Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Hawaii Real Estate Test > National Test > Flashcards

National Test Flashcards

1
Q

What are the Bundle of Rights

A

Possession (landscaping, mining, building set against zoning)
Transfer (sell, bequeath, lease, donate, assign certain rights such as a tenant lease)
Encumber (mortgage)
Exclude (keep people off and prosecute trespassers)
Control, Enjoyment, Exclusion and Disposition (encumber with mortgage)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Real Property Rights

A

Real property is immovable. It includes the land, everything that is permanently attached to it, and the rights that “run with” the land. Personal property, on the other hand, is movable. Private ownership is not absolute

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Real Estate

A

Land + all permanent structures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Real Property

A

Ownership of real estate and bundle of rights associated with it and is tangible where as personal property can be tangible or intangible

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Licensing Laws administered and enforced

A

by the jurisdiction of the state real estate commission

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

License laws

A

Administered and enforced under the state real estate commission

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is AFAIR

A

Fixture or Personal property

Agreement, written in the contract
Functionality when if it was removed then it would have a negative impact on property
Adaption, meaning how the fixture is adapted to the property
Intention, attachment that was intended to be removed when leaving
Relationships is for relationships of the parties

The listing of an item (fixture or personal property) in a sale or lease overrides all considerations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Fixtures

A

Items that are permanently attached to a property, such as by screws, nails, or glue. Fixtures are considered part of the property and will go to the buyer along with the rest of the property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Conversion of property

A

From real property to personal or vise versa.

Severance is when the fixture is detached and made personal
Affixing is where personal property is affixed to become a fixture

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Assession

A

When tenant fails to remove a trade fixture and it becomes real property owned by the landlord

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Emblements

A

are Plants and crops grown by humans. Grown natural are regarded as real property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Factory built homes

A

are either personal property or real property depending on how they are fixed to the ground. Manufactured homes are ones that conform to HUD standards (Department of Housing and Urban Development)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Universal agent

A

Empowered to do everything through power of attorney including legal needs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

General agent

A

similar to Universal but with focus on a particular business or enterprise (can sign)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Special agent

A

or limited agent where there may not be a binding contract and relationship terminate after a particular activity (most real estate broker deals)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Independent Licensee

A

Commission only (no withholding for tax or social security)
Freedom to set hours
Broker has liability for their work
Must comply with IRS requirements for qualified real estate agent
50-100% commission plan only paid by employing broker

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Creation of agency

A

Express agency, written or oral. Implied agency by action

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Different types of agency

A

Single agent (buyer or seller) where agent represents client
Sub agent (sales people etc) where the sub agent works for the broker/ agency to client
Dual agent where the agent works for seller and buyer.
No agency where broker acts as facilitator or transaction broker\Cooperating Broker

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Authority of Real Estate Agents

A

No authority to bind a client to any contract
Receive compensation directly from a client
Accept a listing or deposit that is not in the brokers name

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Agents responsibilities to principals

A

Fiduciary duties OLD CAR
Obedient
Loyalty
Disclosures
Confidential
Accounting
Reliable Care

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is a customer and how differs from a client (principal)?

A

DAR

Disclosures
Accounting
Reliable Care

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Disclosing material fact

A

Includes, opinion of property condition, buyer’s motivations and financial status, open disclosure of relationship with other buyers, title defects, environmental hazards and defects.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Property Disclosure

A

Filled out by Seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

RR105c

A

“Property Information Form” filed out by property manager. Disclosure statement including how many units are in the building*, how many units are arrears in their maintenance fees, how many are in foreclosure and if there’s any litigation in the building etc

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Key difference between licensee’s duty to client and customer

A

No loyalty or obedience to customer
Disclosures
Accounting
Reliable Care

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Express agency

A

in writing or oral

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Independent contractor

A

income based on production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Open listing

A

Allows a seller to work with multiple real estate agents to sell their home where the seller is not bound to a single agent. Instead, multiple agents can compete to find a buyer and receive a commission and seller is free of any obligations except to the agent who successfully negotiates a sale.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Exclusive Agency

A

is exclusive to one agency with expiry date, but leaves the client open to sell themselves without broker assistance or commission
(can lose out to seller agent),

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Exclusive Right to Sell

A

Most widely used contract includes commission of customers found by client (with expiration date), death does not terminate contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Listing contract

A

is not binding on heirs. Is employment contract between brokerage and principal.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Commission

