Prep agent review videos

Question 1

What is ownership of land?

Answer 1

Holding title to it

Question 2

What is the evidence of the transfer of title is the: ____

Answer 2

Deed

Question 3

The seller executes a _____ to transfer _____ to real property and the ____________

Answer 3

1) deed
2) title
3) bundle of rights

Question 4

The bundle of rights include:

Answer 4

Right of Enjoyment
Right of disposition
Right of possession
Right of control
Right of exclusion

Question 5

When a home buyer purchases a property they can expect to have the ______ bundle of rights to their property

Answer 5

Whole

(Right of Enjoyment
Right of disposition
Right of possession
Right of control
Right of exclusion)

Question 6

Who can the bundle of rights typically be broken up and distributed with?

Answer 6

1) Investment properties
2) Rental properties

Question 7

What is the Bundle of Rights

Answer 7

A buyer who purchases a property gets a bundle of rights when the title is transferred, and these rights generally give the buyer the freedom to use property for legal use

Question 8

The ________________ gives the title holder the right to participate in any lawful activities they find enjoyable on the property. For Example, they have the right to put their feet up on the couch and watch TV.

Answer 8

Right of Enjoyment

Question 9

The ___________ protects the title holder’s right to transfer ownership, permanently or temporarily, to another party.

It Basically means you can sell, rent or will the property. You only get this right when the property is owned outright and money is not owed to another party, such as a lender.

Answer 9

Right of Disposition/Transfer

Question 10

The _______________ simply states that the title holder is the legal owner of the property.

Answer 10

Right of possession

Question 11

The _______________ means the owner can use the property in any manner that is legal. Note that when there is a homeowner’s association, the association can place additional restriction on uses, like patio decoration or pet ownership.

Answer 11

Right of control/use

Question 12

The ________________ allows the owner to limit who may enter the property. However, easements may be in place which override this right, such as utility company’s right to access power lines.

Answer 12

Right of Exclusion

Question 13

What is a license?

Answer 13

A official permission to Do, Use, or Own something

Question 14

What does a license sometimes represent?

Answer 14

A permit

Question 15

What is a real estate license?

Answer 15

Permits issues by state governments. Give licensees the legal authorization to represent the home buyer or seller in a real estate transaction.

Its a license to perform the act of soliciting real estate business.

Question 16

Are licenses appurtenant or run with the land?

Answer 16

No they are a personal right. They are not a true interest in the land. They can come from a verbal agreement.

Question 17

Can licenses be revoked at any time?

Answer 17

Yes

Question 18

Is a license a privilege?

Answer 18

Yes, they are a privilate, give permission.

Question 19

Is a license to use the land the same thing as an easement?

Answer 19

No - by definition: easements are a legitimate interest in land and are often irrevocable by the person whose land is being used

Question 20

Licenses are a _____ right and are ______ revocable

Answer 20

personal, easily

Question 21

When are licenses irrevocable?

Answer 21

In some situations where a license holder has spent significant amount to make improvements on the land with the approval of the grantor

Question 22

Does anyone have the title to water?

Answer 22

No one has title to water. Property owners who land adjoins by water have reasonable rights to use a body of water

Question 23

What are Riparian RIVER rights?

Answer 23

WATER MOVING IN A DIRECTION - Allows a property owner to use water from a water course such as a river, stream or creak

Question 24

What are Littorial LAKE rights

Answer 24

WATER THAT DOES NOT HAVE A DIRECTION - Concerning properties near an ocean, sea or lake. Usually concerned with the use and enjoyment of the shore.

Question 25

Correlative use

Answer 25

Allows a property owner the use of underground water or water from a river for irrigation purposes.

Question 26

What is the Doctrine of Prior appropriation?

Answer 26

Use in states where water is scare. Under this doctrine of prior appropriate - it determine the use of water. Use of water is determined by the state, not the by the property adjacent to the body of water

Question 27

What is Accretion?

Answer 27

It’s when soil is deposited by the natural action of water and may increase the size of the property

“Mother nature’s gift to the land owner”

Question 28

What is Reliction?

Answer 28

Gradual change of water line on a real property which gives the owner more dry land

Question 29

What is Erosion?

Answer 29

The wearing away of Land and soil by the action of wind, water, currents or ice

Question 30

What is Avulsion?

Answer 30

“Bad news” The sudden tearing away of land by violent actions of natural causes such as a river or other water course

Ex: dam breaking

Natures way of say “screw you” to the land owner

Question 31

“real = _____”

Answer 31

Immovable

Question 32

” peronsal = _______”

Answer 32

movable

Question 33

What is chattel

Answer 33

personal property, Moooo vable (cow)

Question 34

What is a fixture?

Answer 34

Personal property that has become real property because of its associate with the property.

Example chandelier - starts off as movable personal property but once it becomes installed and immovable (real)P

Question 35

What are the 5 ways to tell if an item qualifies as a fixture?

Answer 35

1. M ethod - method of attachment. Is it attached to the walls, floor, celling with nails, screws, glue, cemment ?
2. A daptability - if a fixture has become an integral part of the home then it has become part of the real property. Ex. pool cover is real property because that specific cover goes for that specific pool
3. R elationship of the parties
4. I ntention of the party when an item was attached. If an item was installed with the intention of making it a permeant attachment, like a built in bookcase, the item is a fixture
5. A greemet - most purchase contract includes which item is included in the sale. Any agreement between the two parties overrides all other factors when determining if something is a fixture.

Question 36

What are trade fixtures

Answer 36

Type of fixture that is used for a trade of business that is considered personal property

items that are Often immovable based on their attachment to real property. (unlike ordinary fixtures that become part of the real property) Trade fixtures go with the person or entity that owns the business where the fixtures is installed because they are considered PERSONAL PROPERTY

Ex: dentist chair goes with the dentist

Question 37

What is an appurtenance?

Answer 37

Something that is installed in or sits on a property. It is something that is considered part of the property. It is sold with the property and is passed on the new owners.

“Runs with the land”

Question 38

Real property is:

Answer 38

immovable or fixed property

Question 39

What is an Encroachment?

Answer 39

The physical intrusion of a structure or improvement on the land of another

Question 40

Where does the property extend?

Answer 40

Up to the sky therefore a tree hanging over the property line is a form of encroachment

Question 41

What are examples of an encroachment?

Answer 41

A fence or driveway over the property line, tree hanging over your property

Question 42

How can encroachments be found?

Answer 42

Through survey

Question 43

When an encroachment occurs what can you sue for?

Answer 43

Truss pass. Encroachment is a form of trust pass

Question 44

What is an Easement?

Answer 44

A right held by one person to use the land of another person for a specified purpose - such as access to a property

Question 45

What is an appurtenant Easement?

Answer 45

Involves two properties owned by two different owners. Involves dominant and servient tenants

Question 46

What is a Dominant tenant?

Answer 46

In control

Question 47

What is a Servient tenant?

Answer 47

serving a purpose to a dominant property

Question 48

What is ingress

Answer 48

to enter

Question 49

What is engress

Answer 49

to exit

Question 50

Does an Appurtenant easement continue after the sale of a property?

Answer 50

yes. An appurtenant easement attaches itself to a piece of property and is said to run with the land. Whenever a new property is sold, the new owner has the same right to use the property as the previous owner did.

Question 51

What is an easement in gross?

Answer 51

Has no dominent tenent because the people crossing the property because they are not used it to get to another property

Question 52

Under each states _______________ law, easements must be ________________ to be valid

Answer 52

STATUE OF FRAUDS LAW, in writing

Question 53

What is an easement in gross?

Answer 53

Has no dominant tenant because the people crossing the property because they are not used it to get to another property

Question 54

What are common examples of easement in gross?

Answer 54

Utility company. Ex: the electric company may want to connect the power lines between two pools. If they want to do this, they will be granted an easement in gross.

Question 55

What is an easement by necessity created by?

Answer 55

by a court

Question 56

When is an easement by necessity issued?

Answer 56

When someone has to cross over someone else’s land to gain access to their property

Question 57

What is an example of an easement by necessity?

Answer 57

For example, let’s say property owner Anne sells a back portion of her land to buyer Dave, but neglects to give Dave an easement for access. If Anne refuses to give Dave the easement, Dave can go to court and have an easement by necessity granted. Easements by necessity are also considered appurtenant easements that will now run with the land.

Question 58

What is an example of an easement by prescription?

Answer 58

Here’s an example to explain how easements by prescription work:

Every night, when your neighbor Joe comes home, he drives his car across a corner of your property. You see him but never stop him, and he does it for a long time. Eventually, you get tired of him driving across your property and tell him to stop, but he says “No way, I have an easement by prescription!” Joe takes the matter to court and the court agrees with him. The fact that Joe’s actions persisted over a long period of time are a big factor in the court granting him the easement. And now, Joe now has a permanent easement by prescription across your property.

Question 59

What is an easement by prescription?

Answer 59

A Prescriptive Easement is defined as an Easement created from an open, adverse, and continuous use, hostile to the true owners title over a statutory period.

It is a lot like taking land from someone else. Acquired not by paying money but rather by acquired without permission.

Question 60

Easements by prescription are the result of a _______, so a ________court order is required for them to be granted.

Answer 60

lawsuit, court order

Question 61

What is “open and notorious”,

Answer 61

which is a legal term meaning “not hidden”.

Question 62

What is “hostile”

Answer 62

not in your best interest.

Question 63

How can easements be terminated?

Answer 63

Agreement/Release - dominant tenement agrees to give up the easement to the servient

Merging - on of the tenants buys the others

Abandonment - stop crossing the property. Then it no longer exists

Need no longer exists - if you can prove that it’s no longer necessary than it can be terminated

Question 64

How is a prescriptive easement aquired?

Answer 64

It is aquired without permission

Question 65

What is “adverse” use

Answer 65

must be done without permission from the owner.

Question 66

An easement in gross involves _____ property

Answer 66

only one

Question 67

Is an easement in gross sold with the land?

Answer 67

No. the easement in gross is for your own personal use, and may not be a right which would be included with your land should you choose to sell your land. An easement in gross does not transfer with the property when it is sold.

