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MD Pre Licensing > Definitions > Flashcards

Definitions Flashcards

1
Q

Salesperson

A

A person associated with a licensed broker who performs real estate activities under the licensed brokers supervision.

(Section 2. Unit 1. Lesson 2.)

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2
Q

Broker

A

A person who performs real estate activities for another person for a fee or compensation of any kind.

(Section 2. Unit 1. Lesson 2.)

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3
Q

Associate Broker

A

A licensed broker who chooses to work under the supervision and name of another licensed broker.

(Section 2. Unit 1. Lesson 2.)

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4
Q

Activities Requiring Licensure

A

“for others, for compensation of any kind”

Section 2. Unit 1. Lesson 1.

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5
Q

Land

A

The earth’s surface extending downward to the center of the earth and upward to infinity, including PERMANENTLY attached natural objects.

(Section 3. Unit 1. Lesson 1.)

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6
Q

Real Estate

A

Land, plus all things attached to it naturally or artificially

(Section 3. Unit 1. Lesson 1.)

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7
Q

Real Property

A

Real estate, plus the interests, benefits, and rights automatically included with real estate ownership.

(Section 3. Unit 1. Lesson 1.)

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8
Q

Personal Property

A

Everything that’s not real property

Section 3. Unit 1. Lesson 1.

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9
Q

Improvements

A

Permanent, man-made attachments that include things such as fencing, buildings, and walkways.

(Section 3. Unit 1. Lesson 1.)

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10
Q

Rights Associated with Real Property

A

Enjoyment, Disposition, Possession, Control, Exclusion

Section 3. Unit 1. Lesson 1.

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11
Q

Right of Enjoyment

A

Right to legally use the property however the owner desires

Section 3. Unit 1. Lesson 1.

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12
Q

Right of Disposition

A

Right to determine how, when. and whether the property is to be sold, leased, mortgaged, or financed.

(Section 3. Unit 1. Lesson 1.)

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13
Q

Right of Possession

A

Right to occupy the property

Section 3. Unit 1. Lesson 1.

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14
Q

Right of Control

A

Right to determine how others may use the property

Section 3. Unit 1. Lesson 1.

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15
Q

Right of Exclusion

A

Right to refuse others access to your property

Section 3. Unit 1. Lesson 1.

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16
Q

Chattel

A

Personal Property

Section 3. Unit 1. Lesson 2.

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17
Q

Emblements

A

Crops produced through cultivation that belong to the tenant during cultivation and after harvest. Considered the renter’s personal property.

(Section 3. Unit 1. Lesson 2.)

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18
Q

Trade Fixtures

A

Equipment that is placed on or attached to real estate which the renter uses in their trade or business. Considered the renter’s personal property.

(Section 3. Unit 1. Lesson 2.)

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19
Q

Fixture or Personal Property Tests

A

Agreement. Adaption. Method at Attachment.

Section 3. Unit 1. Lesson 3.

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20
Q

Agreement (Fixture or Personal Property Tests)

A

What the parties have decided (usually in writing) as to whether an item will stay or go.

(Section 3. Unit 1. Lesson 3.)

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21
Q

Adaption (Fixture or Personal Property Tests)

A

How the item is situated to the real estate.

Section 3. Unit 1. Lesson 3.

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22
Q

Method of Attachment (Fixture or Personal Property Tests)

A

How & whether the item is permanently affixed to the property.

(Section 3. Unit 1. Lesson 3.)

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23
Q

Severance

A

When an item that was real property becomes personal property by detaching it (severing it) from the land.

(Section 3. Unit 1. Lesson 4.)

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24
Q

Annexation

A

Attachment of personal property to real property, thereby making it a fixture.

(Section 3. Unit 1. Lesson 4.)

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25
Q

Mobile Home

A

Constructed with transportation in mind.

Section 3. Unit 1. Lesson 5.

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26
Q

Manufactured Home

A

Constructed in a factory, towed to its destination, and then anchored to the ground.

(Section 3. Unit 1. Lesson 5.)

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27
Q

Modular

A

NOT built with transportation in mind. It’s pieces are constructed offsite, transported to it’s permanent location, and then the build is complete.

(Section 3. Unit 1. Lesson 5.)

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28
Q

Scarcity

A

The concept that there is a finite amount of land.

Section 3. Unit 2. Lesson 1.

