CO BROKER EXAM Flashcards
RE COMM POSITION ON AUDITS
ANY TIME WITHOUT NOTICE!
WHEN RECONCILING THE SETTLEMENT SHEET, WHAT DOES A DEBIT TO THE SELLER, CREDIT BROKER MEAN?
DEBIT SELLER= SELLER PROCEEDS!
CREDIT BROKER= BROKER (Title co) WRITES CHECK TO SELLER
DEFINE TENANCY FOR :
YEARS
PERIODIC
AT WILL
AT SUFFERANCE
FIXED TERM
MONTH TO MONTH
NO EXPIRATION
WITHOUT CONSENT
OBSOLESCENCE:
FUNCTIONAL
EXTERNAL
PHYSICAL
DEPRECIATION CAUSE BY:
OUTMODED DESIGN
OUTSIDE FORCES, INCURABLE
DEFERRED MAINTENANCE
ESCROW ACCOUNT NAME INCLUDES:
BROKERAGE FIRM, TYPE OF ESCROW, EMPLOYING BROKER NAME, ASSOCIATE BROKER NAME
TESTATOR
DEVISEE
CREATOR OF WILL
TO WHOM THE PROPERTY IS LEFT TO
PROMISSORY NOTE
NOT RECORDED
HOW ARW NET LOAN PROCEEDS TYPICALLY HANDLED ON SETTLEMENT SHEET?
D BROKER, single entry
Payed before closing by lender
CLOSING INSTRUCTION FORM & LISTING CONTRACT
ARE USED IN CONJUNCTION
Closing form is initiated at time listing contract is signed
DEBIT/CREDIT FOR BROKERS COMMISSION?
D SELLER
C BROKER
NOVATION
REPLACING OLD CONTRACT WITH NEW
USURY
CHARGING HIGHER INTEREST RATE THAN ALLOWED
WHAT IS TRIPLE NET
TAXES
INSURANCE
CAM (COMMON AREA MAINTENANCE)
WHO HAS MORE AUTHORITY?
GENERAL
UNIVERSAL
OR SPECIAL AGENT
WHICH ONE IS A PROPERTY MANAGER?
UNIVERSAL- absolute
GENERAL- handles principal affairs in specific area (property manager)
SPECIAL- specific transaction (brokers)
EXAMPLE OF DEFERRED MAINTENANCE
APARTMENT BUILDING NEEDING PAINTING
WHAT TYPE OF SALES NEED A LAWYER?
LAND CONTRACT, LEASE OPTIONS, LEASE PURCHASE
NEW HOME PURCHASE
BUILDER HOLDS EM IN THEIR ESCROW
REGISTER WITH BUILDER
MUST ACCOMPANY BUYER ON FIRST VISIT OR NO COMM
INTEREST RATE ON ASSUMED LOAN CREDIT/DEBIT
DEBIT SELLER
WRIT OF EXECUTION VS ATTACHMENT
COURT ORDER TO FORECLOSE
VS
COURT ORDER TO HOLD PROPERTY UNTIL JUDGEMENT MADE (Can’t sell)
DEFINE:
PGI, EGI, NOI
CAP RATE
MARKET VALUE
PGI - potential gross income (rent)
EGI - effective gross income (PGI- vacancy rate losses)
NOI - net operating income (EGI- operating expenses)
CAP RATE- NOI / Market Value
Market Value - NOI / CAP RATE
DEBIT/CREDIT FOR INTEREST RATE?
D BUYER
C BROKER
IS COLORADO TITLE OR LIEN THEORY?
WHAT DOES IT MEAN?
ARE FORECLOSURES JUDICIAL OR NON JUDICIAL?
LIEN THEORY
PUBLIC TRUSTEE HOLDS LIEN AS A ‘DEED OF TRUST’; MORTGAGOR HAS LEGAL TITLE, MORTGAGEE IS BENEFICIARY
FORECLOSURE IS NON JUDICIAL
WHAT TYPE OF LEIN IS A JUDGMENT?
MORTGAGE?
GENERAL LIEN- INCLUDES ALL REAL & PERSONAL PROPERTY
SPECIFIC LIEN- ATTACHES TO ONE PARTICULAR PIECE OF PROPERTY
DEBIT/CREDIT FOR TITLE INSURANCE?
WHAT IF LENDER WANTS BUYER TO BUY ADDITIONAL COVERAGE?
CREDIT BROKER
DEBIT SELLER
CREDIT BROKER
DEBIT BUYER
DEED OF TRUST
HELD BY PUBLIC TRUSTEE UNTIL LOAN PAYED OFF
ESTATE IN TRUST
TESTAMENTARY TRUST
LAND TRUST
PROPERTY GRANTED BY TRUSTOR TO TRUSTEE FOR BENEFICIARY
ON DEATH
TRUSTOR=BENEFICIARY; INTEREST IS PERSONAL PROPERTY NOT REAL; NAME NOT ON PUBLIC RECORD.