A

is always negotiable between seller and agent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Broker Fiduciary duty

A

OLDCAR

Obedience, Loyalty, Disclosure, Confidentiality, Accountability, Reasonable Care/Diligence.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Entities not allowed to broker real estate

A

Non profits, Business Trusts of investment trusts, Cooperative associations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

NAR

A

National Association of Realtors, with trademarked Realtor (broker) and Realtor Associate (sales person)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

TCPA

A

Telephone Consumer Protection Act - Unsolicited telephone calls

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

CAN - SPAM

A

Bans sending unwanted emails, required authorization and opt out

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Uniform Commercial Code

A

fixtures may be personal property (chattels) and separately financed and removed upon foreclosure.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

FINRA

A

Federal Industry Regulatory Agency - registration of all dealers of securities in an investment partnership. Excludes syndicator, property and investors in one state and Lees than 35 investors in a private non advertised sydication

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Surface rights

A

Include water

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Doctrine of Prior Appropriation

A

State owns and controls water rights but can permit to landowner for normal use and attach to property over time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Littoral rights

A

Rights based on the water being non moving such as a lake or sea. Owners next to water can’t own water or land beneath it. High tide etc 20’-40’ setback

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Riparian rights

A

Water that is moving such as a river or stream. If unnavigable then owner has unrestricted use and ownership to midpoint. If navigatable then public (owner has no rights or ownership)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

Fee Simple Absolute

A

Has no restrictions or conditions for use or sale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Fee simple defeasible

A

Must conform to stated use
Determinable (until) usage limitations if violated automatically returns property back to the previous grantor (owner) or heirs.
Condition Subsequent (but if) violations return the property back to the previous owner but not automatic and grantor must take physical ownership back in a limited time frame

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Life Estates

A

Freehold estate that is limited to life of owner/named person (life tenant) and then on death revert back to grantor or to a charity, family member etc through a (remainder) Remainderman (who has future interest in the estate on the life tenant’s death. If no Remainderman then property goes back to the grantor who has reversionary interest in the estate.

Test note - Life Estate can do anything with the estate except devise (will) it so it is not inheritable

Two types of life estates, Ordinary (ends with the death of the life tenant) or Pur Autre Vie (where property reverts back to grantor when 3rd named person dies)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Pur Autre Vie

A

Lifetime of 3rd party who when dies, interest reverts back to grantor from tenant holder

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Legal Life estates

A

Created by state laws not property owner’s agreement to protect property rights of surviving family

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Homestead

A

Protect home from creditors of judgment liens, not exempt from tax, mortgage or improvement debts, signed by both spouses and live there,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Dower and Curtesy

A

Dower (wife’s interest) and Curtesy (husband’s interest) (replaced by Uniform Probate Code). Claim made on estate by surviving spouse, during life of head of the household and pass to children under legal age.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

Elective Shares

A

Replace Dower and Curtesy and allow surviving spouse to claim percentage of decreased real and personal property even though will may exclude them. It is not transferable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Tenancy in Severalty

A

Ownership by one person or entity/corporation that passes to heirs through probate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Tenants/Estate in Common

A

Two or more owners
Can be unequal shares commonly (assumed equal shares if not known)
Identical rights (equal indivisible rights)
Individual interests so that each owner has right to sell or encumber without consent
No survivorship so that the deceased ownership can pass via probate to heirs
Can be acquired at different times
Can acquire at any time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Joint Tenants

A

Own property as one with equal interests and rights that are not divisible
Equal rights and interests until one dies with survivorship (remaining tenants share increased ownership) or sells share with permission to a new tenant in common. When one remains joint tenancy is terminated and becomes estate in severalty and interests become inheritable
All parties acquire at same time and same deed of conveyance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

Partition Suit

A

Can terminate joint or common tenancy plus foreclosure or bankruptcy. Done by a tenant to get out of agreement and have property divided or sold if not agreed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

Tenancy by Entireties

A

For married + same sex couples where interest passed to surviving spouse. Single undivided interest. No foreclosure by individual debts. Terminated by death, divorce or mutual agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

Community Property

A

Either separate property or community. Community property can’t be transfered or encumbered without consent of other party. On death, separate property goes to individual’s heirs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

Estates in Trust

A

Will, deed or trust agreement where the granter transfers interest to trustor who holds and managed estate on behalf of a beneficiary.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

LIving Trust

A

Trustor to convey title to a trustee to manage estate on behalf of a beneficiary who gains all revenue and fees if sold (less trustees fees).

