Chapter 19 Flashcards
Basic Construction
Foundation
Supports a home and protects it from damage.
- Concrete slab
- Crawlspace
- Basement foundation
Foundation Detail
Basic components:
* Footings
* Slab
* Foundation
* Wall
* piers
Major types: concrete slab, basement, crawl space
Termite protection: chemical treatment of ground near foundation walls and piers and use of pressure traeted wood
Ventilation
Waterproofing
TP
Footing
The LOWEST part of construction
TP
Framing: Lowest Part of the Framing is:
SILL plate. This is what rests on top of the footing.
Exterior Wall Sheathing
Sheathing: plywood or partical board
Wrapped in tar paper or house wrap
TP
Window Construction: Muntin
Divide, reinfoce, and join class (constructive)
TP
Window Construction: Mullion
Vertical memebers of a window or door (decorative)
TP
Highest Part of the Roof Framing is: :
The ridge/ridge board
RPOADS
RPOAD Exemptions
RPOADS does not apply to vacant land or commercial property
New construction
Transfer between spouses
{fill in rest of list}
2 Parts to an HVAC System
Indoor (air handler, furnance)
Outdoor (heating and cooling unit)
Certificate of Occupany
Needs to be issued by county before buyer can move in
TP
Residential Square Footage Guidelines
MLS requires you to advertise it but NOT real estate commission
Living area: heated, finished, and directly accessible from other heated living area.
Agents expected to VERIFY square footage on their property.
* Cannot rely on tax records, owner, past transactions
Measure from the EXTERIOR when possible (TP)
Living area
Heated, finished, and directly accessible from other heated living area.
Bsement: Earth and adjacent to one side. Considered “below grade”
Measuring From Interior
If we have to measure from the inside:
Homes: Add 6” for each interior wall
Condominiums: DO NOT include the walls
Note: in condos we own air space - wall to wall
Stairway Rules
The stairs are included in the first and second floor
Ceiling Height
Has to be 7’ in height to count as liviing area (include in sq footage)
Sloped Ceilings
You walk outside of the room until the ceilimng height is 5’. From there you start measuring square footage.
Basements: Pipes and Beams
You can go up to 6’ 4” and it will count (vs. 7’)
MOG
MOG
{review what this is and the exemptions}
Agency Disclosure
Agency Disclosure
Disclosing who we represent in anyone
Agency Disclosure
What we use to tell the consumer who we represent
Form:
Working with Realestate Agents Disclosure Form
{read the form}
Agency Disclosure
When is the Agency Discolsure Form Presented?
Form is “Working with Reall Estate Agents”
Presented at: First Substantial Contact
When the customer starts giving you personal information: i.e., this is my price range, what I can afford, I have to sell a house, why I am moving.
Need to stop them and give them the disclosure form. Have to give it to them within 3 calendar days.
It is not ok to just have a link in your email signature. You have to discuss the form with your customer at first substantial contact.
No. They do not have to sign it but we need to document they did not sign. Keep for three years.
Agency Discloaure
What kinds of transactions require use to use this disclosure
All REAL ESTATE **SALES **transactions (dont choose all realestate transactions becasue this could pertain to porperty management)
on test do not pick rentals or property management pick SALES
Single Agency, Designated, Dual Agency,
Agency Disclosure
What do we need to disclose at initial contact
Have to disclosure to another broker you atre a broker and who you represent (broker to broker)
In order to start a relationship: seller side
we would get a signed listing agreement
In order to start a relationship: Buyer side
Before manking an offer
Dual Agency
Designated Dual Agency
This is when both agents are withing the SAME firm
2 licensee
* 1 designated by firm/BIC to represent seller
* 1 designated to represent buyer
Listing agreement has to be **in writing **at THE FORMATION OF THE R
Rules:
1. BIC and provisional broker cannot be in designatd dual
2. If you have confidential information about the other party you cannot be designated
Dual Agency
To Practice Dual Agency We Need
- Discloure
- Consent from both clients
Listing agreement has to be **in writing **at THE FORMATION OF THE RELATIONSHIP
Buyer Agreements
Buyer Agreements: when need in writing
Before this it is a verbal agreement.
Prior to making the first offer
need it in writing prior to first offer
RPOADS
As a listing agent
We provide them with the form (RPOADS) and advise them of their rights.
3 day recission period if we do not provide prior to making an offer
Their biggest right is to decline broker representation.
