed by a qualified appraiser. The appraiser charges a fee for the service

Answer 89

A competitive market analysis takes into consideration the number of competing homes on the market. This method showcases the competition and may include homes a buyer will most likely view along with the subject property.

Answer 90

Broker Price Opinion (BPO) or a Comparative Market Analysis (CMA).. The BPO provides an opinion of actual value and the CMA provides a range of values.

Answer 91

The loan is based on the sales price or the appraisal, whichever is less. If the appraisal is below the sales price, the buyer must pay the difference between the sales and the appraisal value by closing date.

Answer 92

Appraisal is owned by client who ordered it which is most likely the lender but whoever pays for the appraisal must be given a copy.

Answer 93

Tax Map Key identifies a specific piece of real property in Hawaii

Answer 94

Dizzy Scott Plays Poker Division, Zone, Section, Plat, Parcel (CPR)

Answer 95

1-Oahu 2-Maui 3-Hawaii 4-Kauai

Answer 96

A Mutual Promise between parties in exchange for another promise Promise to Promise When both parties have an obligation to perform Perform to Perform

Answer 97

A promise is exchange for performance. Performance constitutes acceptance. Examples. an option contract, rightof first refusal or a bonus Irrevocable offer.

Answer 98

is usually equivalent to sales price. It is the highest price a ready, willing and able buyer will be pay for a property from a ready willing and able seller.

Answer 99

Is the value determined for real property taxing purpose. Is used for generating revenue, i.e. taxes In Hawaii, it is based on 100% of the market value.

Answer 100

The value used for accounting purposes and is: 1-original cost of structure 2-minus(-) the depreciation of the structure (27.5 for residential and 39 years for non-residential) 3- plus (+)the value of any improvements and 4- plus (+) the value of the land to the value depreciated structure together with improvements.

Answer 101

Insurance Value determines the amount of coverage needed for improvements. Land cannot be depreciated. The cost method is used to value improvements.

Answer 102

Mortgage loan value is the value of the loan compared to the property value.

Answer 103

The leased fee value is the fee simple interest encumbered by a lease. This is the lessor's interest.

Answer 104

Is the interest held by the tenant. The lessees interest. Together the leased fee and lease hold value will equal the fee simple value of the property.

Answer 105

1. surrounding properties convenience to public transportation and amenities the living costs such as taxes, maintenance fees governmental considerations such as zoning, permiting 5. the area in general

Answer 106

REGARDING APPRAISING PROPERTY,THE APPRAISER CONSIDERS STUD S- Scarcity T-Transferability U-Utility D-Demand

Answer 107

1. Principal of Best and Highest Use 2. Principle of Contribution 3. Principle of Substitution 4-Principle of Change 5- Principle of Competition 6- Principle of Conformity 7-Principles of Progression and Regression 8- Principle of Supply and Demand 9- Principle of Anticipation 10- Principle of Increasing and Decreasing Returns

Answer 108

It is the main principle of Appraising. Valued according to the use of the property which produces the highest value for the land. considers uses which are legally permissable, physically possible and financially feasible.

Answer 109

This is the value of a component of property upon its "contribution to the value of the whole property."

Answer 110

When valuing a residential propertyunder market sales method (CMA)

Answer 111

This principle of change considers that nothing is constant . Change can affect property value

Answer 112

Principle of competition is when there is strong demand for real estate, leading to increased competition as well as increased prices.

Answer 113

This principle applies to similar properties of a given market. These similaritid can nclude, type, size, style, age, quality. Conformity maximizes value.

Answer 114

Principal dictates when the demand is greater than supply, the price of house and rent s increase. when the supply is grester than demand, the price of housesand rents decreases. This shows tht supply and demand are inverselyproportional.

Answer 115

It is similar to conformity. Principle of Regression when a high-valued property tend to suffer in close proximity to lower valued houses The principle of Progression is when a lower valued property is in close proximity to higher priced houses.

Answer 116

This principle relies on rumor or something POSSIBLY happening which will cause the houses to increase or decrease in value.

Answer 117

There is a tipping poit where no matter the cost spent for improving a property, the value of the property will remain the same.

Answer 118

Depreciation is loss in value of improvements due to : 1). Deterioration 2- Functional Obsolescences 3- Economic Obsolescence

Answer 119

Is physicl wear and ter.

Answer 120

Outdated Loss of value to reduced desirability --basically old-fashioned. This depreciation is CURABLE.

Answer 121

It can be External or Environmental . Loss of value from causes outside the property itself. This depreciation is INCURABLE since property owner has no control over outside influences such as change in zoningchange in public transportation deterioration of the neighborhood or proximity to airportsor heavy traffic.

Answer 122

The following are appraisal approaches 1. Market Sales Approach (Market Data or Market Comparstison Approach) 2. The Cost Approach 3- The Income Approach via Capitalization and Gross Rent Multiplier

Answer 123

Used to appraise residential property . Most common appraisal approach. Subject Property and Comparable Properties

Answer 124

In Comparing the subject properties to like comparative properties , the math is done as CIA &/OR CBS

Answer 125

C-comparable I-Inferior A-add

Answer 126

C- comparable B- Better S-subtract

Answer 127

based on the cost of construction. ANSI measurement standards single family homes it is the outside measurements condos it is the inside measurements Reproduce or Replace This approach is NOT used for resale properties

Answer 128

1- new construction 2- replacement cost i.e. for insurance 3- Reproduction Cost 4- Unique Properties such as hospitals, libraries, schools

Answer 129

There are 2 approaches to value income producing property: 1- Capitalization 2- Gross Rent Multiplier

Answer 130

Most widely used for valuing income-producing property. Computes the present value of income extended over a period of time. The real property is valued by determining the net income that can be produced by that property over its economic life.

Answer 131

it is the remaining useful life. Economic life is the remaining period which real estate improvements are expected to _generate more income than operating expense_s.

Answer 132

aka Cap Rate It is the interest used to calculate the presentvalue of future periodic payments. It measures how quickly an investment will pay for itself based on the income it produces.

Answer 133

Income generated from the operations of abusiness reduced by operating expenses.

Answer 134

Capitalization Rate = _NET OPERATING INCOME_ _divided by_ _SALES PRICE (Value)_ __

Answer 135

Apartments, Office Buildings, hotels, Shopping Centers. This approach takes into account expenses, unlike the Gross Rent Multiplier therefore this approach is more accurate.

Answer 136

The GRM is a rough estimate of the value of residential (1-4 family) rental property. The rent is gross therefore expenses, vacancy rates and depreciation are not taken into consideration.

Answer 137

Gross (Rent) Multiplier = _Sales Price Value ( of comparable properties)_ _divided by_ _Gross Annual Rent. (Anticipated)_ _Value= Gross Annual Rent x GRM_

Answer 138

GIM is used for multifamily, commercial or industrial properties. It is based on gross annual income and can include income from other sources than rent.

Answer 139

Gross Rent Multiplier Cost Approach Market Approach

Answer 140

Capitalization Rate

Answer 141

Net Operting Income = Sales Price (Value) x times Capitalization Rate

Answer 142

Sales Price (Value = _Net Operating Income_ _divided by_ _Capitalization Rate_

Answer 143

Capitalization Rate= _Net Operating Income_ _divided by_ _Sales Price (value)_

Answer 144

_DIM_ SUM 1- D-depreciation 2- I- Income Taxes 3- M-Mortgage loan payments (principle and interest)

Answer 145

1-realproperty tax 2- insurance 3- fixed expenses 4-advertising 5. maintenance fees 6. utilities 7. landscaping fees 8- operating expenses 9-reserves for replacement

Answer 146

1- separate the value of land from improvements since land cannot depreciate 2- estimate cost of reproducing or replacing 3-estimate all forms of depreciation such as deterioration, functional or economic obsolescence 4- add land value to depreciated cost Comps are used for valuing land itself. That value is added to the value of the cost of construction

Answer 147

A promissary note and Mortgage They go hand in hand

Answer 148

It is a legal instrument in which borrower promises to pay debt over a specified amount of time, usually with interest. This is a "promise to pay" which by itself is an unsecured instrument like an IOU. It is used for any kind of financing including personal property andpersonal debt. It is typically NOT RECORDED.

Answer 149

It is a legal instrument whereby the mortgagor (borrower) pledges her real property to the mortgagee (lender) as security for a loan. This is known as hypothecating. The mortgage secures the debt in case the borrower defaults under terms of the promissary note. It allows the Mortgagee the right TO FORECLOSE vs. the mortgagor's property. Mortgages do NOT have to be recorded to be enforceable. BUT if it is NOT recorded, it can lose its priority to a subsequent mortgagee who records its interest.

Answer 150

It is the Loan To Value ratio. (LTV) The % loaned is compared to the value of the property.

Answer 151

It is the differene between the sales price and loan amount. It is due at closing.

Answer 152

Mortgager charges borrower A PRIVATE MORTGAGE INSURANCE, for the FIRST mortgage loan since these borrowers are considered higher risk.

Answer 153

Considers a borrower's monthly debt payment divided by th gross monthly income Generally a lender will not lend morr than 43% debt to income ratio.

Answer 154

Lien Theory Title Theory Intermediate Theory Each State follows at least one of these theories.

