General RE Vocabulary Flashcards
1
Q
Plottage
A
Assemblage of parts of land, but only if the combined land is more valuable together.
2
Q
Axial Roads
A
Freeways/Highways
3
Q
Sector Roads
A
Main Crosstown Roads (e.g.- Rainbow/Decatur)
4
Q
3 Credit Unions
A
Equifax + Experian + TransUnion
5
Q
Writing off Real Estate in IRS
A
IRS only allows 80%, since 20% is considered land and that is unchangeable.
6
Q
Depreciation for Residential vs. Commercial
A
Residential is 27.5 years
Commercial is 39 years
*20% is land which is nondepreciable
7
Q
Physical Characteristics of Land
A
Immobile
Durable
Non-Fungible
Non-Homogeneous
8
Q
Linkage
A
Feelings & Emotions
9
Q
4 Functions of Real Estate
A
D = Demand U = Utility S = Supply T = Transferability
10
Q
Jan 1st 1978
A
Government outlawed Lead Paint
11
Q
When was KITech Plumbing used in Vegas? Terrible
A
1996-2004
12
Q
CMA
A
Comparative Market Analysis
13
Q
Reconciliation
Appraiser - 3 Approaches to Valuation
A
Sales Comps
Cost
Lease Income
14
Q
Reconciliation
A
An appraisers educated opinion on Value
15
Q
Adequate Need for a CMA
A
3 Comps within 6 months of closing (NOT SOLD - CLOSED)
16
Q
Americans with Disability Act - ADA
A
1986
17
Q
DNB
A
Dun & Bradstreet - Commercial FICO Scoring
18
Q
Cap Rate
A
Capitalization Rate
Used as a tool to understand real estate investments. Divide the income in a year by the sales price to get a percentage.
19
Q
GRM
A
Gross Rent Multiplier
20
Q
HVAC
A
Heating Venting Air Conditioning
21
Q
Fannie Mae
A
Federal National Mortgage Association
22
Q
Ginnie Mae
A
Government National Mortgage Association
23
Q
Freddie Mac
A
Federal Home Loan Mortgage Corporation
24
Q
Secondary Mortgage Market
A
Fanny, Ginnie, & Freddie
25
PMI
Private Mortgage Insurance
| - ONLY used for Conventional Loans, NOT FHA/VA!
26
Private Mortgage Insurance
Only Applies to Conventional Loans
Used as Security when you pay less than 20% down.
PMI costs about 0.25% to 2% of your loan balance per year, depending on your down payment, loan term and credit score.
27
MIP
Mortgage Insurance Protection - Used by FHA!!!
28
VA Loans
Up to $417,000. You can get more mortgage if you pay.
To buy an $800,000 house, subtract 417,000 = 383,000
If you pay 25% of that remainder, they will cover the rest.
29
PITI
Principal Interest Title Insurance
30
Amortization of Interest
On a 30 year Loan it takes 22 Years to be Even
31
RAM
Reverse Annuity Mortgage
- Usually around 70cents on the dollar
- Monthly payments for 30 years
32
ARM
Index - Tied to an Index LIBOR in England is common.
Margin - How much it can go up or down every period
Cap - How high it can go
33
EB5
A governmental program that allows foreigners to get green cards for themselves and all their dependents if they invest $1,000,000 (or 500,000 in poor neighborhood zones) and create 10 jobs over a two year timeline.
34
Assumable Mortgage
When a buyer takes over another persons mortgage without having to get a new one himself.
Often useful when interest rates are rising.
35
Wraparound Mortgage
Brand new loan which includes all existing loans.
Also called AITD or All Inclusive Trust Deed
36
Package Mortgage
Real Property & Furnishings
37
AITD
All Inclusive Trust Deed
38
Points
Percentage of Loan that you pay at closing. Not on the sale price, only on the loan amount!
39
Usury
Excessively high interest rates.
If the rate is 18% but the cap is 15%, you'll need to pay points to make up the difference.
40
Bundle of Rights
```
5 Rights to Real Property
Possession
Control
Enjoyment
Exclusion
Disposition (ability to sell, lease, or transfer)
```
41
Deed of Reconveyance
Given to Owner once he satisfies his mortgage
42
Trustee's Deed
Instrument of Foreclosure
Trustee deeds convey title but offer nothing in the way of warranties or guarantees. A trustee deed exists as a simple and expedient way of transferring title to a new owner.
43
Satisfaction Piece
Removes a lien of encumberance
44
REO
Real Estate Owned
Foreclosed property owned by a bank or financial institution.
