Nationally Accepted General Principles and Practices Flashcards
(243 cards)
1
Q
How is an item permanently attached to the land called?
A
An item permanently attached to the land/property, such as a fence, is included in the definition of real property.
2
Q
What are three slightly different descriptions of property?
A
There are three slightly different descriptions of property.
1) Unimproved dirt and plants, called LAND;
2) Land plus improvements such as fences and buildings called REAL ESTATE;
3) Real estate that includes non-physical interests, such as easements and restrictions, called REAL PROPERTY.
3
Q
What is a rectangular survey composed of?
A
A rectangular survey is composed of Townships.
4
Q
What are townships and sections?
A
Townships are square tracts of land sixmiles on each side. A township then is divided into 36 Sections which are square tracts of land one mile on a side. One mile is 5,280 square feet. So - 5,280 x 5,280 = 27,878,400 square feet. An acre is 43,560 square feet soone Sectionhas (27,878,400 / 43,560 = 640) acres.
5
Q
What is a Metes and Bounds Survey?
A
A metes and Bounds survey basically describes the perimeter of a tract of land. Its legal description contains angles and distances. It begins at a reference point, moves to a Point of Beginning (POB); traverses the perimeter of the property and returns to the POB.
6
Q
What is Eminent Domain?
A
Eminent Domain is the power of the government to acquire privately owned property for use by the public, after paying a fair price. The owner of the property may object to having his land taken but in the end the government does NOT have to have the owner’s permission to condemn (take) the property.
7
Q
How can Eminent Domain be used?
A
A public entity can employ Eminent Domain to acquire private property FOR PUBLIC USE, not to then sell to another private owner for private use. But PUBLICLY OWNED property that has been acquired through Eminent Domain can be LEASED to a private entity for a use that the public will have access to, and the right to enjoyment such as a sports complex or entertainment center.
8
Q
What is Ownership in Severalty?
A
Ownership in SEVERALTY can be described as ownership of a single property by a single person or entity.
9
Q
What rights does an owner of a property in FEE SIMPLE have?
A
When a person owns property in FEE SIMPLE, they have the right of exclusive occupancy (keep everyone else off); the right of enjoyment without interference; and the right to waste, destroy or sell the property. A fee simple owner does have the right to grant an easement to someone to cross the property or use the property. A fee simple owner CANNOT condemn his own property.
10
Q
What is Right of Survivorship?
A
Joint Tenants have what is called a Right of Survivorship. If a Joint Tenant dies the surviving Joint Tenants automatically acquire the deceased interest per stirpes. Each receives a prorata share of the deceased property.
11
Q
What is a beneficiary trust? Who manages the trust?
A
A beneficiary trust is an arrangement where a Trustor’s asset is transferred, to benefit someone over time. A Trustee is charged with managing the Trust.
12
Q
What is a living trust?
A
A living trust is set up while the person establishing the trust (the Trustor) is alive.
13
Q
What is a testamentary trust?
A
A testamentary trust is one that is set up and becomes effective only after the Trustor has died.
14
Q
What is a license?
A
A license is a simply revocable permission for the temporary private use of someone’s property. A ticket to a sporting event being held on private property would be a license.
15
Q
Are are the two types of liens? And what are some examples?
A
There are both voluntary and involuntary liens. Property taxes are involuntary. A judgment lien is involuntary. A mechanic’s lien is involuntary. A mortgage is a voluntary lien.
16
Q
What is a constructive notice?
A
The purpose of the recorded records at the court house is to provide notice to all members of the community. This availability is called “Constructive Notice.” So, when a deed is recorded, the purpose is to protect the owner’s rights but also to provide notice to any buyer regarding any liens or attachments provided regarding the condition of the title of the property they are buying.
17
Q
What is the primary purpose of a deed?
A
The primary purpose of a deed is to transfer title from a seller to a buyer.
18
Q
What is a General Warranty Deed?
A
The seller who believes he is transferring “marketable” title without any problems will sign and deliver a General Warranty Deed.
19
Q
What is a special or limited warranty deed?
A
A seller who only wants to warrant no problems during the period of time he owned the property will provide a Special or Limited Warranty Deed.
20
Q
What is a Quit Claim Deed?
A
A seller who does not want to guarantee anything will simply sign a Quit Claim Deed.
21
Q
What is one mean of enforcing repayment of a lien?
A
The powers granted the lender in the Promissory Note and Mortgage, which are filed on record as a lien against the title, is one of the means of enforcing the lien against the property.
22
Q
What is a Promissory Note?
A
The primary legal financing obligation in which the borrower promises to pay back a sum of money
borrowed. (A contract)
23
Q
What is a Mortgage?
A
A legal document used to secure the performance of an obligation, in which the borrower or mortgagor agrees to pledge property to secure the debt represented by the promissory note. (A
contract).
24
Q
In what order are items paid when a property is sold at an auction?
A
When a property is sold on the courthouse steps because the borrower failed to pay the loan, the first item to be paid is the costs of the sale, including advertising, attorney fees and trustee fees. Then any outstanding property taxes are paid. Then the liens against the property, ranked in order by filing date, until the money is exhausted. If there happens to be any money left over it will be paid to the debtor.
25
What is a strict foreclosure?
A strict foreclosure usually occurs only if the value of the property is less than the debt owed. The lender files suit asking a court to order the borrower to pay the mortgage debt by a certain date or the lender will automatically gain full title to the property.
26
What right does the U.S. Constitution’s Fifth Amendment mention? What did the Founding Fathers think about private property?
The U. S. Constitution’s Fifth Amendment mentions the right to own property. The Founding Fathers upheld the economic view of property. They believed that private property ownership, as defined under common law, pre-existed government. The state and federal governments were the mere contractual agents of the people, not sovereign lords over them. All rights, not specifically delegated to the government, remained with the people–including the common-law provisions of private property.
27
What is a Buffer Zone?
A means by which planners use space to separate two adjoining districts which have incompatible uses. A buffer zone consists of uses which are compatible with uses in each adjoining district.
28
What is zoning?
A police power device which allows for legislative division of space into districts and imposition of regulation prescribing use and intensity of use to which land within each designated district may be put.
29
What is a Certificate of Occupancy?
In order to qualify as a living space, a newly constructed home must be inspected by the local municipality’s building inspector to make sure it was constructed in accordance with the local building codes. If it passes inspection the property will be issued a Certificate of Occupancy.
30
What is a Spot Assessment? Is it allowed?
Reassessing the tax classification for a single property is called “spot assessment” and is NOT allowed unless a material use of the property is changed.
31
What type of properties are exempt from real estate and other property taxes?
Some of the properties that are exempt from real estate and other property taxes include churches, schools, and other not-for-profit organizations as well as state, county and city owned buildings, such as the Department of Transportation building.
32
What happens if a property owner does not pay the taxes for a property by the date set for being “delinquent"?