Question 68

An easement by necessity is created by the ______

Answer 68

Courts

Question 69

In many ways an easement by necessity is a type of _______ easement

Answer 69

implied

Question 70

When will the courts create an easement by necessity?

Answer 70

When the easement is necessary to some piece of property

Question 71

When are easements by necessity most often created?

Answer 71

When a certain piece of land is completely land locked. and the only way to get to the land is by crossing another neighbors property, an easement by necessity is created to provide access over the neighbors property.

However, if at some point in the future other options arise and the necessity no longer exists, neither does the easement.

An easement by necessity can and will only last for as long as it is necessary to achieve its results.

Question 72

A fee simple absolute estate is ____

Answer 72

the maximum degree of ownership one can have

Question 73

What limitations does fee simple absolute estate have?

Answer 73

The government retains the rights to the property through the 4 government powers: PETE

Question 74

What are the 4 government powers?

Answer 74

PETE

P - police power
E - eminent domain
T - Taxation
E - escheat

Question 75

What is police power?

Answer 75

Police power is the states inherent right to regulate an individuals conduct or property to protect the health, safety, welfare and morals of the community.

Question 76

What are common examples of police power as it relates to real estate?

Answer 76

Zoning, building codes, rent control

Question 77

What is not designed to take property away from you, but is there to set standards for how the property can be used?

Answer 77

Police power

Question 78

Is compensation payed to property owners affected by zoning, building codes, or rent control?

Answer 78

No - compensation is not payed to property owners affected by police power. zoning, building code and rent control are police power.

Question 79

What is eminent domain?

Answer 79

Under eminent domain the government can appropriate property if they feel that it is for the greater good of the community?

Question 80

What is the owner of eminent domain entitle to?

Answer 80

Fair compensation usually defined as FAIR MARKET VALUE of the property

Question 81

What process is the compensation of eminent domain paid through?

Answer 81

Condemnation

Question 82

What can a property owner file for when they feel like they didnt get properly compensated during eminent domain?

Answer 82

Inverse condemnation

Question 83

What allows the property owner to file a claim against the government to recover just compensation for the property that was taken

Answer 83

Inverse condemnation

Question 84

What is taxation

Answer 84

Property taxes are a charge on real estate used to pay for services provided by the government

Question 85

Unpaid property taxes are the result of ________ lien

Answer 85

Specific lien

Question 86

What is the difference between a specific lien and general lien in regards to taxes

Answer 86

Unpaid property taxes result in specific lien which means you can loose your property for not paying taxes.

However general lien - where items above and beyond your property can be seized to pay your debts

Question 87

What is escheat?

Answer 87

occurs When a property reverts to state ownership after an individual dies without a will and without an heir to the property.

Question 88

Is an escheat process revocable?

Answer 88

yes - ownership of the estate or property reverts to any rightful heirs that might appear.

Question 89

What does escheat ensure?

Answer 89

It ensures a property always has ownership. If no one else has a claim on the property, the government steps in to manage it

Question 90

What is the definition of eminent domain?

Answer 90

the inherent power of the state to seize a citizens private property or a citizens rights in the property in exchange for monetary compensation

Question 91

What are the most common uses of the property taken by government domain?

Answer 91

Public utilities, highways and railroads

Question 92

What is “The formal act of the exercise of the power of eminent domain to transfer title to the property from its private owner to the government”?

Answer 92

Condemnation

Question 93

Does condemnation have to be ownership of the entire property?

Answer 93

No , it could even be smaller interest in it like and easement

Question 94

When is a property condemned?

Answer 94

When a building has been so dilapidated that it is legally unfit. does not deprived owner of title but forces owner to rectify property

Question 95

What is a situation in which the government takes private property but fails to pay the just compensation

Answer 95

Inverse condemnation

Question 96

Suing the government is essentially ______ condemnation

Answer 96

Inverse condemnation

Question 97

What is zoning?

Answer 97

Zoning is the regulation of private land use and development by the local government

Question 98

Are there such thing as FEDERAL zoning laws?

Answer 98

No

Question 99

Does zoning increase the marketability of the property?

Answer 99

Yes

Question 100

What plan is zoning a part of?

Answer 100

Master plan

Question 101

What is the comprehensive plan to guide the long-term physical development of a particular area?

Answer 101

Master plan

Question 102

What is zoning for land use typically divided into?

Answer 102

Residential
Commercial
Agricultural
Industrial
Special use properties

Question 103

What are special purpose properties/special use properties

Answer 103

Properties that are a benefit to the public like Schools, libraries, police stations

Question 104

What is R3

Answer 104

Residential multi-family

Question 105

What are a set of laws that control:
- height of buildings
- setback
- density (bulk)
- floor area ratios
- buffers
- buffer zones
- variances

Answer 105

Zoning ordinances

Question 106

What is the distance from the edge of the road or sidewalk to the structure that was build. It can also be from the center of the road

Answer 106

Set back

Question 107

What is usually associated with subdivisions, restricting the number of the houses per acre that may be build within that subdivision

Answer 107

Density

Question 108

What is the ratio of the square footage to the land area. It can be used in zoning to limit the amount of construction in a certain area.

Answer 108

Floor area ratio

Question 109

What is found between two lots, such as a fence, a wall or a row of trees

Answer 109

buffer

Question 110

What is a space of land between two districts such as a park, playground or high way

Answer 110

Buffer zone

Question 111

What is the change in the zoning to permit less intensive developments that are currently permitted

Answer 111

Down zoning

Question 112

What is a zone going from commercial to residential an example of?

Answer 112

Down zoning

Question 113

What is an exception that is granted from the zoning rules?

Answer 113

Variance

Question 114

What is an exception to the rule?

Answer 114

Variance

Question 115

What are granted lot by lot and granted on individual basis?

Answer 115

Variance

Question 116

What is a free hold estate?

Answer 116

An estate in which you have exclusive rights to enjoy the possession of a property for an undefined length of time

Question 117

What are the types of FEE hold estates?

Answer 117

1. Fee simple absolute (FEE)
2. Fee simple defeasible
3. Life estate

Question 118

What is a Fee simple/Fee simple absolute?

Answer 118

An estate in land. Ownership can not be defeated by the previous owner or the previous owner’s heirs.

Question 119

What is a less than free hold estate?

Answer 119

An estate in which you have exclusive rights to enjoy the possession of a property for a fixed or defined period

Question 120

What is a fee simple absolute not free from?

Answer 120

encumbrances

Question 121

What is the greatest interest in a parcel of land that one can possible own?

Answer 121

Fee simple absolute

Question 122

What can sometimes be referred to as “FEE”?

Answer 122

Fee simple absolute

Question 123

What is the most common way real estate is owned in common law countries?

Answer 123

Fee simple absolute

Question 124

What is the ordinarily the most complete ownership interest that can be had in real property, short of absolute title?

Answer 124

Fee simple absolute

Question 125

What is fee simple absolute ownership limited by?

Answer 125

PETE, certain encumbrances, condition in the dead

Question 126

When is a fee simple defeasible created?

Answer 126

created when a grantor creates a CONDITION on a fee simple estate.

Upon the occurrence of a specified event, the state may be lost

Question 127

What are the two type of fee simple defeasiable estates?

Answer 127

1. Fee simple determinable
2. Fee simple condition subsequent

Question 128

What is a fee simple determinable?

Answer 128

If a grantor uses conditional language like “To adam, as long as the land is used as a park”

If the land is used for something other than a park, the estate will automatically terminate and REVERT back to the grantor or the grantors estate.

Question 129

What is a fee simple condition subsequent?

Answer 129

If there is a condition such as “no alcohol to be served” then it would be a condition subsequent because you could loose the title if you serve alcohol

Question 130

What is a life estate?

Answer 130

A life estate is an interest in real property which is held for the duration of life for a designated person.

In legal terms - an estate in real property that ends at death. When the estate of the real property either reverts to the original owner or passes to another person.

Question 131

What is the life estate limited by?

Answer 131

Limited by the life of the person holding it or the life of another person

Question 132

What is a Life tenant in regards to a life estate?

Answer 132

A life tenant receives the property and is responsible for the maintenance of the property and paying taxes.

Question 133

If a life tenant allows a property to ____ it would be committing waste

Answer 133

deteriorate. A life tenant can not commit waste

Question 134

what can the life tenant of the life estate not do? What can they do?

Answer 134

CAN NOT
1. Can not commit waste (which means they can not leave a property to deteriorate) in a way that prevents the property from passing to the remainder once their ownership is terminated
2. Can not leave the property to anyone in their will

CAN
3. They may sell, mortgage or lease a property for the duration of the estate, thus all contracts would be terminated by the life tenant. For example: if the life tenant dies, the property goes back to the individual who created the life estate

Question 135

What is the process called where the life tenant (holder of the life estate) dies and the property goes by to the individual who created the life estate?

Answer 135

Estate in reversion

Question 136

If he individual who created the life estate dies, will it go to the life tenant?

Answer 136

No, the life tenant only has the property for as long as the person who created the life estate is a live.

Question 137

What happens to the estate when the holder of the life estate dies?

Answer 137

It reverts to the estate in reversion

Question 138

What happens when the estate in reversion dies?

Answer 138

It goes to the remainder

Question 139

One common example of life estate:

Answer 139

To provide housing for someone until they die

1. When a child transfers a property to the parent for the rest of that parents life. After the parent dies, ownership of the property reverts back to that specific child. In this situation, the child owns a “reversionary right” to this property.
2. If a mother creates a life estate dead to give her younger husband a life estate in the property, assuring that he will always have a place to live. She can ensure in the deed that the remainderment goes to the son after the husband dies. Son will be known as the remaindermaint for that life estate.

Question 140

What is a less than free hold estate?

Answer 140

An estate held by one who rents or leases property

Question 141

What are the classifications of a less-than-freehold estate?

Answer 141

1. ) Estate for years
2. ) Periodic tenancy
3. ) Estate at will
4. ) Estate at sufferance

Question 142

What is a lease hold interest in land for a FIXED PERIOD OF TIME?

Answer 142

Estate for years. It has a defined beginning and end date. No termination Notice is needed because the end date is established at the beginning

Question 143

What is another term for “a tenancy for years”?

