GA Real Estate Exam Prep Flashcards
What is a lease option agreement?
Gives renter a choice to purchase the rented property during or at the end of their lease. (Option to buy)
Fee Simple Defeasible
Own title but if you do something it goes back to the original owner.
Ad Valorem
A tax based on the assessed value of an item. (Latin for according to value)
Novation
When an existing contract or legal obligation is replaced with a new one of equal value. (Latin for new)
Joint Tenancy
Two or more individuals living together and sharing living expenses.
Chattel Real
Personal property.
1 acre
Equals 43,560 square miles.
Escheat
Government taking a property if there is no will or heirs.
Essentials of a Valid Contract
Mutual consent, lawful object, capable parties, consideration.
Protection Period Clause
Safety Clause
A broker or agent proving they found a buyer after the listing expires, so they still get paid.
General Liens
Liens on all property, real and personal property.
Redlining
A method that is illegal, to not give loans to residents of certain areas based on their race or ethnicity.
Secondary Mortgage Market
Lenders selling loans to larger agencies or investors.
Primary Mortgage Market
Where loans are originated.
Net Lease
Lessee pays taxes, insurance and maintenance in addition to rental payments.
Nonconforming Use
Property built under zoning regulations that have changed.
Caveat Emptor
Buyer gets what they pay for, even if it has major flaws. (Buyer beware) (Sold As Is)
Inverse Condemnation
Government taking property for public use that causes damages to the value of near by property.
Mechanic’s Lien
Lein placed on real property for unpaid individuals who have worked on property.
Prepayment Clause
Allowing borrowers to pay before the due date.
Hold Harmless Clause
Moves any property liability from the seller and places it with the buyer.
Real Property
Anything that is attached to the land and underneath. (Bundle of rights)
Cost (replacement) Approach
Estimates the price a buyer should pay for a piece of property that is equal to the cost to build a new building.
Listing
Employment contract b/w broker and seller, to find an able, willing buyer.
Bilateral Contract
Contract in which each party promises to do something.
Open Listing
Property owner gives agent the nonexclusive right to secure a buyer.
Economic Obsolescence
The loss of value of a real estate property.
Encumbrance
Anything that affects the value of property.
Constructive Notice
Notice that is given to the public via recorded documents or newspaper about interests and rights in real estate when the court is unable to reach someone.
Lease
Contract between owner and tenant.
Sandwich Lease
Where a lessee leases a property to an individual with the owners permission. (Subleasing)
Building Codes
Requirements for building.
Government Powers
PETE; Police Power, Escheat, Taxation, Eminent Domain.
Eminent Domain
The right of the government to take over property.
Taxation
Property taxes.
Police Power
How the government regulates real estate; zoning laws, building codes, fire codes, rent control, safety hazards, and tenant rights.
Exclusive Agency Listing
An agreement where the broker acts as the agent and is entitled to a commission regardless of who sold the property.
Negative Amortization
Payments are not covering the interest, so the loan doesn’t decrease.
Gross Lease
Tenant pays a set amount.
Sherman Anti-Trust Act
Free market competition, stops price fixing.
Amortization
Method of paying down a loan by knowing how much goes toward interest and principal.
Short Rate
Cancelling insurance policy earlier than originally agreed upon, and causing higher insurance rates for new policy.
Principal of Regression
The value of high-end real estate goes down because of lower-end properties in the same area.
Narrative Appraisal
The most detailed appraisal there is.
Market Data Comparison Approach
Comparing properties of similar size and condition in the same area.
Physical Deterioration
Physical aspect of the property is going down over the years.
1031 Tax Deferred Exchange
Taking money made from one investment property to put on another that allows taxes to be deferred.
Executory Contract
When one or both parties still have things to do.
Quiet Title Action
A special legal proceeding to determine ownership of real property.
Puffing
Done to make property seem nicer. (Exaggeration)