The property can be sold at auction to collect the taxes. In that case the winning bid gets a tax deed, but not possession of the property, until a period of time has elapsed, allowing time for the original owner to redeem the property by paying taxes and interest on the amount owed. If the taxes are not paid by the delinquent owner within the allowed redemption period, the person holding the tax deed becomes the owner.
33
What happens if a seller decides to back out of a deal after the agent has already found a buyer?
When a licensee has a listing to market a property and has produced a ready, willing and able buyer who has agreed to pay what the seller has asked, and the seller decides to back out of the deal, the agent’s brokerage has still earned and is due the agreed-upon commission
34
Can the rights to an option contract be sold?
Yes. But while the rights to an option contract can usually be sold by the optionee to someone else before exercising the option, the optionee cannot use the property before executing (closing) the contract.
35
What happens when a change is made to an offer?
Offers must be accepted without a change in order to be a contract between an offeror and an offeree. When any change is made to an offer, the offer is extinguished, becomes null and void and is no longer binding on the original offeror. The document, as altered, becomes a new offer or counter offer, perhaps with handwritten changes initialed by the offeree (who now becomes the offeror of the new offer). If the original offeror (now the offeree) accepts the changes by initialing them, the document, with approved changes, becomes a new offer.
36
What are Aleatory Contracts?
Aleatory contracts are agreements, commonly used in insurance policies in which the parties involved do not have to perform a particular action until a specified “chance event” occurs. Events covered are those which cannot be controlled by either party, such as natural disasters, like floods or hurricanes, and/or death.
37
What are the requirements for a contract to be considered valid?
A contract requires a willing buyer and a willing seller, each of age, sane, under no pressure and unrelated. They both have to understand the terms of the contract the same way. There has to be good and/or valuable consideration. If there are contingencies (Title search, survey, physical inspections, and financing availability) that are not fulfilled, the contract is subject to possible rescission by either party. In that case the contract will be declared NULL and VOID.
38
A contractor planning to build a new apartment complex, needs to be sure that the architect drawing the plans has consulted the _______________ (ADA) to include the latest rulings and avoid any potential _______.
Americans with Disabilities Act, fines.
39
The type of construction most used in the construction of residential homes is the...
platform-frame method.
40
When a licensee has a listing for a particular property with instructions to market that property for sale or lease, the licensee is a ____________ .
When a licensee has the authority to manage, lease or sell any of a client’s real estate properties, the licensee is a ____________.
But when a licensee has a power of attorney that allows him to make decision for another individual as if he were in fact that individual, the licensee is a ___________.
Specific agent.
General agent.
Universal agent.
41
What does ACOLD stand for?
“ACOLD” represents the licensees's duties to the principal stated by the brokerage services agreement he/she signed. This means he/she has to be:
- ACCOUNTABLE for any property (money, real estate) of the client in which the agent controls;
- Act with CARE AND DILIGENCE;
- Be OBEDIENT to the clients’ lawful instructions;
- Be LOYAL to the client’s interests above those of anyone else;
- DISCLOSE or give notice of all information that will help the client while keeping confidential all information that might harm a client.
A licensee who has not signed a brokerage services agreement has to be fair and honest with all parties.
42
A good agent communicates _____ with listing clients about activity and inquiries regarding the client’s property. When there has been no interest for a week, the client _____________.
weekly, needs to know that as well.
43
What is an active or intentional fraud when dealing with lenders?
Because lender’s work with ratios related to income and they agree upon sales prices, a major form of fraud is reporting an incorrect price to a lender. For instance, if there are repairs to be made and the seller doesn’t have the money, a buyer and a seller will sometimes agree to report a higher sales price to the lender, so the lender will loan more money to the buyer to give to the seller at closing. Then after the closing the seller will give the buyer the extra money to make the repairs. This is called intentional fraud.
44
What is a subagent?
A subagent is an “agent of an agent.” When a listing agreement is signed a seller does have the right to reject the use of a sub-agent by the agent who is obtaining the listing from the seller.
45
All licensees who are entering into an agency relationship should provide a ____________ at the first substantive contact with a potential client, stating what ______________ (if any) the licensee has with either the property, the buyers, the sellers, or any other situation which might affect the agent’s ability to be unbiased when providing service.
written disclosure, personal interests.
46
Ever since the late 1990’s there has existed a common formal agency relationship between licensee’s and buyers and between licensees and Tenants. The licensee representing the seller is usually called the “__________” and the licensee representing a buyer (or a tenant) is usually called the “___________”
listing agent, selling agent.
47
What is an Exclusive Right to Sell Listing?
What is an Exclusive Agency?
What is an Open Listing?
An Exclusive Right to Sell Listing means only one agent can market the property.
Exclusive Agency means one agent can market the property, but the owner can sell, too.
Open Listing means multiple agents and the owner can market the property.
48
What happens to listing contracts obtained before a licensee transfers from a managing broker to a new one?
When a licensee transfers from a managing broker to a new managing broker the listing contracts that the licensee had obtained while at the former brokerage stay at the former brokerage, unless transferred in writing to the new brokerage, with permission of both the former broker and the new broker.
49
What does Joint Tenancy mean?
| What happens if a joint tenant dies?
Joint Tenancy means that the Joint Tenants have PITT:
- Have an undivided POSSESSORY INTEREST;
- Have acquired the property at the same TIME (in the same deed) and with the same TITLE.
If a Joint Tenant dies the remaining owners automatically receive an equal portion of the decedent’s share (Right of Survivorship). Depending on what agreement exists between joint tenants, a joint tenant has the right to sell his undivided interest in a property. When sold, however, the buyer will be a Tenant in Common with the remaining owners who will still be Joint Tenants.
50
Who is not required to have a real estate license in order to have legal authority to sign a contract to sell property that is owned by the estate?
Owners, trustees and executors of an estate are not required to have a real estate license.
51
When there is a written lease that is for a definite period of time, the tenant is said to have an __________.
But when a property owner and a tenant enter into an agreement where there is no minimum or maximum term stated, and the tenant can leave whenever he wants to or the owner can cancel the agreement whenever he wants to it is a __________ or an __________.
- Estate for Years.
| - Tenancy at Will or Estate at Will
52
What is AIDA?
AIDA is an acronym used in Marketing and Advertising to describe a common sequence of events. The events follow the order Attention, Interest, Desire, and Action. Moving from action-to-action, one loses some percentage of prospective customers.
53
Are most licensees employed or independent contractors, and how does it work with taxes and benefits?
Most licensees are independent contractors which means they are self-employed, working under a contract as agents for a real estate brokerage, with a managing broker who is responsible for the brokerage agents. No income tax is deducted, no workman’s compensation insurance is provided. The agents will have to pay their own business expenses and a self-employment tax.
54
A property that is valued so much above the typical market price (such as a multi-million-dollar home) may require ________________ in media that reaches beyond the local market, such as ________ or _________ in major markets to broaden the size of the area for prospective purchasers.
special advertising, magazines or TV media
55
It seems obvious but one of the ways suggested to make a home more attractive to potential buyers would be to _____ all drapes/curtains and let the light of day in before the open house begins.
