Vocab 1-20 Flashcards
Principle of Progression
A valuation principle that says having a nicer, more expensive homes nearby can increase the value of a property.
Ex: “location, location, location”
Federal National Mortgage Associations (FNMA)
Fannie Mae creates a secondary market for existing mortgages. Does NOT loan money directly but rather buys DVA, FHA, and conventional loans
Functional Obsolescence
Loss in value resulting from functional problems caused by age or poor design
Ex: property with one car garage in a 4 bedroom house
Dual Agent
When are real estate licensee works with both the buyer and the seller
Subject To
Situation in which a buyer takes title to property but the existing loan stays in the name of the seller so the seller is primarily liable for the loan
Material Fact
Fact that a reasonable person would think was relevant to a decision being made. Knowing something that could cause a person to change their mind about a transaction
Ex: unrepaired water damage in the attic of a home for sale
Special Warranty Deed
A deed in which the grantor warrants only against defects that occurred during their ownership
Bundle of Rights
Legal rights of the real estate holder
Possession
Control
Exclusion
Enjoyment
Disposition
Lawful Object
A contract must be legal. If a contract has an illegal purpose, it is void
Contract for Deed
A contract for sale of real estate under which the sale price is paid in periodic installments by the purchaser who is in possession and holds equitable title although the actual title is retained by seller until final payment
CC&Rs
Covenants, Conditions, and Restrictions. Condominium documents that serve as the operational procedures describing the rights and prohibitions of the co-owners in a condominium association
Implied Contract
An agreement created by action of the parties involved but there is no written record nor any actual verbal agreement. This is a legal substitute for a contract that is assumed to have been drawn
Unenforceable Contract
A contract which cannot be enforced in a court of law
Ex: if the terms are ambiguous, if one party has a voidable contract, needs to be in writing, etc.
Balloon Loan
AKA partially amortized loan. It has a fixed rate of interest over a period of time. At the end of the balloon period, the borrower must refinance or pay off the remaining balance
Impounds
An account maintained by the mortgage company to collect recurring costs such as insurance and tax payments that are necessary for you to keep you home but are not technically part of the mortgage