EQUITABLE VS STATUTORY RIGHT OF REDEMPTION
EQUITABLE- BUY BACK PROPERTY BEFORE TAX SALE
STATUTORY- RECLAIMS PROPERTY AFTER TAX SALE
WHAT IS RHE CREDIT/DEBIT FOR THE DOCUMENTARY FEE?
WHAT IS THE FEE FOR A $700,000 SALE?
D BUYER
C BROKER
.0001/ year = $70.00
WARRANTY DEED DEBIT/CREDIT
NOTARIZE
RECORD
D SELLER
D BUYER
STATUTE OF FRAUDS
RE CONTRACTS MUST BE IN WRITING
DEBIT/CREDIT FOR “TAXES PRIOR YEAR”?
NONE
JUST INFO TO PRORATE CURRENT YEAR’S TAXES
CONSTRUCTIVE EVICTION
TENANT GETS SECURITY DEPOSIT BACK, DEFAULT OF LANDLORD (ex- NOT FIXING FURNACE)
OFF RECORD OBJECTION DEADLINE
SPECIAL TAXING DISTRICTS
WHAT APPRAISAL APPROACH ESTIMATES REPLACEMENT COSTS, DEDUCTS DEPRECIATION, ADDS LAND VALUE?
AND WHEN IS THIS APPROACH USED?
COST APPROACH
NEW CONSTRUCTION, or buildings that lack comparables
CO FAIR HOUSING INCLUDES
MARITAL STATUS
SEXUAL ORIENTATION
SECONDARY MORTGAGE MARKET:
FANNIE MAE
FREDDIE MAC
GINNIE MAE
WHICH ONE IS SPECIFIC TO CONVENTIONAL LOANS?
WHICH ONE NOT A GOVT AGENCY?
FREDDIE- CONVENTIONAL
FANNIE MAE NOT GOVT
WHICH MUST BE RECORDED
DEED
MECHANICS LIEN
WILL
MECHANICS LIEN
BARGAIN & SALE
QUITCLAIM
FORECLOSURE
CORRECT TITLE DEFECTS
ACTUAL VS CONSTRUCTIVE/LEGAL NOTICE OF TITLE?
WHAT IS VOLUNTARY ALIENATION?
ACTUAL- DIRECT EXPERIENCE (WILL, DEED, POSSESSION)
CONSTRUCTIVE- COULD/SHOULD HAVE OBTAINED (TITLE RECORDS)
TITLE TRANSFER BY SALE or gift
VICARIOUS LIABILITY
PRINCIPAL LIABLE FOR AGENTS ACTS IF THEY DIRECT, RATIFY, or APPROVED IT
- excludes transaction brokers
TOP 3 SUPERIOR LIENS
- AD VALOREM
- SPECIAL ASSESSMENT LIEN
- INHERITANCE TAX LIEN (taxes owed by deceased persons estate)
HOW MUCH NOTICE DOES LANDLORD NEED TO GIVE TO TERMINATE LEASE IF LEASE TERM IS:
1 YR
1 WK
30 DAYS
3 DAYS
HOW MANY BASELINES?
WHAT DO THE FOLLOWING RELATE TO, HOW BIG ARE THEY, AND WHAT DIRECTIONS?
RANGE
TIER
1 BASELINE FOR EACH PRINCIPAL MERIDIAN
TOWNSHIPS, 6 miles wide
NORTH/SOUTH
EAST/WEST
INTERPRETATION OF TITLE COMMITMENT TO BE DONE BY
ATTORNEY OR
TITLE COMPANY
APPURTENANCES
RIGHTS TRANSFERRED WITH LAND
SURFACE, AIR, SUBSURFACE
HOW LONG DOWS LANDLORD HAVE TO FIX HAZARDOUS REPAIRS?
72 HOURS
IF CLOSING IN ESCROW, DO YOU HAVE TO CLOSE ON SAME DAY?
NO
HOW IS BUYERS CHECK FOR HOUSE PRICE HANDLED ON SETTLEMENT SHEET?
C BUYER, D BROKER
LIS PENDENS
NOTICE OF POTENTIAL JUDGEMENT ; PENDING LEGAL ACTION (foreclosure)
SQ FEET PER ACRE
43560
WHAT IS A STRICT FORECLOSURE?
DEED IN LIEU OF FORECLOSURE?
TITLE TRANSFERS DIRECTLY TO LENDER
VOLUNTARY TITLE TRANSFER TO LENDER TO AVOID COURT
WHAT IS “TRUST DEED PAYABLE TO”, and WHAT IS THE CREDIT/ DEBIT?
…WHAT IF BUYER IS ASSUMING ?
NEW LOAN
C BUYER, D BROKER
C SELLER IF BUYER IS ASSUMING LOAN
IMPLIED WARRANTY OF HABITABILITY
RESIDENTIAL ONLY
ESTOPPEL CONTRACT
TENANTS REPORT STATUS OF LEASE TO BUYER , seller can fill out
FIFTH AMENDMENT
ORDER 11063
PROHIBITS DISCRIMINATION BY RACE IN SELLING/RENTING RESIDENTIAL HOUSING
NO DISCRIMINATION IN FHA/VA RESIDENTIAL
BUYDOWN LOAN
PREPAYMENT OF INTEREST LOWERS RATE
- DISCOUNT POINTS
Usually developers/builders
WARRANT OF:
SEIZEN
FURTHER ASSURANCE
ENCUMBRANCES
POSSESSION
CLEAR TITLE
NO LIENS
RACIAL DISCRIMINATION
13th AMENDMENT
EQUITY
INTEREST AFTER LIABILITIES PAYED OFF
TRUTH IN LENDING/ REG Z APPLIES TO WHICH PROPERTY TYPE?