Answer 143

Estate for years

Question 144

What is a summer rental an example of?

Answer 144

Estate for years. It has a defined beginning and end date. No termination Notice is needed because the end date is established at the beginning of the rental

Question 145

Is a termination notice needed for estate for years?

Answer 145

No. No termination Notice is needed because the end date is established at the beginning of the rental

Question 146

What tenancy is not bound to a lease for a fixed period?

Answer 146

Periodic tenancy

Question 147

month-to-month, week-to-week and year-to year are an example of what tenancy?

Answer 147

Periodic tenancy

Question 148

Does proper notice have to be given for periodic tenancy?

Answer 148

Yes - so landlord has time to find someone new

Question 149

What estate gives the leasee the right to possession until the estate is terminated by either party

Answer 149

Estate at will

Question 150

Which estate has a term that is indefinite?

Answer 150

Estate at will - basically it can ended at any time

Question 151

What estate arises when a tenant wrongfully hold over after the expiration of his term?

Answer 151

Estate at sufference

Question 152

Is Estate at sufference a form of trespass?

Answer 152

No - at one point the tenant had the right to be on the property.

Question 153

When a estate at sufference is created, the landlord would need to do what?

Answer 153

Legally Evict the tenant

Question 154

What are the two general ways you can own property:

Answer 154

1) by yourself
2) with someone else or others

Question 155

What is ownership by yourself of property

Answer 155

Ownership in severalty

Question 156

What is Ownership with someone else

Answer 156

Concurrent estate

Question 157

What type of estate is joint tenancy?

Answer 157

Concurrent estate

Question 158

What type of estate is tenancy in common?

Answer 158

Concurrent estate

Question 159

What tenancy occurs where tenants:

1) have different percentages of interest (tenant A & B each have 25% while Tenant C has 50%)
2) occur tenancy at different times (tenant A&B obtained in 2009 while tenant C obtained later in 2018)
3) Each tenant can receive their ownership interests through separate convyences (tenant A & B can be on same title by tenat C has own distinct title)
4) ONLY THING EACH TENANT SHARES IS POSSESSION ( share unity of possession)

+ NO right of survivorship

Answer 159

Tenancy in Common

Question 160

What tenancy occurs where tenants:

Each tenant much obtain
1) equal shares of the property
2) with the same document
3) at the same time

4 unities: TTIP
T- time
T - title
I - interest
P - possession

+ right of survivorship

TTIP ROS

Answer 160

Joint tenenacy

Question 161

What happens if any of the 4 unities of TTIP are broken

Answer 161

Tenancy Reverts from JOINT TENANCY to TENANCY IN COMMON

Question 162

What does TTIP stand for?

Answer 162

Time, Title, Interest, possession

Question 163

What are the main similarities of Joint tenants & tenants in common

Answer 163

When two or more people own a property of either joint tenants or tenants in common - each individual owns a share of the entire property and has the right to possess it

Question 164

What is the biggest different for joint tenants and tenants in common?

Answer 164

The right of survivorship

Question 165

What happens when a owners of Joint tenancy dies? Do they have a right of survivorship

Answer 165

1) The interest of the deceased owner automatically transfers to the surviving owner or owners
2) Yes - joint tenancies have the right of survivorship

Question 166

Example of Joint tenancy right of survivorship:

If Carol, Vivian and stephen own a property with joint tenancy, what happens if vivian dies?

Answer 166

Stephen and carol each obtain one half of vivians share of the property

Question 167

What happens when a owners of tenants in common dies? Do they have a right of survivorship?

Answer 167

1) Since there is no right of survivorship - generally a deceased common in interest belongs to their estate -( unless they have a will that include the other tenants)
2) No

Question 168

Example of tenancy in common right of survivorship:

If Carol, Vivian and stephen own a property with joint tenancy, what happens if vivian dies?

Answer 168

Vivian’s heirs get vivians share of the property, not the surviving owners

Question 169

If you own property with a corporation, what tenancy would you take it as?

Answer 169

Tenant in common, NOT JOINT TENANT

This is because corporations don’t die, the dissolve.

Tenants in common DO NOT have right of suvivorship so this applies to cooporations

Question 170

In a lease, who is the lessor and who is the lessee

Answer 170

Landlord - lessor
Tenant - lessee

OR - gives
EE - receives

Question 171

Can oral leases can be binding?

Answer 171

Yes however generally leases are written

Question 172

What do leases provide?

Answer 172

They give Exclusive right to the Lessee

and reversionary right to the lessor

Question 173

What is it called when the owner of a lease has the right to regain possession of the property after the lease has expired?

Answer 173

A reversionary right

Question 174

What must a lease contain?

Answer 174

Must contain everything that’s in a lawful contract:

M - mutual agreement
C - consideration
C - capable partes
L - lawful object

Question 175

What does the tenant in a lease have right of?

Answer 175

Quiet enjoyment and possession of property: Assurance that their possession will not be disturbed by anybody with superior title

Question 176

The lease is a ______ contract:

Answer 176

Bilateral contract - which means a promise for a promise

“I promise to let you live in the property if you promise to pay”

Question 177

Does death usually terminate the lease?

Answer 177

NO - death doesn’t usually terminate the lease:

The responsibilities as state in the agreement could pass on to the heirs of the deceased

Question 178

Are leases personal property?

Answer 178

Yes - Leases are personal property as they do not always run with the land

This means that when the property is sold, the lease does not always transfer with it.

It is a contract with an individual person. lease is a piece of paper. Piece of paper is moveable. Moveable is personal property

Question 179

Can a tenant assign or sublease a property

Answer 179

Yes - UNLESS the lease forbids it. The tenant has the right to assign or sublease the property

Question 180

In a lease: What is it called when an tenant transfers contract rights?

Answer 180

Assignment

example: if you assign your lease to bob, you can move on with your life and bob is not responsible to the landlord

Question 181

In a lease: What is it called when a tenant rents the property they lease to another person while still maintaining their responsibity to the landlord under their rental agreement

Answer 181

Sublet

example: if you sublet your lease to bob, and the landlord does not get paid, you are responsible regardless of what bob does or does not do

Question 182

What is a term used in the law of real property to describe a circumstance in which a landlord either does something or fails to do something that he has a legal duty to provide.

Answer 182

Constructive eviction

ex: if landlord does not provide water to the tenant as a tenant can not live without water thus they must vacate

Question 183

What does HOA stand for?

Answer 183

Home owners association

Question 184

The HOA will have its own government documents in the form of _________ and _____________-

Answer 184

bylaws & CC&Rs

Question 185

What does CC&Rs stand for?

Answer 185

Covenants, Conditions, and Restrictions

Question 186

What is the Declaration of CC&Rs exactly?

Answer 186

The declaration of the CC&R is the legal document that lays out the guidelines of the planned community

Question 187

Where are the CC&Rs recorded? Are they legally binding?

Answer 187

They are recorded in the county records in the county where the property is located and are legally binding.

Question 188

CC&Rs are the rules of ______

Answer 188

your neighborhood

Question 189

The CC&Rs govern what?

Answer 189

What you can and cannot or must do with respect to your home

Question 190

What is the goal of the CC&Rs?

Answer 190

to protect, preserve, and enhance property values in the community. Most of the time, the rules make sense and are easy to accept.

Question 191

It is typical for the ______to regulate things such as:
- basketball hoops
-clotheslines
-fences
-TV antennas/satellite dishes
-garbage cans
-External architecture
and much more..

Answer 191

CC&Rs

Question 192

How are changes made to the CC&R?

Answer 192

Because this record is kept on file with the sate, it can be difficult to amend and requires a vote by the HOA membership to make any changes

Question 193

What happens if you don’t abide by the CC&Rs?

Answer 193

If you don’t abide by the CC&Rs, the HOA may impose penalties for any violations.

If you violate the CC&Rs the penalties can include:
-fines
-forced compliance
-or the HOA can even file a lawsuit

Question 194

If _______ cover the “what of the HOA, the ________ cover the “how”. The HOA, is which is typically set up as a ______ is an organization set up to maintain a private planned community

Answer 194

CC&Rs, bylaws, nonpropfit corporation

Question 195

What governs how the HOA operates and contain the information needed to run the HOA business

Answer 195

bylaws

Question 196

What covers
- Frequency of HOA board elections
-Process for nominating and electing new board members
-Membership voting rights
-Number of members that serve at one time
-Length of board member service terms
-Meeting frequency
-How the meetings are conducted
-The duties of the various offices of the board of directors and much more

Answer 196

the bylaws of HOA

Question 197

are bylaws difficult to change?

Answer 197

Yes, like CC&Rs, bylaws are difficult to change. The require a vote by the membership to amend

Question 198

Does passing your real estate exam mean you are a realtor?

Answer 198

No - Passing your exam makes it legal for you to find a property for a buyer but it DOESN’T mean you are a realtor.

Question 199

What is a real estate agent in most states?

Answer 199

A licensed real estate sales person - that works under a licensed real estate broker

Question 200

What is the name of a real estate professional who is also a member of the NAR? What doe NAR stand for?

Answer 200

Realtor

NAR stands for National Association of Realtors

Question 201

What do you become a member of NAR

Answer 201

1. Pay membership dues
2. Abide by the associations ethics and standards.

Question 202

What do Realtors promise?

Answer 202

Bound by the code of ethics, Realtors promise to operate by 1. Transparency, 2. Honesty, 3. Integrity

Expected to conduct their business with the best interest of their clients in minds.

Without exaggeration or misrepresentation of any time

They should be experts in their fields

Question 203

Realtors can be _____ or ______

Answer 203

Agents or brokers

Question 204

Which licenses allows a person to represent a buyer or sell in a real estate transaction in exchange for compensation?

Answer 204

1. Salesperson license
2. Sales associate license
3. Brokers license

Question 205

Agents must work under who?