An agent is not helped by telling the neighbors to stay away; showing a home that looks too “______” or one where pets are roaming around inside. If a home is vacant it is very helpful to have it “______ with rental furniture.”
open, lived in, staged.
56
Is Earnest Money required to make a contract legal?
No, earnest money is NOT required in order to have a valid contract. Earnest money is traditionally offered by a buyer to induce (or convince) the seller that the buyer is serious (in earnest) about wanting to buy the property.
57
Can trust accounts be interest-bearing?
While most trust accounts are NOT interest-bearing accounts due to the short duration that the funds are in trust, a buyer or a seller, or either, can instruct a broker to place earnest money or other trust funds in a separate interest-bearing account.
58
The history begins with The Civil Rights Act of _____ - the basic law affecting discrimination by _____ in the use or occupancy of any kind of real estate, including land, commercial and residential.
Then, conversely, the Supreme Court case known as Plessy V. Ferguson, which, in 1896 established the ruling that "separate but equal" was okay, and it wasn't repealed for sixty years until passage of The Civil Rights Act of 1964. Then Title VIII of the Civil Rights Act of _____ (called _________ or FHA) was passed, which prohibited discrimination in the sale, rental and financing of dwellings based on _____, _____, _______, or _______ _____.
In _____, Congress passed the ________ _________ ___ to include prohibition of housing discrimination based on the ____ of an individual. The Fair Housing Act (Title VIII) was then amended in ____ (effective March 12, 1989) by the Fair Housing Amendments Act, which expanded the coverage to prohibit discrimination based on ________ or on _______ ______ (presence of children under age of 18, and pregnant women). While Federal laws recognize the seven basic categories, some states have added other categories, such as ______ _________ and ___________ (age) to their individual state Fair Housing Laws.
- 1866.
- Race.
- 1968.
- Fair Housing Act.
- Race, Color, Religion or National Origin.
- 1974.
- Community Development Act.
- Sex (gender)
- 1988.
- Disability, Familiar Status.
- Sexual Orientation, Elderliness (Age)
59
A lender that restricts the number of loans in certain areas of a community because of its racial or ethnic make-up, or the lender’s poor collection record in the neighborhood is referred to as...
Redlining
60
How are buildings classified?
Buildings are classified according to the age, amenities, and current condition. An office building that is relatively new, at the center of town, with up-to-date materials, a concierge in the lobby and perhaps a small restaurant might be classified as Class A building. A building that is old, in a poor location, and poorly maintained would be classified as a CLASS D Building.
61
What is a property manager's primary responsibility?
A property manager with a written management agreement is and agent and as an agent he has to work in his client’s best interest. This will of course mean protecting the property, maintenance and repair, collecting rents, etc. But the primary management responsibility is to generate as much investment profit as possible.
62
A building that has retail on the ground floor, offices on the next ten floors and condos on the next ten floors and a restaurant at the top is a...
Mixed-use Development.
63
The typical home loan is secured by a ________ or a ____ __ ____.
mortgage or a deed of trust.
64
What is PITI?
Principal, Interest, Taxes and Insurance.
65
The repayment of an amortizing home loan is “amortized” over a period of time with payments that include both...
Principal and Simple Interest.
66
If the Loan-to value (LTV) ratio is greater than 80% the lender, for its own security may insist the payment contain an ______ payment which will accrue at the lender’s office to pay the annual Taxes and Insurance. That is why an amortizing home loan payment is often referred to as containing _____. But there are other payments that are not included in the PITI payment, such as the monthly _____ ____.
escrow, PITI, utility bills.
67
What happens to a property subject to special tax assessments that is sold at a foreclosure sale?
If a property is subject to special tax assessments it is being additionally taxed because it is receiving some special benefit. If it happens to be sold at a foreclosure sale, after payment of (1) the costs of the sale, including the advertising, the attorney fees, and any trustee fees (2) any owed special assessments are collected, then regular unpaid property taxes and then the next lien in priority.
68
If a loan is arranged where the loan is to be paid off completely over a set number of years and each monthly payment contains the amount interest due for the previous month and a portion of the principal balance the loan is said to be an __________ _____.
The Latin word “Amort” means to kill and the objective is to “kill the debt”, a little each month. But if the payments don’t completely eliminate the debt and NW the payment contains only interest and none of the principal is due until the end of the term as a balloon payment, the loan is called a ______ _____.
amortizing loan, straight loan.
69
Which organizations warehouse loans for the lending industry?
FNMA (Fannie Mae), GNMA (Ginnie Mae) and FHLMC (Freddie Mac).
ROBBIE MAC does NOT warehouse loans.
70
When a seller transfers title to his property to a buyer under a _______ ________ _____, he is warranting that the title is good and marketable and has no defects. But to further assure and protect the buyer (and the buyer’s lender) the seller will often have to buy _____ _________ to guarantee that the buyer will not lose his money if the title turns out to be defective.
general warranty deed, title insurance
71
What is the last step in the appraisal process?
When an appraiser has completed all of the relevant calculations and comparisons involved in the three approaches to value, he will not average the numbers, he will consider all numerical and conditional factors available in his analysis and RECONCILE the numbers to estimate the value of the subject property.
72
What is Aesthetic Zoning?
Aesthetic Zoning means a zoning in which, zoning regulations such as conformity to architectural and landscaping requirements are imposed to preserve the aesthetic features or values of an area.
73
When is an agreement between buyer and seller referred to as an arms-lenght transaction?
When a property has been on the market for a long period of time; when the buyer and the seller are not related; when both parties have a good knowledge of the property’s condition; when neither is under undue pressure, the agreement they reach is referred to as an arms-length transaction.
74
What are riparian rights?
What are littoral rights?
What are the terms for water rights for owners of property whose land abuts a river, lake or ocean?
There are several terms for water rights for owners of property whose land abuts a river or a lake or ocean. If the water is large enough and deep enough for commercial boats, the property owner owns the land only to the “high water mark” of the river or lake/ocean. The government (the state) owns the bottom and the public has a right to use the water for transportation. Water rights along a river are called Riparian Rights. Water rights on a lake or ocean are called Littoral rights. If the water is just a shallow creek, each property owner owns to the middle (the thread) of the creek.
75
Metes and bounds survey must begin and end at...
POB (Point of Beginning)
76
When a property is legally described using the “lot, block and plat” method it is probably in a ________ and the plat is recorded at the __________. Only the lot’s boundaries will appear on the plat. A purchaser will want a “______ _______” that shows not only the boundaries where all the improvements are located so he can see if there are any encroachments.
subdivision, courthouse, location survey.
77
A tenant who has signed a lease usually has the right to exclusively occupy and use the property covered by the lease. This interest that the tenant has in the landlord’s property, which exists for a definite period of time, is called an...