Answer 155

Hawaii is a lien theory State. A lien theory state means the mortgagee holds only a secured interest; therefore the mortgagor is the legal owner of the land. 26 States use this theory. 15 of the 26 use both mortgages or deed of trust.?? If the property is foreclosed, The mortgagee may _not_ take possession before foreclosure. _Lenders must go through the process of foreclosure._

Answer 156

A trustee holds legal title until the loan has been satisfied or foreclosed. In this title theory state lenders may _possess the property upon default of the borrower._ The instrument is a deed of trust or a trust deed. the parties: 1-trustee (neutral 3rd party) holds _Legal Title._ 2- trustor (borrower) holds _Equitable title._ 3- The beneficiary (lender) benefits since lender can foreclose its interest upon default by trustor.

Answer 157

It is an INSTRUMENT used in title theory states in place of a mortgage. It is a _financing instrument that pledges real property as SECURITY for debt._

Answer 158

This is in the title theory state of financing. It is when the legal title is held by the trustee and snce the trustee has no rights rights to title.it is _a legal interest only._

Answer 159

It is in the deed of trust allowing the trustee to sell the property.

Answer 160

In the Mortgage , it is the "due on sale clause "allowing the lender to demand full payment of the loan, if mortgagor transfers any interest in real property without the mortgagees consent. Most conventional loans are designed to: 1-protect lender from sale of mortgagor to person who is a poor credit risk or to a person 2- allows lender to raise interest rate or charge an assumption fee when the property is sold to buyer who assumes mortgage

Answer 161

1- when the loan is paid in full. Trustee (usually at expense of buyer) conveys property back to buyerr and releases the deed of trust from record. 2- the loan goes into default. , The trustee arranges to have the property foreclosed upon by private auctioneer (or sherriff in some parts of the country at the courthouse steps).

Answer 162

This theory is adopted by a few states such as Illinois. This mortgage theory is based on the principles of title theory but requires the mortgagee to foreclose to obtain legal title.

Answer 163

Amortization is paying off a debt through installments over a specified period of time. Amortization payment describes fixed principal and interest of the mortgage loan payments (usually monthly) . As the payments are made, the principal is reduced until loan is paid in full.

Answer 164

It transfers a mortgage loan from one mortgagee to another. Purchasing mortgage loans occur in the secndary market. This is a bank to bank transfer. It is the respondsibility of the assignee to notify the borrower. No changes are made to the mortgage. From the borrower's pov the only change is to whom the ayment is made.

Answer 165

It is a payment that is _greater_ than **_p_**receding installment payments_,_ creating a balloon for that payment, usally the final payment. Example is an interest only loan. IF A TEST QUESTION ASKS to calculate the balloon payment for an interest only loan, just calculate the loan amount is the balloon payment.

Answer 166

1% of the loan amount. Points are one time charge paid bybuyer to lender or mortgage broker at the time of closing. Point are interest paid upfront to increase lender's yield. It is a form of prepaid interest and tax deductible. Points are negotiable. ruleof thumb: if borrower is intends to refinance or sell property in 10 years, consider paying minimal points and pay higher interest rate. if borrower is intends to live on property longer than 10 years, pay more points upfront to lower interest rate.

Answer 167

Both are points.

Answer 168

It is a signed statement certifying facts for the benefit of another party as of the date of the statement. It isused in certain situations: 1- when a mortgagee purchases a mortgage in a seondary market, the assignee may require an estoppel certificate from the mortgagor. This statement will certify the mount of the loan and the rate of interest as of the date of the signing. 2- when a buyer intends to purchase an income producing property, the buyer or the buyer's lender may require estoppel certificates from tenants. The certificate will affirm the conditin of lease and any other agreements between landlord and tenant.

Answer 169

a US government agency whose mission is to maintain the stability of and public confidence in theUSBanking System. FDIC insures cash deposits that have been placed in member institutions that capsat $250,000

Answer 170

The FED was created 1913. Central banking sys of US. It is quasi-public banking system, having both public and private components.

Answer 171

An impound account us an account established by a mortgagee to pay a borrower's property tax snd insurance cost.

Answer 172

A financial institution whose loans are reglated by law to limit risk. Commercia banks and insurance companies are institutional lenders.

Answer 173

A mortgage that issubordinate to another mortgage. It was recorded after the first mortgage.

Answer 174

it is an amount a lender charges a borrower if all or a portion of the required payment is not paid within the specified amount of time.

Answer 175

A person who meets with a prospective borrower and collects information regarding brrower's assets,liabilities and income and savingd history so different loan products are discussed and a determination is made as to the type of loan.

Answer 176

A company or individual that originates mort. loans, sells themto other investors,services the monthly payments, keep related records, and acts as an escrow agent to dispurse insurance and tax funds. _Advantages:_ 1) requirements are well-established. 2) Has direct access to bank's underwriters Good for _Borderline borrowers_

Answer 177

A Person or Company who acts as a go between for a lender and borrower by originating the loan by taking application, qualifying thr borrowerand matching the borrower with an appropriate loan product offered by numerous lenders . Paid by Commission (loan origination fee) but does not continue to service the loan. Advantage:borrowe working with broker has a large selection of loan products. Disadvantage May take longer for approval because he has different loan investors, the specific requirements differe.

Answer 178

It is the fee paid by a mortgagor to obtain mortgage insurance on a loan. This insurance protects the lender in event borrowe dies or becomes disabled. The fee is paid as a lump sum at closing or periodially or both. A borrower can receive for conventional and non conventional mortgage loans FHA loans reuire borrower to pay a mortgage insurance premium for whom the premium is tax deductible.

Answer 179

This is restoring a loan after the lender accelerates the loan, usually immediate before foreclosure. To restore the mortgage loan, borrower must bring loan current including fees and other charges. Once received lender will bring the loan back to active status.

Answer 180

Substitution of a new party for one of the original parties to a contract. Original party released from obligation and liabilities and the new party takeds on. All parties have to agree to the novation. This results in a new contract. All FHAand Veteran's Loans .

Answer 181

underwriting fee, administrative fee or processing fee Is the fee lnders or mortgage brokers charge to put together a loan documentation. Fees can be fixed or charged as points.

Answer 182

This occurs when a lender has actually approved the borrowe for a certin loan amount pending an appraisal value covering the sales price of the subject propery.

Answer 183

aka Reserves or Impounds the Amounts required by a lender, at closing, to be deposited into an escrow account or trust account, principally current and future payments of: 1- hazard insurance 2- real property taxes 3- PMI 4- interest that will accrue from closing date to end of the month.

Answer 184

It is the initial step in determining loan qualification. After a loanofficer consider's borrowers income, assets and credit history to see if applicant qualifies for the next step---preapproval.

Answer 185

The primary market consists of lenders who provide financing for the purchase of a home.

Answer 186

**P**rincipal, **I**nterest, **T**axes **, I**nsurance is made in a single monthly payment. The borrower will pay an amortized payment : of principal, interest, real property tax and a. monthy homeowner's and PMI payment. This single monthly payment assures the lender that the borrower is current with taxes and insurance.

Answer 187

aka PMI This is charged if the LTV ratio is above 80% of the appraised value at closing. It is provided by a commercial insurer and not a gov. agency.

Answer 188

Allows PMI to be canceled when the owed amount reaches a certain level. IE. when debt is less than 80% of home's value and automatically cancels when loan principle is less than 78% of its original cost. This fee is tax deductible.

Answer 189

it is receiving a new nortgage loan to replace the original. Usually done to obtain a better interest rate term and rate. The first loan is paid off from the proceeds of the second loan.

Answer 190

It is an alternative financing device. Instead of obtaining a mortgage loan, the owner of the property sells the property, receives cash proceeds and simultaneously enters into a lease with the buyer of the property. Advantages: Seller receives cash from purchase price. The seller can deduct the lease rent as a business expense rather than deducting only the interest portion of a mortgage loan payment. The seller can depreciate improvements over a potentilly long depreciation period. For the buyer receives rental inome and can take the depreciation deduction. Disadvantages: Seller loses property. At the end of the lease term, the seller may have to leave the property. Buyer becomes liable for any hazardous materials produced or deposited on the property by the seller lessee.

Answer 191

or Release of Mortgage It is a document signed by lender acknowledging a mortgage loan has been fully paid. The lender provides the releaseto mortgagor but it is the mortgagor's responsibility to record the release at the Bureau of Conveyances.

Answer 192

This is whereexisting mortgage loans are bought sold or traded between mortgage originators and investors; It is a bank to bank transaction. The loans are repackaged into mortgage backed securities and sold to investors. This allows the original lender to buildliquidity to support additional funding.

Answer 193

Fannie Mae Freddie Mac Ginnie Mae

Answer 194

Federal Home Loan Mortgage Corp. General Oversight by HUD Once a private crporation, though it acted in a quasi-publiccapacity making rules and regulations for the secondary mortgage market. Freddie Mac purchases both conventional and non-conventional loans.

Answer 195

Under HUD it is a quasi-public capacity making rules and regulations for the secondary mortgage market. When they ran into problems in 2008, government assistance stepped in. They compete with Freddie Mac . The purchase both conventional and unon-conventional loans.

Answer 196

Government NationalMortgage Association. It is a division of HUD Its major role is providing a guarantee and payment to purchases of securities that are backed by the government.`

Answer 197

It has priority over another mortgage. Happens because the mortgage recorded prior to another mortgage (firt in time, first in line) or a mortgagee that previously recorded it mortgage agreed to subordinate its interest. A senior mortgage ranks ahead of another mortgage in terms of rights in the security.