Misrepresentation and Ommission
Misrepresentation
Rules and Comments section of General Statues Laws. In appendix C.
Spoke something that was inaccurate
Misrepresentation and Ommission
Ommission
left someyhjing out
Misrepresentation and Ommission
Willful Misrepresentation
Lied
Misrepresentation and Ommission
Willful Ommission
Left it uot on purpose
Misrepresentation and Ommission
Negligent Ommission
Page 835.
Forgot and left it out
Listing Agreemnet and Buyer Agency Agreements
These are. EMPLOYEMNT contracts
different than SALES CONTRACTS
Sales Contracts
Contract is between buyer and seller
Purpose of the listing agreement
To find a ready, willing, and able buyer
Llisting agreeemnt
The following MUST be included in a listing agreement
- License number
- Non discrimination clause
- Beginning and end date - no automatic renewal
When do we deliver documents
Delivery of Instruments Rule AKA
- Immediatley but never later than 3 days
- Need to also turn into the firm no later than 3 days
ALL DOCUMENTS
Type of Listing
Exclusive Agency Agreement (the seller can sell themselves and I do nt get paid) vs. Exclusive Right to Sell (I get paid no matter what)
If the seller sells themselves:
Bonuses
Do We Have to Discolsure Bonuses?
i.e., builder bonus
Yes. Prior to making an offer
Termination of Agency Agreements
What terminates an agreeement
buyer agency agreement and buyer broker agreement are the same
- Expiration Date
- Completion of Sale
- Death of the Seller or Death of the Buyer
- NOT death of agent unless they are a sole practitioner
Do Not Call List
Do Not Call List
Check list every 31 days
Exceptions (you do not have to check the DNC list if):
Business relationship up to 18 months ago
90 days after they make inquiry
FSBO if you actually have a buyer (you do not have to check the DNC list before you call them)
Anti Trust Act
- Price Fixing
- Market Allocation (you work in this side of town, I will work on this side of town)
- Boycotting: I am noyt going to show your listing becasue of XYZ
- Unfair Competitive Trade Practices
Advertising
Guidelines When Advertising Listings
- We have to get consent from seller
- Include firm name and BIC name on all advertising
- Cannot discriminate
This includes ALL forms of advertising
Oral Buyer Agency Agreement
Oral Buyer Agency Agreement
- Is an expressed agreement
- Cannot put a timeframe on an oral agreement
- The agreement is non-exclusive. Buyer can work with as many agencies as they want.
*
Sub Agency
Subagency Rules
- We are ALL subagents of the firm
- If the firm has a seller (llisting cllient) we are all subagents of the seller
- If the firm has a buyer we are ALL subagents of the buyer
i.e., Buyer comes in to office and wants to see listing they dont have. You have to call listing agent and ask to show property. Have to ask firm
On the exam when you hear subagency it means the buyer DOES NOT want to
Contracts
Essential Elements of a Valid Contract
Needs to be in the contract for a court of law to enforce
Must know this! Pg. 207 in adventure guide
- Agreement Mutually
- Competent Parties
- Consideration (money or something of value)
- Legal purpose)
Contracts
Void vs. Voidable
- A void contract cannot be enforced
- A voidable contract (one person is able to void the contract)
Example: contarct with a competent party and incompetent party (minor).
Contract
Mistake of Fact
If there is a mistake of fact (both parties thought something different). The contract can be voided.
Contracts: Offer and Acceptance
What Makes an Offer Contract Valid
Multiple test questions on offer accept and communications
Mailbox rule
For an offer to be valid seller has to:
* accept
* signed AND
* communicated to the other side
When it is communicated to the other side.