Estate for Years (even though it may be only six months).
78
When a person owns a Co-Op Apartment, they don’t own real estate. They own _____ in a corporation that owns the property where the apartment is located. As stockholders in the corporation they own what is called a “________ ______” that entitles them to use a particular apartment in the building. If they want to sell their apartment they are selling the stock in the corporation and their lease goes to the new owners.
Stock, Proprietary Lease.
79
Are residential apartment or condominium managers responsible for seeking offers to purchase the property?
No, that is not one of their duties.
80
A couple living together who are not married but are co-owners of the residential property are most likely _____ __ ______. They can own equal or unequal portions of the property. It is possible, however, if they have _____ (____, ____, ______ and ________) they are _____ ______ with a right of __________.
Tenants in Common, TTIP (Time, Title, Interest and Possession), Joint Tenants, Survivorship.
81
What is interest?
Interest is the market rate fee that is charged a borrower to be able to use someone else’s money. It is usually earned (during the term of the loan) before being paid but can be paid in advance (discount points).
82
What is the priority of a mechanic lien?
Depending on the jurisdiction a mechanic’s lien may be treated as any other lien as far as priority date of filing is concerned, or it may receive special treatment with regard to priority. This may involve using either the date that the mechanic’s work began on the property or the date the mechanic’s work was completed.
83
What is an easement and how can it be terminated?
An easement is a recorded right to cross or use someone else’s property. There are several ways it can be terminated: By agreement of the parties, by abandonment for a specified period of time under state law, or by merger - which means one of the property owners buys the other’s property. The sale of one of the properties, either the encumbered property or the appurtenant (benefiting) property would NOT terminate the easement.
84
A person who holds a Life Estate is also referred to as a Life Tenant because the term for which he/she can control property will only exist for his or her life. What happens after the death of the life tenant?
After the death of the person who is the “measuring life” (either the life tenant or someone else under the term “pur autre vie”) of a Life Estate, the ownership will either revert to the “grantor” (of the life estate) or will be passed on to a “remainderman.”
85
What is Could on Title?
There are many ways that the title to a property may be considered “less than perfect.” When this happens, the title is not a “clear title” but is said to have a “cloud” on it. One way this can occur is when a relative, often a brother or sister, claims to have an interest in the property. Until the cloud is cleared away, the marketability of the title is greatly reduced because no buyer wants to pay for something that the seller may not completely own.
86
What is Legal Title?
| What is Equitable Title?
When a home owner has received a deed transferring title which contains a full bundle of rights (Exclusive right to occupy, right to enjoy without interference and right to waste destroy or sell/lease) he is said to have Legal Title. A person who is buying property under a land contract or contract for deed and has occupancy and enjoyment rights but hasn’t received the deed yet, has Equitable Title.
87
What is a non-judicial foreclosure?
A non-judicial foreclosure means that the lender has a right to sell the debtor’s property without having to go through a long legal foreclosure process. This is because the lender’s trustee is holding the title to the property under a Deed of Trust, or Trust Deed, given to the trustee by the debtor to secure the debt. The loan documents contain a “Power of Sale” clause, allowing the lender to place the property on the market for sale if the borrower defaults.
88
When a homeowner fails to pay his home loan as promised, the loan documents and the mortgage have provisions to allow the lender to begin a ______ _________ proceeding. The decision to begin the foreclosure process is determined by the ______ after attempting to collect from the borrower. The borrower then has an ______ _____ ___ _________ by paying the debt completely before the foreclosure reaches the stage of a public sale. After the sale the debtor has a _______ ______ ___ ___________, usually for a year, to come back and redeem his ownership by paying the debt and all costs related to the sale.
judicial foreclosure, lender, equitable right of redemption, statutory right of redemption.
89
When entering information on a closing statement, a Debit is shown as a _____ and a Credit is shown as a ______. The sales price of a property would be a ______ to a buyer and a _____ to a seller. The remaining loan balance would be a debit to the _______.
charge, payment, debit, credit, seller.
90
What is the contribution principle of value?
Adding a new porch to property will also add to the property's market value. This is an example of the Contribution principle of value.
91
What is a Net Listing?
Net Listings are illegal. It may occur when an owner sets a minimum amount that he wants to receive from the sale of the property and lets the broker have as commission whatever amount is received above the set minimum net proceeds.
92
What is a common consequence suffered by a mortgagor in a foreclosure procedure?
A common consequence suffered by a mortgagor in a foreclosure procedure is that the borrower's credit rating is damaged for a significant period of time.
93
What is a trade fixture?
Items attached as a fixture when installed by a tenant in a commercial rental space, that are used for trade or business, such as a grill in a restaurant, and that can be easily removed without damage to the property, are called trade fixtures, even though they are permanently attached, can be removed.
94
The National Environmental Policy Act of 1969 was passed to create the _________ ________ ___ (EPA).
Environmental Protection Agency.
95
What is a Planning Commission and what are its member's responsibilities?
A Planning Commission is a local government agency which determines plans for the physical growth of a community. Its members are responsible for approving developers site plans, subdivision plans, and to make sure that zoning ordinances in a community are properly enforced.
96
What does the county and local government need to do in order to determine how to calculate the property tax rate to provide enough revenue to cover a community's budget?
The county and local government needs to (1) assess all properties (2) derive a taxable value by subtracting any exempted property values from the total assessed values and (3) divide community’s budget by the taxable value. The millage rate that is derived is used to multiply against the value of a property to determine that particular property’s tax owed.
97
Can conditions/restrictions be changed? Can covenants be changed?
When a property is restricted, and the ownership is dependent (conditioned) on a particular use as set forth in a deed, the condition will remain in effect no matter how many times the property is sold. But any covenants (promises) between the parties can be changed by agreement of the affected property owners.
98
What is Regulation Z?
Regulation Z is a section of the Truth in Lending Law that requires disclosure of all costs of financing the purchase of owner occupied residential purchases of one to four units. It also requires disclosure of the annual percentage rate of the loan.
Implementation of Regulation Z is over seen by the Federal Reserve Board. Regulation Z does not enter into basic contract law nor does it set interest rates.
99
What is an equalization factor and what is it used for?
An equalization factor is sometimes used to increase or decrease the taxes collected for a particular area. For instance, if an area is substantially wealthier than another area the assessed value for the wealthier might be increased by an equalization factor by 25%. Then, when the overall property tax rate is used, the result is higher property taxes for that area than in a less wealthy area.
100
What is a tax certificate?
A tax certificate is used to collect delinquent taxes by “selling the tax lien” to someone who will most likely simply collect interest when the property owner finally does pay the taxes. But if the property owner doesn’t pay the taxes, after a stipulated period of time has passed, the person who bought the certificates (and who has been paying the taxes) will receive a deed to the property.
101
What does it mean to be in breach of a contract and what are the consequences?