Answer 205

A licensed broker who is legally accountable

Question 206

______ are licensed to facilitate real estate transactions. They work under a license broker who is legally responsible.

Answer 206

Real Estate agents

Question 207

_______ have more stringent license requirements and have the option to work alone or have other agents work under them

Answer 207

Brokers

Question 208

_______ Are licensees that are a part of the NAR, a trade organization

Answer 208

Realtors

Question 209

A (an) ______ is a person who has been legally empowered to act on behalf of another person or entity

Answer 209

Agent

Question 210

Is an agent the same as a POA

Answer 210

No, having an agent is not the same as a power of attorney, where one person has the power to act as another person for that one act

Question 211

A client is also known as a ______

Answer 211

principle

Question 212

What does the law of agency define?

Answer 212

The rights, duties and responsibilities of all legal parties

Question 213

Once an agency relationship is created, then what must the agent follow?

Answer 213

The agent must follow fundamental responsibilities

Question 214

What are the fundamental responsibilities of an agent, once an agency relationship is created?

Answer 214

OLD CAR

O - obedience
L - Loyalty
D - disclosure

C - confidentiality
A - accounting
R - reasonable care

Question 215

If a seller refuses to take an offer for a reason that violates fair housing lows, does obedience apply in regards to the agency relationship?

Answer 215

NO - the agent should not and legally can not follow those instructions

Question 216

When it comes to the real estate transaction, the client must put the clients BEST INTEREST above anyone elses, including their own. What is this known as?

Do what is best for the client not the commission check.

Answer 216

Loyalty

Question 217

If an agent gives preference to an offer due to a bonus, what is this in violation of?

Answer 217

Loyalty, aspect of agency relationship

Question 218

If an agent is getting a bonus for selling a certain property, does he or she have to tell the client? what is this referred to as?

Answer 218

Yes, they must disclose it to the client before writing up a purchase offer. This is under Loyalty, which is an aspect of agency relationship.

Question 219

The agent must _______ any information they receive that can benefit the clients position in negotiation?

Answer 219

disclose

Question 220

If an agent is representing a buyer and the agent knows the seller has a pending offer on another house, what should the agent do?

Answer 220

It is the agents duty to disclose that information to the client

Question 221

What is something that might cause the buyer to change their actions regarding the purchase?

Answer 221

Material facts

Question 222

Must agents disclose any material facts?

Answer 222

Yes

Question 223

Should agent disclose information learned about their clients? what is this known as?

Answer 223

No, confidentiality

Question 224

Should the agent disclose a client/principles business information, financial situation, personal affairs and or other reasons for doing the transaction to the other party?

Answer 224

No, confidentiality

Question 225

How long does the fiduciary duty of confidentiality last to the client?

Answer 225

Forever

Question 226

Does the fiduciary duty of confidentialty end after the close of the business transation?

Answer 226

No - the fiduciary duty of confidentiality lasts forever

Question 227

If an agent knows the client lost their job and is selling because of financial situation, can they disclose to the other party after the transaction is over? what is this called?

Answer 227

No, confidentiality lasts forever - unless a court instructs you to disclose certain items they seem is necessary

Question 228

What is it called when agents are responsible for accurate money and documentation of each transaction, which includes accurate RECORD KEEPING

Answer 228

accounting

Question 229

What is it called when agents are expected to have a certain level of knowledge and be able to guide and advise clients through a process without harm. Licensed real estate professionals are legally held to a standard that can be hard to pin down.

Answer 229

Reasonable Care

Question 230

As a real estate agent clients will expect you to knowledgeable advise them on Prices, Inspections, negotiations, repairs and many other aspects of the transactions - what is associated with?

Answer 230

Reasonable Care

Question 231

IF questions comes up by a client, that the agent does not know, what is expected of the agent?

Answer 231

Expectations to advise them on how to obtain the information they seek (Reasonable care)

Question 232

Should an agent offer advise or services that they are not qualified to clients?

Answer 232

No - advise or services that the agents are not qualified for should not be offered just to please the clients (Reasonable care) “stay in your lane”

Question 233

If an agent has a hole in the patio, should the agent offer advise on what causes patio holes and how to replace the patio?

Answer 233

No - the real estate agent rather advise the client to listen to a certified inspector (reasonable care)

Question 234

A ______ duty legally obligates one person to act solely in the interest in another person

Answer 234

Fiduciary (verb)

Question 235

What is the name of the person who knowingly accepts the obligation of one person to act solely in the interest in another person

Answer 235

A fiduciary (noun)

Question 236

A fiduciary agrees to always but whose best interests first?

Answer 236

Client’s

Question 237

What is the name of an interested party who might be dealing with an agent but is not being represented by the agent

Answer 237

Customer

Question 238

Is their a fiduciary duty by the agent owed to the customer?

Answer 238

No

Question 239

A customer can expect _______ dealing from an agent

Answer 239

Honest and fair dealing

Question 240

What is the name of someone who has and agency relationship with an agent?

Answer 240

client/principle

Question 241

Is their a fiduciary duty by the agent owed to the client?

Answer 241

yes

Question 242

Is their a fiduciary duty by the agent owed to the principle?

Answer 242

yes

Question 243

What does it mean with a fiduciary duty is owed to a client or principle?

Answer 243

This means that the agent is expected to exercise discretion when acting on your behalf and they must adhered to specific responsibilities and standards in acting in good faith and loyalty.

Question 244

What is the term for when the buyer and seller are represented by the same agent? do people prefer this? why or why not?

Answer 244

dual agency

Most people don’t prefer this because there is a natural conflict of interest. The agent is trying to be fair to both side. Because they have to remain neutral they are not effectively working on behalf of either party

Question 245

What type of agents are hired to perform one specific duty for the client

Answer 245

Special agent

Question 246

What is the standard agency relationship for a real estate agent and client

Answer 246

special agent -

Question 247

What agent’s authority is limited to one specific task

Answer 247

special agent

Question 248

What one act is a real estate agent hired for?

Answer 248

Finding a buyer for the listed property. once the act is complete, the agency relationship ends

Question 249

What type of agent can perform any and all act associated with principal’s ongoing business the agent has been appointed to act in.

Answer 249

General agent

Question 250

What agency relationship is continuous and ongoing.

Answer 250

General agent

Question 251

What type of agent is a property manager

Answer 251

General agent

Question 252

When does a general agency relationship end

Answer 252

It ends when the contract ends or by mutual agreement

Question 253

What agency relationships have full authority to act on behalf of a principle?

Answer 253

Universal

Question 254

Many times a Universal agent have who to act on their principal’s behalf?

Answer 254

A Power of Attorney

Question 255

Many time universal agents can act like they are the ______ by doing what?

Answer 255

principle, sign legal documents or purchase or sale property for them

Question 256

What agency is created when the licensee and the principle express their intentions either oral or in writing to enter into an agency relationship

Answer 256

Express agency/ Express agreement

Question 257

Is an ORAL expressed agreement valid?

Answer 257

The validity of an oral agreement in establishing an agency relationship varies from state to state. It may also be possible for an oral agreement to establish an agency relationship, but not enforceable by the licensee when trying to collect a fee.

Question 258

What is the typically written agreement between the agent and client?

Answer 258

Listing agreement or buyers agency agreement

Question 259

What agreement is the most appropriate and legally safe way to create an agency relationship.

Answer 259

written agreement

Question 260

What agency establishes an agency relationship through the actions of the two parties.

Answer 260

implied agency

Question 261

In what agency occurs when nothing formal has been said or written down, but the real estate licensee and the principle act as if they have an agency relationship

Answer 261

implied agency

Question 262

This is an example of which agency?:

Susan is selling her home by herself and puts up a for-sale sign on the lawn. You drive by, see the sign, and stop in. You identify yourself as a real estate agent and ask some questions about the house. Susan tells you she doesn’t want to list the house for sale with any brokerage, but she does tell you to bring any possible buyers around.

The next day you bring the Bauers, who really like the house and want to make an offer. You inform Susan and begin negotiating a deal. If this situation were to end with you filing a lawsuit for the commission, ultimately it would be up to a court to decide.

Answer 262

implied agency

Question 263

What agency happens when a person makes a representation to a third party, whether by words or conduct, that another person is their agent- and subsequently the third party deals with that person as an agent. The original person will not be permitted to deny the existence of the agency if to do so would cause damage to that third party. And by damage we mean financial loss.

Answer 263

agency by estoppel

Question 264

This is an example of which agency?:

Stephen is Oscar’s agent. Oscar terminates the agency relationship but, unbeknownst to him, Stephen continues to transact with third parties on his behalf. If Oscar fails to notify any third parties of Stephen’s termination, Oscar may still be bound to any agreement Stephen enters into.

Answer 264

agency by estoppel

Question 265

This is an example of which agency?:

Say you’re the owner of a building and you tell your agent to show an apartment to a possible tenant. The agent goes ahead and negotiates a lease even though you didn’t give the agent any direct authority to do so. The tenant assumes the agent has the authority, and an _______ has been created.

Answer 265

agency by estoppel

Question 266

What agency occurs when a principal approves and adopts, an act which has already been done in his name and on his behalf by another person (like a real estate licensee) who, in fact, had no actual authority (whether express or implied) to act on behalf of the principal.

Answer 266

Ratification

Question 267

What agency creates an agency relationship between the principal and the agent for that one act that was ratified by the principal- not for any past or future action

Answer 267

Ratification

Question 268

What are the main types of agency

Answer 268

1) Express agency/ Express agreement
2) implied agency
3) agency by estoppel
4) Ratification
5) Agency by necessity
6) Agency Coupled with an Interest

Question 269

What agency arises when one party makes a decision on behalf of another person who is unable to do so. The decision must be essential in nature, and it must be in the principal’s best interests when making the decision.

Answer 269

Agency by necessity

Question 270

which agency arises it is practically impossible for the agent to communicate with the principal

Answer 270

Agency by necessity

Question 271

What is an agency coupled with an interest is a situation in which an agent has some kind of interest in the property that’s being sold.

Answer 271

Agency Coupled with an Interest

Question 272

This is an example of which agency?:

Suppose a part-time broker is also an architect. The broker/architect agrees to design some houses for a builder, who’s giving the broker/architect the listings for the sale of the finished houses. In essence, the broker/architect has now made an investment in the project, so the builder can not cancel the agency agreement.

Answer 272

Agency Coupled with an Interest

Question 273

What agency occurs when the buyer and the seller are both represented by the same real estate broker.