RESIDENTIAL
ASSIGNABILITY OF PURCHASE CONTRACT
ALLOWED IF SPECIFIED IN ADDITIONAL PROVISIONS
BUNDLE OF RIGHTS (6)
Are they transferred with land?
POSSESSION
USE
TRANSFER/DISPOSITION (sell)
EXCLUDE (no trespass)
ENJOYMENT
ENCUMBER (lien)
NO, NOT ALL NECESSARILY TRANSFERED
PROCURING CLAUSE
AGENT WHO IS FIRST TO NEGOTIATE WITH BUYER
SON
BOS
SELLER OWNS NATIONAL
BUYER OWNS STATE
EMINENT DOMAIN
ESCHEAT
FORCED SALE OF PRIVATE PROPERTY FOR PUBLIC USE
GOV’T TAKES ABANDONED PROPERTY
GROSS VS NET LEASE
GROSS- RESIDENTIAL
NET- COMMERCIAL
WHICH PM’S DIVIDE COLORADO INTO NORTH, CENTRAL AND SOUTH ZONES?
UTE
NEW MEXICO
6TH
ESA
ENVIRONMENTAL SITE ASSESSMENT
IDENTIFY POTENTIAL OF CONTAMINATION
PHASE 2- SAMPLING
WHAT ARE THE NUMBERS FOR CAPITAL GAINS EXEMPTION?
$250k single
$500k married
WHO IS USUALLY DEBITED FOR THE FOLLOWING:
TITLE EXAM SURVEY/CREDIT REPORT INTEREST ON NEW LOAN LOAN SERVICE FEE HAZARD INSURANCE TAX RESERVE
WHO GETS THE CREDIT?
D BUYER
C BROKER
LEAD BASED PAINT PENALTY FOR INCORRECT DISCLOSURE
TREBLE (3 times) DAMAGES UP TO $16k
Buyer has 10 days to conduct risk assessment
Seller must retain LBC copy for 3 years
TENANTS IN COMMON
UNEQUAL SHARES ALLOWED
NO SURVIVORSHIP
CONDEMNATION VS ACCRETION (WATER)
CONVERT WATER FROM AGRICULTURE TO DOMESTIC
ADDITION OF LAND CAUSED BY WATER
WHAT IS A NET LISTING? LEGAL IN CO?
COMMISSION IS ANY AMOUNT RECEIVED IN SELLER OVER THE NET AMOUNT REQUIRED BY SELLER
YES, ALLOWED BUT NOT ADVISED
LEAD BASED PAINT
1978
AN EASEMENT
IS AN ENCUMBRANCE
IF BUYER/SELLER DECIDE TO SPLIT CLOSING DOC FEES, WHAT IS THE CREDIT/DEBIT?
D BUYER 1/2
D SELLER 1/2
C BROKER
RULE F DOES NOT APPLY TO
NEW CONSTRUCTION
REAL PROPERTY TRANSFER DECLARATION
Optional, used in closing
Info for county assessors
HOW MUCH DOES FDIC INSURE ESCROW ACCOUNTS FOR?
$100k
HOW OFTEN CAN U USE THE CAP HAINS EXCLUSION?
1 every 2 years
CONSTRUCTION LOAN
INTEREST ONLY/STRAIGHT LOAN, REPLACED WITH LONG TERM
MONEY DISBURSED AS NEEDED
PERMISSIVE USE THAT GIVES NO FUTURE RIGHTS TO USER
LICENSE
TEMPORARY USE
FIRPTA %
WITHHOLD 10% IF SELLER IS FOREIGNER
HOW ARE THE CURRENT YEARS PROPERTY TAXES PAYED?
WHAT IS THE CREDIT/ DEBIT?
IN ARREARS (the next year)
D SELLER
C BUYER
SQ INCHES PER SQ FOOT
144
COOLING PERIOD RESCISSION
LEGAL TIME PERIOD TO TERMINATE CONTRACT W/O REASON
ACCORD & SATISFACTION
AGREEMENT TO ACCEPT SOMETHING DIFFERENT THAN WHAT CONTRACT SUGGEST
Reduce sale price
MUTUAL ASSENT
OFFER & ACCEPTANCE
COST APPROACH
IMPROVEMENTS & LAND ARE VALUED
SEPARATELY
IMPOSSIBILITY OF PERFORMANCE
PARTY MAY BE RELEASED FROM A CONTRACT ON THE GROUNDS THAT UNCONTROLLABLE CIRCUMSTANCES HAVE RENDERED PERFORMANCE IMPOSSIBLE
RESCISSION PROVISION APPLIES TO
HOW MANY DAYS?