Answer 198

The sales price is insufficient to pay the total cost of all the liens together with the costs of a sale. The seller is either unwilling orunable to pay . Therefore, the lender agrees to reduce the loan amount. This reduction allows the seller to pau all sales cost so property can be closed. It can result to a personal obligation by the seller for the mount forgivien.

Answer 199

It is an interest-only mortgage loan (in contrast to an amortized mortgage loan.)

Answer 200

Is charging of an illegal interest rate. The Office of Consumer Protection generally investigates. Ususry laws can be complicated as it differ depending on: 1- type of loan 2- type of transaction and 3- where the jurisdiction lies.

Answer 201

12% regarding purchasing residential real property?

Answer 202

1- purchase money mortgage: first mort. loans; seller financing 2- graduated payment mortgage loans 3- reverse annuity mortgage loans 4- agreements of sale 5- transactions for the sale of goods where seller is in the business of selling goods 6- Employes' Retirement System (ERS) loans 7- indebtedness secured by time shares

Answer 203

in a mortgage or promissary note makes it due and payable immediately if the borrower defaults

Answer 204

This clause assures that title revests to the borrower when the debt is paid. This is common to the title theory states.

Answer 205

This allows the lender to demand full payment of the loan if the mortgagor transfers any interestin the real property without the mortgagee's consent. This clause is designed to 1- protect the lender from sale by mortgagor to a person with bad credit or 2- allow lender to raise interest rate or charge an "assumption fee" when propertyis sold to a buyer who assumes an existing loan.

Answer 206

It is a provision in the loan agreement that permits lender to raise the interet rate. An adjustable rate mortgage loan has an escalation clause.

Answer 207

It states that theborrower cannot repay aa loan prior to a speified date. Whereas a "lock in" rate is an interest committment made by a lender on a mortgage pending mortgage loan approval.

Answer 208

This clause allows lender to charge a fee if borrower pays off mortgage loan amount early . This allows lenders to ensure they get a certain return on their investment.

Answer 209

allows a lender to voluntarily permit a prior or subsequent mortgage o take priority over the lender's otherwise superior mortgage. 3 common situations 1- in refinancing a jr. mortgage may subordinate its lien enabling the first mortgagee to retain priority 2- in a leashold property a lessee wants to construct a development on the property. The fee owner may be willing to subordinate this interest as the lessor will be able to charge higher rent and the development increases the property value. 3- a senior mortgage may subordinate its lien to allow a construction loan

Answer 210

This mortgage loan has an escalation clause which links the interest rate to an economic index. The interest rate adjusts periodically as the index changes.

Answer 211

the considertions whether an ARM loan fits your needs, the followng should be onsidered: 1- how long does one intend on owning the house. if short term, go for lower interest rates but if long term, consider fixed rate to avoid interest rate increase 2- Does the person expect her income to increase? If it does, the increase can cover the higher payments should interest rates increase! Some ARMS can be converted to fixed rate mortgage loan. The conversion fee, however, cn be too high to make up the savings of having an initial lower interest rate.

Answer 212

It allows borrwer to pay what he wants to repay. If the borrower's payment isn't enough to cover the interest, the result is negative amortization.

Answer 213

It is a mortgage loan consisting of self-liquidating payments.

Answer 214

(Monthly principal and interest mortgage loan payments); An _amortization rate must be given._ The rate is based on "per one0thousand" of the loan amount. The loan amount is divided by 1,000 and that number is multiplied by the amortization rate.

Answer 215

It is secured by 2 or more parcels of real property. This kind of loan is used frequently by developers who buy a whole tract of land and subdivides it into lots. The loan covers the whole tract but contains a partial release clause that allows the developer to sell individual lots over time without retiring the entire mortgage.

Answer 216

The purpose is to receive short-term financing until more permanent financing is obtained. Commonly used when a purchaser has not sold her exisiting loan before she closes on her new home.

Answer 217

It is a fixed loan. Neither the mortgaged real property nor the amount borrowed may be altered during its term.

Answer 218

A residential mortgage loan that meets Fannie Mae or Freddie Mac Standards. They may be retained by originator or sold in the secondary mortgage market. It carries lower interest rates andmore favorable terms than a nonconforming mortgage loan. The maximum loan limit for single family homes is revised annually according to year-to-year changes in average purchase prices.

Answer 219

A single mortgage loan given to replace or to combine several outstanding mortgages.

Answer 220

A short term financing of real estate construction. Generally funds are distributed on a percentage-completed basis according to the borrower's agreement with his builder. This is a "draw". The loan is usually followed by long term fnancing called a "take out" loan or "permanent" loan upon completions of improvements.

Answer 221

It is a nongovernmental backed loan. The loan is conventional as the lender looks only to the credit of the borrower and the security of the property. This is typically considered a fixed rate, fixed term mortgage loan.

Answer 222

A conventional mortgage loan other than one guaranteed by the Veteran's Administration (VA) or Insured by the Federal Housing Administration (FHA) or other such governmental agency.

Answer 223

Itis an unsecured instrument, not secured by a mortgage orlien (an unsecured promissary note), The opposite of a debenture is a non-recourse loan.

Answer 224

Specifies an interest rate that remains fixed for the life of the mortgage regardless of market conditions.

Answer 225

Itis fixed with low payments in the early years and higher payments later on. This loan is designed to meet the financing needs of young homeowners with growing income or savvy business investors. It nvolves _Negative Amortization_ which occurrs when the loan principal increases, rather than decreases after loan payments are paid. The loan payments do not cover the interest so the unpaid interest is added to the outstanding loan balance, increasing the principal balance. Most GPMs usually charge a higher rate than a conventional loan because part of interest due is deferred until later years. Possibly problematic in a delining market as there may not be enough equity in the property.

Answer 226

A growing equity mortgage loan is fully amortized over a significantly shorter term than 30 years. Thesr payments typically increase each year.

Answer 227

It is a loan from a private investor. It is usually at less than 70% or less loan-to-vlue which is considered low. Many times, this loan is considered as an alternative to foreclosure and is knowas a "last resort" loan.

Answer 228

A jumbo loan exceeds the Fannie Mae and Freddie Mac conforming limit.

Answer 229

It is a Government backed loan. IE. FHA and VA are non conventional loans.

Answer 230

A nonconforming loan is a residential mortgage loan not meeting the standards or is to large to be purchased by Freddie Mac or Fannie Mae in the secondary market. The interest rate is higher than for a conforming loan. Only private lenders can purchase loansthat exceed the allowable amount.

Answer 231

Is secured by real property for which the borrower has no personal liability. If a borrower defaults, the lender's only remedy is seizing collateral. This loan usually involves a low LTV (50-60%). Residential real estate aregenerally recourse loans. It is more common for commercial real estate loans to be non-recourse.

Answer 232

This permits the morgagor to boreow additional money under thr same mortgage loan. Usually this loan involves certain conditions, such as making sure the assets of the mortgage are sufficient to cover the loan amount. IE. Home Equity Line Of Credit (HELOC)

Answer 233

A loan secured by both real property and personal property.

Answer 234

High quality loans that meet the standards set by Freddie Mac and Fannie Mae and are eligiblefor purchase in the secondary mortgage market. Prime Mortgage Loans have low default risk and are made to borrowers with good credit records and a substantial monthly income.

Answer 235

A PMM loan is used to purchase real property secured by mortgaging that property. When the property to be purchased is used as collateral for a loan. 1. First mortgage loans 2) seller financing ( a mortgage given to seller of the property in exchange for providing financing for part or all of the purchase price.

Answer 236

A PMM applies to both first mortgage loans and seller financing butHAR form only applies to seller financing.

Answer 237

It is when loa proceeds are disbursed periodicallyover a long time period to provide regular income for the borrower-mortgagor. Where lender pays the borrower. Usually for elderly person whois "house rich and cash poor". The loan is repaid by 1. mortgagor dies 2- mortgagor no longer occupies the property 3- property is sold. This loan is a nonrecourse loan.

Answer 238

The lender agrees as part of the loan to accept some or all of the payment in the form of a share of the increase in value (the appreciation) of the property. In exchange for a share of theappreciated value, the interest rate is lower than prevailing market rate. The share of the appreciated value is determined and due at the sale of the property or at termination of the mortgage loan.

Answer 239

It' a home loan in which an investor is granted a share of the equity in the property. This allow the investor to participate in the proceeds from resale.

Answer 240

With a shared appreciated mortgage loan, if the property's value decreases, the borrower still owes whatever principal is outstanding. with a shared equity mortgage loan, if the borrower sells the property for a loss, the investor receives nothing.

Answer 241

It has 2 definitions: 1- defined as an interest-only loan on a set term, whereby the borrower pays only interest on the principal balance, with the principale balance due after 1 or more years thus creating a balloon payment. 2- Defined as a loan for a specific time-frame having a maturity for more than 1 year. This loan comess due on. given date, often before periodic payments pay in full.

Answer 242

Itis a long term mortgage loan permitting the lender to adjust the loan interest rate up or down in response to changes in the money market rates and conditions of demand for mortgage loans.

Answer 243

It is a second mortgage that exists in addition to the first mortgage loan. This type of financing is used when thefirst loan has low interest rates. The second lender assumes the first loan and adds additional monies. The borrower makes one payment to the second lender for both loans at an intermediate rate. Since most conventional loans have an alienation clause (due on sale) , these loans are not common.