Answer 273

Dual agency

Question 274

What agency comes about when potential buyers don’t have an agent, so they contact a seller’s real estate agent directly when they are interested in a property. They ask the seller’s agent to submit an offer on their behalf.

Answer 274

Dual agency

Question 275

Where do problems arise in dual agencies?

Answer 275

A potential conflict of interest. Can be loyal to one. You are a neutral party.

Agency relationships usually involve a fiduciary duty. This means the agent must have a sense of loyalty to their client. If the agent is representing both sides on the same transaction, who gets their loyalty? This potential conflict of interest is why dual agency is frowned upon in some areas and is straight-up not allowed in others.

Question 276

What are the restrictions for dual agency to protect against conflict of interest:

Answer 276

1) The agency must inform both buyer and seller of the dual agency in writing

2) The agent is required to treat both buyer and seller with complete honesty

3) The agent must provide full disclosure regarding the property and it’s material condition

4) Agent CAN NOT reveal confidential or personal information of either party involved

5) The agent has to look out for both parties interests

6) When it’s time to make an offer - the real estate agent can not advise either the price to offer or the price to accept

7) FIDUCIARY DUTY OF LOYALTY IS NOW GONE. They are not allow to advance one parties interest over another. The agent must stay in neutral

Question 277

What agency is created when a buyer and seller each have their own agent but each agent is under the same broker?

Answer 277

dual agency

Question 278

Can a dual agency occur when there are two agents involved?

Answer 278

yes, If one agent from the brokerage has a home listed and another agent from that same brokerage has a buyer-brokerage agreement with someone who wants to buy the listed property, dual agency occurs.

Question 279

Who is a person appointed to act for another in business or legal matters?

Answer 279

Attorney

Question 280

Is a power of attorney always a layer?

Answer 280

No

Question 281

What is a Legal document that authorizes someone to act for you?

Answer 281

Power of attorney

Question 282

When you grant someone the power of attorney, that act as the:

Answer 282

Attorney in Fact

Question 283

Who can you authorize to:

signing checks and tax returns, entering into contracts, buying or selling real estate, depositing or withdrawing funds, running a business, or anything else you do for yourself.

Answer 283

Attorney in fact, by giving them the power of attorney

Question 284

What is the right to keep possession of a property belonging to another person until a debt owed by that person is discharged

Answer 284

Lien

Question 285

Are liens attached the property or the owner?

Answer 285

Property

Question 286

When you take on a property, you want to make sure you have appropriate ______ removed before transferring title

Answer 286

Liens

Question 287

What are all of the classifications of liens?

Answer 287

1) General or specific
2) Voluntary or involuntary
3) Statutory or equitable

Question 288

What type of lien is a lien on property both real and personal of the debtor?

Answer 288

General Liens

Question 289

What type of lien is judgement lien

Answer 289

general lien, involuntary lien

Question 290

What type of lien is corporation lien

Answer 290

general lien

Question 291

What type of lien is franchise tax lien

Answer 291

general lien

Question 292

What type of lien is inheritance tax lien

Answer 292

general lien

Question 293

What type of lien is income tax lien

Answer 293

general lien

Question 294

What type of lien is debts of a deceased person lien

Answer 294

general lien

Question 295

what is a lien against one property?

Answer 295

specific lien

Question 296

What type of lien is mechanics lien

Answer 296

specific lien, involuntary lien

Question 297

What type of lien is trust deed?

Answer 297

specific lien, voluntary lien

Question 298

What type of lien is mortgage?

Answer 298

specific lien, voluntary lien

Question 299

What type of lien is property tax assessments

Answer 299

specific lien

Question 300

What is a lien placed on the property with the consent of the owner

Answer 300

voluntary lien

Question 301

What is a lien placed on the property without the consent of the owner

Answer 301

involuntary lien

Question 302

What is the name of the courts final decision on the right of an obligator to pay the parties involved. Once this is filed, it created a general lien against all of the property of the defendent

Answer 302

Judgement lien

Question 303

This is filed for the nonpayment of labor of materials that were used to improve the property

Answer 303

Mechanics lien

Question 304

Can mechanics lien impair your ability to get a loan on the property?

Answer 304

Yes - mechanics liens take priority, so if money comes back mechanics lien will be paid off before the lender is paid off in the event of forclosure

Question 305

What is the lien placed on the property by law?

Answer 305

Statutory lien

Question 306

What is the lien placed on the property by written contract or by what is fair and equitable?

Answer 306

Equitable lien

Question 307

What does the borrower have to sign, which serves as a “I owe you” before the lender gives the borrower the money?

Answer 307

Promissory Note

Question 308

What note states the terms of the loan such as - the rate of interest and the number of years the borrower has to pay back the loan.

Answer 308

Promissory Note

Question 309

What is evidence of the debt?

Answer 309

Promissory Note

Question 310

What security does the lender have once they give the money to the borrower?

Answer 310

The security is the collateral, which is the property the borrower uses to buy with the funds

Question 311

What does mortgage actually mean?

Answer 311

Pledge

Question 312

Mortgagor gives what?

Answer 312

gives the pledge to the lender

Question 313

Is the Mortgagor the borrower or the lender?

Answer 313

Borrower

Question 314

What is the clause that requires that a loan (mortgage) to be paid off when the property is sold

Answer 314

Due on sale

Question 315

What two categories do states fall under regarding securing a loan made for the purchase of real property:

Answer 315

1) Title Theory
2) Lien Theory

Question 316

What is the real property that is pledged to the lending institution, which has a lien on the real property

Answer 316

Lien Theory

Question 317

What is it called when the borrower conveys legal title to a trustee. The borrower is the trustor. The bank is the beneficiary

Answer 317

Title Theory

Question 318

What is a loan that covers two or more pieces of real estate?

Answer 318

Blanket mortgage

Question 319

What loan allows one of the properties to be sold before the entire mortgage loan is paid off

Answer 319

Blanket mortgage

Question 320

Why are blanket mortgages helpful for developers?

Answer 320

consider a situation where a developer is building ten homes. A standard mortgage would require the developer to pay off the entire mortgage in order to sell one home. Or the developer could take out 10 individual loans that need to be separately managed, but could be paid off as each home is sold.

With a blanket mortgage, the developer takes out one loan to cover all 10 developments. When one-tenth of the mortgage is paid off, a “release clause” is triggered allowing one of the homes to be released from the lien so it can be sold. One thing to note is that, depending on the terms of the blanket mortgage, the loan may need to be refinanced as separate properties are sold.

Question 321

How many sets of fees does a blanket mortgage require?

Answer 321

one set of fees rather than seperate fees for each property

Question 322

What does the individual save on in an blanket mortgage?

Answer 322

Saves on fees of applying for and closing on multiple loans

Question 323

Who typically uses blanket mortgages?

Answer 323

1) developers
2) Businesses with multiple locations they wish to own and operate
3) Real estate developers who are investing in commercial or residential property such as apartment buildings or multi family homes
4) house flippers who buy multiple properties to flip

Question 324

What is it called when you buy a property with the intention of selling it quickly to turn a profit

Answer 324

houseflipping

Question 325

What is a gradual reduction of a loan debt through periodic installment payments of principal and interest

Answer 325

Amortization

Question 326

What is the amount that is loaned to you?

Answer 326

Priniciple

Question 327

What is the amount you are paying for the right to borrow that money (rent on money)

Answer 327

Interest

Question 328

Where is the mortgage payment applied with each payment?

Answer 328

A portion of the payment is applied toward reducing the principle, and another portion of the payment is applied toward paying the interest on the loan

Question 329

What shows the ratio of principle and interest, and demonstrates how the a loan debt decreases over time

Answer 329

Amortization table

Question 330

What is a loan called that has been completely paid off at the end of the loan term?

Answer 330

Fully Amortized

Question 331

This is when you keep making your payments on time but the debt keeps increasing

Answer 331

Negative Amortization

Question 332

What is a loan where you are just paying the interest?

Answer 332

Straight note

Question 333

What is a type of secondary financing for the type of purchase of real property

Answer 333

A wraparound mortgage aka WRAP

Question 334

In what financing does a junior mortgage “wrap around” an existing mortgage?

Answer 334

A wraparound mortgage aka WRAP

Question 335

What is often referred to as a “second” mortgage? But it could also be a third of fourth mortgage

Answer 335

A junior mortgage

Question 336

What term refers to the priority of liens?

Answer 336

“Junior” in the case of junior mortgages.

Question 337

In the case of a foreclosure, what order are the mortgages paid?

Answer 337

1) Senior mortgage paid down first
2) Then Junior mortgages are paid based on the date they were recorded

Question 338

Wraps are a form of_____

Answer 338

Seller financing

Question 339

What is any transaction in which a property’s seller finances all or some of the purchase directly with the buyer

Answer 339

Seller financing

Question 340

How is seller financing secured?

Answer 340

a promissory note that details the terms of the financing and the promissory note serves as evidence of the debt.

Question 341

Do seller-financed deals require principal to be paid upfront?

Answer 341

No, don’t require the principal amount to be exchanged upfront.

Question 342

What does the installment payments in the seller-financed deals include?

Answer 342

The buyer makes installment payments directly to the sell which includes principal and interest

Question 343

When is a wraparound mortgage structure used?

Answer 343

When a seller has a remaining balance to pay on a properties first mortgage loan.

The agreement takes into account the remaining balance on the seller’s existing mortgage at its contracted mortgage rate and adds an additional balance to arrive at the total purchase price.

Question 344

What is the advantage to the seller in a WRAP loan?

Answer 344

• In a wrap, the seller charges an interest rate based on the terms of the existing mortgage loan.
  -To break even, the seller must charge at least as much interest as they are being charged on their existing loan. That gives the seller flexibility when negotiating the buyer’s interest rate.
• Generally, the seller will negotiate the highest possible interest rate so they can make payments on the first mortgage while also earning a profit on the deal.

Seller-financed purchases don’t have the same costs as financing through banks and other types of lenders, which can benefit both the buyer and the seller.

Question 345

What is this and example of?

