National Flashcards
Calls for existing loan to be placed in lower priority position to another lien
Subordination clause
One payment is larger than the monthly payments
Balloon payment
Makes the sale contingent upon a certain event
Failure to fulfill the contingency voids the contract
Contingency clause
Broker has broader authority as compared to that in a property listing
General agent
The broker has limited authority
Special agent
A listing on a property in which the broker holds an option
Option listing
Appears to be valid but because of a defect, could be overturned by one of the parties
Voidable contract
Created from the actions or conducts of the parties
Implied contract
Placed by action of law against a property without the owners consent
Involuntary liens
An area separating 2 incompatible zone dares from each other
Buffer zone
The right to take private property for public use with just compensation
Eminent domain
The transfer of personal property
Bill of sale
Right to enact laws for health, safety and welfare of the public
Police power
The right to buy or lease a property within a specified period for a specified price and term
Option
Projected rent if property is 100% occupied
Gross scheduled income
Rent which was owned by a tenant but unable to be collected
Credit losses
A written instrument that transfers ownership of real property
Deed
Is a complete history of the property
Chain of title
An area separating 2 incomparable zoned areas from each other
Buffer zone
Property acquired by spouse during marriage
Community property
Conveys the grantor’s interest and warrants title against all claims
Warranty deed
Oral will
Nuncupative will
A gift of personal property through a will
Bequest
Each partner has full liability for debts of partnership
General partnership
Forced transfer through any of the following
Eminent domain
Adverse possession
Foreclosure proceedings
Involuntary alienation
A business entity with combined characteristics of limited partnership and certain types of corporation
Limited liability companies (LLCs)
Is ownership by one person
Severally ownership
Lease with a major tenants such as a department store or supermarket
Anchor lease
Highest for of ownership and the most common form
Fee simple absolute
Rent is a fixed payment amount
Gross lease
Base rent is paid plus a percentage of lessee’s gross sale volume
Percentage lease
Tenant pays a fixed amount plus the property expenses, utilities, real estate taxes, insurance premium and maintenance
Net lease
A fund set by the Federal Comprehensive Environmental Response Compensation and Liability Act to bear the cost of cleaning up polluted property
Superfund
Defunct, derelict or abandoned commercial or industrial site contaminated with hazardous and toxic waste
Brown field
The amount a willing buyer would pay and a willing seller would sell
At arms length transaction
Market value
Loss due to outdated features, technological advances or poor design
Functional obsolescence
Loss due to factors outside of the property and usually incurable
Economic obsolescence
Shared ownership by 2 or more people having the right of survivorship
Joint tenancy
Mutual agreement to end the lease
Surrender and acceptance
Lease with option to buy or re-lease
Lease-option
Co-ownership by 2 or more people with no right of survivorship
Tenancy in common
Transfers real property though a will
Devise
Rent is paid for a specified and definite period of time
Estate for years
A lender altering the terms or conditions for home loans in specific geographic areas as a means of discrimination
Redlining
The actual amount of money paid for the property in a transaction
Market price
All owners, current and previous, have strict liability for remediation of polluted property
Strict liability
The gathering together of many loans for a sale in the second market
Warehousing
Ownership interest between husband and wife only with the right of survivorship
Tenancy by the entireties
Legal action used to terminate a tenancy in common or joint tenancy
Suit for partition
Denying that housing is available for sale or rent, or channeling prospects towards or away from certain areas
Steering
An Uncoerced transfer by gift or deed
Voluntary alienation
Composed of general and limited partners
Limited partnership
Lease with an escalator clause that calls for increase or decrease in rent at specified intervals
Graduated lease
Completely hand written will
Holographic will
An insurance policy that protects the lender against defects which could be determined by an inspection of public records
Alta title policy
Includes words of conveyance like, convey and warrant; grant and release; remise, release and quit claim
Granting clause
Title that is without cloud or defect
Merchantable title
Formal declaration made before an authorized official such as a notary public
Acknowledgment
Estimating the value of the subject property by comparing the subject property with similar properties that have sold
Comparison approach
Personal property is moveable
Chattel
Written instrument by which a property owner conveys and transfers an ownership interest in real property
Deed
Used to clear title defects
Quit claim deed
Demand, utility, scarcity and transferability
Elements of value
Seller agrees to take specified amount as net proceeds and broker may retain amount of sale price above net amount
Net listing
Makes the sale contingent upon the buyer obtaining financing
Mortgage contingency clause
Prohibits anti-competitive practice such as,
Different broker firms agreeing to fixed commissions
Leading consumers to believe commissions are non-negotiable
Boycotting other companies listings
Sherman anti-trust act
By the actions and or statements of the parties
Implied agency
The listing broker will be paid if he or she finds a buyer, if another broker finds a buyer or if the seller sells the property
Exclusive right to sell listing
Created when land held by a single owner is broken down into 2 or more parcels and one parcel is landlocked
Easement by necessity
Transfer of real property from a person who dies without a will
Descent
Profit tends to breed competition which can reduce the profit
Principal of competition
Releases all of the grantor’s interest
Quit claim deed
One party has permission to cross or use another’s property
Not permanent and may be revoked)
Easement personal
All of the terms have been stated between the parties
Expressed contract
Encouraging owners to sell or rent their homes because minority families are entering the neighborhood
Blockbusting
Protect the public from the reporting of inaccurate information by credit bureaus
Fair credit reporting act
The rate of return an investor wants to receive or that the property is producing
Capitalization rate
A summery of the chain of title
Abstract of title
An appraisal approach in which the cost of building the structure is calculated, depreciation is subtracted and land value is added
Cost approach
The actual income received after deducting vacancy and credit losses from the gross schedule income
Effective gross income
A right across one property for benefit of the adjacent property
Easement appurtenant
Use which pre-dates the zoning ordinance and therefore may continue
Nonconforming use
Specific authorization from the principle
Expressed agency
A court order to enforce the terms of a contract
Specific performance
Provision whereby one party agrees to protect another party from damages or lawsuits
Indemnification clause
Legal remedy of canceling a contract and restoring the parties to their original positions
Rescission of contract
The non-judicial submission of a dispute to a 3rd party arbitrator with both parties agreeing in advance to comply with the final decision of the arbitrator
Arbitration
Increase in rate of return through using borrowed money
Leverage
Hypothecates the property as collateral for dept
Mortgage or trust deed
Level or constant payments including principal and interest (p&i)
Amortized
Payments made PITI taxes and insurance go into escrow account
Budget
Interest only during term of loan with principal due at maturity
Straight
The monthly payments are less than the interest
Negative amortization
Seller remains liable for the existing loan and agrees to create a new loan for the buyer for a greater amount and at higher interest rate
Wraparound loan
Interest rate and payments change periodically during the life of the loan
Adjustable rate loan
Loan in which payments are lower in the early years but increase in intervals until the loan becomes fully amortized
Graduated payment loan
Allows borrower more funds with in the same loan
Open end loan
Loan in which the borrower is not held personally liable for the debt
Non-recourse loan
Allows lender to declare the loan balance immediately due and payable if borrower defaults
Acceleration clause
Allows lender to declare debt due and payable if property is sold
Alienation clause
Allows lender to charge prepayment penalty if loan is paid off early
Prepayment clause
States that the note and mortgage null and void when borrower pays off the dept.
