Final Exam Flashcards
Purpose of Appraisal
And estimate or opinion of value based on an analysis of the relevant data.
Trade fixtures are?
A fixture placed with the intention of being removed.
Cost Replacement Approach
The cost at today’s prices, using today’s construction materials to replace a building with one that has the same function.
Reproduction Cost
The cost at today’s prices of constructing an exact replica.
Hazard Insurance- paid in advance how far?
One year
Property Tax Formula?
Annual Tax divided by 365= Daily Rate
Then,
Daily Rate x the number of days.
Insurance Proration formula?
Annual Premium divided by 365 = daily rate
Then,
Daily rate x the number of days
Accrued Interest formula
Loan Balance x Rate of Interest =annual interest
Then,
Annual Interest divided by 360 = daily interest
Then,
Daily Interest x number of days owed.
Special Agent
One who is appointed to act on a particular occasion or for a specific purpose. A person with limited authority.
Exclusive right to sell
Right to market is exclusive and commission is guaranteed if property is sold, no matter who sells it. Contract must be in writing & have a definite date of termination.
Universal Agent
Authorized to perform any act that the principal could perform.
General Agent
Has the authority to bind the principal in business conduct.
Fiduciary
Implies trust and confidence
Earnest Money
A purchaser’s initial commitment by use of something valuable to indicate that he/she wants to buy the property. This earnest money is deposited into the broker’s trust account until the transaction is closed.
Lien
Creditor uses this as a way to take a debtor’s property as payment for the debt owed.
Voluntary or Involuntary Debt
Depending on whether they are recorded with the owners consent or without it.
Statutory Lien
Mechanics lien, involuntary
Equitable lien
Vendee’s lien, voluntary
Specific lien
Attached to only one parcel of property.
General lien
Attached to all properties the debtor has.
Property Tax Lien
When ad valorem taxes and special assessment taxes are not paid by the property owner within the time allowed.
Mortgage Lien
When a purchaser pledges a property to the lender as security for a loan. If repayment is not paid according to terms, the lender can force sale of the property. These liens are voluntary.
Mechanics lien
This allows contractors workmen and suppliers of building materials to place a lien against the property if they are not paid for improving it. These liens are involuntary.
Vendee’s lien
This protects a buyer from losing their earnest moneydeposit in case of default. This is voluntary.
Attachment lien
This grants the court custody of a specific property to prevent the owner from transferring ownership while a suit for damages is being decided.
Judgment lien
Arises out of a lawsuit. When one person sues another person for damages. The debtor receives a lien on any property they own in that county.
IRV
I= net operating income
R= capitalization Rate
V= value
If any two of these components are known, the third component can be calculated.
Net Operating Income (NOI)
Effective gross income minus the total operating expenses.
Deals with income made from a business within the past year.
Income Approach
The value of property is based on the anticipated amount of income.
Net Operating Income formula
Potential Gross Income - Vacancy Rate =Effective Gross Income - Operating Expenses = net Operating Income
Regulation Z
Gives lenders guidelines to follow in disclosing to borrowers their exact cost of credit.
Who does Regulation Z apply to?
- All loans up to $25,000 for personal family & household purposes.
- All residential real estate transactions involving credit regardless of the amount.
- Residential mortgage loans for 2 to 4 family residential properties providing the owner occupies one of the units.
CAM license (community association management)
Limited to tasks involved in managing homeowners associations such as are found in subdivisions and condominium complexes.
Must work as agents of a broker.
Property Manager
One who is given the responsibility of maintaining preserving and enhancing an owners property & generating the highest possible net return from it.