Let’s say that Vivian has an $80,000 mortgage on her home with a rate of 4%. She sells her home to Stephen for $120,000 who puts 10% down and borrows the remainder, or $108,000, at a rate of 7%. Vivian earns 7% on $28,000 (the difference between $108,000 and $80,000), plus the difference between 7% and 4% on the $80,000 mortgage.

Answer 345

Wrap around mortgage

Question 346

Who takes on the greatest risk with seller financed services?

Answer 346

the seller takes on greater risks and responsibilities so they often require higher-than-average down payments. If the buyer defaults on any payments, it will be up to the seller to pay the original loan or risk foreclosure on the home.

Question 347

What clause requires the seller to repay the original mortgage entirely if collateral ownership is transferred or if the collateral is sold.

Answer 347

alienation clause

Question 348

Do seller financing loans require higher or lower down payments?

Answer 348

Higher

the seller takes on greater risks and responsibilities so they often require higher-than-average down payments. If the buyer defaults on any payments, it will be up to the seller to pay the original loan or risk foreclosure on the home.

Question 349

What clauses are common in most mortgage loans, which often prevent wraparound loans from occurring.

Answer 349

alienation clause

Question 350

If either party fails to perform the purchase agreement contract, what can the other party obtain?

Answer 350

Remedies in the from of Monetary damages and specific performance

Question 351

Certain relief when a purchase agreement contract is broken / pay back for the other party not following through

Answer 351

Remedies

Question 352

What are the two main types of remedies?

Answer 352

1) Monetary damages
2) Specific performance

Question 353

What are the most common type of legal remedy when dealing with home purchases

Answer 353

Monetary damages

Question 354

If a seller backs out of a purchase agreement, what does a buyer sue for when they seek compensation for all the costs they paid and return of their earnest money deposit and often ask for additional compensation for missed time and opportuniteis

Answer 354

Monetary damages

Question 355

What is a court order that requires a party to perform a specific action, usually one stated in the original contract

Answer 355

Specific performance

Question 356

What is considered an equitable remedy and is used when monetary damages will not satisfy the party seeking relief

Answer 356

Specific performance

Question 357

If specific performance is sought, will the client likely face monetary damages

Answer 357

NO, If specific performance is sought as a remedy, it’s unlikely that monetary damages will also be awarded. While each state’s laws are different, usually it’s one or the other.

Question 358

What elements must be present in order for specific performance to be possible:

Answer 358

1) Contract - For a court to order specific performance, there must be a valid and enforceable binding contract.

2) Damages Inadequate - Specific performance is only ordered when monetary damages are inadequate to compensate the injured party.

3) Mutuality of Obligation - There must also be a mutuality of obligation, meaning that both parties have undertaken duties toward each other as part of the contract.

4) Judge’s Discretion - When creating a real estate sales contract, the parties can freely include specific performance as a remedy. But if this provision is not included in the contract, the potential for specific performance is left to the judge’s discretion. It will be up to the court to determine if specific performance is the best remedy after one party shows a breach of contract.

Usually, the court will require the plaintiff, or the party benefiting from the judge’s ruling, to show that they substantially performed their part of the contract and that they are capable of continuing to perform their contractual obligations.

Question 359

What is “lis pendens”

Answer 359

relates to a buyer and specific performance - notice of pendency

Once a lawsuit is underway, the real estate buyer can also file a legal document known as a “notice of pendency”. This notice, also called a “lis pendens”, effectively prevents any transfer of the property to a third party until the claim has been resolved. The seller will be unable to sell the property to another buyer while the lawsuit is ongoing.

Question 360

Can real estate broker sue for specific performance?

Answer 360

No - real estate brokers cannot sue for specific performance. If there is a breach of contract that negatively impacts them, a broker would sue for monetary damages.

Question 361

What are the Two basic classifications of home loans

Answer 361

1) Conventional Loans
2) Unconventional Loans

Question 362

What loans are not secured by FHA, USDA or VA

Answer 362

Conventional Loans

Question 363

Who are conventional loans offered by?

Answer 363

Private lenders

Question 364

What are conventional loans often referred to as?

Answer 364

Conforming loans

Question 365

What do conventional loans conform to?

Answer 365

Rules set forth by Fannie Mae and Freddie Mac

Question 366

Who are the two largest investors in Conventional loans

Answer 366

Fannie Mae, Freddie Mac

Question 367

Who are conventional loans good for?

Answer 367

Those with excellent credit, those in good economic standing, and and have money for large down payment

Question 368

The benefits of flexibility of property to purchase and chance to significantly reduce mortgage insurance

Answer 368

Conventional loans

Question 369

What are the two basic types of conventional loans

Answer 369

1) fixed rate mortgage
2) adjustable rate mortgage (ARM)

Question 370

What mortgage has an interest rate that does not change?

Answer 370

Fixed rate mortgage - monthly payments will be the same

Question 371

What mortgage has an interest rate that adjusts monthly or a year

Answer 371

Adjustable rate mortgage

Question 372

What are unconventional loans backed by?

Answer 372

backed by government or secured by band or private lender

Question 373

Who are unconventional loans good for?

Answer 373

Individuals with low income or less than perfect credit

Question 374

What are FHA and VA loans?

Answer 374

Unconventional loans

Question 375

What loans are insured by the federal housaing adminstration and require a small down payment

Answer 375

FHA loans

Question 376

Do VA loans require a down payment? do they have to occupy the residence?

Answer 376

No, Yes

Question 377

Where are loans originated?

Answer 377

Primary market

Question 378

What is the market where lenders and investors buy and sell existing mortgages or mortgage backed securities (resell market place of loans)

Answer 378

Secondary market

Question 379

What Loans have the primary purpose of:

to ensure lenders of loss so that they are not scared to lend to people with a wider variety of economic backgrounds.

Answer 379

FHA loans, established in 1934 - did this through smaller down payment and smaller monthly payments paid down in 30 years

Question 380

What is the Federal National Mortgage Association created in 1938

Answer 380

Fannie Mae

Question 381

What association buys FHA insured mortgages from the lenders which created a secondary market place where

Answer 381

Fannie Mae

Question 382

When it comes to the US government or Fannie mae, who grantees Monthly principal and interest payments?

Answer 382

Monthly principal and interest payments are guaranteed by Fannie Mae, but not by the US government.

Question 383

What is the government national mortgage association? when was it created?

Answer 383

Ginnie Mae - 1968

Question 384

What is a federally-owned corporation of the Department of Housing and Urban Development. and administers special assistance programs, and its main focus is to ensure liquidity for US government-insured mortgages, including those insured by the FHA and VA.

Answer 384

Ginnie Mae

Question 385

What is a warranty deed?

Answer 385

A warranty deed gives the grantee a warranty, or guarantee, that the grantor does actually have legal title to the property. The seller, who is the grantor, is promising the buyer that “Yes, I do own this property and I have the right to sell it to you.”

Question 386

What are the basic characteristics of a deed?

Answer 386

1) Signature - the signature of the person transferring the real estate (the grantor);
2) Date - the date of the transaction;
3) Names - the names of the parties involved; and
4) Description - a description of the property being transferred.

Question 387

What is not required for a warranty deed?

Answer 387

RECORDING

Question 388

If recording is done in a warranty deed, what must be done?

Answer 388

The documents must be ACKNOWLEDGED

Question 389

What is the big advantage to the buyer with warranty deeds

Answer 389

title protection

In addition to guaranteeing their ownership of the property, the seller warrants that the property is free of encumbrances- except those noted in the deed itself, which can be things like easements, zoning restrictions, and subdivision deed restrictions. And the protections in warranty deeds are granted whether the seller and the buyer are individuals or businesses.

Question 390

What deeds are good options for real estate sales where commercial or residential properties are transferred between parties who don’t know each other.

Answer 390

General Warranty Deeds and Special Warranty Deeds

Question 391

What do both General Warranty Deeds and Special Warranty Deeds guarantee?

Answer 391

Both types of deeds guarantee to the buyer:

1) that the seller owns the title;
2) that the seller is legally allowed to sell the property;
3) that the property has not already been sold;
4) that the property is free of debt or other claims (aside any mentioned in the deed); and
5) that the seller is responsible for any problems/faults with the property.

Question 392

Which deed is when the grantor is responsible for any breach of warranties and guarantees, even if the breach occurred without their knowledge or during a period when the grantor did not own the property

Answer 392

General Warranty Deeds

Question 393

For which deeds are title insurance most often used?

Answer 393

puts a greater amount of risk on the seller, so title insurance is used in most transactions to help guard against possible claims and liens. Before a title company will provide insurance for a title, they will conduct a full title search and explore any other possible breaches. This gives the buyer extra peace of mind, as both the seller and the title company have verified that title to the property looks clean.

Question 394

What is another name for a special warranty deed?

Answer 394

Limited warranty deed?

Question 395

What deed only covers the period of time for which the seller owned it. While the seller must still defend the title against other claims and compensate the buyer for any unsettled debts or damages, they must only do so for debts and problems that happened during their ownership of the property?

Answer 395

special warranty deed

Question 396

When is a special warranty deed used?

Answer 396

Special Warranty Deeds are only used in special cases where a General Warranty Deed is not a good option.

Question 397

A deed where a seller makes no warranties of any kind

Answer 397

Quitclaim deed

Question 398

what deeds involve quick transfers between people with established relationships such as between family members or when a situation requires a property’s quick release.

Answer 398

Quitclaim deed

Question 399

From the grantee’s perspective, what deed is better than a quitclaim deed, but not as good as a warranty deed.

Answer 399

Bargain and sale deed without covenants

Question 400

What deed includes a warranty that the grantor has title to the property but does not guarantee that the property is free of claims

Answer 400

Bargain and sale deed without covenants

Question 401

What is a bargain and sale deed will specifically state one or more additional guarantees

Answer 401

bargain and sale deed with covenants

Question 402

A bargain and sale deed with covenants is similar to a:

Answer 402

special warranty deed

Question 403

What deed is better for the grantee than a bargain and sale deed without covenants, but still not as good as a general warranty deed.

Answer 403

special warranty deed

Question 404

When are Bargain and sale deeds are most often used?

Answer 404

when property is transferred after a foreclosure, tax sale, or the settlement of a deceased person’s estate. They may also be used in the same situations as a quitclaim deed, although they give the grantee a little more protection.

