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real estate > exam smart terms > Flashcards

exam smart terms Flashcards

1
Q

A lease where the landlord pays taxes, assessments, insurance, etc.

A

Gross Lease

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2
Q

A lease where the tenant pays all or part of taxes, assessments, insurance, etc. Taxes paid by tenant would be tax deductible for the tenant.

A

net lease

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3
Q

A lease where the rent is based on a percentage of sales; normally used in retail leases

A

percentage lease

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4
Q

A lease where the payments can go up or down, but are pre-determined

A

graduated lease

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5
Q

A lease usually long-term; e.g., farmers, gas stations, etc. Win-win for landlord tenant

A

ground lease

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6
Q

The type of deed used to transfer title from a seller to a buyer whereby seller gives buyer greatest protection; seller promises the covenant of seizin, quiet enjoyment, against encumbrances, further assurance and warranty forever

A

general warranty deed

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7
Q

A type of deed transferring title from a seller to a buyer. However, the seller only makes promises regarding ownership, encumbrances, etc. during the time period in which the seller owned the property, no promises before that.

A

special warranty

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8
Q

A type of deed transferring title from a seller to a buyer where the only promise made by the seller is the covenant of seizing (seller promises ownership of the property and the right to sell)

A

bargain & sale deed

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9
Q

A type of deed transferring title from a seller to a buyer where NO promises are made by the seller. The seller says IF I own it, but I`m not saying I do, I give you whatever rights I MAY have. This deed is typically used to quiet cloudy titles.

A

quitclaim deed

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10
Q

A loan where the payments apply to interest only; usually short-term; e.g., used on construction loans

A

straight note (Term Loan)

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11
Q

A loan where the payments apply to principal and interest; however, the principal loan balance is only partially paid down, thus usually requiring a balloon payment at the end of the loan term

A

partially amortized note

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12
Q

A loan where the payments apply to principal and interest; the entire principal loan balance is totally paid off over the term

A

fully amortized

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13
Q

A note where payments start out lower than normal, then go up yearly typically for 5 years, then leveling off for the remaining term; the FHA245 is a type of graduated payment note; sometimes can result in negative amortization

A

graduated payment note

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14
Q

A note where the interest changes periodically, thereby possibly changing all terms of the loan

A

adjustable rate mortgage (ARM)

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15
Q

A mortgage clause where a lender charges a penalty if the loan is paid off early

A

pre-payment clause

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16
Q

A mortgage clause where a lender calls a loan balance due and payable upon the happening of certain event, e.g., non-payment of mortgage

A

acceleration clause (due on default clause)

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17
Q

A mortgage clause where a lender calls a loan balance due and payable upon selling the property; makes loan non-assumable

A

alienation clause (Due on Sale Clause)

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18
Q

A mortgage clause where lenders change the lien priority that is different than recording date; lender waives their right in favor of another

A

subordination clause

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19
Q

A mortgage clause that voids the security upon the loan being paid off

A

defeasance clause (Null and Void Clause)

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20
Q

2 ways a buyer can take over a sellers loan

A

subject to, assumption

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21
Q

An assignment of a loan from the seller to the buyer where the seller remains solely liable for debt

A

subject to

22
Q

An assignment of a loan from the seller to the buyer where the buyer becomes primarily liable for debt and the seller remains secondarily liable

A

assumption

23
Q

mortgage that is owner financing; typically where a seller carries a second mortgage on behalf of the buyer

A

purchase money mortgage

24
Q

mortgage that covers more than one property; used by developers, etc. Usually contains a partial release clause to release each property as it is sold

A

blanket mortgage

25
Q

mortgage that uses both real and personal property as security

A

package mortgage

26
Q

mortgage that acts as a line of Credit; can borrow again and again on the same loan; e.g., home equity loan; works like a credit card

A

open end mortgage

27
Q

A type of mortgage where predetermined amounts, in addition to regular principal and interest payments, apply to principal each month

A

growing equity mortgage

28
Q

Typically, a short term loan; money is released as needed; usually riskiest type of loan

A

construction loan mortgage

29
Q

A type of mortgage where the mortgagee (lender) pays the mortgagor (borrower) a fixed amount every month; usually for retired people with home completely paid off

A

reverse annuity mortgage (RAM)

30
Q

A type of loan where the borrower typically pays a down payment of 20%, thus receiving an 80% loan from the lender; there is no government involvement in this type of loan

A

conventional loan

31
Q

An organization in the secondary mortgage market that buys notes from local lenders; government corporation under HUD; buys notes in depressed areas of country; primarily buys FHA & VA loans

A

GNMA, Ginnie Mae:

32
Q

The largest organization in the secondary mortgage market that buys notes from lenders, thus providing liquidity for lenders; even though a private organization. raises money by selling government guaranteed bonds; buys all types of loans

A

FNMA, Fannie Mae:

33
Q

Earns money by bringing lenders and borrowers together; normally does not actually make loans

A

mortgage broker

34
Q

Acts as a middleman between lender and borrower; actually make the loans to the borrowers; earns money by servicing loans

A

mortgage bankers

35
Q

A type of lender with their largest investment in residential home loans

A

savings & loans

36
Q

A type of lender that historically specialized in making business loans

A

commercial banks

37
Q

Set the maximum interest rate that can be charged by law

A

usury laws

38
Q

A federal law pertaining to lenders having to disclose all loan costs to borrowers

A

truth in lending (Reg z)

39
Q

A federal law whose purpose is to inform borrowers ahead of time total closing costs so borrowers can shop around to get the best deal

A

real estate settlement procedures (RESPA)

40
Q

who oversees RESPA

A

HUD (housing and urban development)

41
Q

Owner financing where the seller keeps the warranty deed for the entire duration ; thus the seller retains legal title. The buyer gets possession and receives an equitable title , allowing for the buyer to obtain the deed after the entire contract is paid off.

A

contract for deed. Also referred to as an installment contract or land contract.

42
Q

Number of years item is profitable

A

economic life (shorter than physical life)

43
Q

Number of years item is physically sound

A

physical life

44
Q

Allows owners of investment property to deduct a percentage of the cost of the property each year from their taxable income

A

tax depreciation (recapture)

45
Q

The use of a property that provides greatest net return on land

A

highest & best use

46
Q

A property is only worth what one can get another one for just like it

A

substitution

47
Q

The total value of combined properties exceeds total value of individual properties

A

assemblage (plottage increment)

48
Q

An approach to value best used on residential property and vacant land; uses comparable properties to estimate values

A

market data approach

49
Q

An approach to value best used on special purpose properties, such as churches and hospitals; the approach values a property by determining the current replacement cost, less depreciation, plus the current land value

A

cost approach

50
Q

An approach to value best used on income producing properties such as shopping centers, apartment complexes, etc. This approach uses the net operating income and a capitalization rate to estimate the value.

A

income approach (capitalization approach)

real estate (3 decks)

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