Answer 244

1- Purchase Money Mortgage Loan 2- Agreement of Sale 3- Assumption of Mortgage Loan 4- Subject to a Mortgage Loan

Answer 245

On the mainland this is called: a land contract; installment sales agreement; installment sales contract; contract for deed. It is a financing device and an _executory contract to sell a property._ Legal title is is held by the seller until the agreement of sale is paid in full while the buyer purchases real property. The buyer hass all therights and interests in the property, therefore he has _equitable title_. There are 2 closings. 1- the typical cost of conveyance are paid and equitable title passes to the borrower (vendee) 2- theagreement of sale is paid off and legal title passes to vendee.

Answer 246

The buyer takes over the mortgage loan from the seller (mortgagor) and the buyer pays the mortgagee directly. Should the buyer default, the buyerhas 100% personal liability (primary) and the mortgagor also has 100% liability (secondary.

Answer 247

In an assumption of mortgage loan, itis a document from the mortgagee acknowledging the sum due on the mortgage loan. Only non-conventional loans, usually FHAandVA loans, allow an assumption and only with a novation (trade out).

Answer 248

When a buyer purchases a property "subject to" a mortgage loan, the _buyer is not taking on any personal liability._ If a default occurrs the mortgagee's only recourse is against the mortgagor, not the buyer

Answer 249

1- Federal Housing Administration. (FHA) 2- Veterans Administration (VA)

Answer 250

1- Employees Retirement Systems (ERS) Loan Progrm 2- Hula Mae Loans

Answer 251

Created in 34after the Great Depression. In 1965 it became part of the Dept. of Housing ad Urban Development's office of Housing. The FHA assists _owner-occupied residential buyers_ who might not be able to meetthe down paymentrequirements for conventional loans. The FHA provides mortgage insurance to private lenders. An applicant who has satisfactory credit, enough cash to close the loan and sufficientsteady income to make monthly mortgage loan payments may be apprved by te FHA

Answer 252

1- The FHA _INSURES_ the loan. ( the largest insurer of home mortgage loans in the world) in whole or part against default by a borrower. The insurance premium is paid by the borrower. 2- FHA requiresa minimum down payment of 3.5%for a loan. 3- There are no income limitd but there are loan limits. 4-There is no prepayment penalty. 5- A FHAloan may be assumable by a qualified owner-occupant. If there is an assumption, the lender will issure a reduction certificate signed by a lender stating the outstandingamount on the loan mortgage. 6. There is possible lenience by the FHA during financially difficult times. 7- There is funding for purchasing an existing home, home improvement, refinancing, and reverse mortgage loans. 8- Active duty militar may qualify for reduced interest rates. 9- An FHA loan has a low mortgage loan interest rate. 10- The FHA loan can include closing costs. 11- The FA does not allow lender's to charge more than 1% for origination fees. 12-_The FHA does not make direct loans. The lenders loan the money and th_e _FHA insures the loan._

Answer 253

In 1944, Congress passed an act allowing veterans to qualifyforloans which are **_quaranteed**_ by the _**government_** subject to maximum income limitations. A guaranty is the amount the VA must pay a lender in the event of loss due to foreclosure. To be eligible the applicant must receive a **_certificate of eligibility_** by the VA. It is reusable depending on the circumstances. The VA may allow a veteran or nonveteran to assume a VA loan. If a veteran assumes the loan, then the original veteran's eligibility can be restored if the assuming veteran is willing to substitute his availible eligibility for that of the original veteran. If not then the original veteran cannot have eligibility restored until the assuming loan is paid off. The maximum loan amount depends on 1). the reasonable value of the property indicated on the Notice of Value (NOV) and cannot exceed the limit and 2) lender's needs in terms of secondary market requirements. Interest rates and points negotiated between lender and veteran. The vender and seller may negotiate for the seller topay all or some of the points. The points cannot be financed in the loan. The veteran must pay a funding fee to help defray costs of the VA home loan program. The funding fee may be financed in the home loan. Closing costs are payable by the veteran and are limited to a specific list of items plus a one percent flat charge by the lender. Closing costs cannot be financed in the loan except in certain refinancing circumstances.

Answer 254

1- To purchase or construct a resident including a condo or coop to be owned and occupied by the veteran as a home. 2- To refinance an existing mortgage loan. 3- Ro repair, alter or improve a residence owned and occupied as a home by the veteran. 5- To simultaneously purchase and improve a home. 6-To improve a residence-owned and occupied by the veteran's home through installation of a solar heating or cooling or a combined heating and cooling solar system. 7. To purhase a one family residential unit ia condo housing development approved by the VA

Answer 255

No downpayment is required unless the purchase price exceeds the reasonable value of the property or the loan is a GPM loan. The lender may require a down payment necessary to meet secondary market requirements.

Answer 256

Through a funding fee at loan closing. The veteran can pay a maximum of 1- reasonable and customary amounts for any or all of the "Itemized Fees and Charges" deisngated by the VA plus 2- a 1 % flat fcharge by the lender plus Reasonable Discount Points

Answer 257

The lender must cover any cost of these items out of its flat fee: 1- lender's appraisals 2- lender's inspections except construction loan cases 3- loan closing or settlement fees 3- document prep fees 4- preparing loan papers or conveyance fees -attorney's services other than title work 5- photos 6- interest rate lock-in fees 7- postage and other mailing charges, telephone calls and other overhead 8- amortization schedules, passbooks 9- escrow fees 10- notary fees 11- commitment fees or marketing fees of any secondary purchaser of the mortgage and preparing and recording of assignment of mortgage to such purchaser 12- trustee's fees or charges 13-fees for truth-in-lending disclosure statement 14-fees charged by loan brokers or finders or other third parties affiliated with the lender or not 15- tax service fees 16. **_Real Estate Agent or broker fees or commissions in connection with a VA loan may not be charged to or paid by the veteran purchaser_**

Answer 258

1- payment of the buyer's VA funding fee 2- Prepayment of the buyer's property taxes and insurance 3- Payment of extra points to provide permanent interest rate buydowns 4- Provision of escrowed funds to provide temporary interest rate buydowns and 5- Payoff of credit balances or judgements on behalf of the buyer

Answer 259

1- payment of the buyer's closing osts or 2- Payments of points as appropriate to the market.

Answer 260

The purpose is to assist Hawaii members and retiresss of the ERS of Hawaii through financing. Applicant finds a conventional lender that has funds allocated from this program. The lender decides the best loan for the applicant. If the lender decides tht the ERS loan meetd the needs of the applicant aand they qualify, the lender underwrites the loan. After the loan closes, the ERS buys the loan through an assignment ofmortgage loan. The original lender services the loan.

Answer 261

1- Financing is limited to a). acquire or construct a home; b). improve an existig home; c). refinance certain existing loans and d). purchase leasehold property in fee. 2- home must be 1-4 dwelling unit, townhouse, condo or zero lot line unit, 3- It must be a conventionalloan --( no VA or FHA) 4- Must be owner-occupied 5- If lease hold, the leaser expiration must extend at least 5 years after date of promissary note and mortgage 6- There is ahigh prepayment penalty if the loan ispaid off within 1 yaer from the loan date. 7- There can be only (1) ERS 1st mortgage lon and only (1) ERS 2nd mortgageloan at any given time. 8- Applicant must have at least 50% interest in the property 9- The LTV must not exceed 80% 10- The loan must comply with Fannie Mae and Freddie Mac guidlines.

Answer 262

It was created in 1979 for familiesof low and moderate income. It provides eligible home buyers with mortgage loans atinterest rates below those available for conventional loans. The (HHFDC) or Hawaii Housing Finance and Development Corp. is responsible for this program. They work withparticipating PRIVATE lending institutions. Once loan eligibility is verified, thelender processes the loan application and upon closing delivers the loan to the HHFDC.

Answer 263

1- A home can be new or existing sngle family residence and townhome/condo unit. 2- It must be located within Hawaii State. 3- When a leasehold residence is to be purchased using Hula Mae financing, the remaining term of lease must be at least 35 years and the lease rent must be fixed for no less than 10 years from the date of the mortgage loan. 4- The applicant must be an owner-occupant throughout the term of the loan. 5- The loan must be secured by the property to be purchased. 6- A Hula Mae Mortgage cannot e used to: a). refinance an existing mortgage loan; b). convert an agreement of sale or c). purchase fee simple title to a leasehold property 7- The loan has a purchase price limitation. 8- The applicant must be a resident of Hawaii/ 9- The applicnt must be a us citizen or declarant alien 10- The applicant must be 18 years or older. 11- The applicant must not been granted a loan previously under the Hula Mae Program. 12- Yje applicant and spouse must not have owned or had any interest in a principal resident or beneficial interest in a Land Trust involving a principal residence in or out of the State of Hawaii, for a period of **_three years_** prior to applying for the Hula Mae Loan 13- The applicant must not have an income that exceeds a prescribed limit. 14- If the property is sold or otherwise disosed within 9 years of purchase, the benefit of the lower interest ratr may be "recaptured".

Answer 264

If the land is vacant, it cannot be depreciated, therefore the capitalization rate is the interest rate alone (return on investment)]

Answer 265

1- Real Estate Settlement Procedures Act(RESPA) 2- Truth-in-Lending Act 3- Dod Frank Act 4- Lead Based Paint Act

Answer 266

1- Requires that disclosures regarding settlements costs be made. 2- eliminate kickbacks or referral fees 3- limit the amount required to be placed in an escrow account. RESPA applies to (1-4) residential property from a _federally insured_ lender. If it applies, then lenders, escrow and sellers are subject to certain requirements. Commercial, agreicultural and business transactions are EXEMPT.