45
Gift Limit per Person
$14,000
46
203K Loan
FHA loan which includes Repairs to a House.
Streamlined - up to $50,000 for small changes
Standard - $5,000 minimum used for structural such as wall removal or plumbing.
47
LOI
| LOU
Letter of Intent
| Letter of Understanding
48
Alienation Clause
Language in a mortgage or trust deed that allows the lender to call the loan immediately due and payable in the event the owner sells the property or transfers title to the property. Almost every loan today contains an alienation clause, which means title cannot transfer and a buyer cannot purchase subject to an existing loan without triggering a due on sale clause.
49
Severalty
Only one person owns it
50
Bequest or Bequestor
Personal Property
51
Devise or Devisor
Real Property
52
Tangible / Corporeal
House or Land
53
Intangible / Incorporeal
Bundle of Rights
54
Doctrine of Prior Appropriation
Riparian Rights - Rivers, Streams, Non-navigable
| Littoral Rights - Oceans, Lakes, Navigable Rivers
55
Accretion
Increase of land by the deposit of soil by water
56
Chattel
Personalty or Personal Property
57
Emblements
Fructus Industriales - Crops Harvested
58
Legal Test of a Fixture
M.A.R.I.A.
```
Method of Annexation - How permanent?
Adaptation to Real Estate - Being used as realty or personal?
Relation of Parties
Intent: Installation
Agreement: Clarified in Contract
```
59
1 Mile (in feet?)
5,280 ft.
60
1 Mile squared
640 Acres
61
Township
36 blocks of 640 acres ??????
62
Lis Pendens
Legal Document registered
Notifies potential lenders and purchasers that there is a possible judgement against the property.
63
Allodial System
Government owns all the land until bought out by private citizens
64
Arrears
$ That is owed and past due.
65
Adverse Possession
5 Years in Nevada. Must be open, notorious, and make improvements on the land.
66
Escheat
When the government takes over property when someone dies intestate.
67
Governmental Powers
Police Power
Eminent Domain
Taxation
Escheat
68
Real Property Transfer Tax
In Nevada - $5.10 per $1000 or 0.51% of Sale
Paid to the State (unlike Property Taxes which are paid to the County)
69
SIDS
| LIDS
Special Improvement Districts
Land Improvement Districts
Assessment or Taxes levied on certain areas
70
Origination Points
A percentage of the loan amount paid to the loan officer for creating and approving the loan.
NOT tax deductible.
Amount depends on credit score.
71
Discount Points
Prepaid interest.
1 point = 1% of Loan amount
For every point paid, you lower the interest rate by .25%
So instead of a 6% rate, after paying 3 points you'd be paying 5.25%.
72
Mortgage Lien
Voluntary Lien
Also referred to as a Deed of Trust Lien
Anything after the First Mortgage Lien is known as a Junior Lien
73
Datum
A Point from which elevations are measured.
74
Lien
A charge against a property.
Lenders Security or Collateral
All liens are encumberances.
75
4 Types of Liens
Voluntary Lien - Owner Creates Lien (Mortgage)
Involuntary Lien - Not His Choice (Judgement - 2 Types:)
Statutory Lien - Real Estate Taxes
Equitable Lien - Arises out of common law. Judge orders a lien until you pay back delinquent charge.
76
Subordination Agreement
When the holder of a superior lien allows a junior lienholders interest to move ahead of his.
77
Joint Tenancy
Right of Survivorship amongst joint tenants
When one person dies, their interest is divided among those who are left.
78
Tenancy In Common
Multiple People Hold Interest Percentages in Real Property.
Upon death, a persons interest reverts to his heirs or those specified in a will.
79
Encroachment
When a building or fence illegally extends beyond the land of an owner.
80
Encumberance
A Claim or Charge that attaches to real estate.
Held interest by someone who is not the owner.
Liens/ Restrictions / Easements / Licenses / Encroachments
81
Marital Rights to Property upon Death
Dower - Upon husbands death, wife assumes property
| Curtesy - Upon wife's death, husband assumes property
82
Homestead
?
83
Fee Simple Estate Defeasible
An estate that is subject to the occurrence of some specified event.
Three types of defeasible estates are the fee simple determinable, fee simple subject to an executory limitation or interest, and the fee simple subject to a condition subsequent.
Because a defeasible estate always grants less than a full fee simple, a defeasible estate will always create one or more future interests.
84
Fee Simple Determinable
Qualified by a special limitation.
