DRENew Flashcards
Assemblage
Combining 2 or more parcels
Anticipation
A purchase/sale decision
Balance
Occurs when supply & demand factors at the point of balance
Change
constant physical & economic change that influence value
Comparable
a property that is considered: alternative, similar, & competing to the subject property
Conformity
property is in harmony (style, condition, etc) with the surrounding properties
Contribution
an item is onl worth what it contributes in value to the whole
Plottage
increase value by combining smaller lots into one large lot for greater $$
Substitution
knowledgeable buyer will pay no more for one item than for a comparatively equivalent substitute
Government/Rectangular Survey
a TOWNSHIP is 6mi x 6mi (36 sq Mi)There are 36 SECTIONS in a township
There are 640 ACRES in a Section
One ACRE = 43,560 ft
Initial East-West Lines drawn in a RECTANGULAR SURVEY are “Base Lines”
Initial North-South Lines drawn in a RECTANGULAR SURVEY are “Principal Meridians”
Every 6 mi (EVERY TOWNSHIP) there are more lines drawn (called Township lines for E/W and Range lines for N/S)
What is a Township
Small unit of a RECTANGULAR SURVEY. Each 6 mi is a new TOWNSHIP
How large is a Township?
36 square mi (6mi x 6mi)
How Many SECTIONS in a TOWNSHIP?
36 (6x6)
How Many ACRES in a SECTION?
640
How Many FEET in an ACRE?
43,560
What are “Base Lines”
Initial E/W lines drawn in a RECTANGULAR SURVEY
What are “Prime Meridians”
Initial N/S lines drawn in a RECTANGULAR SURVEY
What are “Township Lines”
E/W Lines drawn every 6 mi in a RECTANGULAR SURVEY that outline each TOWNSHIP
What are “Range Lines”
N/W Lines Lines drawn every 6 mi in a RECTANGULAR SURVEY that outline each TOWNSHIP
What duties does an Agent Owe to Client?
CCLOAD
Confidentiality, Care, Loyalty, Obedience, Accountability, Disclosure
What is a Special/Specific Agent
A limited agent who is authorized for a specific transaction for a set amount of time
What is a General Agent?
An agent authorized for a series of transactions or acts over a continues period of time (e.g., a property manager)
What is a Universal Agent?
A broad agent - same as a Power of Attorney. Can act in ALL MATTERS of REAL ESTATE on behalf of Client
What is Single Agency?
When the Client/Principal (seller OR buyer) deals with the Agent, who acts on behalf of principal
What is Dual Agency?
When SELLER AND BUYER both have same agent for a transaction. MUST HAVE CONSENT and knowledge by both clients
What is a Transactional Broker
a non-agent. Commonly known as a “transaction coordinator” or “facilitator”. They assist both parties with paperwork without representing or negotiating for either buyer or seller.
What is the correct formula for the COST APPROACH TO VALUE?
Cost to Reproduce Depreciation + Value of Land = Value
Two JTs, one conveys his interest to another party. What is the result?
JT is severed and the new 3rd party becomes a TIC with the remaining JTs
Where is GRM used?
For the INCOME APPROACH when appraising SFRs. TRICK: It’s not used for Commercial properties (Cap Rate is). Difference is minor (GRM takes GROSS RENT, Cap Rate is Net Operating Income)
What is the timeline to rescind a timeshare purchase?
7 days
How long do you have to file a complaint with HUD if you believe your rights have been violated?
1 Year
When a Broker hires a new Agent, how long does the Broker have to notify DRE?
5 days
What is an Encumbrance?
Anything that burdens the title of the property or limits its use. Common examples are easements, liens, and restrictions on use.
What is an Encroachment?
When a permanent object from one property extends over onto another property illegally. Classic example is the fence that extends over.
What is a Lien?
A type of encumbrance. For exam, it is a claim on a property to secure a debt.
What is a Restrictive Covenant?
An agreement in a deed that requires one party to do (or not do) something.
How long does DRE have to grant or deny a request for payment from RE Recovery Account?
90 days
When a Broker changes business address, how long does he have to notify DRE?
ONE BUSINESS DAY
How many hours of CLE must a MLO complete each year?
8 hours
What does the SAFE Act cover?
Mortgage Lending, passed 2008. “Secure and Fair Enforcement for Mortgage Licensing Act”
What is the punishment if you are acting as a RE broker or MLO without a license?
up to $20k fine and 6 mos imprisonment. If corporation, $60k fine
How many hours of EDU required to apply for MLO endorsement?
20 hours
What is a Net Lease?
a lease agreement where the tenant pays SOME OR ALL of the costs of building ownership such as (CAM fees, taxes, or insurance)
What is a Gross Lease?
When the lessee does NOT pay any costs of ownership and just pays a set monthly rental amount
What is a Percentage Lease?
When the lessee has a base rent plus a percentage of sales. Common in RETAIL spaces
What is a Graduated Lease?
Rent changes occur at predetermined future dates
How to calculate Net Operating Income?
Net Operating Income = (total anticipated revenue - expenses).
Total Anticipated Revenue = ((potential gross income - (vacancy + rent loss)) + (any additional income)
How can a Join Tenancy be created?
By grant, purchase or will. It cannot be created by “operation of law.”
What does Federal Law require with regards to appraiser licensure?
An appraiser must be licensed when involved in any federally-related transaction with an amount of $250,000
How many times can you take MLO exam? What’s the waiting period between each sitting?
3x / 30d
Using income approach for a property, value = what?
Value = (Net Operating Income) / Cap Rate.
Homestead abandonment rules
Selling a property = loss of homestead. OR filing declaration of abandonment. Don’t need to file DOA if selling, can file another @ new house and it’s valid. Only 1 homestead at a time.
Can tenants by the entirety be partitioned by Court order?
No
When is a credit check typically done with a RE loan?
After pre-qual/before pre-approval.
Pre-qual send financial info so lender can esitamte the amount they’d qual for.
Pre-Approval is where they get credit and get a letter of pre-approval subject to appraisal and income verification.
Upon request, when must CC&Rs be provided to a purchaser of a condo?
within 10 days
What is the primary purpose of acknowledgement of a Deed?
The primary purpose is to verify the document was executed without duress. The secondary purpose is to verify the identity of the party signing the document.
What is a latent defect?
A defect not easily visible or detectable during a normal inspection.
What is a patent defect?
A defect in the property which is obvious and easily visible.
How many units require a property manager to be on site?
16 or more.
Obsolescence
the process or condition of going out of date or no longer being of use.
Functional obsolescence
a property not complying with a recognized utility. It’s features that are not practical or desirable.
Economic obsolescence
factors unrelated to the property itself and outside of the owners’s control diminish
External obsolescence
events outside the owner’s control such as zoning changes make the building’s value diminish.
What’s an equitable lien?
Lien arising out of a claim on goods or property conferred by a court.
What’s a general lien?
A lien against ALL property owned by the Debtor.
When an apartment owner converts to condos, how long do tenants have to puchase their units?
90 days after the issuance of the public report
Indictment or felony charging must be reported to DRE when?
Within 30 days
How many square miles in a quadrangle?
576
Quadrangles are 24 miles square, so their area is 24x24=576 sq mi.
Equitable Conversion
when, after parties have entered into a binding contract, the buyer becomes the “equitable owner” before delivery of the deed
Accession
one acquires title to additions or improvements as a result of annexation fo fixtures or the accretion of alluvial deposits on the banks of streams
When did CERCLA become law? What is it?
1980 - Comprehensive Environmental Response, Compensation, and Liability Act.