Answer 267

1- The lender must provide a Loan Estimate (LE) to the borrower under TRID ( Truth-in-lending RESPA Integrated Disclosure) a) not later than **_3 business days**_ after lender receives loan application or information sufficient to complete a loan application and b). at least _**7 business day_s** before consummation. 2--Lendersor mortgage brokers must give a booklet providing valuable info for the consumer including glossary of terms, the process and bpractices relating to loans and settlements. within **_3 business days of applying_** for a mortgage loans. 3- kickbacks and unearnedfees are prohibited.

Answer 268

The CD is a closing statement prepared by a qualified neutral 3rd party such as an escrow agent, lender or qualified party. It is the settlement sheet or statement. It provides an accounting of costs and prepardcredits and debits summarizing the real property sale. (similar to a balance sheet). 6) In hawaii escrow usually does not furnish the borrower info to seller or vice-versa. An agent, though may ask escrow to furnish both sides of the CD and it is escrows decision whether to comply.

Answer 269

First any account established on behalf of borrower to pay future costs such as taxes, insurance premiums, including flood should borrower not pay. The lender may charge for the current month and a cushion that cannot be greater than **_1/6_** **_(2 months of payments_**) of the estimated total annual payments from the escrow accout.

Answer 270

The seller cannot require the buyer purchase title insurance from a particular title company.

Answer 271

This law and regultion is to protect consumers in credit transactions and residential related transactions by **_requiring disclosures from creditors about credit terms and costs._**

Answer 272

1- the APR 2- Methof ofdetermining finance charge 3- Balance upon which the finance charge would be imposed 4- The amount of the finance charge 5- Amount to be financed 6- Total # of payments 7- # and amounts of payments 8- Due dates and periods of payments to repay the debt 9-Notice to borrow that borrower will give secured interest in his home to lender ad if he defaults, he will lose the home. 10-Notice to borrower that it is not required to complete the agreement just because these disclosures or has signe a loan application. 11) a descriptive explanation of the terms *amount financed, finance charge, annual percentage rate, total payments, and total sale price.* 12- Carge or Percentage amount which may be imposed by a creditor on accoount of a late payment 13- Statementwhether the debt obligation on it original terms and conditions can be assumed or assigned. 14-Disclosure of whether there is a prepayment penalty or not.

Answer 273

It is the borrower's cost for receiving a loan including any costs directly or indirectly thst the lender rquires to pay in order for the borrower to receive credit. The finance charge can also inslude fees by someone other than the lender if the lender requires escrow as a condition to the loan.

Answer 274

The actual (effective) cost of borrowing money. The APR adds the finance charge ( the cost allocated over the length of the loan to the interest rate, The APR is considered accurate ifit is computed to be within **_1/8 of 1%_** or if not, it must be rounded to the nearest **_1/4 of 1%._**

Answer 275

If an ad states a rate of finance charge, it must state the APR using the term annual percentage rate. If any of the following are used in an ad: 1- the Amount or % of any down payment. 2- the number of payments or repayment period 3- the amount of any payment 4- the mount of any finance charge Using any of the above will Trigger the ollowing requirements 1- theamount or percentag of the down payment 2- the terms of repayment ver the life of the loan including any balloon payment anf the APR using the term annual percentage rate.

Answer 276

The right of recission is. the right a consumer has to cancel a transaction after it is closed which is **_3 business days from closing_** It applies to home equity loans, reverse mortgage loans and refinancing, if the lender that provides the funds is not the original lender and the property is owner occupied. If creditor fails to give the homeowner the notice of the right to rescind, the borrower has 3 years to rescind from the transferof the borrower's interest in the property or upon sale of the property, whichever comes first. Then a consumer buys a home on credit and uses his home for collateral for the loan, there is no right of rescission.

Answer 277

A federal law thatpermits the government to regulate the financial industry.

Answer 278

Set up by Dodd Frak Act as a regulatory body to oversee financial products and services offered to consumers. Now, CFPB administers and enforces both RESPA and TILA which are now known as TRID- truth-in lending-respa integrated Disclosure.

Answer 279

It is enforced by the CFPB with the assistance of the state attorney generals. 1- Civil Penalties can range from $5,000- $1 million per day: First Tier: forany violation of a law, rule or final order or condition imposed in writing by the Bureau, a civil penalty may not exceed $5,000 for each day during which such violation or failure topay continues. Second Tier. For any person that recklessly engages in a violation of the federal consumer law, a civil penalty may not exceed $25,000 for each day such violation continues. Third Tier. For any person knowingly violates a federal financial law, a civil penalty may not exceed $1 million a day during such fiolation continues.

Answer 280

if someoneintentionally gives false or inaccurate info 2- Fails to disclosebunder the TRID provisions 3- Understates the APR 4- Fails to comply with any requirement under TRID, he shall be fined not more than $5,000 or imprisoned not more than 1 year (misdemeanor) or both.

Answer 281

If a person sells or leases a residential housebuilt prior to 1978 must disclose to the consumer all known info about lead-based paint and is reqired to privide a federal pamphlet, regarding lead hazard info. Before an offer is accepted_, the consumer has a 10 day calendar_ opportunity to conduct a risk assessment.

Answer 282

Settlement occurs when title to real property transfers from thwe grantor to the grantee. I many states, this happens whenclosing documents are signed but In Hawaii closing is to be at recordation when the conveyance document is recorded in the Regular System or registered at theLand Court.

Answer 283

In the Regular Systemis when theconveyance document is delivered and in Land Court when the property is registered.

Answer 284

It is a Federally statement prepared by a qualified neutral third party. The Closing Disclosure is also known as the closing statement; HUD-1 statement (formerly); the settlement sheet (formerly). This disclosure provides an accounting of costs and prepaid items (debits and credts) summarizing the real property sale.

Answer 285

It is required if a buyer uses a federally insured lender and if the property is a real property residential.

Answer 286

There is settlement info for the buyer and a separste disclosure for the seller. In most state there is one disclosure which includes both seller and buyer info..

Answer 287

The borrower is the person receiving financing. The borrower is the buyer.

Answer 288

Lon fees title fees appraisal fees brokerage commissions title insurance premiums, escrow fees, inspection fees and other related expenses. These costs are negotiable.

Answer 289

The Purchase Contract breaks down the charges between the buyer and the seller.

Answer 290

1- 50% escrow fee 2- 40% standard title insurance policy cost 3- recording documents that pply or benefit the buyer ( mortgage, deed, agreement of sale, assignment of lease 4- Cost of drafting instruments required by the lender that benefit the buyer ( mortgage, promissary note, agreement of sale) 5- Required notary fees that benefit buyer 6. Condo and AOAO ownership transfer fees 7. Cost of obtaining buyer's consent (if required for leasehold property 8- FHA and VA discount points and mortgage loan fees.

Answer 291

1- 50% escrow fee 2- 60% of standard title insurance policy cost 3- recording documents that benefit seller ( release of mortgage or other liens vs. the seller) 4- Conveyance tax (transfer tax) 5- required notary fees that apply to seller 6- Cost of survey or staking 7-Cost of obtaining a seller's consent ( if required for leasehold property) 8- FHA and VA mandatory closing fees 9- HARPTA 10- FIRPTA 11- Cost of drafting conveyance documents and bills of sale.

Answer 292

A credit is an entry showing the dollar amount due to the borrower or seller. A credit is positive.

Answer 293

It is an entry show the sum charges as due or owing. A debit is Negative.

Answer 294

An account established by the mortgagee to pay the borrower's future property tax and insurance costs. Mortgage loan payments are increased to include these costs and funds collected and disbursed when payments are due. Lenders prefer this arrangement. It is limited to 2 months for taxes and insurances.

Answer 295

Paid Outside ofClosing. They are charges of costs paid upfront or after closing. These fees are not debited in the Disclosure but included only as info. i.E. an appraisal or redit report is paid upfront.

Answer 296

It is proportionally dividing and distributing costs between the buyer and seller usually based on the date of closing.

Answer 297

1-real property taxes 2- interest 3- insurance premiums though not typical 4- rental income 5-association fees 6-maintenance fees 7-marina fees

Answer 298

Because they cover a period of time. At closing, the ownership transfers from the the seller to the buyer and these costs must be reconciled. IE Seller prepays real property taxes. The prepaid period extends past closing. The Seller does NOT pay real property taxes that are due and owing.

Answer 299

If items are PREPAID by the Seller, the period of proration is from **_the closing dateuntil the end of the prepaid period_** and If items are unpaid by the seller, the period of proration is from the **_beginning of the unpaid period until closing._**

Answer 300

For the city and countyof Honolulu, real property taxes are **_assessed by October 1st but paid on a fiscal year_** **_The fiscal year is July 1- December 30. is the 1st installment._** **_The 2nd installment is from January 1- June 30._** _If seller did not pay_, the the _buyer is credited_ up to date of closing and seller debited. If _Seller did pay_, _the seller is credited_ nd the buyer is debited. Buyer is responsible for Day of Closing.

Answer 301

It is a fee based on performing service., a sales transaction. Consideration for thebrokerage firm successfully finding a satisfactorybuyer for the property.

Answer 302

The fee isis typically paid by the Seller at closing per the listing agreement. The fee is negotiable nd is calculated as a percentage of the sales price.