HOME EQUITY LOANS
TRUTH IN LENDING, REG Z
3 DAYS
WHO IS CREDITED THE INTEREST ON AN ASSUMED LOAN?
BUYER
WHAT IS CO STATE DEFAULT FOR DEED ON PURCHASE CONTRACT?
SPECIAL WARRANTY
STATUTE OF LIMITATIONS
INJURED PARTY HAS CERTAIN TIME PERIOD RTO RESCIND/DISAFFIRM
VALID DEED
GRANTING CLAUSE
DESCRIPTION
SIG OF GRANTOR
DUAL AGENCY=
TRANSACTION BROKER
PROVISIONS DELETED FROM LICENSEE BUYOUT ADDENDUM
APPRAISAL
LIQUIDATED DAMAGES
SELLER CAN TERMINATE FOR ANY REASON WITHOUT PENALTY
NO COMMISSION FOR BROKER
NEVER USED AS OPERATING EXPENSES
DEBT SERVICE- INCLUDES INTEREST PAYMENTS
DEPRECIATION
INCOME TAX
CAPITAL IMPROVEMENTS
RENTAL INCOME $36k & VACANCY RATE 2%. TAXES $3600, RESERVES $1800, DEBT SERVICE $4000. CAP RATE 12%. WHAT IS MARKET VALUE?
$36k X .98 (vacancy rate of 2%)= EGI $35,280
EGI - ( $3600 + $1800 = $5400 )=
NOI $27,880
NOI / .12 = $232,333
SEVERALTY
TENANCY IN COMMON
JOINT TENANCY
COMMUNITY PROPERTY/TENANCY BY ENTIRETY
SOLE OWNERSHIP, PASSES TO HEIRS
NO RIGHT OF SURVIVORSHIP
RIGHT OF SURVIVORSHIP, SHARE A SINGLE TITLE
OWNED BY MARRIED COUPLE
PACKAGE LOAN
BLANKET LOAN
REVERSE MORTGAGE
INCLUDES PERSONAL PROPERTY
MORE THAN ONE PROPERTY; SUBDIVISIONS
LENDER PAYS BORROWER, PAYMENTS ADDED TO LOAN BALANCE (ELDERLY)
CMA DOES NOT INCLUDE
ACCRUED DEPRECIATION
WHO IS DEBITED FOR INTEREST RATE ON ASSUMED LOAN
SELLER
FAIR HOUSING EXEMPTIONS
SINGLE FAMILY HOME, NO BROKER, MAX 3 HOUSES OWNED
RENTAL IN 1-4 UNIT BUILDING WHERE OWNER LIVES
PRIVATE CLUBS/RELIGIOUS, LEASES TO MEMBERS
GOV’T RETIREMENT HOUSING
*NEVER DISCRIMINATORY ADVERTISING, NO DISCRIMINATION OF RACE
NOT NEEDED IN JOURNAL
ÑAME OF PERSON WHO WROTE CHECK
ARREARS
NOT PAYED YET, PAY IN FUTURE
WATER SOFTENER
SMOKE DETECTORS
SECURITY SYSTEMS
SATÉLITE SYSTEMS
…. IF INCLUDE :
CHECK BOXES ON CONTRACT!
PMI
USED IN HIGH LTV CONVENTIONAL LOANS
DEBIT/CREDIT FOR RECORDING FEES?
TAX CERTIFICATE FEE?
D BUYER
C BROKER
SAME
TRUSTEE HAS WHAT KIND OF TITLE?
NAKED TITLE
CHECKS COMING IN =
CHECKS GOING OUT=
IN = DEBIT
OUT = CREDIT
BROKER TO PREQUALIFY BUYER:
SS NUMBER, ADDRESS (credit report)
OCCUPATIONAL INFO
RE COMM WILL NOT INSURE
PARTNERSHIP
CORPORATION
SOLE PROPRIETOR
LLC
SOLE PROPRIETOR
CAN BROKER ESCROW ACCOUNT INCLUDE WITHHOLDING TAXES?
NO
COLOR OF TITLE
CLOUD ON TITLE
MARKETABLE TITLE
TTILE INVALID
DEFECT ON TITLE
FREE OF DEFECTS & ENCUMBRANCES
HUD HOMES ARE SOLD
AND REQUIRE
AS IS
A SPECIFIC HUD CONTRACT
ARE MARKUPS ALLOWED
YES WITH WRITTEN CONSENT
INTEREST IS PAYED
IN ARREARS (Feb 1 payment is for Jan)
SCARCITY, IMPROVEMENTS, PERMANENCE, AREA PREFERENCE ARE WHAT TYPE OF LAND CHARACTERISTIC?
ECONOMIC
CONVERSIÓN
SEVERANCE
ANNEXATION
CHANGE OF PERSONAL/REAL PROPERTY
REAL TO PERSONAL
PERSONAL TO REAL
ZONING, AKA-
PRIMARY PURPOSE?