A contract, to be valid, has to have an offer and an acceptance that are exactly the same. The parties have to have the ability to contract (of age and sane) and there must be either good or valuable consideration. If one of the parties does not comply with the terms of the contract as written, they can be declared in breach of the contract and may not only lose their rights but be subject to possible legal action requiring specific performance or payment of monetary damages.
102
What does a contract need to be enforceable?
For a contract to be enforceable, it needs to be in writing and there must be consideration. Consideration is one of the necessary elements of a contract. The “Quid Pro Quo” or “That for Which.” It can be valuable consideration, such as money, or it can be good consideration, such as services, which can be considered as valuable.
103
A safety device in all homes that meet standard community building codes will have an ________ ______ ________ ______ which will stop the flow of electricity if there is a sudden increase in electricity that may cause danger to the property.
Electric circuit breaker switch.
104
What is a distribution box in a septic system
A typical residential septic system for a property outside of the community’s sewer system will have a distribution box for treating effluent and an underground septic field for the distribution of the treated effluent. Typically, at least an acre of property per home is required for an individual septic system to provide ample room for the distribution field.
105
Two common forms of written contracts that are very important to a licensee are
(1) a ________ _________ ___________ between a seller and the licensee’s brokerage setting forth the terms under which the licensee will act as an _____, with the seller as a _____, to market the seller’s home;
(2) a ______ _________ _______ __________ between a prospective buyer and the licensee’s brokerage setting forth the terms under which the licensee will act as an ______ with the buyer as a ______ to search for, offer, negotiate, assist in engaging services such as inspectors and lenders and close the purchase of a home.
written listing agreement, agent, client, written buyer agency agreement, agent, client.
106
What are examples of price-fixing and market allocation, and are those practices legal?
If all or some of the brokerages in a particular community agree to charge the same commission rate (price-fixing) or to allocate to certain brokerages exclusive areas (market allocation), in providing brokerage services to the community, that would be an illegal activity, a violation of the Sherman Anti-Trust Act.
107
Who is a consumer?
Who is a customer?
Who is a client?
A consumer is someone who owns a home, who wants to buy a home or who is renting a home.
A customer is someone who has merely expressed an interest in either buying or selling a home or a third party that the licensee is assisting without having a written bilateral brokerage services agreement or working with on behalf of a principal.
A client is a principal, someone who has signed a written bi-lateral brokerage services agreement with a licensed brokerage.
108
When a property that has been listed for sale is destroyed by a tornado, the listing agreement between the licensee and the owner is...
destroyed as well.
109
After the term of the listing or buyer agency agreement has expired or has been terminated, the licensee still owes a duty of ___________ to the former client for any material information that might damage the former client.
confidentiality.
110
What is a listing agent?
A listing agent represents sellers while a selling agent represents buyers.
111
What will not terminate a listing?
The death of either the selling broker or buyer does NOT usually terminate a listing. The death of the seller or the listing broker will terminate the listing
112
What is a latent defect? If known, do listing agents have to disclose latent defects? If the seller knew a latent defect (roof leak in heavy rain) existed but didn’t tell the agent, who would be liable?
A latent defect is a defect which cannot be discovered by ordinary inspection. The Seller is required to provide disclosures on the home. This disclosure requires the seller to provide a list of defects on the home that they are aware of, but may not be obvious. While a seller may later deny that they knew about this, patchwork on drywall found after purchase where a leak has formed is an obvious sign that the seller knew there was an issue. The listing agent, similar to the seller, must disclose when asked of any defects on the home, and while their duties are limited, depending on the circumstances they may be on the hook as well if they were aware of the issue and did not disclose.
113
Who is responsible for filling out the property condition disclosure statement?
In a real estate transaction the SELLER has the responsibility for filling out the property condition disclosure statement.
114
What happens if a managing broker dies or loses his/her license?
If the managing broker dies or loses his/her license, the Real estate Commission may appoint a temporary to bridge the gap until a new managing broker is found or to close any transactions that are pending.
115
What is a safety or protection clause (also called carryover clause)?
A safety, or protection clause in a listing, also called a carryover clause, will allow a broker to claim a commission, after the listing has expired, if the owner sells directly to a person the broker or one of the broker’s agents introduced to the property during the listing period. The protection period may be for any agreed period (30 days: 90 days; six months) of time after the expiration.
116
What is the difference between a right of first offer and a right of first refusal?
There is a difference between a right of first offer and a right of first refusal. A person who has wanted to buy a property may get the right to make the first offer, whereas a person who has the right to take accept or refuse a deal that the seller has already gotten has a right of first refusal.
117
The seller had agreed to mediate the radon gas problem in his basement within 31 days. It has been 31 days and he still has not addressed the issue. The current status of the sales contract is that the seller has...
defaulted on the contract.
118
A contract allowing a person to deal in cocaine sales on a property would be ______ because to be valid, a contract must have a _______ _________ and without a legal purpose neither party can legally enforce performance under the contract.
VOID, legal objective.
119
Who does the employing broker need to give a copy of the employment agreement to?
An employing broker must give a copy of the employment agreement, including any modifications, to every one of his or her employees and licensee contractors.
120
What is an IRS Safe Harbor Test?
The Internal Revenue Service has a set of rules that will determine whether a licensee is an employee of the brokerage or an independent contractor. The process is called a Safe Harbor Test.
121
What is product marketing?
When a brokerage advertises each of its listed properties in the Saturday newspaper the marketing approach is called product marketing.
122
A licensee should show sellers, near the end of a listing presentation, a blank copy of the _________ __________ to help them become more familiar with the upcoming transaction.
Purchase agreement.
123
Is Earnest Money required to make a contract valid?
Any statement that earnest money is required or must be a certain amount or percent of the sale price to have a valid contract is FALSE. Earnest money is not required at all to make a contract binding. Earnest money is merely a way for the buyer to say to the seller, “Please consider my offer. I am serious about wanting to buy your property.”
124
What is the most common item to be prorated at closing?
Several items could be prorated at a closing but the most common item to be prorated is Property Taxes.
125
What is a Chain of Title?
The chronology of successive owners of record of a parcel of real estate is known as the Chain of Title.
126
If a licensee believes he is being approached by a fair housing tester he should...
treat them equally and not violate any fair housing laws.
127
To try to ensure Fair Housing Compliance and make sure that the brokerage agents understand the law, the _________ _______ ___ _________ ________ should contain a section on Fair Housing.
brokerage policy and procedures manual
128
A real estate license is _______ whenever a person wants to manage one or more property owned by others in return for compensation.
required.
129
What is corrective maintenance?
When a rental property has a defect that can be repaired through non-structural maintenance or rehab, like by replacing rusty pipes with PVC pipes, it is called corrective maintenance.
130
A factory requiring federally-mandated reductions in carbon emissions will cost the owner _______ _________ _________ and have the result of reducing the _______ ___ ___ __________ for the owner.
additional investment expenses, return on the investment.
131
Why would an investor prefer a commercial rental property over a residential rental property?