Testamentary trust is the same but only takes effect when trustor dies

(personal and real property)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

Land Trust

A

Trustor conveys title or real property only to trustee over limited time but remains beneficiary (could be a corporation) and controls property and trustee and can be hidden. The beneficiary’s interest is personal property with advantages for transferring, encumbering and robating in state at death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

Cooperatives

A

All buildings, land and improvements are owned by corporation in severalty. Owners hold leasehold estate (proprietary lease). No deed. Unit can be independently financed. Can deduct mortgage interest and property tax imposed on individual units

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

Timesharing

A

Administered by Time Share administrator appointed by DCCA

Partial interest in development + equity in unit. Title and right to sell, will, rent etc

Tenants in Common - deed to undivided interest in unit prorated to paid for plan

Interval Ownership - Estate for (x) years + title to unit during time period. End of period, becomes tenant in common

Right to use - lease agreement for rights to occupy a unit for x weeks over x years. No equity interest

Vacation License like hotel operation, can’t rent or lease unit and can’t be sold for profit

Vacation Lease on unit for fixed annual occupancy but can sublease or transfer interest

Club membership right to occupy for specific time of club buildings used by members. Fixed times or at different times each year

Can deduct property tax from income tax

Timeshare Disclosure Statement
7 days to terminate after signature
Real Estate agent can be liable if purchase cancels

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

Partnerships

A

If real estate business, all actively engaged in business must have salesperson or broker license.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

Corporation

A

If real estate business, manager must be employee or officer with brokers license. Security-need securities license.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
65
Q

Tenancy and rights of heirs

A

Tenancy in common (don’t have to have equal shares or interest) , when one owner dies, their share is passed on to their heirs. The heirs then own the property together with the original owner as tenants in common.

Joint tenancy,when one owner dies, their interest is automatically transferred to the surviving tenants. The surviving owners inherit equal shares of the property title.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
66
Q

Easements in Gross

A

Utilities, road widening
Personal right granted to one party and not attached to grantor’s real property. No dominant or servient estates.
Personal easement in gross terminates on grantee’s death
Commercial easement can be transferred, assigned or willed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
67
Q

Appurtenant easement

A

Right or privilege associated with property (easement to access sea/dock)
Dominant tenement (beneficiary how uses land access but doesn’t own

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
68
Q

License

A

Personal, not transferable, and don’t attached to land. terminate on death of either party or sale of property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
69
Q

Servient tenement

A

Owns land and burdened by access rights that runs with the land.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
70
Q

Easements when the land is sold

A

Easements appurtenant are tied with the land and not personal to the owner of the land and recorded as part of the deed. If the servient estate is sold, the new owner must allow the owner of the dominant estate to continue to use the land. Similarly, if the dominant estate is sold, the new owner will have access to the easement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
71
Q

Creation of easements appurtenant

A

Easement Grant (dedication to public (must accept to record)
Easement of Necessity where property is landlocked (not HI)
Easement of Prescription (HI 20 years):
Not secret (open, notorious and visible)
No permission given (hostile and adverse to owners interest)
Exclusive to the party making the claim
Continuous and uninterrupted
Adverse Possession = transpassing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
72
Q

Termination of easements appurtenant

A

No longer needed
Dominant and Servient become one
Release of right
Abandonment of easement
Nonuse of easement
Adverse possession by owned of Servient tenement
Destruction of Servient tenement
Lawsuit (quiet title action)
Excessive use

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
73
Q

Priority of liens

A

First recorded, except tax (always first), mechanics (when work began) can take priority

In a foreclosure expenses paid first

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
74
Q

Restrictive Covenants (deed or lease restriction) CC&Rs

A

LImit the actions of the person or entity.

Prevail if stricter than zoning

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
75
Q

Deed restrictions

A

Restrictions are contracts between two parties.

Take precedence over all. Run with the land

Declaration Restriction for subdivision, PUD, condominium and commercial industrial parks have similar resitivtoons to Deed restriction but they can’t be extinguished through quitclaim deed

Deed condition stricted use of property and violation gives grantor right to repossess and file suit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
76
Q

Deed of and in Trusts

A

Deed of trust is for 3rd party collateral on a loan.
Deed in Trust is for land Trusts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
77
Q

Patent Deed

A

Used to transfer government property to private parties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
78
Q

Estoppel

A

Prevents a person to make a claim that is against their previous actions. (sells property with defect title, buyer sorts it out and original owner prevented from taking it back because of their previous defect title actions)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
79
Q

Federal Regulation

A

primary concerned with real property usage, natural disaster, land description and discrimination and does not levy real estate taxes

80
Q

States regulate

A

Real estate businesses and can levy taxes but normally pass to local governments.