If the specified limitation is violated, the property reverts back to the original owner.
No need to go to court.
85
Fee Simple Subject to a Condition Subsequent
Conditions on ownership; however, a violation does not immediately revert ownership.
Has to go through court.
86
Fee Simple Estate Absolute
Ownership with all rights and property.
Transfers to heirs or those specified in will.
87
Net Listing
Seller specifies a net amount they will be paid with any excess going to the agent as commission.
Conflicts with Fiduciary Interest.
It's illegal in some states.
88
Simple Interest
P (1 + rt) =
Interest is paid the same every month regardless of time or amount already paid.
89
Compounding Interest (Not Continuous)
P(1 + r/n)^nt where r is rate in decimal and n is the number of times compounded in a year.
90
Compounding Interest (Continuous)
Pe^rt where e is Euler's Number or 2.718
91
e
Euler's # lim(1+1/n)^n as n approaches infinity.
92
Fiduciary Duties
OLD CAR
Obedience - Obey Instructions
Loyalty - Place Clients interest above others
Disclosure - Them them everything (unless law states other)
Confidentiality - Don't Reveal to others
Accounting - Report Status of all Funds
Reasonable Care - Know your shiz
93
CC&R's
Covenants, Conditions, & Restrictions
Private agreements that affect land use.
May be included in deed.
94
Easement
The right to enter onto a property without owning it.
Dominant and Servient
95
Real Estate
vs.
Real Property
The land, buildings, subsurface, and air is the Real Estate.
Add The Bundle of Rights and you get the Real Property.
96
Emblements
Fructus Industriales
Crops Harvested
As opposed to Fructus Naturales
97
Annexation
Converting Personal Property into Real Estate
Building a Sidewalk or a House.
98
Severance
Converting Real Estate into Personal Property
Harvesting Crops, Removing fixtures
99
Chattel
Personalty, Personal Property
100
Title
vs.
Deed
Title refers to ownership of deed
Title is Noncorporeal, it's a concept.
A Deed is a PHYSICAL Document that transfers real property title.
101
NAREB
National Association of Real Estate Brokers
102
NAR
National Association of Realtors
103
Conservatorship
A legal concept where a guardian is appointed by a judge to manage the financial affairs of a person or company.
Fannie & Freddie were placed into Conservatorship in 2008.
104
Naked Title
Naked title
Bare legal title to property, carrying with it none of the benefits of ownership. Usually the title held by a trustee,with the beneficiary holding equitable title.
105
Estate for Years
In real estate, one type of leasehold estate is the estate for years, or estate for term.
In this type of lease, there is a defined specific beginning date and an ending date for a specific term. This means that no notice to vacate is required, as the ending date of the lease is when the tenant should vacate the property.
The lease cannot be terminated before expiration unless both parties agree. The rights and obligations of the owner or landlord and the tenant are spelled out in the lease.
106
Estate at Sufferance
When a lessee overstays their term specified in the lease.
107
Pur Autre Vie Estate
"For the Life of Another" Estate.
When the allowance of someone to occupy a home is based on the life of another persons.
108
Reversion
When interest in a property "reverts" back to the original.
Such as in a life estate or a pur autre vie estate.
109
Conforming Loans
Under $417,000
110
DTI
Debt - to - Income Ratio
For FHA Loans to be conforming the DTI must be in a comfortable range for them to approve the loan.
111
Housing Ratio / Front-End Ratio
The first ratio of the FHA's Debt to Income Ratio Number
Anticipated monthly mortgage payment plus other monthly costs of homeownership: homeowner association (HOA) fees, property taxes, mortgage insurance and homeowner's insurance. To calculate your housing ratio or front-end ratio, your lender will divide your anticipated mortgage payment and homeownership expenses by the amount of gross monthly income.
112
Total Debt Ratio / Back-End Ratio
The second ratio of the FHA's Debt to Income Ratio #
These payments are expenses like minimum monthly credit card payments, student loan payments, alimony, child support, car payments, etc. Your lender will add up all your monthly installment and revolving debts in addition to your estimated monthly mortgage payment and housing expenses and divide that number by your monthly gross income.
113
Specific Lien
Only applies to that one property. For example a mechanics lien is only on that one property. He can't go after your other assets.
However, an Income Tax Lien is NOT a specific lien because it can go against all of your property.
114
Injunction
a judicial order that restrains a person from beginning or continuing an action threatening or invading the legal right of another, or that compels a person to carry out a certain act, e.g., to make restitution to an injured party.