DEED RESTRICTIONS
IMPLEMENT MASTER PLAN,
REGULATE LAND
WATER RIGHTS:
APPROPRIATIVE
LITTORAL
RIPARIAN
STATE OWNS WATER
LAKES/OCEANS
RIVERS/STREAMS
SINGLE PARTY LISITNG
HAS NO HOLDOVER CLAUSE
WHICH ELEMENTS OF VALUE DOES AN APPRAISER WORK WOTH IN A SALES COMPARISON APPROACH?
SUBSTITUTION (other properties)
CONTRIBUTION (improvements)
CASH TO CLOSE DOES NOT INCLUDE
CLOSING COSTS
DEBIT/CREDIT FOR TAXES?
D SELLER
C BUYER
WHAT IS UCC FOR?
Personal property, trade fixtures
UNIT IN PLACE METHOD
COST OF INSTALLING INDIVIDUAL UNITS (PLUMBING, ROOF…) TO ESTIMATE VALUE
CAN SELLER DECLINE PROPERTY DISCLOSURE?
YES
BUT- MUST DISCLOSE ALL LATENT MATERIAL DEFECTS
WHAT ARE OPTIONS
CONSIDERATION GIVEN FOR THE RIGTH TO PURCHASE PROPERTY
HOW MANY ACRES ARE IN THE NW 1/4 of SW 1/4 and E 1/2 of SW 1/4 OF A SECTION?
HOW MANY IN A TOWNSHIP?
4x4= 16. 640/16= 40
2x4= 8. 640/8= 80
40 + 80= 120
120 x 36 = 4320
LATERAL VS SUBJACENT SUPPORT
SURROUNDING LAND
BELOW THE SURFACE
WHICH DEED LIMITS THE COVENANTS?
SPECIAL WARRANTY
HOW MANY WEEKS IN A YEAR?
52
FAMILIAL STATUS
CHILDREN, PREG WOMEN
HOW MUCH IS A DISCOUNT POINT
1% of Loan
Or 1/8 of a %
RE VALUE:
ANTICIPATION
SUBSTITUTION
CONTRIBUTION
ASSEMBLAGE (PLOTTAGE)
*REVERSIONARY VALUE
BENEFITS EXPECTED BY BUYER
SAME AMOUNT FOR EQUAL PROPERTY
IMPROVEMENTS EFFECT ON VALUE
CONJOINING PROPERTY
*ESTIMATED SELLING PRICE IN FUTURE
WHAT TYPE OF AGENT CAN YOU NOT BE IF WORKING FOR YOUR FAMILY, FRIENDS, BUSINESS ASSOCIATES OR REGULAR CLIENTS?
TRANSACTION BROKER
NOTICE TO QUIT
DELIVERED TO FAMILY MEMBER OF AT LEAST 15yrs
HOW CAN YOU MAKE UP CE COURSES?
RETAKE STATE EXAM
TAKE BROKERAGE EDUCATION COURSE (24credits)
SPECIFIC PERFORMANCE BOX CHECKED
= SELLER
CAN SUE FOR BOTH SP & LIQUIDATED DAMAGES (earnest money)
TRADE FIXTURES & CHATTEL
PERSONAL PROPERTY
MONUMENT, COURSE, DISTANCE, POB
METES & BOUNDS
Monument- “bounds”
Distance- “metes”
Course- direction
POB- point of beginning
MINIMUM REQUIREMENT FOR LISTINGS
NONE
INTERPLEAD EARNEST MONEY?
BROKER RELEASES TO COURT
ESTOPPEL
PRINCIPAL ALLOWS CUSTOMER TO BELIEVE RHWIE IS AN AGENCY; PRINCIPAL IS ESTOPPED (LEGALLY PRECLUDED) FROM DENYING THE AGENCY
DEED OF RECONVEYANCE
ISSUED BY TRUSTEE TO MORTGAGOR WHEN MORTGAGE IS PAID OFF
HOW OFTEN DOES RE COMMISSION REQUIRE PROPERTY MANAGER TO DELIVER ACCOUNTING REPORT TO OWNER?
30 DAYS, unless stated otherwise in agreement
BROKERS SHOULD PROVID SAFEGUARDS ON WHAT TYPE OF DOWN PAYMENTS?
RESIDENTIAL
WHEN ADJUSTING COMPARABLES, WHAT ADJUSTMENTS DOES AN APPRAISER MAKE TO THE SUBJECT PROPERTY?
NONE. ADJUSTMENTS ONLY MADE TO COMPARABLES
EXCULPATORY LANGUAGE NOT ALLOWED IN
ANY CONTRACT BROKER IS NOT A PARTY TO, and NEVER IN ADDITIONAL PROVISIONS
BUYER CAN TERMINATE IF DAMAGE OCCURS BEFORE CLOSING IF IT IS WHAT % OF PURCHASE PRICE?
10%
WHAT IS THE TYPICAL (PAYED IN ADVANCED) CREDIT/DEBIT FOR WATER & HOA FEES?
….WHAT IF IT IS PAYED IN ARREARS (NOT PAYED YET)?
