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Real Estate NJ by Jawad > Terms/Words to know > Flashcards

Terms/Words to know Flashcards

(67 cards)

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1
Q

Dower

A

a wife’s life estate interest in her husband’s property

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2
Q

Curtesy

A

a husband’s life estate interest in his wife’s property

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3
Q

Real estate can be defined as

A

land and everything permanently attached to it

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4
Q

The distinguishing feature of a defeasible fee simple estate is that…

A

it may revert to a grantor if the prescribed use changes

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5
Q

a distinct feature of a joint tenancy is that joint tenants

A

cannot will their interest to a party outside the tenancy

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6
Q

There are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property B is said to be which of the following in relation to property A?

A

Servient estate

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7
Q

In a case of foreclosure, which lien will always be paid first?

A

Tax liens

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8
Q

What does the “chain of title” to a property mean?

A

A chronology of successive owners of record

list of people who owned the home in the past

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9
Q

The Uniform Residential Landlord and Tenant Act fundamentally attempts to…

A

encourage fairness and simplicity in lease forms and provisions

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10
Q

Syndicate

A

Group of investors who combine funds to buy, develop, and/or operate a property. They keep investing in more properties if successful

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11
Q

Joint Venture

A

Group of investors who combine funds, similar to Syndicate, but only for 1 Project. They do not keep working together on additional projects.

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12
Q

Opportunity Cost

A

The return that an investor could earn on capital invested with minimal risk

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13
Q

General partnership

A

A syndicate in which all members participate equally in managing the investment and in the profits or losses it generates

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14
Q

Limited partnership

A

Invest $ in the property but do not participate in operating the property. Only responsible for their original investment… if there’s a loss on the property – the general partners are responsible for any debt exceeding your initial investment

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15
Q

How do you calculate Taxable Income?

A

Net Amount - Interest & Depreciation

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16
Q

Are there pre-payment penalties in New Jersey?

A

NO

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17
Q

Deductions - you can deduct your T.I.P.P. - what does the T.I.P.P. stand for?

A
  • Taxes
  • Interest on mortgages
  • Prepayment penalties (none in NJ)
  • Points
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18
Q

What are Capital Improvements

A

Ex: putting on an addition, paving a driveway, replacing a roof, adding central air conditioning, and rewiring the home

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19
Q

What is CASH FLOW

A

The amount of money you have left after every expense (including your mortgage payment) is paid

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20
Q

The Four principal types of Investment are

A

Money, Equity, Debt, Real Estate

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21
Q

TAXATION: the “Adjusted Basis” is

A

The cost of the investment plus capital improvements, less depreciation

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22
Q

Can principal payments on your Mortgage be deducted from taxes?

A

NO, only your Interest payments may be deducted for tax purposes

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23
Q

How much is the Capital Gains tax exclusion?

A

Up to $250,000 for a single seller and $500,000 for a married couple can be excluded from gains tax every Two Years

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24
Q

Pre-Tax Cash Flow =

A

= (NOI - Debt Service)