Counties and local government regulate land use, control of improvements and taxes (school districts can levy taxes as well)

81
Q

Federal Housing Administration

A

Promotes and regulates home ownership

82
Q

Encroachment

A

Is encumbrance on property. Determined by survey. Fence constructed over lot line.

83
Q

Police power

A

Government restrictions on real property (zoning)

84
Q

Power of eminent domain

A

Government right Process is condemnation

85
Q

Power of escheat

A

Dies without will if no heirs reverts to government through escheat (15 years HI)

86
Q

License

A

Permits use but not give ownership (boys club)

87
Q

Originary Lease

A

Has interest in the property for a fixed period of time and can enjoy possession and exclusion (but not landlord)

88
Q

URLTA

A

Provides blueprint for state laws for fair conditions between landlords and tenants including maximum deposits, interest on deposits, commingling, Return of deposits.

Does not apply to transient rentals (under 180 days) hotels, motels, cooperative proprietary leases or residential occupancy under a contract for deed

89
Q

Dedication

A

Allocation of land to public and public acceptance

90
Q

All liens are encumbrances but all encumbrances are not liens

A
91
Q

Taking

A

Government taking property without just compensation

92
Q

Voluntary (mortgage) and involuntary liens (taxes).

A

Charges against property.
No ownership interest but is an encumbrance that runs with the estate until paid and cleared.
Leinholder can bring legal action to force sale acquire title.
Short sale made when there is less value in the property than what is owed
Voluntary created intentionally by say a mortgage company
Involuntary created by law (tax liens, judgment or municipal)

93
Q

Alienation

A

Transfer of title both voluntary and involuntary

Property is liable to be sold

94
Q

Metes and bounds

A

Start at POB (point of beginning) and return to it end end of description, great for irregular plots in HI
Metes = distance and direction
Bounds = fixed reference points
Datum - how high
Natural marks used such as trees, rocks, rivers and lakes
Artificial landmarks are surveyors stakes

95
Q

Bilateral Contracts

A

Agreement between the vendee (buyer) and vendor seller) via a standard state template contract

96
Q

Unilateral contracts

A

One has to do something. (e.g. option)

97
Q

Valid contracts

A

Binding and enforceable on all parties
Competent parties
Mutual consent
Valuable consideration
Legal Purpose
Voluntary act of good faith

Acknowledged - verification of grantor’s identity through a notary

98
Q

Void contracts

A

Illegal. Unable to complete. One or more elements missing.

99
Q

Voidable

A

May be rescinded by one or both parties if are not legally competent (minor, crazy).

100
Q

Essential elements of Contracts

A

Offer, Acceptance, Consideration, Legal Capacity of Parties, Reality of Consent,
Legality of object, possibility of completion

101
Q

Statute of Frauds

A

The Statute of Frauds, contracts to be in writing to be enforceable for the sale, gift, or financing of real property

102
Q

Contract Remedies

A

Specific performance, rescission (return), compensatory damages, liquidated damages

103
Q

All terms except those required by law are negotiable

A
104
Q

Risk of loss of property is upon the seller during escrow

A
105
Q

Land Contract for Deed

A

Contract for deed or land contract, legal agreement between a buyer (vendee) and seller (vendor) of real property where seller finances the purchase of the property with a lien. The buyer moves in when the contract is signed (1st closing) and pays the seller monthly payments (has equitable title). The seller retains legal title until all payments are made (2nd close).

If buyer defaults, vendor may get property back and keep down payment depending on judgment

106
Q

Options

A

Allows seller (optionor) grants buyer (optionee) the opportunity to buy the property by a certain time and an agreed cost and terms. If the buyer goes ahead the option payment is deducted from the earnest money. This is a unilateral agreement that becomes a bilateral agreement once the option is exercised. No obligations on the optionee (buyer) but the seller must perform if the option is triggered. Can be used in commercial transactions also to allow buyer to investigate zoning, permits etc (equitable interest).

107
Q

When does sales contract end

A

Rejected, countered, accepted (becomes executory contract)? Withdrawing is unilateral and gives all earnest money back to buyer.