An investor might decide to purchase a commercial rental property rather than a residential rental property because commercial tenants generally are easier to deal with than residential tenants.
132
Government-owned buildings are usually classified as...
Institutional Real Estate.
133
Because a lender is in the business of earning money by charging interest, the longer the loan term the greater the income. So a borrower who pays the loan off earlier than the scheduled pay-off date sometimes has to pay a...
prepayment penalty.
134
What is a Title Theory State?
A state in which a mortgage actually conveys title subject to a condition.
135
What is an advantage of a non-judicial foreclosure, for a lender, in a title theory state?
In a Title Theory state, for the lender, an advantage of a non-judicial foreclosure is the process is quicker since they do not have to go through the courts.
136
What is an escalator clause?
An Adjustable Rate Mortgage (ARM) contains an escalator clause that allows the interest to adjust over the loan term as market rates of interest rise and fall.
137
What is the advantage of a VA compared to a traditional loan?
The advantage of a VA loan compared to a traditional mortgage is the VA does not allow prepayment penalties to be charged if a veteran pays off a loan early.
138
What is underwriting?
The mortgage broker or the loan officer don’t evaluate credit for approval of loans. The analysis of the extent of risk assumed in connection with a loan is done by a specialist at the lender and is known as underwriting.
139
A construction loan is usually a _______ risk than a residential loan.
higher.
140
How does the law of Supply and Demand apply to money?
The law of Supply and Demand applies to money. The more there is, the cheaper it costs – interest rates drop. The less money available the higher the interest rates.
141
How do you determine the true cost of borrowing money?
The base rate of interest is one cost but to determine the true coast one must add the loan origination charges and other factors. When blended together and spread over the cost of the loan the new and higher rate is called the Annual Percentage Rate or APR
142
What is APR?
Annual Percentage Rate is the yearly cost of credit. Interest Rate plus finance charge.
143
A site analysis on residential property is conducted by an _________ to try to estimate of the property's ________ ___ _____ ____.
appraiser, highest and best use.
144
What is plottage?
Plottage is a term used when merging a lot with an adjacent property with the result that the larger property has more value.
145
When an old property seems to be newer and in better condition than it should be because it has been constantly maintained and remodeled, in valuation terms its __________ age is greater than its ________ age.
chronological, effective.
146
What is homestead?
Homestead means where you live. When an owner does not occupy a property as his primary residence it will NOT be his homestead.
147
What is Gross Rent Multiplier (GRM) used for?
A gross rent multiplier (GRM) is used to determine the value of rental property by multiplying the monthly rent by the GRM. If the Value is known and the GRM is known, then the monthly rent can be calculated. $295,000 / 135 = $2,185 monthly rent
148
Violating zoning laws is an _______ use of property. Building a warehouse in a neighborhood zoned residential would be a ________. Zoning laws can also regulate what kinds of animals can be kept on a property.
illegal, violation.
149
What is the lot, block and plat system, and what is it used for?
A recorded plat method, also called the lot block and plat system, is used to describe properties in residential, commercial, and industrial subdivisions.
150
Is a title search and a title report a factor for making an appraisal of value or preparing an appraisal report?
A title search and a tile report (or opinion of title) is NOT a factor in making an appraisal of value or preparing an appraisal report.
151
What is severance?
Removing a bird feeder that was permanently attached to the land, or cutting trees in a pine forest, or taking a chandelier that is attached to the dining room ceiling are all examples of severance.
152
What is the level of government that is charged with collecting taxes on real property?
The level of government that is charged with collecting taxes on real property is the county or local (city or town), not the state or federal government.
153
What is a rectangular survey?
A rectangular survey with Townships Ranges, Sections, Meridians and Base Lines is an accepted method of legal description.
154
What is the numbering of townships and the numbering of ranges?
A rectangular survey has townships and ranges. The numbering of townships is between baselines that run east-west and the numbering of ranges is between meridians that run north-south.
155
What are Dower Rights?
The rights that a wife acquires in her husband's fee simple property.
156
What are Curtesy Rights?
The rights that a husband acquires in the wife's property upon her death.
157
The inheritance protection of ______ (female) and ______ (male) Rights that apply only to married couples have been largely supplanted by community property laws and elective share laws.
Dower, Curtesy,
158
When a person has control of property with a full bundle of rights, and there is no way to know when his ownership will end, he is sometimes referred to as a _______ ______, but the terminology used is a _______ ______. When a tenant has a right to use the property but limited rights of ownership under a lease, the lease will have a definite termination date and the term used is a ________ ______. Between the two is something referred to as a ____ ________ – a person who has a Life Estate that has limited rights like a tenant and an unknown term length. Because the end of the term is unknown, a life estate is also a _______ ______.
freehold tenant, Freehold Estate, Leasehold Estate, life tenancy, freehold estate.
159
When an owner who is a joint tenant or a tenant in common wants to sell her portion or the property ownership and exit the relationship, but the other owners won’t cooperate, she may have to file a _______ ____ in _____ _____ to have the property sold to the highest bidder.
Partition Suit, civil court.
160
Owners of condominiums that are part of a high-rise building actually own a ___ _____ ______ in an airspace and have a ______ __ ______ ______ in the common elements of the building or complex.
fee simple interest, tenancy in common interest.
161
What is an Encroachment?
Anything of the neighbor’s that extends across a property line, such as a fence, or a portion of a building or even a part of a garden, without the owner’s permission, is an Encroachment.
162
What is a lien?
A lien is a notice to the public filed of record at the county courthouse that the title to a property is encumbered or clouded by a debt, or other appurtenance which is an attachment of a right or benefit by someone other than the owner.
163
What is an appurtenance?
Any right or privilege which belongs to and passes with land.
164
What is a will? And can it be changed?
A will is an amendatory instrument that can be changed at any time during the maker's lifetime. A will only takes effect after the testator’s death.
165
What is a devise?
| What is a devisee?
Real property that is transferred according to someone’s last will and testament is known as a Devise (not spelled “device”) and the beneficiary is a Devisee.
166
Money is a Legacy and the beneficiary is a...
Legatee.
167
Personal Property is a...
bequest.
168
What is the Right of Redemption?
When a borrower defaults and the lender begins foreclosure he/she has a right of redemption to halt the foreclosure process by paying the delinquency.
169
What is a short sale?
When a property is for sale but the debt is greater than the market value, sometimes the lender will agree to a short sale and take less than is owed on the property to avoid foreclosure.
170
When there is a "_____ __ _____" provision in the loan or trust deed document, a __-_______ foreclosure can force the sale of the liened property without a foreclosure suit
power of sale, non-judicial.
171
Failure of property owners to enforce property and use restrictions in a timely manner is a way of...
terminating a restrictive covenant.
172
What is asbestos?
Asbestos is a powdery mineral found in older building materials such as sheetrock and insulation and even some glue that holds mirror pans on a wall. It is a health hazard when airborne.