Answer 303

The commission is dictated bylocal real estate sales activity.

Answer 304

Traditionally, the agent'scommission is earned when a buyer who i"ready willing and able" is found to purchase the property when both parties sign a sales contract, even if later the seller backs out of the contract. In Hawaii, theexclusive right to sell listing contract allows the brokeragr firm to receive acommission if the buyer is ready, willing and able to pay the listing price and meet material terms of the listing contract and the SELLER refuses to sign the purchase contract

Answer 305

The commission is _EARNED_ when the brokerage finds a ready, willing and able buyer to purchase the property. The commission is _RECEIVED afterthe transaction closes._

Answer 306

It is a secured interest that a party has in the property of another because of a debt or obligation that that has not been fulfilled Lienee is the debtor and the lienor is the creditor. The lien can be personal property which allows the creditor to take back the article of personal property. Regarding realproperty, a lien allows acreditor to foreclose (a forced sale) on a property , should the debtor default in his debt or obligation.

Answer 307

Until foreclosure, title remains with the debtor. The creditors only receive title if they are the highest bidder t a foreclosure sale.

Answer 308

The priority of lien is determined by the date the date the lien is recorded at the Bureau of Conveyances.

Answer 309

It means the 1st recorded interest will have priority over the 2nd recorded interest which has priority over a 3rd lien etc. Recorded interests may be subject to a subordination or statuatory lien which allows that interest to overtake a previous recorded interest.

Answer 310

Craeted by 1- agreement of the parties or2- by law.

Answer 311

Stauatory and involuntary. The law states if a debtor defaults in his obligations in specific situations, then automatically the creditor has a lien in the property i.e. the debtor doesn't pay real property taxes for 3 years.

Answer 312

1- Specific Liens 2- Statuatory Involuntary General Liens S3-tatuatory Involuntary Specific Liens

Answer 313

These liens attach only to the specific parcel or property that it is liened against i.e. tax lien or a mortage

Answer 314

When the mortgagor receives a loan from a mortgagee, the mortgagee requires a mortgage from the mortgagor's property. The mortgage creates a lien against a specific parcel of the property

Answer 315

Unpaid real estate taxes charged against a specific party creates a lien by law,. In Hawaii if mortgagor fails to pay the property taxes for at least 3 years, the County has the right to forecloseon the property.

Answer 316

This is a voluntary lien. i.e. a mortgage. The creditor requests the debtor give him a secured interest in order to receive financing from the creditor.

Answer 317

A lien imposed by law ( statuatory) without consent of lienee (involuntary) attaches all BOTH personal and real properties of the lienees.

Answer 318

1) . Judgement Lien: when a party wins a civil lawsuit, the court reders a _JUDGEMENT_ which requires the losing party to pay monetary damages to winning side. If losing party doesn't pay damages, in HAWAII and nearly all states, the winner can obtain a lien against the losing party's property by recording his interest. 2) Federal and StateTax Lien: When a party fails to pay federal or state taxes that are owed the government can attach a lien to both personal and real property.

Answer 319

A lien imposed by law (statuatory) without lienees consent (involuntary) attaches lienees specificparcel of property (specific. Therefore an AOAO or mechanic can force sale of a specific parcel of real property

Answer 320

Association has a lien, by law, against an owner of a unit because of unpaid common expenses (maintenance fee) regarding that unit. Association liens have priority to all other liens except 1- governmental liens for taxes and assessments 2- recorded mortgage liens recorded prior to recordation of notice of lien by the AOAO This lien allowed the AOAO to foreclose

Answer 321

Lien that secures payment for materials and service provided in the maintenance, repair and improvements ofreal property by vendors. such as arhitects, contractors, subcontractors, laborers and material suppliers.

Answer 322

Hearing is held to determine probable cause exists. An application for a lien and a _Notice of Lien_ stating the facts is recorded. Documents must be recorded no later than _45days after the date of completion_ of the work. The "date of completion" is date the owner or general contractor completes _publication_ of a notice of completion or abandonment. If notice of completion is not recorded within 1 year after actual completion, the date of cmpletio is 1 year after actual completionor abandonment. The lien expires 3 months after entry of the Order Directing Lien to attach unless proceedings are started within that time to collect the amt. due.

Answer 323

The lien takes effect from the time of the visible work for the improvement. It has priority over all other liens EXCEPT 1- liens in favor of any branch of government 2- mortgage, liens or judgements recorded prior to the time of the visible commencement of work 3- mortgages re`corded prior to the date of completion in which all or a portion of the money advanced under and secured by the mortgages ar used for the purpose ofpaying for improvements,

Answer 324

If items are **_prepaid_** by Seller, the period of proration is: ## Footnote **_closing date until end of the prepaid period._**

Answer 325

It **_unpaid by seller_**, the period ofproration is from the **_beginning of the unpaid period until closing._**

Answer 326

legal enforcement of a lien by a lienor or lien-holder resulting in a **_forced sale of the property._** _Foreclosure terminates_ all rights of the borrower in the property.

Answer 327

They are conduted by auction with the highest bidder receiving the propert. Very often the lender may bid at sale and may be the sole bidder.

Answer 328

It is a legalprocess where the mortgagee forces a sale of the mortgagor real property to satisfy the mortgagor's debt. If the borrower defaults under the terms of the promissory note or mortgage, enabling the lender to accelerate the promissory note. If borrower is unable to pay accelerted rate, the lender can start the foreclosure process.

Answer 329

Upon winning the lawsuit, the mortgagee is awarded thejudgement. the Mortgagees remedyis the difference between the foreclosurer sales price and the debt owed to the mortgagor (deficient amount). The deficient amount is limited to the difference between thedebt and the property's fair markt valur when the market value is higher than the foreclosure price.

Answer 330

1- expenses of the sale including commissioner's fees, attorney's fees and court costs 2-real property taxes, if any dye 3-pay principal and accrued interest on the foreclosed loan 4-jr. liens in order of priority and any remaining proceeds to mortgagor.

Answer 331

1- recordation fees 2-prorated real property taxes 3- costs securing possession 4-if there is a recorded lien for delinquent common assessments, then the BOD can collect a 6 mo. assessment

Answer 332

Judicial Foreclosure Non-Judicial Foreclosure

Answer 333

It is initiated by lawsuit.A judge orders a commissioner to conduct sale of theproperty at public auction. ## Footnote **_In Hawaii, it is subject to court confirmation._**

Answer 334

There are potentilly 2 rounds of bidding. the 1st round is a public auction at the courthouse lanai the 2nd round is a confirmation hearing ( aboutn5 weeks after the 1st round). At the court confirmstion, the bid must be 5% higher than the final 1st round bid. If no one bids at the 2nd round, the property goes to the highest bidder of the 1st round. The buyer will acquire title by a commissioner's deed which does not contin any warrenties.

Answer 335

It does not involve court action. The foreclosing party must be: 1- a condo AOAO 2- time share association 3- a vendore with a power of sale provision 4- a mortggee under a mortgage with a power of sale provision It is initiated by the foreclosing party's attorney providing public notice. It consists of 1 round of bidding.

Answer 336

The owner-occupied residential borrower has the right to request a dispute resolution, Ifit isrequestedthen themortgagee is requiredtoparticipatr or insteadthe mortgagee may opt to judcially foreclose. This results in a longer foreclosure process and this law hascaused an increase in judicil foreclosures.

Answer 337

It is a propertysold through a foreclosure auction in which the lender is the highest bidder. The only reason the lender is the highest bidder is its interest in recouping some of its loss.

Answer 338

It is when a lender allows the borrower to deed his realproperty to the lender in exchange for the lender to cancel the debt. It is a last ditch effort for the borrower to mitigate his credit. A lender might allow it to save itself money the time and cost of going through foreclosure.

Answer 339

It is a right a property owner has in his real property.

Answer 340

Equitey Redemption and Right of Redemption.

Answer 341

aka Equitable Right of Redemption It is the right of the mortgagor to **_redeem his real property before foreclosure._** The mortgagor has the right to pay full balance with accrued interest, prior to foreclosure, thus avoiding foreclosure. This right applies to all types of foreclosure including real property taxes.

Answer 342

Statuatory Right of Redemption This right allows the property owner to redeem his real property **_after_** foreclosure to his property. In Hawaii, the right of redemption applies only to **_real property tax foreclosure_** (not mortgage foreclosure). **_within 1 year_** **_He needs to pay:_** **_1- the cost of the foreclosure sale_** **_and_** **_2- the foreclosure price plus interest_** **_to repurchase his former property._** about 1/2 the states have this right.

Answer 343

A lease (demise) is a verbal or written agreement allowing a party (lessor) the right to grant **_temporary possession of a property_** to another party (lessee). Though a lease can be verbal, any lease for more than **_1 year must be in writing_** to be enforceable. A lease is both **_a contract and a conveyance._** A lease is a conveyance in that it conveys temporary interest in the premises.

Answer 344

Major lease provisions such as 1-lease term 2-rent 3-rent renegotiation dates 4- how the rent renegotiation is calculated 5-new rent payment 6- expiration date 7-surrender clause

Answer 345

It must be within 10 calendar days from acceptanceof the sale contract. The buyer has 10 calendar days from receiving docs to review, accept or rejectthe terms of the lease.