  • NOI: net operating income
  • Debt Service: periodic principal and interest payments
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25
Are "Real estate, Real Property, and Realty' all the same?
YES
26
Real Estate Taxation: You have to adhere to "PETE":
- Police Power (zoning, health dept) - Eminent Domain (the right for them to take away your property for gov't use - Taxation (gov't has right to tax you) - Escheat (if you pass away with no heirs, gov't sells your house and takes your money
27
"Equalization" is used to...
minimize discrepancies
28
How long does it take for you to go into Tax Foreclosure when you don't pay your taxes...?
6 months. Taxes are always the #1 Lien on the property, placed every year on January 1.
29
Dual Agency
- 2 Agents from one SAME broker represent the buyer/seller (ex: 2 agents from Weichert) *** It’s not dual agency if there’s 1 agent from 1 broker and 1 agent from another brokerage, even though they’re under the same franchise name ***
30
What is ad valorem taxation
Property tax, based on assessed value. o Ad valorem tax is levied annually on the taxable value of a property in order to help fund government and public services
31
What is 'Tax Base'?
The total of all assessed values in a jurisdiction excluding exemptions
32
Tax Rate - What is the Millage Rate?
Take the millage rate and multiply by .001 (two decimals to the left) ** Think of "MiLLage" with 2 L's, so you move the decimal 2 spots to the 'L'eft
33
How do you calculate the Tax Rate Derivation?
Divide tax requirement by the tax base ** Think of "Derivation" as "Divide" so you have to divide the tax requirement by tax base (tax "base", "base" on the bottom of the division)
34
How is the individual tax bill assessed?
Individual Tax Bill = RATE x Taxable Value Taxable value: (assessed value minus exemptions and adjustments)
35
ETHICS: Fair Housing Act: "Racist Realtors Can Never Have Financial Success" (What does R.R.C.N.H.F.S stand for in regards to discrimination)
``` Race Religion Color National Origin Handicapped 1988 Familial Status 1988 Sex (as a gender) 1974 ```
36
RESPA =
Real Estate Settlement Procedures Act
37
Reg Z ->
1. APR - Lender has to disclose this 2. Interest Rates - no triggering 3. Right of rescission - 3 days to cancel
38
"TRID" ->
Truth in lending Respa ID - Integrated Disclosure ^ "TRID"
39
Condominium is
an ownership of a unit of airspace plus undivided interest in common elements
40
A Co-Op is
an ownership of a share in a corporation, plus proprietary lease in unit ** Owners potentially liable for expenses of entire co-op. Creditors may foreclose on entire property**
41
What is a lien?
A financial burden on the property
42
What is an Encumbrance?
aka "mortgage" ... a "cling" on the property that lowers the value of a property
43
Seller's Property Condition Disclosure (SPCD) Form contains what?
it contains the seller's attest of the property's condition at the time of contracting for sale. * must be transmitted to buyer by a state-stipulated deadline* * Required to be completed with Sale of contract* * If seller answers 'no representation' - seller cannot be held liable as no position was taken.* * Buyer must acknowledge receipt when given the completed form*
44
What kind of interest does the buyer own after a real estate sale contract is signed by the principal parties? a) Legal Title b) Lienholder interest c) Remainder interest d) Equitable title
d) Equitable title
45
What parties must be identified in a sale contract? a) Only a seller b) Seller and buyer c) Seller, buyer, and agent(s) d) Seller, buyer, and title company
b) Seller and buyer
46
To create an enforceable option-to-buy contract, there must be an exchange of: a) a promise to sell and a promise to buy b) valuable consideration and a right to buy c) valuable consideration and a promise to buy d) a down payment and a post-dated contract for sale
b) valuable consideration and a right to buy
47
An option-to-buy is: a) not assignable unless the contracts specifically allows assignment b) never assignable c) assignable, with seller permission d) assignable unless the contract prohibits assignment
d) assignable unless the contract prohibits assignments
48
Foreclosures: Judicial Foreclosure: What is a deficiency judgment?
judgment by court on borrower to forfeit other property to pay off any shortfalls from foreclosure
49
Foreclosures: Strict Foreclosure
court orders legal transfer of title directly to lender without public sale
50
Foreclosures: Deed in lieu of foreclosure
'power of sale' granted to lender; no suit; no deficiency judgement; NO REDEMPTION PERIOD AFTER SALE
51
Foreclosures: Non-judicial foreclosure
'power of sale' granted to lender; no suit; no deficiency
52
Land Use: What is a master plan
A land use plan for a municipality, county, or region which incorporates community opinion, the results of intensive research, and the various land use guidelines and regulations of the state. Acts as a blueprint for subsequent zoning ordinances and rulings **Know that its for a municipality/county/region, not the for the State***
53
What is a quitclaim deed used for?
QuitClaim Deed: Commonly used to transfer property to another person, as a gift. (Usually done in Marriages, or between Family Members) **Since this is considered a "gift" they don't pay taxes for transferring the property**
54
What is the Metes and Bounds method?
describes perimeter by landmarks, monuments, distances, angles *Usable within the rectangular survey system* **Starting at Point of Beginning (POB), follow perimeter, return to POB**
55
What is the Lot and Block System? (Recorded Plat Method)
used to describe properties in residential, commercial, industrial SUBDIVISIONS *Tracks of land divided into LOTS, then grouped into BLOCKS*
56
What are the dimensions of a township?
6 miles by 6 miles
57
How many sections are in a township?
36 sections per township. 1 section = 640 Acres
58
What is a contract?
An agreement between two or more parties who have a "**MEETING OF THE MINDS**", and have pledged to perform (or refrain from performing) some act - a valid contract is legally enforceable by meeting certain requirements of contact law
59
The key things a Contract needs to be Valid:
- competent parties - voluntary act of good faith - mutual consent - valuable consideration - legal purpose
60
Conveyance Contract Requirements:
- must be in writing - must contain legal description - must be signed by one or more parties - exception: per Statute of Frauds, leases for one year or less may be verbal and still be enforceable
61
Are contracts assignable?
They are assignable UNLESS expressly prohibited... or if the contract is a personal service contract (Listings not assignable)
62
Bilateral vs Unilateral contract
Bilateral: both parties promise to perform Unilateral: one party performs only if other party performs
63
Express vs Implied Contract
Express: all terms expressly agreed to Implied: unintentional agreement deemed to exist due to terms implied by actions
64
Executed vs Executory Contract
Executed: fully performed Executory: performance yet to be completed
65
Misrepresentation and Fraud: What is "puffing"?
The licensee boasting about property's benefits they are "puffing" the property's benefits
66
What is a subagency?
- outside brokers and agents who help the listing agent - listing broker's own agents - (disallowed in some states)
67
What can the buyer do if a seller defaults in a sale contract?
The buyer can cancel, or sue for damages or specific performance (ex: buyer's deposit)

Real Estate NJ by Jawad (1 decks)

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