Question 405

When given the option, grantors prefer to use what deed?

Answer 405

Bargain and sale deed because it limits their liability.

Question 406

When given the option, Grantees prefer to use what deed?

Answer 406

Always prefer a general warranty deed because it gives them the most protection possible.

Question 407

What deeds are used when limited or no warranties can be provided but title can be proved.

Answer 407

bargain and sale deeds

Question 408

What clause in a mortgage or trust deed stipulates that the entire debt is due immediately, if the borrower defaults under the terms of the contract. It will also give the conditions for when a lender can demand a full loan repayment.

Answer 408

Acceleration clause

Question 409

Is accelerating a loan a good or bad thing?

Answer 409

Accelerating a loan is usually a bad thing. Usually it means that a borrower has missed payments or violated the terms of the contract and the lender is demanding immediate payment of the full loan amount to avoid foreclosure.

Question 410

home loans typically have an __________ clause that is triggered when the borrower misses too many payments.

Answer 410

Acceleration clause

Question 411

What clause is also known as an alienation clause

Answer 411

Due-On-Sale clause

Question 412

What clause is a loan stipulation that requires a borrower to pay the entire loan balance if the property is being sold.

Answer 412

Due-On-Sale clause

Question 413

Lenders use this clause to prevent the buyer of a property from assuming the current loan at the original interest rate.

Answer 413

Due-On-Sale clause

Question 414

What penalties exist to protect lenders against the loss of interest income that would have been paid on the loan over time.

Answer 414

Prepayment penalties

Question 415

What clause stipulates a penalty charge which can be imposed on a borrower who pays off a loan early.

Answer 415

Prepayment penalties clause

Question 416

In real estate, _________ refers to the order of liens on a property.

Answer 416

subordination

Question 417

When is a Subordination clauses typically used?

Answer 417

Subordination clauses are typically used when a home loan is refinanced and there are existing liens on a property. Refinancing generally results in the original home loan being paid off and a new loan getting issued with the new interest rate. Chronologically, that would put the new loan at the end of the line- but mortgage lenders require their loans to be first in line. In order to complete the refinance, other lien-holders would have to agree to be subordinate to the refinancing loan.

Question 418

What is an example where not all lien-holders may agree to the subordination clause

Answer 418

For example, if you fall behind on your taxes, the IRS may put a lien on your home to ensure they get paid back. If you try to refinance, the IRS will have to decide whether or not to be subordinate to your loan. They may agree but, if they don’t, your refinance may not be approved.

Question 419

What clause effectively makes the current claim senior to any existing claims that have already been recorded.

Answer 419

Subordination clauses

Question 420

What clause is a loan provision that allows an individual property in a blanket mortgage to be released from any liens by the lender.

Answer 420

Release clause

Question 421

Blanket mortgages enable investors, builders, and developers to place multiple properties under a single loan, which is much more efficient than having multiple mortgages. If the loan contains a __________, a designated parcel or property is freed from any claims by the creditor once a proportional amount of the loan has been paid off, giving the borrower full rights to that property.

Answer 421

Release clause

Question 422

What is a intentional misrepresentation or a representation without any regard of the actual facts or the suppression.

Answer 422

Actual fraud

Question 423

What is it call when a promise made without any intention to follow through with that promise.

Answer 423

Actual fraud

Question 424

What is this an example of:

telling a buyer that the roof of a property is completely fine when he knows full well that it is not ok at all. It would also be actual fraud to for the agent to say “do not worry about the roof, if buy this house I will personally fix it, you have my word” they will fix the roof., when they do not have the ability to fix or have no intention of fixing it.

Answer 424

Actual fraud

Question 425

What is lying through omission

Answer 425

Negative fraud

Question 426

What occurs when somebody does not disclose a material fact to somebody in a effort to get somebody to enter into a contract that can cause that person to a bad situation with respect to money, damage or even personal harm.

Answer 426

Negative fraud

Question 427

What is this an example of?

when an agent is showing a home with roof problems and the client asks “are there any issues with the structure of the roof?” and the agent replies “have I shown you the basement?”

Answer 427

Negative fraud

Question 428

What is lying without knowing you are lying

Answer 428

Constructive fraud

Question 429

What is this an example of?

An example would be when an agent is showing a home with roof problems and the client asks “are there any issues with the structure of the roof?” and the agent replies “Ya, its fine, the roof is great” when the roof has problems but the agent authentically things the roof is fine.

Answer 429

An example would be when an agent is showing a home with roof problems and the client asks “are there any issues with the structure of the roof?” and the agent replies “Ya, its fine, the roof is great” when the roof has problems but the agent authentically things the roof is fine.

Question 430

What is A deceptive act done intentionally by one party in order to influence the other party to enter into the contract

Answer 430

Fraud

Question 431

What does fraud have that missrepresentation does not?

Answer 431

intent

Question 432

Does fraud make a contract void or voidable?

Answer 432

Voidable

Question 433

What is a representation of a material fact made by a party who believes it to be true, the other party relied on the statement and entered into the contract based upon the statement which later on turned out to be incorrect.

Answer 433

Missrepresentation

Question 434

Does missrepresentation make a contract void or voidable?

Answer 434

voidable at option of injured party

Question 435

What is an exaggeration of fact?

Answer 435

Puffing

Question 436

What determines that documents that must be in writing to be enforceable?

Answer 436

Statute of frauds

Question 437

In most states, what must be in writing?

Answer 437

Real estate documents such as: Sales contracts , deeds & mortgages

Question 438

What must an agent have in place in order to collect compensations

Answer 438

Employment contract (listing agreement), in writing

Question 439

What does “time is of the essence” mean in a contract?

Answer 439

Everything must be done within a specific time

Question 440

What does an “as is clause” mean in a contract?

Answer 440

Means a buyer is buying a property as he sees it, with all existing conditions

Question 441

Who is the name of the party transferring the contract?

Answer 441

assignor

Question 442

Who is the party receiving the contract?

Answer 442

assignee

Question 443

What is the transfer of contract writes from one party to another?

Answer 443

assignment

Question 444

Are personal service contracts usually assignable?

Answer 444

No

Question 445

what is the term the substitution of one contraction for another and releases liability (new contract)

Answer 445

Novation (nova = new)

Question 446

An assignment does not relieved the assignor from liability unless what has been granted?

Answer 446

novation

Question 447

What is a contractual provision that determines in advance the measure of damages if a party breaches the agreement?

Answer 447

A liquidated damage clause

Question 448

What occurs when there is an agreement between the contracting parties to waive all the remaining duties and to terminate the contract.

Answer 448

Rescission

Question 449

What is an oral or written agreement to do a specific thing?

Answer 449

contract

Question 450

for the “as is clause” must they disclose the defects

Answer 450

Yes it is being sold as is. The defects must be disclosed just not required to fix it.

Question 451

What contract is a promise for a promise?

Answer 451

bilateral contract

Question 452

What type of contracts are sales contracts and listings?

Answer 452

Bilateral contract

Question 453

What is a one sided agreement? one party makes a promise to perform

Answer 453

Unilateral contract

Question 454

What type type of contract is a lease option?

Answer 454

Unilateral contract

Question 455

In a lease, who is the lessor and who is the lessee

Answer 455

Lessor - landlord
Lessee - renter

Question 456

what type of contract is the lease?

Answer 456

bilateral contract - The lease is a bilateral contract because both the landlord and tenant have obligations to perform.

Question 457

Are leases personal property?

Answer 457

leases are personal property as they do not always run with the land. It is a contract with an individual person.

Question 458

What is a A reversionary right in a lease agreement?

Answer 458

A reversionary right means the owner has the right to regain possession of the property after the lease has expired.

Question 459

What does a lease have to contain to be valid?

Answer 459

Just like in any other contract a valid lease must contain mutual agreement, consideration, capable parties and lawful object

Question 460

What does the lessee have the right to?

Answer 460

The lessee has the right of quiet enjoyment and possession of property which is the assurance that their possession will not be disturbed by anybody with superior title (the landlord).

Question 461

Does death terminate the lease?

Answer 461

Death does not usually terminate the lease, upon death of one of the parties; the responsibilities as stated in the agreement could pass on to the heirs of the deceased.

Question 462

What is the difference between an assigment and an sublet?

Answer 462

An assignment is a transfer of contract rights as supposed to a sublet is when you rent the property you lease to another person while still maintaining your responsibility to your landlord under your rental agreement.

Question 463

Does the lease have the right to assign or sublet the property?

Answer 463

Unless the lease forbids it the tenant has the right to assign or sublet the property.

Question 464

What is a term used in the law of real property to describe a circumstance in which a landlord either does something or fails to do something that he has a legal duty to provide.

Answer 464

Constructive eviction

Question 465

What is this an example of?

An example would be if the landlord refuses to provide heat or water to the apartment as a tenant can not live without water, thus they need to vacate the premise

Answer 465

Constructive eviction

Question 466

What is a rental agreement for the use of the property where the tenant pays a fixed amount which does not change as a result of changes in the various expenses of the property. The landlord pays for these expenses such as all repairs, taxes and operating
expenses incurred through ownership.

Answer 466

Gross lease

Question 467

What is a rental agreement where the responsibility to pay taxes, insurance, and maintenance are incurred by lessee in addition to the monthly lease payment. This is often referred to as a triple net lease.

Answer 467

Net lease

Question 468

What is a rental agreement indicating a tenant’s option to purchase a property during the term or at the end of the lease.

Answer 468

Lease option

Question 469

What is a rental agreements that is based on a percentage of the monthly or annual gross sales made on the premises.

Answer 469

percentage lease

Question 470

What leases are common with large retail stores, especially in shopping centers

Answer 470

percentage lease

Question 471

A net lease where the responsibility to pay taxes, insurance, and maintenance

Answer 471

A triple net lease

Question 472

An option contract is a unilateral contract because?

Answer 472

It is a unilateral contract in that the seller is obligated to sell, but the buyer has the option to buy.

When created, an option contract is a unilateral contract. But when the buyer exercises the option, it becomes a bilateral contract.

Question 473

An in an option contract who is the seller and who is the buyer?