Answer 346

determines the future outcome as to whether 1- the land and unit revert to lessor and the lessee surrenders the property and moves out. 2- only the land reverts to the lessor and the lessee owns the unit 3-the lessor negotiates to extend the lease or negotiate a new lease. 4- the lessor seels the fee so lessee becomes the fee simple owner of the property 5- the lessor and lessee have agreed on a price the lessor will pay for the apartment unit and its share of the common elrments upon expiration of the lease 6- thelessee may have to remove the structure and restore the leased premises to its original condition as per lease provisions.

Answer 347

The short term lease does not allow lessee any ownership or interest in the land or unit.

Answer 348

A covenant that the landlordwill not interfere withthe tenant's quiet enjoyment and possession of the premises.

Answer 349

1- Actual eviction (landlord excludes tenant from the entire leased premises) 2- Partial Eviction: the tenant is excluded frompart of the lease premises. 3-Constructive Eviction: Reults from landlordallowing premises to become uninhabitable. i.e. nonfnctional plumbing; contaminated water, flooded premises, firedamage, mold, chemical leakage etc.

Answer 350

1- tenncy for years 2- periodic tenancy 3- tenncy at will 4- tenancy at sufference

Answer 351

It is a tenancy for a fixed period of time.

Answer 352

It is a tenancy for successive periods of time. Last unil terminated by giving **_proper notice_** from either party. In a month to month, landlord required to give **45 days notice** to vacate and is prorated if tenant leaves early. Tenant required to give **28 days notice**.

Answer 353

_1- Express Agreement_: landlord in writing, or by actions agrees to leas from period to period _2- Implication_ the lease has no set termination date but does provide for rent at specific periods _3- Operation of Law:_ law states if hold over tenant, landlord can elect to treatthe tenant as a periodic tenant on same terms as original lease

Answer 354

The tenancy terminates at the will of either the landlord or tenant. In Hawaii, a **_10 day notice to qui_**t MUSTbe given. A tenncy at will terminates: 1- either party dies 2-tenant commits waste 3-tenant attempts to assign his tenancy 4-landlord transfers his interest in the property 5- landlord executes lease to 3rd party.

Answer 355

Tenancy is wrongfully in possession. Landlord can give a 5 day notice to quit. Landlord can evict Tenant.

Answer 356

Federal Law that must be complied with if the tenant is in the military and he gets change in residency military orders: the servicemen can terminate contract and is obligated under the lease **_up to 30 days after the next rent payment is due._**

Answer 357

Under a commercial lease, the lessee enters into a lease transaction for business or commercial purposes. Therefore the property is income producing property for the tenant

Answer 358

Gross Lease and Net Lease

Answer 359

The tenant pays a flat rent and the landlord pays all associated property costs. Utility charges are commonly paid by the tenant but are negotiable.

Answer 360

The tenant pays rent and associated property costs such as utilities and real estate taxes For condos or coopes, these fees can include CAM (common area maintenance) or CAS (common area services) charge.

Answer 361

This lease requires the tenant to pay insurance in addition to taxes and utilities.

Answer 362

the tenant pays for utilities, real estate property taxes, insurance, repair and maintenance. Since tenant ays for expenses, the landlord can determine his net monthly income.

Answer 363

With a percentage lease, the tenant's rent is based solely on the % of gross income.

Answer 364

The tenant's rent is solely based on gross income. This rent is paid in arrears usually around the 10-15th of the month.

Answer 365

Commission isusually based on 2 month's rent

Answer 366

A term used regarding sublease. A sandwich lease is the first lease of a property from a lessor to a lessee who in turn subleases to another. The leasehold is the lessee of one party and a lessor to another. The owner of the sandwich lease is neither the fee owner or user of the property.The sandwich lease may involve a chain of leases.

Answer 367

The laws are HRS521 and to an extent HRS661. Leases not exceeding 1 year may be oral. Leases for more than 1 year must be in writing to be enforceable. If no written agreement, the tenancy is month to month.

Answer 368

Rent is payable at the beginning of each month. Late penalty fees cannot exceed 8%. Rent Increase Month to month tenancy, landlord is required to give 45 days written notice to increase the rent Less than a month to month Tenancy. The landlord is to provide 15 days written notice to increase rent.

Answer 369

It is an ownership law and not a land use law. Therefore condo law has to comply with zoning and building codes.

Answer 370

A condominium is an estate in real property whereby a portion is _designated for separate ownership_ and the remainder is _designated for common ownership_ (solely by the unit owners).

Answer 371

Each unit owner owns: 1- an individual ownership interest of their unit and 2- an undivided common interest in the common areas.

Answer 372

A condo can exist not only for residential property (highrise, lowrise, townhome or house) but for **_commercial, agricultural and spatial property as well._** **_A condo unit can also be a parking stall, boat dock, commercial space, warehouse etc._** **_Each unit can be mortgaged, taxed, insured, sold or otherwise transferred independentlyof all units._** **_Under 514B the term "condo property regime (CPR) and "horizontal property regime" are synonymous with condominium._**

Answer 373

A form of ownership whereby the title to the land and building is held by a corporation in fee simple or leasehold. The corporation leases the individual apartments to its shareholders.

Answer 374

1- A proprietary lease (as tenants of the co-op) 2- Shares of Stock

Answer 375

HRS514E and HAR Title16 Chapter 106 In Hawaii, it is an arrangement whereby a **_buyer receives the right to use, occupy or possess real property for less than 60 days per year_** on a periodically recurring basis. A time share interest can be: 1- an ownership interest through a deed or as a tenant in common or 2- Right to use a property for a specific period of time through a membership agreement, a lease or a license.

Answer 376

Must be real estate licensed and also register with thethe Director of DCCA.

Answer 377

Any person who operates an exchange program which is a plan where timeshare holders share interes in a timeshare plan and may exchange occupancy rights among themselves, with holders of timeshare interests in other time share plans or with holders of units in other projects. Must be registered with the DCCA.

Answer 378

Any person, other than developer or sales agent who for compensation, solicits or encourages a prospective buyer to attend a time share sales presentation or to cntact a times share sales agent or developer. An acquisition agent cannot sell or offer to sell or discuss pricce or terms of sale any interest in a times share plan with a prospective buyer. May be an individual solicitor or to a firm employing solicitors.

Answer 379

OPC- Outside Public Contact

Answer 380

Outside Public Contact or Off Premises Contact. This person acts as an acquisition agent but does not sell time share interests. Therefore an OPC does not have to be real estate licensed. Can only solicit prospective buyers to ATTEND a presentation. Cannot engage business activities except within a broker's place of business or from within a booth operated by the broker.

Answer 381

Under Hawaii Law if the units are located where there are transient vacation units are located in same project with private residential units, the time share units or transient vacation rentals can be charged up to 50% more maintenance fees than the residential units.

Answer 382

The counties can, through zoning, limit the location of timeshare plans and transient vacation rentals.

Answer 383

7 calendar days after the buyer signs the contract to buy an interest in a time share plan or within 7 calendar days after the buyer receives the disclosure statement, whichever is later, either party may cancel the contract without penalty.

Answer 384

1- name and address of the developer 2-description of time share units 3-whether time share plan is located in a condo property and a description of project 4- any restraints on the transfer of the buyer's time share interest 5- whether time share plan is an ownership or usshare use lan 6- rigthe 7 day mutual right to cancel 7-a statement that every shale or transfer, made in violation of the timeshare law is voidable at the election of the buyer 8- notice of any liens, title defects or encumbrances on or acffecting title to units or plans 9- notice of any pending law suits 0- total financial obligationof the buyer 11- estimate of maintenance fees, real property taxe and other periodic expenses.

Answer 385

An owner of an interest in a timeshare plan who is not a licensed realtor can receive monetary compensation --not exceeding $1,000.00 per project during a year---for referring a prospective buyer.

Answer 386

1- voidable at the election of the buyer 2- civil penalties such as not less than $500.00 nore more than $25,000.0 for each separate offense or stopping thatperson from continuing to engage in all time share activities

Answer 387

Prior legislation disallowed documents affect leasehold timeshares interest to be accepted for recording in Land Court. After July 2012 fee simple time shares are not longer recorded in Land Court. Therefore all documents are now recorded in the Regular System!

Answer 388

Any land that is divided or proposed to be divided into lots for the purpose of sale or lease as part of a common plan. A subdivision can be registered or unregistered. Those that comply with subdivision laws are registered.

Answer 389

Follow: 1-County Law 2- State Law ULSPA 3-Federal Law

Answer 390

Each County has set ordinances setting forth the various requirements for the creation of a subdivision. Generally required to provide installation of roadways, street lights, sidewalks, curbs and utilities to service each subdivision. If subdivisions adjacent to shoreline or mountain areas, the developer is required to dedicate right of way for public access through the subdivision. A developer may sell lots for sale prior to the final subdivision approval with a non-binding sales contract.

Answer 391

ULSPA The UniformLand Sales Practice Act. Public Offering Statement is a a statement that discloses the physical characteristics of the subdivided lands and other material circumstances.

Answer 392

In Hawaii, ULSPA's Public Offering statement must include 1- name and address of developer 2- general description of the subdivided lots including total # of lots. 3-any encumbrances, zoning and tax info 4- property use 5-info regarding improvements 6-existing zoning and land use designation of each lot and proposed use of each lot in the subdivision The public offering statement must not be used for promo urposes untilproject is registered, and afterwards ony in its entirety. 7- a statement that the buyer has a 7 calendar right to rescind with no penalty aftersigning of the contract to purchase subdivided lands from the developer.