173
Because the majority of City and County revenue comes from real estate taxes, when property values fall, revenue for local governments...
also falls.
174
What is homestead tax exemption?
Government’s offer homestead tax exemptions to homeowners in order to allow tax relief on an owner's principal residence.
175
What are Ad Valorem Taxes based on? How are they calculated?
Ad Valorem Taxes are based on the assessed value of the real property. The calculation involves multiplying the appraised value by an assessment rate to derive the assessed value and then multiplying the assessed value by a tax rate – a percentage which will vary depending on the local jurisdiction. (Example: Property Value = $400,000 x Assessment Rate of 30% = $120,000 (Assessed Value) x Tax Rate of 35 mills (.035) x $120,000 Assessed Value = $4,200 Annual Property Taxes
176
Is an offer a contract?
An offer is not a contract until accepted by a seller without making a change and notification to the offeror of the acceptance. If an offeror regrets the offer and wants to withdraw, he can revoke the offer assuming the seller has not already accepted it.
177
What can be a good reason to terminate a contract?
Contracts require both parties to perform the agreed tasks or duties. If a party to a contract abandons his obligations the other party can terminate the contract (or can sue for specific performance.) A tenant who fails to pay rent has abandoned his duty and the landlord can terminate the lease and evict the tenant. A landlord who fails to make repairs has abandoned his duty and the tenant can terminate the lease.
178
What is a notice of acceptance and when is it required?
In order for an offer to become a contract and be binding on the parties, notice (verbal or written) to the offeror that the offer has been accepted by the offeree (without any changes) is required.
179
What does "Pitch" refers to in construction?
In construction, the term "pitch" refers to the slope of the roof.
180
________ ______ dictate(s) the minimum and maximum pressures allowed for plumbing fixtures.
Building Codes.
181
An agent must disclose to his buyer client ______ _____ about the property that a reasonable person needs to know. An example might be that the air conditioner is 13 years old
material facts.
182
What is negligent misrepresentation?
Negligent misrepresentation is an intentional nondisclosure of a material fact. For example. a buyer asks if a property has radon gas in the basement. The agent says there is none when he knows there is a radon problem.
183
When a broker lists a property, and then decides to buy it for herself, then still collects the agreed-upon commission she is guilty of ___-_____.
self-dealing.
184
What are agency disclosure laws?
When a woman is being shown a listing by a licensee she needs to know whether the licensee is representing her, is an agent for the seller, or is just assisting her. That’s why agency disclosure laws exist.
185
As a financial responsibility, the sponsoring broker must keep a _____ for each escrow account.
journal.
186
A brokerage is required to reconcile its trust (escrow) accounts on a _____ basis.
monthly.
187
When a Florida broker holds a nonresident Georgia license he _____ maintain an account in Florida if he also has an account in Georgia.
cannot.
188
What is an in-house sale?
If one of the brokerages licensees represents the buyer and another represents the seller in the same transaction, it would be referred to as an in-house sale.
189
What happens if a managing broker's license is revoked?
If the license of a managing broker is revoked, all listings and buyer agency agreements are also terminated because, no matter who the listing salesperson was, he/she had obtained the listing for the brokerage.
190
How long after a listing agreement is signed, must the licensee give a copy of it to the seller?
When the agent and seller sign the listing agreement the licensee must give a signed copy to the seller ASAP.
191
What are the most common changes made to listing agreements?
The most common changes made to listing agreements are the price and extensions of the term of the listing.
192
Is a property condition disclosure required for mobile homes?
Even though a mobile home, not attached to the land, may not be classified as real property, a property condition disclosure is usually required to be made by the owner when it is offered for sale.
193
If a licensee finds that the seller is refusing to pay an earned commission, the licensee needs to report the situation to the ______ (because the commission is actually due to the brokerage) so the brokerage can sue the seller for _____ __ ______.
broker, breach of contract.
194
What costs does a new agent incur when starting with a new brokerage?
A new agent may have to pay monthly fees to the brokerage for desk space, land-line telephone as “start-up costs” because the new agent hasn’t generated any money to the brokerage yet.
195
What is an installment contract or contract for deed?
On occasion, when a buyer cannot produce the entire agreed-upon sales price, the seller will accept an arrangement where the buyer can move in and make monthly payments. A contract setting forth the terms of the arrangement is signed by both parties but there is no closing and title is not transferred until the full price is paid. This is called an Installment Contract or a Contract for Deed.
196
What does the phrase "Time is of the essence" mean?
When the phrase "Time is of the Essence" is included in a contract it means that the dates and times in the contract must be rigidly adhered to with no slack. (5:00 PM doesn’t mean 5:15PM). If there are no dates and times in the contract it means “As expeditiously as possible.”
197
What is a gross lease for commercial rental properties?
A gross lease for a commercial rental property means that the rent paid to the landlord will cover everything…the rent, the utilities, the taxes, insurance, common area maintenance, building repairs and janitorial services.
198
What is a net lease for commercial rental properties?
A net lease for a commercial property means that the rent is all that the tenant owes but the tenant is required to pay the utilities, the taxes, insurance, common area maintenance, building repairs and janitorial services. Anything in between is called a modified gross or modified net lease.
199
A managing broker should hold ____ _______ and/or _____ _______ to make sure all agents and clerical help are given and hear the same information.
staff meetings, sales meetings.
200
Among other requirements, to be valid a deed must be delivered to the ______ by the ______ - and accepted by the ______ - during the ______’s life. A deed that has been recorded in the public records is presumed to have been delivered to the _____.
grantee, grantor, grantee, grantor, buyer.
201
How are commissions split?
While a brokerage can often have both sides of a transaction, the sales commission from a sales transaction is usually divided between a licensee (the brokerage) whose agent has the listing and a licensee (another brokerage) whose agent brings the buyer to the listing. The seller’s representative’s position is called the listing side and the buyer’s representative’s position is called the selling side.
202
What is Bait and Switch?
When an attractive offer (for interest rates, or for a product) is advertised but the prospect who attracted by the offer and responds but is sold something more expensive, the tactic is called Bait and Switch.
203
What is the CAN-SPAM Act?
Legislation that states that commercial emails must offer an opt-out option and cannot have a deceptive subject line is the CAN-SPAM Act.
204
The ____ _____ ________ ___ ________ ___ (RESPA) prohibits lenders from taking kickbacks or unearned fees.
Real Estate Settlement and Procedures Act.
205
Every real estate office must have displayed at all times a poster called the ____ ______ ________ _____ to state that the business requires its agents to provide equal opportunity to all in buying and leasing housing.
Equal Housing Opportunity Poster.
206
Whenever a licensee is showing property to prospective purchasers an appointment needs to be made so the owner/seller of the home can not only straighten the property but actually plan to __ _____ __ ___ _____ while it is being shown.
be absent from the property.
207
What are two good reasons to have a caravan to tour homes that ere for sale?