Answer 473

seller = optionor
buyer = optionee.

Question 474

In a ________ the lessee agrees to lease the property with an option to buy the property.

Answer 474

Lease option

Question 475

What is a bilateral Employment Contract between principal and broker whereby the broker is employed by the principal to find a buyer and accept a deposit.

Answer 475

A listing

Question 476

What is the most essential element of an enforceable broker-principal relationship.

Answer 476

A listing contract

Question 477

A _____ hires a broker to find a buyer, not to sell a house.

Answer 477

Listing

Question 478

protection period clause is also known as ___________, ____________, __________

Answer 478

safety clause, extender or carry- over clause.

Question 479

What is the clause that allows agents to be able to close deals with buyers you found during the term of the listing.

Answer 479

protection period clause (aka safety clause, extender or carry- over clause.)

Question 480

listing agreement is a ______

Answer 480

personal service contract

Question 481

Should the principle or seller die, or either party becomes incapacitated or the property is physically destroyed, such as by a fire or a natural disaster, the, is the listing agreement terminated?

Answer 481

Yes - In short remember this, a personal service contract needs a person there, therefore you can not assign this contract to another person.

Question 482

What is the right of subrogation?

Answer 482

is the right to pursue someone else’s claim.

Question 483

What are the examples of subrogation?

Answer 483

You may find subrogation in leases, mortgages, insurance policies, guarantees and other agreements.

Question 484

What does this example describe?

Suppose you own a building which burns down due to the negligence of a third party.

Your fire insurance company can pay off your claim,

Answer 484

Subrogation

Your fire insurance company can pay off your claim, however, the insurance company is then subrogated to your claim against the negligent third party.

This means your claim against the negligent third party is treated as having been assigned to the insurance company, which may sue him to recover the amount it paid you on account of the fire loss.

Question 485

What does this example describe?

Suppose you hold an interest in someone else’s real property. It might be an easement, a leasehold estate or a lien or encumbrance of some sort.

If the owner allows the property taxes to go into default, you might decide to pay the taxes in order to protect your own interest. By doing so, however, you also protect the interest of the owner by paying off an obligation the owner should be paying.

Answer 485

Subrogation

In this situation, you are subrogated to the rights of the taxing authority and may proceed against the fee owner in order to obtain reimbursement for the taxes you paid.

Question 486

What is a legal agreement which establishes one debt as ranking behind another debt in the priority for collecting repayment from a debtor?

Answer 486

Subordination

Question 487

What does subordination typically involve?

Answer 487

Loans

Question 488

What are the 4 essential elements of Value?

Answer 488

STUD

Scarcity - is there alot of it?
Transferability - can i sell it?
Utility - Can I use it?
Demand - anyone want it?

Question 489

what is the present worth of one commodity to draw on the open market.

Answer 489

Market Value

Question 490

How is the original cost of an item related to its value?

Answer 490

The original cost of an item has no relevance to its value.

Question 491

What is a form of depreciation which results in a loss in value even though the property is still in good condition.

Answer 491

Obsolescence

Question 492

What is obsolescence due to conditions within the property

Answer 492

Functional Obsolescence

Question 493

What obsolescence are these an example of?

– Poor design
- Too many or too few materials
– excess construction
– lack of utility (features that are not practical or desirable)
– Overly costly operating expenses.

Answer 493

Functional Obsolescence

Question 494

What is obsolescence that is a form of depreciation caused by factors that are not on the property, in the property or even within the property lines.

Answer 494

Economic obsolescence

Question 495

What obsolescence are these an example of?

• Rezoning
  -crime in area
• recession
• national economic depression
• abandon near by building

Answer 495

Economic obsolescence

Question 496

What are these an example of:
- Paint jobs
– roof repairs
- Deferred maintenance
– Repairs to the heating or cooling system
- Faulty wiring
- Lose tiles
- Breakage
- Dated construction material
- normal Wear and Tear.
the list can go on and on….

Answer 496

Curable physical deterioration examples

Question 497

What is the most obvious form of deprecation because, simply said, you can see it. When your maintenance does not keep up with the natural wear and tear

Answer 497

physical deterioration

Question 498

is Physical Deterioration is not a form of Obsolescence?

Answer 498

No

Question 499

In real estate your value will increase if it is in the area of much more desirable homes. What is this an example of?

Answer 499

Progression

The Principle of progression states that the value of less expensive properties will increase when more expensive properties come into the area.

Question 500

In real estate your value will decrease if it is in an area of less desirable homes. What is this an example of?

Answer 500

Regression

The principle of regression states that the value of a more expensive properties will decrease when less expensive properties come into the area.

Question 501

The Principle of Substitution is the basis for the _______ approach

Answer 501

Market Data approach to appraisal.

Question 502

In _____ , there must be other properties in the area which could be substituted for the subject property and which have recently sold.

Answer 502

The Principle of Substitution

Question 503

What principle says that the maximum value of a property usually is established by the cost of acquiring an equavelent substitute property that has the same use, design and income.

Answer 503

The Principle of Substitution

Question 504

What is the market data approach also known as?

Answer 504

sales comparison approach

Question 505

What appraisal approach is usually used to establish Rent Schedules

Answer 505

market data approach

Question 506

What appraisal approach becomes less reliable during times of rapid economic change or instability, in an inactive market or in analyzing unique properties

Answer 506

market data approach - because there are limited options for comparing properties.

Question 507

Which appraisal approach is it when you are finding value by comparing a property to other properties of similar size and condition in the same area.

Answer 507

market data approach

Question 508

What appraisal approach is the process of estimating the value of a property by adding to the estimated land value the appraiser’s estimate of the replacement cost of the building, less depreciation.

Answer 508

Cost approach

Question 509

What is the appraisal approach most commonly used to appraise special purpose properties such as Libraries, Schools and police stations.

Answer 509

Cost approach

Question 510

What appraisal approach sets the upper limits of value

Answer 510

Cost approach sets the upper limits of value because essentially you are looking at what it cost to replace a building brand new.

Question 511

Is the cost approach best for new or old buildings?

Answer 511

New

This approach is most appropriate for the appraisal of new property, not old. This is so because the older the building is the more variables there are estimating it’s value. If something was built yesterday, then that cost of how much it cost to build is much more accurate.

If you had to appraise a property from 1910 you would be using the current cost of reproduction, the Cost it took to build it in 1910 would not be a factor.

Question 512

What are the Methods for estimating the cost of Construction:

Answer 512

• Unit-in-Place Method
  -Unit-in-place calculates the added cost of single units installed;
  Square Footage Method
• Square Footage method utilizes exterior dimensions to calculate the cost per square foot
  Quantity Survey Method
• Quantity survey calculates the cost of labor and materials to construct each component of a building, it is very accurate but time consuming

Question 513

What is the ratio of the price of a real estate investment to its annual rental income before expenses such as property taxes, insurance, and even utilities for vacation rental properties.

Answer 513

Gross Rent Multiplier

Question 514

How is the
The GRM is calculated?

Answer 514

price / rent (rent can be yearly or monthly)

Question 515

What is Valuable consideration?

Answer 515

It is a necessary component of all contracts. It is the benefit one party receive in exchange for granting benefit to the other. Generally it is money in any amount both parties agree to, though it can take other forms.

Question 516

What is a promissory Note?

Answer 516

negotiable instruments that serve as evidence of debt

Question 517

What does “At arms length” Mean?

Answer 517

Means transactions involving independent and objective parties with no unrelated motivations to distort the true value

Question 518

Mortgage bankers typically do what?

Answer 518

Originate a large number of loan transactions and then sell these mortgages at a discount to large investors in the secondary market

Question 519

When real estate under an estate for years is sold, what happens to the lease?

Answer 519

It binds the new owner.

Tenancy for years is the common form of rental agreement and binds all future owners for the term of the lease.

Question 520

What is a land contract also known as?

Answer 520

Conditional installment sales contract

Question 521

What happens in a Conditional installment sales contract (Land contract)

Answer 521

The vendor (seller) becomes a lender to the vendee (buyer). The Vendee gets to use the property (equitable title) as the seller retains legal title of land as a security device (the right to sell.

Question 522

What real estate advertisement does not include the employing broker?

Answer 522

Blind ad

Question 523

When can a lien be filed for a mechanics lien?

Answer 523

Within 90 days of the supply of materials

Question 524

What is a “quiet title”

Answer 524

Owner might use this action to correct a minor mistake in the property description or to remove and easement that’s been unused for years.

Additionally, they are used when a third party tries to assert some right to the property through a dubious claim.

The suit “quiets” that persons’ claim to the land and establishes a clear ti

Question 525

What ownership is undivided interest in common areas and a separate interest in a certain unit of an industrial, commercial or residential building?

Answer 525

A condominium unit has fee simple ownership of their unit as well as an undivided ownership share of any common areas, like a pool or clubhouse.

“undivided interest: means that a person owns a share of property that can’t be separate from the whole.

In other words, If a condominium project has fifty owners, each unit owns one-fiftieth of the common areas

Question 526

A “GPAM” mortgage loan provides for:

Answer 526

Graduated Payment Adjustable Mortgage (GPAM) allows for the deferment of certain principal payments.

Question 527

What does RESPA do?

Answer 527

Make borrowers more aware of costs and charges. ITs a standard for closing procedures

Question 528

What does standard policy of title insurance protect agains?

Answer 528

Forgery and improperty delivery

Question 529

What is a desist and refrain order?

Answer 529

Issued by the RE commissioner against a developer. Similar to a restraining order in that it immediately halts the action or actions in question

Question 530

What is conversion and an example

Answer 530

Conversion is unauthorized use or control of someone else’s property, at a minimum personal property.

A property manager wrote a check to himself from his clients trust account to cover office rent cost.

Question 531

What is the purpose of the truth and lending act? (TILA)

Answer 531

The purpose of this act was to promote the informed used of credit

Question 532

What doesn’t place limits on the rates of interest or loan fees that a lender chargers. Limits for interest rates are imposed by state usury laws

Answer 532

TILA doesn’t place limits on the rates of interest or loan fees that a lender charges. Limits for interest rates are imposed by state usury laws.