Answer 393

1- _Criminal:_ If a person intentionally violates ULSPA or intentionally in an application for registration or makes false statements of material facts. He is guilty of a felony and can be fined not less than $_5,000_ and not more than_250,0000,0000_ and may be imprisoned for not more than _2 years or both._ 2- Civil: if a person unintentionally or intentionally violates ULSPA and makes untrue material facts or omiits material facts the buyer relied on, that person is liable. Remedies for the buyer can include return of the consideration paid with interest, reasonable attorney fees and out of pocket expenses of the buyer.

Answer 394

1- Less than 20 separate lots, in the subdivided land are offered for sale in a period of 12 months. 2- leasehold agricultural lots within agra district and no dwellings on lots 3- cemetary lots 4-CPR's 5-Time Shares 6- if seller sells vacant land (raw land) or a sellers sells vacant land and is legally obligated to build a structure within 2 years of selling the property 7- the subdivision plan states there will be 10 or less buyers.

Answer 395

(ILSFDA) The Interstate Lands Disclosure Act This law is designed to providea buyer with adequate disclosure so he can make an informed decision about the purchase of a lot in the subdivision.

Answer 396

It is a common interest community.

Answer 397

1- real property other than a condo, coop or a time share that is subject to a planned community 2- a community other than a condo, coop or time share which is subject to a recorded Declaration that is enforceable by an association.

Answer 398

PUD is a Planned Unit Development. A high density residential development on a large tract of land. An underlying zoning district doesn't permit mixed uses ther than by PUD. It can have schools, commercial centers, housing, recreation etc.

Answer 399

A corporation is a legal entity created under state laws. Corporations are perpetual in existence. Corporations can hold title to real property but not as a joint tenant or tenant by entirety since both have right of survivorship.

Answer 400

double taxation. the individual shareholder is taxed on his profit and the corporation is also taxed on its profit. Since a shareolder is part of a corporation, he is taxed twice.

Answer 401

Subchapter S of the IRS. Has limited number of shareholders. Avvoids double taxation.

Answer 402

A partnership is an association of 2 or more people in business to make a profit. In Hawaii, they have to be registered with the DCCA. Each partner binds the partnership and each partner has unlimited liability in acts carrying out the usual business of the partnership.

Answer 403

A limited partnership is similar to a general partnership except that in addition to 1 or more general partner, there are 1 or more limited partners. General partners manage and accept full liability for debts while limited partners have no direct management authority. The liability of a limited partner is limited to the amount of his investment.

Answer 404

A document created by a trustor that gives one party legal ownership to the trust property and gives another party an equitable ownership. A single party can never be a trustor, a trustee and beneficiary.

Answer 405

is a one time grouping of 2 or morre people in a business undertaking. It is a legal entity but is limitedto a particular joint undertaking. It is not a continuous relationship.

Answer 406

An association of people formed for a specific purpose. The purpose to usually to prfit frrom a common enterprise. It is not a legal entity. HUI qualifies as a syndicate.

Answer 407

A financial device which investors purchase shares in a trust with the subject matter being a real estate venture. It is a security. Individuals can invest in REITS either by purchasing shares directly on an open exchnge or by investing in a mutual fund that specializes in public real estatee.

Answer 408

is a shared ownership of real property. It is a hybrid between time sharing and tenancy in common. The fractional owners receive a deed entitling shareholders to certain usage rights, usually in the form of weeks. The purchaser owns part of the title as opposed to units in time per timeshares. Therefore if the property appreciates in value, so do the shares. As with ownership, a fractional owner can sell the interest.

Answer 409

1- sex ( sexual orientation) 2- Color 3- Religion 4- Ancestry (national origin) **_5- Marital Status_** 6- Familial Status 7-Race 8-Disability (handicap) **_9-Age_** 10-HIV

Answer 410

Created in 1866. Prohibits discrimination against _race_ (ethnicity) and _color_ and has been interpreted to include _all ethnic groups and national origin._

Answer 411

Created in 1962 Prohibits discrimination in the sale and leasing of properties owned, operated or financed by the federal government.

Answer 412

Prohibits discrimination in public accomodations in federally assisted programs and employment on the basis of race color religion sex national origin.

Answer 413

Created in 1968 Prohibits discrimination in housing on the basis of: 1-race 2-color 3-religion 4-national origin

Answer 414

Created in 1974. added "sex" as another protected category from housing discrimination. This act act also created housing assistance programs for lower income families known as Section 8.

Answer 415

Created in 1988 Added familial status and handicap as protected categories from housing discrimination.

Answer 416

Administered by the Secretary of Housing and Urban Development.

Answer 417

Panic Peddling

Answer 418

To guide a prospective buyer to an area or away from an area for discriminatory reasons. A buyer wants to live in an area where others of his ethnicity live.

Answer 419

A lender refuses to make loans in certain areas because of a discriminatory reason. Lender refuse to lend in an area because historically the area has a high percentage of a certain race.

Answer 420

1- a physical or mental impairment that substantially limits one or more of a person's major life activities or 2- a record of having such an impairment or 3- being regarded as having such an impairment

Answer 421

1- **1-2-3** An ownre sells or leases **1 residential property** in a **2yr. period** and he doesn't own more than **3 residential properties.** No discriminatory advertising; no real estate agent and the property is not owner occupied. 2- Mrs Murphy leasing units in a 1-4 family home in which owner lives. 3- Religious: Religion org. can discriminate by limiting sale, rental or occupancy of its dwelling to itsmembers as long as its membership in such religion is not restricted on account of rac, color or national origin. 4- Private Club: Owning lodging and operating for other than commercial purposes , can limit the lodging occupancy to its members or give preference to its members. 5- Older Person: can be occupied by persons 62 years or older or occupied by persons 55 yrs. or older if at least 80% of the occupied units are occupied by 1 person who is 55 yrs. or older. 6- Controlled Substance: A landlord does not have to lease to a criminal convicted of illegal manufacture or distribution of a controlled substance. 7- Occupancy Standards: The federal government can set reasonable occupancy restrictions.

Answer 422

In all states , real property taxes are taxes levied on real property. Ad Valorem Tax - a tax paid according to value. Assessment Values can be found at the county Real Property Tax Office.

Answer 423

It is the power of the government to take private land for public use with just compensation.

Answer 424

It is condemnation

Answer 425

A mortgage

Answer 426

A promissary note

Answer 427

In leashold property and assignment of lease, a mesne assignment is an intermediate assignment in a series of assignments which occurs prior to the latest assignment.`

Answer 428

For more than 270 calendar days of a calendar year.

Answer 429

an amount deducted from a property's value to arrive at the net taxable value.

Answer 430

Real Property tax is calculated by multiplying the net taxable value by the tax rate.

Answer 431

Real Property Taxes are administered by the counties.

Answer 432

General Classifications decided by the counties 1- single family and 2 family residential properties 2- 3 or more family residential , apartment, htel and resort property 3- commercial property 4- industrial property 5- agricultural property 6- conservation property

Answer 433

Must occupy home morethan 270 days a calendar year. Applies to single family homes, condos and coops that are either fee simple or leasehold.

Answer 434

The conveyance tax (transfer tax) paid by seller of real property. Transfer can be made by deelease, sublease,assignment of leaseor an agreement of sale.

Answer 435

It is based on the property purchaseprice thebuyer'sintended use of the property.

Answer 436

7.25% must be with held regarding a **_nonresident **_s_**eller_** which can incude a partnership or corp. transferring his property. A nonresidentis a partynot been in the state for 200 days or more. **the buyer** is responsible to withhold taxamount from seller's proceeds no later than 20 days

Answer 437

It is Hawaii's form of a sales tax on all business activity. It is 4.712%

Answer 438

10.25% on gross rentalproceeds received from furnishing an apartment, house, condo for less than 180 days.

Answer 439

The seller is a non resident of Hawaii but a foreigner as well. 1- Owner occupied and worth $300,000. or less = 0% 2-Owner occupied sales price between $300,000-1,000,000= 10% 3-Owner occupied but $1,000,000 and up= 15% 4-Non Owner occupied and $300,000. or less = 15% 5- Non owner occupied but $300,000-$1,000,000 = 15% 6- Non owner occupied $1,000,000=15%

Answer 440

defer taxes like-kind cannot be used for personal residence Identify replacement property ( up to 3) w/in 45 days of closing Acquirr replacement w/in 180 days of closing diff. between sold property and replaced property= boot and is not deferred

Answer 441

1- decline in the value of the asset (used in appraising) 2-allocating the cost of the asset over the estimated useful life Residential real property may be depreciated over 27.5 years Only improvements on structures can be depreciated. Land cannot. and commercial property over a 39 yr. period.

Answer 442

multiply length x width divide by 43560

Answer 443

**_C_**_hef_ **_Ragu_** **C-**Conservation **R-**Rural **AG-**Agricultural **U**- Urban

Answer 444

A rule issued by the governmental departments to carry out the law.

Answer 445

An established guideline or standard. HAR The Real Estate Commission can make rules licensing agents. but the legislature makes laws.

Answer 446

it is a local law passed by the local governing authority (ie city council) Usually has todo with zoning building, occupancy and safety.

Answer 447

A lot which meets the minimum size and dimensions for that zoning district.

Answer 448

Accessory Dwelling Unit is a second house attached detached to immediate family or outside parties. Must have separate entry, bath and kitchen. Lot size must be a minimum of 3,500 sq. ft. lot