(1) Allow the brokerage agents to view as many properties as possible
(2) Get feedback in the form of written evaluations and suggestions for improving the attractiveness of the property.
208
Even though license law is strict about handling trust funds and requires procedures for disbursement, if a civil court orders that trust funds be disbursed, the broker must...
follow the directions of the court.
209
What would be contained in an escrow account ledger?
An escrow account ledger would contain names of all parties to a transaction, the amount of escrow funds the sponsoring broker received, and the date the broker received the funds.
210
An _____ _____ (Closing Agent) would qualify as a disinterested third party in a transaction.
Escrow Agent
211
What does commingling mean?
The term commingling refers to mixing clients’ or customers’ funds with brokerage operating funds or with a licensee’s personal funds. It is illegal and can result in revocation of a license.
212
Are encroachments recorded?
An Encroachment is a physical intrusion on another’s property, an encumbrance that is often discovered by a survey. An encroachment is not recorded and is not part of a chain of title.
213
A lien is filed against title as a _____. For example, when a loan secured by a mortgage is obtained, a document is filed by a lender at the county courthouse as a _____ to give public notice of the “cloud” on the title to the property being used as _______. Whenever a title search is conducted to find if the title is clear, the lien will be discovered and reported.
claim, lien, security.
214
Because the money paid to a licensee who is an independent contractor is not subject to deductions for taxes, the brokerage will send the IRS a _____ ____ at year-end reporting the commission gross income paid the contractor during the year. The contractor will receive a copy to use when preparing taxes.
Form 1099.
215
Telling a prospective buyer or tenant that a property is not for sale or rent when it is not only untruthful it may be considered a...
discriminatory activity.
216
To avoid trouble with discriminatory advertising licenses should write the ads from the perspective of...
all protected classes.
217
How much time does a person who feels discriminated have to file a complaint with HUD?
Someone who feels they have been discriminated against whether regarding employment, or fair housing, has one (1) year to file a complaint with HUD.
218
What is a rent roll and what is its purpose?
A rent roll is a listing of occupied units in an apartment complex and the amount of money each is currently paying or will be required to pay in the future. It is a useful tool to help determine the annual rental income for the property, a number that is important to estimate value.
219
What is an important part of a property management report?
Most property managers prepare regular reports for owners. An important part of a property management report is the number of delinquent accounts.
220
Two important factors that will determine the potential for a rental property to generate income are...
(1) its ability to attract tenants.
| (2) the amount of operating expense.
221
While most apartments and rental homes are leased on an annual basis, a ground lease might be for as much as __ ____ and a Hotel lease is typically for ___ ___.
99 years, one day.
222
A net lease allows a tenant more ______ ___ _______ - to make repairs, manage utility usage, shop for cheaper insurance and otherwise save money.
control over expenses.
223
What is an Acceleration Clause?
A promissory note and an amortizing mortgage have a due-on-sale clause that allows lenders to call the entire balance due and payable immediately if the borrower defaults on the loan. It is called an acceleration clause.
224
When does the mortgagor have an equitable right?
| When does the mortgagor have a statutory right?
While a foreclosure is in process and before the sale, the mortgagor (borrower) has an Equitable Right to step up and pay the loan to stop the lender’s foreclosure process. After the sale has been completed the former owner (borrower) then has a Statutory Right to redeem his or her property (for a period of time depending on local law).
225
What type of properties are considered residential properties?
Residential property usually refers to Condominiums and Cooperative apartments as well as single family homes, duplexes and multi-units.
226
When a neighbor violates a deed restriction or a zoning violation, it only takes ___ _____ ________ to enforce the ordinances, covenants or restrictions by bringing an action in a _____ __ ___.
one other neighbor, court of law.
227
What is a budget mortgage loan?
A lender provides a loan where the payment includes the taxes and insurance in addition to the principle and interest. This is referred to as a Budget Mortgage Loan.
228
What are reverse annuity mortgages?
The homeowner receives (rather than pays) monthly payments. The debt accumulates as the payments are received. Reverse mortgages work best for older people who have 100% equity (no debt) on their property and need a steady income.
229
What are the differences between FHS and VA Loans?
An FHA loan insures the borrower for about 20% of their loan amount while a VA loan guarantees a portion of the loan amount. This encourages lender to have a higher Loan to Value (LTV) ratio.
230
What is an Exculpatory Clause?
An Exculpatory Clause in a loan means that the collateral consists of only the specific property being used as security and does not extend to other assets the borrower might have.
231
The Department of Housing and Urban Development (HUD) regulates ______ ___ (GNMA) and _____ ___ (FHLMC).
Ginnie Mae, Freddie Mac.
232
The Equal Credit Opportunity Act prevents lenders from discriminating against...
race, color, religion, national origin, sex, marital status, age or dependency on public assistance in the granting of credit to consumers.
233
What is CMA?
Salespeople are often called upon to provide comparable sales, and current listings to a seller who wants to list a property for sale. This is called a CMA or Competitive Market Analysis.
234
What is the principle of Supply and Demand?
When a new manufacturing plant opens nearby and is offering 1,000 new, high-paying jobs, the likely increase of the area’s real estate values will reflect the principle of Supply and Demand.
235
What is a blanket mortgage?
A Blanket Mortgage is secured by more than one property. The loan on lots in a still-to-be-developed subdivision might be covered by a blanket mortgage. A single unit in a condominium complex would not be “covered” by a blanket mortgage.
236
What is Functional Obsolescence?
The loss of value of an improvement due to functional inadequacies, often caused by age or poor design is called Functional Obsolescence.
237
When a taxing entity initiates an assessment, the assessment creates an...
Involuntary Tax Lien.
238
What's a form of public land use control?
A form of public land use control are codes that regulate building construction.
239
How many acres does a rectangular survey section have?
A rectangular survey township has six miles on each side. Within a township there are 36 sections which have one mile on each side. One mile is 5,280 linear feet. One acre has 43,560 square feet. 5,280 x 5,280 = 27,878,400 square feet / 43,560 square feet = 640 acres.
240
What is a limited partnership?
In a limited partnership the General Partner makes decisions and is liable for debts. Limited Partners cannot participate in the management decisions and are only liable for the money that they have invested.
241
What is market value?
The most common definition of when market value occurs is the moment a buyer and a seller agree on a price after an arms-length negotiation. An appraiser’s job is to estimate market value, so he checks first to see that the negotiation leading to the contract was fair. Then he uses the three approaches to appraisal to try to support the contract price the buyer and seller agreed upon.
242
A ________ buys land expecting it to grow in value over time with no effort on his part.
A ___-______ will divide a larger tract into smaller tract to create more value.
A _________ will add improvements such as fences, streets, utilities and buildings.
Speculator, Sub-divider, Developer.
243
Is a broker required to share commissions with a cooperating broker in a transaction?
A broker is NOT required to share commissions with a cooperating broker in a transaction unless there is an agreement between the brokerages. or a unilateral contract offer has been made to other brokerages.