D BUYER
C SELLER
ARREARS = D SELLER, C BROKER
(Title company refunds seller for any over payment after Bill has been paid)
EXCLUSIVE AGENCY LISTING
BROKER NOT PAYED IF SELLER FINDS BUYER
EIS
ENVIRONMENTAL IMPACT STATEMENT
PROJECTS IMPACT OF PROPOSED PROJECT
RISK MANAGEMENT
AVOID
CONTROL
TRANSFER (Insurance)
RETAIN (do nothing)
BUYER REMEDIES
SUE FOR SPECIFIC PERFORMANCE
SUE FOR LIQUIDATED DAMAGES (earnest money)
CONVEYANCE CLAUSES:
HEBENDUM
REDDENDUM
TENENDUM
TYPE OF ESTATE (life..)
RESTRICTIONS (liens…)
PERSONAL PROPERTY?
TITLE INSURANCE PROTECTS
THE BUYER
WHICH ITEMS ARE EXCLUDED FROM OPERATING EXPENSES
DEBT SERVICE (aka mortgage)
DEPRECIATION
INCOME taxes
SHORT SALE
MORTGAGOR ATTEMPTS TO SELL FOR LESS THAN WHAT IS OWED
ADA MODIFICATIONS
PAID BY RENTER
BROKER OF RECORD =
EMPLOYING BROKER
WHICH ONE INSURES LOANS?
FHA or VA
WHICH REQUIRES A CERTIFICATE OF REASONABLE VALUE?
WHAT ARE RHE FRONT & BACK END RATIOS?
FHA, VA GUARANTEES
VA (appraisal)
29% , 41%
DATUM
BENCHMARK
ELEVATION REFERENCE POINT
OFFICIALLY SURVEYED ELEVATION MARKER
EARNEST MONEY RELEASE FORM
IS OPTIONAL
DEED REQUIRES
SIGNATURE OF GRANTOR ONLY
DUST (elements of value)
DEMAND
UTILITY
SCARCITY
TRANSFERABILITY
LATENT DEFECT
HIDDEN
HOW MANY PRINCIPAL MERIDIANS ARE THERE?
HOW BIG IS A SECTION?
HOW BIG IS A TOWNSHIP?
36
1 sq mile, 640 acres
6 sq miles, (36 sections= 23,040 acres)
LAND IN THE NW CORNER OF A TOWNSHIP IS LOCATED IN
SECTION 6
ILC
IMPROVEMENT LOCATION CERTIFICATE, “SURVEY LITE”
Based off surveyors observations
WHAT IS INCLUDED IN THE PRE-PRINTED PORTION OF SALES CONTRACT?
PREOWNED HOME WARRANTY INFO
WHAT IS TRID?
WHICH LOANS ARE EXCLUDED?
WHAT ARE THE 2 IMPORTANT DOCUMENTS, AND WHAT DID THEY REPLACE?
TILA + RESPA
HELOCS, REVERSE MORTGAGES
LOAN ESTIMATE (replaced TRUTH IN LENDING & GOOD FAITH ESTIMATE)
CLOSING DISCLOSURES (replaced FINAL TRUTH IN LENDING & HUD 1)
On the Rectangular Survey System, what does Section 16 represent?
READ/DEFINE:
NE 1/4 NW 1/4, Sec 17, T.2.S., R. 3W, 6th PM
Schools
Read right to Left
Principal Meridian, Range column, Township row, Section row, parts of a section
1 SECTION
1 SQ MILE OR 640 ACRES
PITI
PRINCIPAL
INTEREST
TAXES
INSURANCE
INVERSE CONDEMNATION
GOVT FAILS TO PAY OWNER AFTER TAKING PROPERTY BY EMINENT DOMAIN, OWNER CAN SUE
COVENANT OF QUIET ENJOYMENT
GRANTOR GUARANTEES TITLE AGAINST 3RD PARTY CLAIMS
NON-RESIDENT BROKER REQUIREMENTS
BROKER IN HIS HOME STATE
PASS CO LICENSING LAWS
DOWS NOT NEED OFFICE IN CO BUT DOES NEED CO TRUST ACCOUNT IF RECEIVING MONEY FROM CLIEN IN CO
WHAT IS THE HIGHEST FORM OF OWNERSHIP, AND WHAT DOES IT INCLUDE?
FEE SIMPLE, ABSOLUTE
COMPLETE BUNDLE OF RIGHTS
..FEE SIMPLE DEFEASIBLE= MAY REVERT TO GRANTOR IF CONDITIONS NOT MET
WHEN WOULD A TAX DEED BE USED?
FOR CONVEYING TITLE WHEN A PROPERTY SELLS FOR NON-PAYMENT OF TAXES (TAX SALE/FORECLOSURE)
CONVERSION OF FUNDS
USING PRINCIPALS FUNDS TO PAY FOR YOURSELF
DEFEASANCE CLAUSE
PREPAYMENT CLAUSE
DUE ON SALE
TRUST DEED RELEASED WHEN MORTGAGE PAID OFF
FINE FOR PREPAYMENT
ACCELERATION (IMMEDIATE PAYMENT OF LOAN) IF BORROWER SELLS PROPERTY
WHO PRESIDES OVER RE COMM HEARINGS?