Defeasance clause
Charging more that the rate set by law
Usury
The rate specified in the note or contract
Contract or note rate
The process of the lender rewriting the terms of an existing loan, substituting the buyer as debtor
Novation
Given by the lender to the buyer to verify loan balance and terms when the buyer takes over payments on an existing loan
Reduction certificate
The process of selling a loan to another lender
Assignment
Process of bringing data together from the three appraisal methods to arrive at a final estimate of value
Reconciliation of data
Period of time over which the property will produce income and be economically beneficial to the owner
Economic life
Process of converting net income into value
Capitalization
Sometimes used to estimate values of small income properties
Gross rent multiplier
The income remaining after operating expenses are deducted from the gross income
Net income
Lease in a co-op in which the tenant has the right to rent a particular unit
Property lease
Executed by a borrower setting forth the exact unpaid balance and rate of interest
Estoppel certificate
Appraisal value must be equal to or greater that the purchase price and the buyer must see appraisal
Escape clause
Buyer does not originate a new loan but takes over payments and assumes personal liability on an existing loan
Loan assumption
Federal law that requires lenders to disclose all the terms and costs in obtaining a consumer loan
Truth in lending act
regulation Z
Prohibits discrimination in the sale, rental, advertising and financing of houseing
Federal fair housing laws
Value is affected by scarcity of a product and the desire for that item
Principals of supply and demand
Is a statutory method of taking title to or acquiring an interest in the property of another
Adverse possession
An easement created by adverse possession
Prescriptive easement
Ownership lasts as long as certain conditions or uses are met
Defeasible fee simple
The substitution of a third person in place of another in relation to. Claim or debt
Subrogation
Conveys the grantor’s interest but has no expressed warranty
Bargain and sale deed
Issued prior to closing of a sale
Preliminary title report
Protects the buyer against certain defects
Owner’s title policy
The grantor May reserve a right, such as an easement across the property or a life estate
Reservation and exception clause
A duplicate set of public records maintained by a title company
Title plant
Defines the title being transferred
To have and to hold
Habendum clause
Provides buyer of a business with a list of seller’s creditors
Bulk sales affidavit
Document signed by one spouse prior to the other spouse acquiring property in order to prevent it from becoming community property
Disclaimer (deed)
Conveys the grantor’s interest and warrants title against claims arising only from the grantors actions
Special warranty deed
The rights and improvements that are transferred with land
Appurtenances
Charge against property to bear the cost of municipal functions
Taxation
A use granted in violation of the zoning ordinance
Variance
Any claim right or interest held by one who is not legal owner of the land
Encumbrance
An easement created by adverse possession
Prescriptive easement
Requires certain contracts to be written to be enforceable and to be signed by the parties
Statute of frauds
All terms have been performed by the parties
Executed contract
Terms have not been fully performed
Executory contract
A contract that is worded loosely or vaguely
Illusory contract
The listing broker will be paid a commission only if he finds a buyer
Open listing
Listing broker will be paid a commission if he or another broker finds a buyer not if the seller sells the property
Exclusive agency listing
The amount pre determined by the parties as the total amount of compensation an injured party would revive if the other party breaches contract
Liquidated damages
$250,000 of gain for single taxpayers
$500,000 of gain for married taxpayers
Capital gain exclusion
Regulates use of ground water
Arizona Department if Water Resources
ADWR
Sets state environmental standards
Arizona Department of Environmental Quality ADEQ
Regulates federal environmental rules and laws
Environmental Protection Agency EPA
Commissioners rules require disclosure
Arizona Department of Real Estate
ADRE
Property goes through phases of growth, stability and decline
Principal of development equilibrium and disintegration
Real estate values do not remain constant
Principle of change
The use of the property which will produce the greatest net return
Principal of highest and best use
Maximum value of a property tends to be set by how much it costs to by an equally desirable property
Principal of substitution
Value will tend to be more stable in an area where there is a reasonable degree of conformity
Principle of conformity
The presence of lesser properties adversely affects the value of greater properties
Principle of regression
The value of a component part is determined by how much it adds to or detracts from the value of the whole
Principal of contribution
Value is affected by the expectation of future events
Principal of anticipation