115
Covenants for Title
5 Covenants
(1) covenant for seisin
(2) covenant of the right to convey
(3) covenant against encumbrances
(4) covenant for Quiet Enjoyment
(5) covenant of general Warranty
Covenants for seisin and of the right to convey are ordinarily regarded as being the same thing. Essentially, they make a guarantee to the grantee that the grantor is actually the owner of the estate that he or she is transferring.
The covenant against encumbrances promises to the grantee that the property being conveyed is not subject to any outstanding rights or interests by other parties, such as mortgages, liens, easements, profits, or restrictions on its use that would diminish its value. The existence of Zoning restrictions do not constitute breach of this covenant; however, the existence of a violation of some type of zoning or building restriction might be regarded as a breach thereof.
The covenants of quiet enjoyment and general warranty both have the legal effect of protecting the grantee against all unlawful claims of others, including the grantor and third parties, who might attempt to effect an actual or constructive eviction of the grantee.
The first three covenants of title ordinarily do not run with the land, since they become personal choses in action—rights to initiate a lawsuit—if breached upon delivery of the deed. The others are covenants appurtenant or run with the land and are enforceable by all grantees of the land.
In order to recover on the basis of a breach of a covenant of title, financial loss must actually be sustained by the covenantee, since such covenants are contracts of indemnity. In most jurisdictions, the maximum amount of damages recoverable for such a breach is the purchase price of the land plus interest.
116
Four Types of Deeds
Warranty Deed
Quit Claim Deed
Special Warranty Deed
Bargain & Sale Deed
117
Warranty Deed
The most common form of Deed.
When you buy a property at closing, you buy the deed at Warranty that it is free of encumbrances and liens.
Title Insurance is used in case of an error in this information.
118
Quit Claim Deed
Used when money is not involved in a change in a Deed.
Examples are if a family are changing the owners amongst themselves. Or if a person gets married and wants to put their spouse on the deed as well.p
119
Special Warranty Deed
a deed in which the seller warrants or guarantees the title only against defects arising during the period of his or her tenure or ownership of the property. The grantor makes no warranty against defects existing before the time of his or her ownership.
120
Bargain & Sale Deed
A bargain and sale deed does not warrant against any encumbrances. It does imply that the grantor holds title to the property. Since it does not warrant good title from the grantor, the grantee could be in trouble if title defects appear at a later date. This type of deed is used frequently in tax sales and for foreclosure actions.
121
ALTA
American Land Title Association (ALTA)
122
RESPA
Real Estate Settlement Procedures Act
123
HUD-1
The HUD-1 settlement form is the government form that lists all of your closing costs.
124
Torrens
Torrens title is a system of land title in which a register of land holdings maintained by the state guarantees an indefeasible title to those included in the register. Land ownership is transferred through registration of title instead of using deeds.
125
Novation
Substituting a new contract for an old contract.
An example might be if the parties interested change. Or if dates change, etc.
126
1031 Exchange
?
127
REITs
Real Estate Investment Trust
A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate.
Equity REITs: Equity REITs invest in and own properties (thus responsible for the equity or value of their real estate assets). Their revenues come principally from their properties' rents.
Mortgage REITs: Mortgage REITs deal in investment and ownership of property mortgages. These REITs loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities. Their revenues are generated primarily by the interest that they earn on the mortgage loans.
Hybrid REITs: Hybrid REITs combine the investment strategies of equity REITs and mortgage REITs by investing in both properties and mortgages.
128
Four Unities in Joint Tenancy
PITT
Possession
Interest
Title
Time
129
Profit
The right to take soil, sand and gravel
130
Hypothecate
To pledge collateral as security
131
How many square feet in an acre?
43,560
132
DD-214
Shows your status as a service member and acknowledges the nature of how you left the military.
133
Caveat Emptor
"Buyer Beware" - Often the one who is buying knows less information than the seller.
134
Patent Defects
Visible upon Inspection
135
Latent Defects
Invisible upon Inspection, Hidden from sight in walls, eg.
136
Estoppel
In law, estoppel is a set of doctrines in which a court prevents a litigant from taking an action the litigant normally would have the right to take, in order to prevent an inequitable result. Estoppel occurs when a party "reasonably relies on the promise of another party, and because of the reliance is injured or damaged"
137
Mortgage Banker
Mortgage Banker: Lends you money using a warehouse line of credit and processes your loan.
138
Mortgage Broker
Mortgage Broker: Sends your loan file to a lender who will lend you money and process your loan.