ADMINISTRATIVE LAW JUDGE (retired)
ACRES PER SQ MILE
640
TIME LIMIT FOR FILING A COMPLAINT WITH OFHEO (HUD) FOR FAIR HOUSING VIOLATION ?
FOR LAWSUIT?
1 year of violation
2 YEARS
RULE F DOES NOT APPLY TO
NEWLY CONSTRUCTED HOMES WITH WARRANTIES
BASIS
ADJUSTED BASIS
PURCHASE PRICE
PURCHASE PRICE + CAPITAL IMPROVEMENTS
LENDER NEEDS 7% ON A $100k LOAN WITH 6.5% INTEREST RATE. HOW MANY DISCOUNT POINTS SHOULD HE CHARGE, and HOW MUCH MONEY WOULD IT BE?
1 DISCOUNT POINT = % ?
1 DISCOUNT POINT = 1/8%
7-6.5 = .5 x 8 (points per 1%) =
4 POINTS
$100,000 x .04 = $4,000
1 TOWNSHIP
36 SQ MILES/ 6 MILES SQUARE
640x36 = 23,040 ACRES
TRANSFER TAX =
DOCUMENTARY STAMP TAX
WHEN CONVEYING REAL PROPERTY
CO WITHHOLDING %
2% if over $100k
Or Total Net Proceeds
Whichever is less
WHAT IS THE RATE OF RETURN?
CAP RATE
WHO HAS LEGAL TITLE IN A LAND CONTRACT?
VENDOR (SELLER) RETAINS TITLE UNTIL PAYED OFF BY VENDEE
COMMUNITY PROPERTY (MARRIAGE) EXCLUDES:
GIFTS
INHERITANCE
WHO REQUIRES SEPARATE ESCROW ACCOUNTS?
HOA’s over 30 UNITS
PROPERTY MANAGERS- For each property owner
HOMEBUILDER EXEMPTION
CORPORATIONS MAY SELL WITHOUT A LICENSE
WHAT IS COVERED BY NAR (national association of realtors) & NOT RE COMM?
ETHICAL STANDARDS
SECONDARY MORTGAGE MARKET
FANNIE, FRE, GENNIE
do not use their own funds
SHERMAN/CLAYTON ANTITRUST LAWS DESIGNED TO PREVENT-
MONOPOLIES; ANTI-COMPETITIVE BEHAVIOR/ UNFAIR TRADE PRACTICES
STRAIGHT LOAN
PAY INTEREST ONLY; PRINCIPAL PAYED AT END
INCOME RATIO VS DEBT RATIO
FRONT END RATIO- PAYMENT CANNOT EXCEED WHAT % GROSS MONTHLY INCOME?
BACK END RATIO - PAYMENT PLUS OTHER DEBTS CANNOT EXCEED WHAT % OF GROSS MONTHLY INCOME?
MONTHLY HOUSING EXPENSES/MONTHLY GROSS INCOME 28%
MONTHLY HOUSING + DEBT/MONTHLY GROSS INCOME 36%
RE COMM: HOW MANY MEMBERS, HOW LONG TERM?
DUTIES?
5 members
3 years
LICENSING, REGULATION, ENFORCEMENT
For brokers, appraisers, mortgage originators, subdivision developers, HOAs, conservation easement holders
HOW DOES LANDLORD INITIATE EVICTION?
COURT ORDER
IRV
INCOME
RATE (commission)
VALUE (cost of property)
WHAT IS DEBIT/CREDIT FOR “TRUST DEED PAYOFF”?
PAYOFF OLD LOAN
D SELLER
C BROKER
WHAT IS AD VALOREM, and WHO IS EXEMPT?
PROPERTY TAX
HOMESTEAD
GOV’T OWNED PROPERTY
NON PROFIT OWNED PROPERTY (church)
AN ILLEGAL CONTRACT IS
VOID
COUNTERPROPOSAL
AMENDS
LENDER MAY NOT REQUIRE DISCLOSURE OF
CURRENT PROPERTY TAXES
FIRPTA
PORTION ON NET PROCEEDS
WHAT ARE IMPROVEMENTS ?
DEFINITION OF REAL ESTATE?
MAN MADE STRUCTURES PERMANENTLY ATTACHED TO LAND
LAND + IMRPOVEMENTS
CERCLA (SUPERFUND) LAW
BROWNFIELD REVITALIZATION ACT
CONTAMINATED PROPERTY; EACH OWNER HAS COMPLETE LIABILITY
FUNDS FOR CLEANUP OF SUPERFUND SITES
WHAT DOES MEC STAND FOR, and WHEN IS IT TYPICALLY USED?
MUTUAL EXECUTION of CONTRACT
(DATE BOTH PARTIES SIGNED)
COMMERCIAL
EASEMENT:
APPURTENANT
IN GROSS
PRESCRIPTIVE
BY NECESSITY
ATTACHES TO PROPERTY
NOT FOR BENEFIT OF OWNER (ex-utility company)
USE WITHOUT PERMISSION, 18 YEARS = CREARES PERMANENT EASEMENT
GRANTED BY COURT, LANDLOCKED PROPERTY
WHICH IS NOT A SUBDIVISION?