108
Q

Sales contracts are binding on heirs in case of death of principles. Offer may be withdrawn any time before acceptance

A
109
Q

Voluntary Alienation

A

Sale of property that has to be sold

110
Q

Involuntary Alienation

A

Foreclosure, bankruptcy, adverse possession, eminent domain.

111
Q

Constructive Notice

A

Notice given to the public via recorded documents such as a deed recorded with the new title in the public records held at the county.

Acknowledgement verifies signatures and allows recordation, confirms authenticity

112
Q

General Warranty Deed (warrants most), Quitclaim Deed (warrants least). Quiet title is…

A

Any lawsuit that attempts to confirm ownership, fix a title error, or settle an ownership dispute. The end result of a quiet title lawsuit is a court order clarifying or confirming who owns the subject property. In other words, a quiet title fixes the chain of title.

113
Q

Property Descriptions

A

Location of property
Metes and Bounds-survey, distances from point to point in feet and degrees.
Plat or Lot and Block-description by reference
Government Rectangular system-meridians and baselines (not in Hawaii)

114
Q

Types of liens

A

VISE (Voluntary, Involuntary, Statutory, Equitable

115
Q

Property tax

A

Equals assessed value times rate divided by 1000

116
Q

Hypothecation

A

Pledging property (through a mortgage)

117
Q

Theories of financing

A

Lien (or mortgage) Theory State-Hawaii. Borrower holds title, lender has recorded lien. Title Theory State-mortgagee or third party actually holds legal title to property as security for loan Defeasance).

118
Q

Defeasance clause

A

Within a mortgage contract that states the property’s title will be transferred to the borrower (mortgagor) when they satisfy payment conditions from the lender (mortgagee).

119
Q

Acceleration clause

A

Immediately due and payable. Alienation (due on sale) is one specific form of acceleration. (assumption taking over loan, novation off the hook)

120
Q

Judicial foreclosure

A

Suit (day in court)

121
Q

Nonjudicial foreclosure

A

Power of sale, to advertise, open house, hold auction.

122
Q

Equitable redemption

A

Before foreclosure sale can pay all to get back

123
Q

Statutory Redemption

A

After foreclosure can pay all to get back (only tax sales in HI)

124
Q

Deed in lieu of foreclosure-

A

Mortgagor gives back property to bank

125
Q

Distribution of sales proceeds

A

Loans, liens, expenses, closing costs, taxes, mortgage, commission

126
Q

Deficiency judgment

A

Attaches to owner in case not enough equity in property to get loan amount back for judicial foreclosure.

Non judicial foreclosures require lender to file a new deficiency suit

Non judicial foreclosures no not allow redemption rights

127
Q

Nonrecourse note

A

No personal liability if written in note

128
Q

Subordination

A

Changes the liens priority)

129
Q

Secondary mortgage market activities

A

Activities between lending institutions (Fannie Mae, Ginnie Mae, Freddie Mac) Do not deal directly with public

130
Q

Loan to Value ratio

A

What percentage of appraised value can you get a loan (VA = 100%)

131
Q

What is novation?

A

To replace or substitute

132
Q

VA loans assumed by non vets make vet secondarily liable (no novation)

A
133
Q

All assigned loans, assignor remains secondarily liable.

A
134
Q

What is APR?

A

Annual Percentage Rate for the full costs of the loan over a year

135
Q

Equity

A

Value minus debt

136
Q

TILA

A

Truth in lending act, protects you against inaccurate and unfair credit billing and credit card practices finance charges, Reg Z (truth in advertising) protection against shady lending practises and kickbacks

137
Q

RESPA

A

Real estate settlements procedures act - provides buyer with disclosures of settlement costs and to reduce the costs of closing by the elimination of referral fees and kickbacks.

Good Faith Estimate. For residential first mortgage loans only.

138
Q

National Environmental Policy Act 1969

A

environmental policies for land use

139
Q

CERCLA/super fund

A

1986 Land owners held liable even if innocent for environmental violations

140
Q

Lead

A

Lead based paint act 1992 to disclosure for paint in homes before 1978 with safety brochure

141
Q

Types of loans

A

ARM’s (adjustable rate mortgage), Fixed Rate, Graduated, Negatively Amortized etc.