NC Statue of Frauds
Statue of Frauds
Certain documents have to be in writing to be enforceable (DREAMOILS)
Deeds, Restrictive Covenants, Easements, Assignments, Mortage, O???, Installement Land Contract, Leases longer than 3 years, Sales contracts
If you drop the S - we are now talking about the Connor Act
Sales contract does noyt have to be recorded
Installemnt Land Contracts
Full legal title is given when it is paid off
Buyer has equitable title
Option Contract
Know this
Unilateral Contract
License Law
Who Needs a License
Buy, sell, lease
for others for compensation need a license
Exemptions: attorney, selling or leasing your own property including LLC, FSBO,
exemptions: TP
Firm LIcense
Any firm that is an entity needs a firm license
Licensed and Unlicensed Assistants in Property Management vs. Sales Office
How much education for PB
3 - 30 hour courses within 18 months of day of licensure
If not completed by then you become inactive
Continuing Education: 4 hours of elective done by June 10. If not, midnnight on June 30th become inactive
BIC = 8 hours of education. BIC update and 4 hours elective
Inactive is due to educationm
Exoired is due to
BIC
2 years experinec
LImited Non-LIcensed Commercial Broker
Need to advertise what kind of broker they are
Know what they can and cannot do
Amendment (changes terms) and Addendum (adds terms)
Rights when porerty borders a bodyy of water
Latoral rights: large bodies of water with tides. Own: Mean or average high tide mark
Riparian Rights: Property line ends (depends) - if the water is navigable or non-navigable BY motorboat
Non-navigable: property ends in center or moddle of waterway
Navigable: property line ends at the edge of the shoreline
Personal Property vs. Fixtures
Total Circumstance Test
XXX
Method
Adaptation
Types of Estates
Types of Estates
Think about how we hold title and deeds
1. Fee Simple/Fee Simple Absolute
2. Defeasible Estate (ownership can be defeated - comes with conditional ownership ~ if you do xyz)
3. Life Estate: conventional life estate vs. por avturave (for the life of another. measuring life is not grantee, it is another party.)
How We Take Title (upon death)
Severalty
(one person or entity)
Will go to heirs or by will
Co-ownership (more than one person)
* Tenancy by entirety (married when you took title) - always survivorship
* Tenants in Common (many owners - can be 2 or 200) - never have survivorship. If someone dies, the other ownership passes to the heirs
* Joint Tenancy (buy at same time from same person for same percentage) - has survivorship. In NC you need to write survivorship in the deed to take title.
Deeds
General Warranty Deed - grantor makes all types of promises to grantee for ever
Special Warantee Deed - same promises to grantee but only for the time they own it
Quit Claim Deed - no promises at all
Three Legal Descriptions
Meets and Bounds
Lot and Block (refernced on plat map - subdivisions)
US Governement Survey (used in west and midwest).
Title Insurance
- Backs up the promoses the grantor is makng in the deed
- 2 polices: one for brrower and one for lender
Land Use Controls
Legal non-comforming use: zoning changed, you are granfathered to continue
chapter 5
Public Offering Statement
Recision period for new construction
7 days
Condo 5 days
Liquidated Damages
Agreed upon amount $$ written in contract in case of breach (earnest money)
Ammoritization
Lona that is paid in full
Co-ops
Buying shares of stock and fo rthat you are getting a proprietary lease for property
Commission Splits
REad who buyer is and …….
review
RESPA
TILA (review trigger terms)
Affiliated Business Relationships
Under RESPA we need to disclose how much these peple charge and client is not required ot use them
Fair Housing
Note: The government extended sexual orientation as a protected class
Primary MOrtgage Market vs. Secondary
Primary: banks and credit unions
Secondary: Fannie May, Freddie Mac (buying loans)
Sue for Partition
Trying to go to court to force the sale
cant do with tenancy by entirety (co-owner by spouse)
RESPA
- Prohibits illegal kickbacks between setllement service providers
- Disclosure of settlement costs (disclosure 3 days prior to closing)
Finance
Documents to Sign at Closing
Signing 2 documents
* Mortage/Deed of Trust (depending on state - NC). Collat
* Promisory Note
Finance
Promisory Note
Mortage Note or Note
Know clauses in promsory note
due on sale clause: bring me all your money now
Accelleration clause: bring me all yoyur money now becasue you defaulted
Pre-payment penalty: I am going to charge you more money
Defeatance Clause: It has been paid off, I am going to release my lien on the property
Full Performance
Impossibility of Performance
Picture questions
C: property taxes
Math for Exam
- Tax bill proration
- Excise tax
- Commission math
- Annual interst or loan interest (daly, monthly, etc.)
- Cash that a buyer brings to closing
- Cash a seller walks away with (proceeds)
- Loan factor math
- Principle reduction of balance after one payment
- Loan origination fees and dicount points
- Acreage math
Loann to value
Debt to income
Adjustments on comps (CMAs)
Net Operating Income (cap rate)
Cost approach
Profit loss
Area math - other areas
- Acreage math
Tax bill proration
Excise tax
Commission math
Annual interst or loan interest (daly, monthly, etc.)
Cash that a buyer brings to closing
Cash a seller walks away with (proceeds)
Loan factor math