CONDO
CAMPGROUND
TIMESHARE
COOPERATIVE
TOWN HOME
CAMPGROUND
SELLER REMEDIES
LIQUIDATED DAMAGES (Earnest money) default
SPECIFIC PERFORMANCE IF CHECKED
LIFE ESTATE:
CONVENTIONAL
PUR AUTRE VIE
LEGAL- HOMESTEAD/DOWER & CURTESY
REMAINDERMAN
REVERSIONARY
MEASURED BY OWNERS LIFETIME
OWNERS LIFE
ANOTHER’s LIFE
PRINCIPAL RESIDENCE
SURVIVING SPOUSE
PARTY TO RECEIVE TITLE
REVERTS TO ORIGINAL OWNER
HOME INSPECTORS
DO NOT REQUIRE A LICENSE!
CALCULATE LOAN BALANCE AFTER 2 MONTHS FOR A $200k LOAN with 6% INTEREST RATE AND $1250 MONTHLY PAYMENT
200,000 x .06 = 12,000/12= 1,000
$1250 - 1000 = $250
200,000- $250= $199,750
199,750 x .06 = 11,985 /12 = 998.75
$1250 - 998.75 = $251.25
199,750 - $251.25 = $199,498. 75
MARKET VALUE
MARKET PRICE
LISTING PRICE
SELLING PRICE
ARM
ADJUSTABLE RATE MORTGAGE
WHICH TAKES PRIORITY:
WILL
RIGHT OF SURVIVORSHIP
SURVIVORSHIP
HOW ARE COMMERCIAL RENTAL RATES DETERMINED?
PRICE PER SQ FT, TRIPLE NET
HYPOTHECATION
SECURING A LOAN BY PLEDGING PROPERTY AS COLLATERAL, WITHOUT GIVING UP POSSESSION
DEATH OF LANDLORD TERMINATED LEASE, WHICH TYPE OF LEASE?
TENANCY AT WILL
CO PROPERTY TAX PAYMENT DEADLINES
LUMP SUM APRIL 30
1/2 end of FEB, 1/2 JUNE 15
MARKET VALUE IS $100k, ASSESSMENT RATE 7.96%. WHAT IS THE TAX BILL IF THE TAX RATE IS 52 MILS?
MARKET VALUE x ASSESSMENT RATE = ASSESSED VALUE X MIL LEVY = TAX BILL
100k x .0796 = $7,960 (assessed value)
$7,960 x .052 (tax rate) = $669.21 (tax Bill)
WHAT LAW DOES THE RIGHT OF RECCISSION APPLY TO?
TRUTH IN LENDING- REG Z
WHAT IS “DEPOSIT PAYED TO”, and WHAT IS THE CREDIT/ DEBIT?
EARNEST MONEY CHECK
C BUYER
D BROKER
WHO SIGNS DEED?
SELLER
COLLUSION
MARKET ALLOCATION
GROUP BOYCOTT
REDLINING
STEERING
BLOCKBUSTING
BROKERS JOIN TOGETHER IN ORDER TO PUT ANOTHER BROKER OUT OF BUSINESS
BROKERS AGREE NOT TO
COMPETE WITH EACH OTHER
BROKERS AGREE TO EXCLUDE OTHER BROKERS
REFUSING TO MAKE A LOAN FOR UNFAIR REASONS
STEERING BUYERS AWAY FROM PARTICULAR NEIGHBORHOOD
PERSUADING HOMEOWNERS TO SELL BY PREDICTING ‘UNDESIRABLES’ MOVING TO AREA
PROOF OF TITLE (3)
TORRENS
ABSTRACT OF TITLE
TITLE INSURANCE
TAXES ON HIUSE VALUED AT $80k are $450. TAK RATIO 16%.
WHAT ARW TAXES ON HOUSE NEXT DOOR WITH MARKET VALUE OF $75k?
450/80,000= .0075 x 75k=
562.5
HOW MANY MONTHS OF TAXES CAN LENDER TAKE FOR ESCROW?
3
ON THE FINAL LINE OF THE SETTLEMENT SHEET, WHAT DOES A CREDIT SELLER DEBIT BROKER MEAN FOR THE SELLER?
MONEY OWED BY SELLER, SELLER IS “UPSIDE DOWN”
WHAT IS THE PURPOSE OF THE EQUALIZATION BOARD?
RAISE/DROP PROPERTY TAXES TO MATCH CURRENT MARKET VALUES
MAXIMUM AMOUNT INTEREST CAN BE CHARGED ON CARRYBACK (seller lender) LOAN?
45%
RATIFICATION
THE ACT OF SIGING OR GIVING FORMAL CONSENT
HOW MANY FEET IN A MILE
5280
WHO PAYS TITLE INSURANCE
BUYER
What does the trustee hold
DEED OF TRUST
AKA NAKED TITLE