142
Q

ECOA

A

Equal credit opportunity act - discrimination law for lending

143
Q

UETA

A

Uniform Electronics Transactions Act - and the Electronic Signatures i Global and National Commerce Act (E-Sign) provide legal online signatures

144
Q

Discount points

A

Always negotiable between buyer and seller 1% added to the loan

145
Q

What is PMI

A

Private Mortgage Insurance)? When is it usually required? anything under 20% down

146
Q

Leasehold estates

A

Nonfreehold, equity interest, technically personal property

147
Q

Leasehold estate for years

A

for a defined period of time and then terminated such as a 1 year lease

148
Q

Periodic estate

A

Automatic renewal of lease so long as all fees and restrictions are adhered to (such as month to month leases) 45 days landlord, 28 days tenant termination

149
Q

Estate at will/tenancy at will

A

Not agreed termination date and can continue for life or within the termination provision. 10 days termination notice

150
Q

Estate at sufferance

A

Terminated/evicted tenant that fails to leave the property

151
Q

Right of reversion

A

Owner transferred property to another person but retained the right to future possession/ ownership. Owner’s future interest in the property

152
Q

Types of Commercial Leases

A

Gross (Landlord gets gross amount and all expenses from it).
Net lease (landlord gets net amount. Tenant pays rent + all utilities and expenses),
Graduated lease (graduated amounts through the term of the lease for inflation),
Fixed lease,
Percentage (retail) of sales plus base rent.

153
Q

Functions of a property manager

A

Managing clients properties and financial performance need a license if managing more that 1 client. Duty to tenant= collect tenant’s rent and give receipt; keep property habitable

154
Q

Types of Value

A

Income, use, appreciation (market value) and tax benefits, supply and demand

(market, production, appraised)

155
Q

Characters of Value for Real Property

A

(intrinsic, )

156
Q

Basic Economic Valuation Principles

A

DUST = demand utilities, supply, transferability

157
Q

Anticipation

A

New safeway, contribution (new room), increasing returns/diminishing returns (painting new floors)

158
Q

Depreciation

A

Loss of value of real estate from any cause. Used in cost approach to valuation

159
Q

Cost approach to price/valuation

A

Price is equal to the cost of constructing an equivalent building on special purpose properties (church)

Property Value = Land Value plus Cost New minus Depreciation.

The market data approach is best used for residential properties and vacant land.

Regression, progression (compromals adjusted to property appraised) based on nearby homes

160
Q

Income approach

A

The cap rate formula = annual rate of return on an investment property.

Cap Rate = Net Operating Income (NOI) / Property Value x 100%

Net Operating Income (NOI) is calculated as:
Rental Income + Ancillary Income - Direct Operating Expenses

Cap rates between 4% and 12% are good.

The GRM dividing the property’s price by its gross rental income.

Gross Rent Multiplier = Property Price / Gross Rental Income

161
Q

Progression

A

Value of existing home of lesser value increases because of more expensive homes in a neighbor being built

162
Q

Functional obsolescence

A

Property has outmoded physical or design features that are outdated. Curable means they can be replaced and costs offset from contributed value. Or incurable such as a floor plan that would cost more to replace than value achieved

163
Q

External/Economic obsolescence

A

Where the surrounding area contributed or reduced property value

164
Q

Public Land Use controls

A

Planning, zoning, nonconforming use, variance, spot zoning (to make one lot commercial for a store)

165
Q

Federal Regulations ILSFDA

A

The Interstate Land Sales Full Disclosure Act is a Federal law regulating sale of unimproved lots administered by Consumer Financial Protection Bureau
Designed to prevent fraudulent marketing schemes for unsee lots
Must disclosure:
Types of title being transferred
Number of homes currently occupied
Recreation facilities
Distance to communities
Utilities charges
Soil condition
Foundation and/or construction problem

Purchasers must receive Property Report unless:
Less than 25 lots
Lots of 20+ acres
Areas where seller has to construct in less than two years

166
Q

Private Land Use regulations

A

Deed Restriction
Deed or lease restrictions (Restrictive Covenants) set standards for all parcels within a subdivision. If conflict with zoning then stricter prevails.