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29
Q

Permanence of Investment

A

Involves improvement, such as sewer, roads, & utilities, that are long-term, stable investments with relatively stable returns over time.

(Section 3. Unit 2. Lesson 1.)

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30
Q

Location or Area Preference

A

A property’s value is impacts by where it’s situated and how interested people are in buying or living in the area.

(Section 3. Unit 2. Lesson 1.)

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31
Q

Immobility

A

The geographic location of a piece of land is fixed, it can never be changed.

(Section 3. Unit 2. Lesson 1.)

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32
Q

Indestructability

A

While improvements may deteriorate over time, the land itself can’t be destroyed.

(Section 3. Unit 2. Lesson 1.)

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33
Q

Uniqueness

A

Land isn’t interchangeable. One piece of land isn’t exactly like another.

(Section 3. Unit 2. Lesson 1.)

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34
Q

Bundle of Rights

A

DEEP C. Right of Disposition, Right of Exclusion, Right of Enjoyment, Right of Possession, Right of Control.

(Section 3. Unit 2. Lesson 2.)

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35
Q

Sub Surface / Mineral Rights

A

The right to use underground resources ex. natural gas & minerals

(Section 3. Unit 2. Lesson 2.)

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36
Q

Air Rights

A

Open space above properties.

Section 3. Unit 2. Lesson 2.

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37
Q

Right of Profit

A

Example - Right to harvest timber and sell it.

Section 3. Unit 2. Lesson 2.

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38
Q

Littoral Water Rights

A

The region or share next to a lake or ocean. A stationary body of water. Littoral : Lake

(Section 3. Unit 2. Lesson 2.)

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39
Q

Riparian Water Rights

A

River Bank. A moving body of water.

Section 3. Unit 2. Lesson 2.

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40
Q

Legal Description systems used in the US

A

Lot & Block. Metes & Bounds. Rectangular.

Section 3. Unit 3. Lesson 2.

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41
Q

Lot & Block

A

Mainly used in urban & suburban areas.

Section 3. Unit 3. Lesson 2.

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42
Q

Metes & Bounds

A

Uses monuments, compass headings, & directions.

Section 3. Unit 3. Lesson 2.

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43
Q

Rectangular

A

Divides land into 6-mile-square townships, which can be further divided.

(Section 3. Unit 3. Lesson 2.)

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44
Q

Monument

A

A permanent physical marker that is either man-made or natural. Frequently used in the metes & bounds system.

(Section 3. Unit 3. Lesson 2.)

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45
Q

Metes

A

Direction & distance of a line forming the boundary of a property.

(Section 3. Unit 3. Lesson 3.)

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46
Q

Bounds

A

Physical features that define the boundaries of the land.

Section 3. Unit 3. Lesson 3.

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47
Q

Township

A

Consists of 36 one-square-mile sections

Section 3. Unit 3. Lesson 5.

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48
Q

Section

A

Consists of 640 acres

Section 3. Unit 3. Lesson 5.

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49
Q

Principle Meridian

A

The north-south line that runs through the initial point.

Section 3. Unit 3. Lesson 5.

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50
Q

Range Lines

A

North-south lines that do not run through the initial point

(Section 3. Unit 3. Lesson 5.)

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51
Q

Township Lines

A

East-west lines that do no run through the initial point

Section 3. Unit 3. Lesson 5.

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52
Q

Base Line

A

East-west lines that run through the initial point

Section 3. Unit 3. Lesson 5.

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53
Q

Survey

A

Where the legal description appears

Section 3. Unit 3. Lesson 6.

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54
Q

Survey Sketch

A

Visual depiction of location & dimensions of a property

Section 3. Unit 3. Lesson 6.

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55
Q

Spot Survey

A

Location, size, & shape of improvements on a property.

Section 3. Unit 3. Lesson 6.

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56
Q

Voluntary Lien

A

Lien created by the owner of the property

Section 3. Unit 4. Lesson 2.

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57
Q

Involuntary Lien

A

Lien placed against a property without the owner’s consent

Section 3. Unit 4. Lesson 2.

58
Q

General Lien

A

Lien placed against all property belonging to an individual

Section 3. Unit 4. Lesson 2.

59
Q

Specific Lien

A

Lien placed against a specific piece of property

Section 3. Unit 4. Lesson 2.

60
Q

What causes a property tax lien to be placed?

A

Unpaid real estate taxes

Section 3. Unit 4. Lesson 2.

61
Q

What causes a mechanics lien to be placed?

A

Failure to pay for work performed on the property

Section 3. Unit 4. Lesson 2.

62
Q

What causes a judgement lien to be placed?

A

Failure to pay monetary damages from a lawsuit

Section 3. Unit 4. Lesson 2.

63
Q

What causes a mortgage lien to be placed?

A

Financing a home purchase

Section 3. Unit 4. Lesson 2.

64
Q

Four Types of Easements

A

Easement appurtenant, Easement in gross, Easement by necessity, Easement by prescription

(Section 3. Unit 4. Lesson 2.)

65
Q

Easement Appurtenant

A

Permanent right to use another’s land for the benefit of a neighbor

(Section 3. Unit 4. Lesson 2.)

66
Q

Easement in Gross

A

Right to use the land. Not necessarily an adjoining property

(Section 3. Unit 4. Lesson 2.)

67
Q

Easement by Necessity

A

Usually involves access to a road

Section 3. Unit 4. Lesson 2.

68
Q

Easement by Prescription

A

Acquired through years of use

Section 3. Unit 4. Lesson 2.

69
Q

Possessory Rights

A

Rights to occupy a property

Section 3. Unit 4. Lesson 2.

70
Q

Non-Possessory Rights

A

Easements

Section 3. Unit 4. Lesson 2.

71
Q

Party Wall

A

Constructed on boundary line separating two properties

Section 3. Unit 4. Lesson 2.

72
Q

License (Encumbrance)

A

Temporary permission to use a property

Section 3. Unit 4. Lesson 5.

73
Q

Lis Pendens

A

Legal notice that a lawsuit is pending that affects the title of a property

(Section 3. Unit 4)

74
Q

Freehold Estate

A

Ownership. For an undetermined length of time

Section 3. Unit 5. Lesson 1.

75
Q

Leasehold Estate

A

Renting. Provides interest in real estate for a limited time

(Section 3. Unit 5. Lesson 1.)

76
Q

Fee Simple Ownership / Fee Simple Absolute

A

Inheritable property that retains the entire bundle of rights

(Section 3. Unit 5. Lesson 1.)

77
Q

Life Estate

A

Property possessed for someones lifetime

Section 3. Unit 5. Lesson 1.

78
Q

Fee Simple Determinable

A

The title remains with the new owner as long as the conditions of ownership are met. Type of Fee Simple Defeasible estate. Inheritable Freehold estate.

(Section 3. Unit 5. Lesson 1.)

79
Q

Fee on Condition / Fee Simple Submit to a Condition Subsequent

A

The estate continues unless a specific event occurs, in which case ownership may revert to the owner or the owners successors. Type of Fee Simple Defeasible estate. Inheritable.

(Section 3. Unit 5. Lesson 1.)

80
Q

Remainderman

A

A life estate with remainder interest refers to a situation in which a remainderman named by the owner when forming th estate receives title to the property upon the death of the life tenant.

(Section 3. Unit 5. Lesson 1.)

81
Q

Act of Waste

A

An abuse of a property by a person who holds interest through a life estate.

(Section 3. Unit 5. Lesson 1.)

82
Q

Revisionary Interest

A

A life estate in which property title reverts to the owner upon death of the life tenant.

(Section 3. Unit 5. Lesson 1.)

83
Q

Dower

A

Property held by the wife - widow

Section 3. Unit 5. Lesson 1.

84
Q

Curtesy

A

Property held by the husband - widow

Section 3. Unit 5. Lesson 1.

85
Q

Estate in Severalty

A

One person owns the property

Section 3. Unit 5. Lesson 2.

86
Q

Tenants in Common

A

Hold an undivided interest in the entire property. Ownership percentage passes to heirs after death.

(Section 3. Unit 5. Lesson 2.)

87
Q

Joint Tenancy

A

If any of the owners die, the others own the deceased persons shares.

(Section 3. Unit 5. Lesson 2.)

88
Q

Tenancy by the Entirety

A

If one spouse dies, the other becomes the sole owner. Has the right of survivorship. If they divorce, their tenancy by the entirety would end automatically and become tenants in common.

(Section 3. Unit 5. Lesson 3.)

89
Q

Beneficiary (Trusts)

A

Person benefiting from the trust.

Section 3. Unit 5. Lesson 4.

90
Q

Trustee (Trusts)

A

Person carrying out the trustors wishes

Section 3. Unit 5. Lesson 4.

91
Q

Trustor (Trusts)

A

Person conveying title to a trustee.

Section 3. Unit 5. Lesson 4.

92
Q

Living Trust

A

Created during a persons lifetime. The trustee manages the trust according to the terms of the trust. A living trust is established to convey property.

(Section 3. Unit 5. Lesson 4.)

93
Q

Testamentary Trust

A

Created according to the terms of the will of a deceased person. Does not avoid probate.

(Section 3. Unit 5. Lesson 4.)

94
Q

Syndicate

A

Organizations with many participants with the common purpose of making a profit from a real estate investment.

(Section 3. Unit 5. Lesson 7.)

95
Q

Joint Venture

A

2 or more people come together for the single, temporary purpose of buying real estate, improving the properties, and selling for a profit.

(Section 3. Unit 5. Lesson 7.)

96
Q

Express Agency

A

An agency agreement this is understood and agreed to by both parties.

(Section 4. Unit 1. Lesson 2.)

97
Q

Implied Agency

A

An agency relationship that exists because you behave in a way that leads the customer to believe you to be their agent.

(Section 4. Unit 1. Lesson 2.)

98
Q

Ratification

A

Acceptance after the fact, either through paperwork or actions of the parties

(Section 4. Unit 1. Lesson 2.)

99
Q

Estoppel

A

Prevention of a legal claim that is contrary to the persons own actions

(Section 4. Unit 1. Lesson 2.)

100
Q

Acronym for Fiduciary Duties for Clients

A

OLD CAR

Section 4. Unit 2. Lesson 2.

101
Q

Obedience (Fiduciary Duties)

A

Follow clients instructions, lawfully

Section 4. Unit 2. Lesson 2.

102
Q

Loyalty (Fiduciary Duties)

A

Put clients interests ahead of all others

Section 4. Unit 2. Lesson 2.

103
Q

Disclosure (Fiduciary Duties)

A

Divulge all facts pertinent to the transaction

Section 4. Unit 2. Lesson 2.

104
Q

Confidentiality (Fiduciary Duties)

A

Keep information shared by the client private. Do not end when client relationship ends.

(Section 4. Unit 2. Lesson 2.)

105
Q

Accounting (Fiduciary Duties)

A

Properly handle all money or property entrusted to you.

Section 4. Unit 2. Lesson 2.

106
Q

Reasonable skill and care (Fiduciary Duties)

A

Provide clients with quality, knowledgeable, and prudent service

(Section 4. Unit 2. Lesson 2.)

107
Q

Acronym for Customer Duties

A

DRHP. Old Cars Drip.

Section 4. Unit 2. Lesson 3.

108
Q

Meaning of DRHP

A

D- Disclosure of material facts
R- Reasonable skill and care in performance
H- Honesty and fair dealing
P- Prompt presentation of all written offers and counter offers

(Section 4. Unit 2. Lesson 3.)

109
Q

Appraisal

A

Unbiased estimate of the value of a particular property as of a particular date

(Section 5. Unit 1. Lesson 2.)

110
Q

Mortgage Value

A

Price at which the property can be loaned on or sold for a foreclosure sale

(Section 5. Unit 1. Lesson 2.)

111
Q

Investment Value

A

Return on investment a property may provide

Section 5. Unit 1. Lesson 2.

112
Q

Insured Value

A

Cost to replace or rebuild a property

Section 5. Unit 1. Lesson 2.

113
Q

Evaluation

A

Study of a property, potentially for land use or marketability

(Section 5. Unit 1. Lesson 2.)

114
Q

Comparative Market Analysis (CMA)

A

An unbiased estimate or opinion of the market value of real property by a real estate licensee who isn’t a licensed or certified appraiser

(Section 5. Unit 1. Lesson 3.)

115
Q

Brokers Price Opinion (BPO)

A

Usually ordered by a lender in a foreclosure situation in lieu of a full appraisal. CMA w/ a different name for a different purpose.

(Section 5. Unit 1. Lesson 3.)

116
Q

Price (Appraisals)

A

What a buyer had paid for a property and what the seller has accepted

(Section 5. Unit 1. Lesson 4.)

117
Q

Cost (Appraisals)

A

What it would cost to recreate a property if it disappeared off the face of the earth.

(Section 5. Unit 1. Lesson 4.)

118
Q

Value (Appraisals)

A

What a property is worth

Section 5. Unit 1. Lesson 4.

119
Q

Acronym for Factors Influencing Value

A

DUST

Section 5. Unit 1. Lesson 5.

120
Q

Demand (Factors Influencing Value)

A

Relates to the properties popularity

Section 5. Unit 1. Lesson 5.

121
Q

Utility (Factors Influencing Value)

A

Speaks to the properties function

Section 5. Unit 1. Lesson 5.

122
Q

Scarcity (Factors Influencing Value)

A

Reflects the market supply or lack thereof

Section 5. Unit 1. Lesson 5.

123
Q

Transferability (Factors Influencing Value)

A

The ease with which the deed can be transferred and the property put to the desired use.

(Section 5. Unit 1. Lesson 5.)

124
Q

Sales Comparison Approach (Appraisals)

A

Used in nearly all residential appraisals. Uses a process of comparison with similar properties that have a known sale price to determine a subject propertys market value.

(Section 5. Unit 2. Lesson 1.)

125
Q

Principle of Substitution

A

The value of a property is equal to the value of an equivalent subject property.

(Section 5. Unit 2. Lesson 1.)

126
Q

Cost Approach (Appraisals)

A

Measures value as a cost of production, including the acquisition of the land and the construction costs. i.e. cost of rebuilding

(Section 5. Unit 2. Lesson 2.)

127
Q

Depreciation

A

A loss in value

Section 5. Unit 2. Lesson 2.

128
Q

Physical Depreciation

A

A loss in value caused by deterioration in physical condition

(Section 5. Unit 2. Lesson 2.)

129
Q

Functional Obsolenscence

A

A loss in value caused by defects in design, such as a poor floor plan

(Section 5. Unit 2. Lesson 2.)

130
Q

External Depreciation / Economic Obsolenscence

A

A loss in value caused by an undesirable or hazardous influence offsite i.e. airport noise

(Section 5. Unit 2. Lesson 2.)

131
Q

Curable Depreciation

A

An item that can be repaired or replaced, and where the cost to cure the item is less than or the same as the anticipated increase in the propertys value

(Section 5. Unit 2. Lesson 2.)

132
Q

Incurable Depreciation

A

Items not practical to correct

Section 5. Unit 2. Lesson 2.

133
Q

Site Value

A

Assumes the land is vacant and bases opinion on highest and best use

(Section 5. Unit 2. Lesson 2.)

134
Q

Reproduction Cost

A

Cost to build an exact replica of the subject property with the same materials and deficiencies

(Section 5. Unit 2. Lesson 2.)

135
Q

Replacement Cost

A

Reflects the cost to build a functionally equivalent property

(Section 5. Unit 2. Lesson 2.)

136
Q

Income Approach / Income Capitalization Approach (Appraisals)

A

Uses the income the property generates to estimate a properties value

(Section 5. Unit 2. Lesson 3.)

137
Q

Gross Rent Multiplier (GRM)

A

A valuation method used for rental properties and estimates how rental income properties relates to value. Best used for 1 to 4 family units where the primary use is as a rental property.

(Section 5. Unit 2. Lesson 3.)

138
Q

Gross Income Multiplier (GIM)

A

The same as GRM, but uses all sources of income from the property rather than only rent. Best used for 5+ unit income properties with multiple sources of income.

(Section 5. Unit 2. Lesson 3.)

139
Q

Direct Capitalization

A

Uses a single year’s expected income divided by a capitalization rate to arrive at a market value for the property. Generally appropriate for small to med sized properties and those with stable forecast net income.

(Section 5. Unit 2. Lesson 3.)

140
Q

Yield Capitalization

A

Used when the investor wants a value based on long-term holdings, along with the effect of debt repayment and potential resale of the property on the ultimate return on investment.

(Section 5. Unit 2. Lesson 3.)

141
Q

Federally Regulated Transaction

A

Apply to financing, refinancing, and the use of real property as security for a loan when the property is valued above $400k. Under $400k is exempt.

(Section 5. Unit 3. Lesson 2.)

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