CC&R’s enforced by injunction and lost through Latches if left too long
Quitclaim Deed can terminate a private deed restriction

Declaration Restriction
Declaration of Subdivision, PUD, Condo, Comercial/Industrial parks contain private use restrictions (same legal effect as deed restriction powers) but can’t be extinguished by agreement or quitclaim deed

167
Q

Taking

A

Government confiscation without adequate payment

168
Q

Fair Housing terms

A

Blockbusting familial status, redlining etc. know what they mean, steering

169
Q

Civil rights Act of 1866

A

No racial discrimination. know exceptions

170
Q

Fair Housing 1968,

A

Protect race color religion national origin definitions:
Housing is a dwelling, Familial cannot restrict number of occupants with children.
Disability physical or mental impairments + recovery programs. Disabled can make modifications to dwelling and return to original state. Prohibited denying participation in MLS or rental service.

1988 (added protected classes). No exemptions if you use or are a real estate licensee

1995 HOPA Act exempts senior housing familial status discrimination by person 62 Plus or older or 80% of 55+.

171
Q

ECOA

A

Equal Credit Opportunity Act deals with discrimination in lending

172
Q

How does earnest money, purchase price, loan amount, loan assumption appear on the closing statement?

A

Accounting of debits and credits
Debits amount person owes and pays at closing
Credits amount set aside for person having already paid or willing to pay via a loan
1. General Information
2. Loan Terms
3. Projected Payment (Principal and interest, insurance, estimated ESCROW, monthly mortgage over term
4. Costs at Closing

173
Q

Prorations

A

If seller prepaid, credit seller, debit buyer with number of days buyer owns property

174
Q

Exceptions to title insurance policies are NOT covered

A
175
Q

Withdrawing IRA funds to buy home

A

You can withdraw from your IRA at any time and for any purpose, but there may be tax penalties involved.

There is a carveout if you’re a qualified first-time home buyer who hasn’t owned a home in the last 3 years prior to closing. You can withdraw up to $10,000 to buy or build your first home without a 10% tax penalty

176
Q

Depreciation always excludes vacant land

A
177
Q

Deductions on personal residence can only be property taxes and mortgage interest. Only real estate held as investment (business) can deduct expenses of maintenance

A
178
Q

To calculate gain - add capital improvement cost to basis (acquisition cost) subtract from sales price. Cap rate equals rate of return.

A
179
Q

Tax deferred exchanges 1031 exchange

A

Each is like a separate sale of like kind properties. Tax on the gain is postponed.

180
Q

Imputed interest may be assumed by IRS if interest rate charged by seller is too low.

A
181
Q

Homeowner can deduct real estate taxes on tax return

A
182
Q

Personal residence - no deduction for depreciation

A
183
Q

Exchange-like kind (investment for investment). Must be investment property not personal residence. Defers tax does not forgive it.

A
184
Q

Investment property

A

Improvements minus depreciation is calculable gain.

185
Q

Income Capitalization Approach to property value

A

Divide Net Operating Income into (by) Capitalization rate

income
________
cap rate

186
Q

GRM

A

Property Price divided by the gross monthly rent = GRM
GRM x monthly gross annual income = Value

187
Q

Mortgage Income Calculator

A

Monthly housing expenses divided by monthly gross income = income ratio
Monthly gross income x income ratio = monthly housing expenses mortgage interest, principal, fees, insurance)

188
Q

Capital Gain on sale of investment

A

Net sales proceeds - adjusted base = Capital Gain

189
Q

Adjusted Basis

A

Beginning basis (what you bought the property for) + capital improvements - costs/easements, other expenses = Adjusted Basis

190
Q

Cash Flow

A

Total Revenue flowing in and out of business (income - all expenses and costs = Cash Flow (note depreciation not allowed)

191
Q

Depreciation of investment property

A

Only allowed on improvements over a fixed term (39 years (after 1994)

192
Q

ROI is calculated by

A

Net Operating Income divided by Price - ROI

193
Q

Property Taxes

A

Tax base = total assessed homes - exemptions

Tax Rate - budget divided by the tax base

Individual tax rate = Tax rate x taxable value

194
Q

Conversion

A

Worse than commingling, misappropriation of Escrow funds by converting them for brokers business or personal use

195
Q

Credits and Debits

A

Debit - Money you owe Must (pay or has already paid at close)

Credit - Money owed to you (Amount must receive or already received at close)

196
Q

MATH CALCULATIONS
Loan to Value LTV
Appraisal-Original value if given present value and depreciation
Lease calculations-calculations involving percentage lease to determine sales
Commission splits and calculating selling price
Sales price required to achieve net amount given expenses
Calculating monthly payment given expenses
Calculating GRM

A

Hawaii Real Estate Test (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions