Property Ownership/Other Flashcards
With tenancy in common, when one person dies the surviving owner takes ownership.
False, does not to other owner
Under tenancy in common, when one dies, the heirs receive the property
T/F: A bill of sale is the document used for the transfer of personal property
True
A bill of sale is the document used for the transfer of personal property
T/F: A deed is the document that is used to transfer the bundle of rights to another
True
Real estate contains 2 basic items: Land + ______
All appurtenances
Natural appurtenances: trees, streams, etc
Man made: Houses, fences
Oil, natural gas, etc.
T/F: Personal property is easily movable. Such as a desk or chair
True
Personal property easily movable
T/F: A fixture starts out as personal property but once you attach it to the house it becomes a fixture and is considered real estate
True
A fixture starts out as personal property but once you attach it to the house it becomes a fixture and is considered real estate
T/F: Trade fixtures are personal property
True
Since tenant can remove and take with them when lease is over
T/F: Emblements are growing crops on a field and are also considered personal property
True
Emblements are growing crops on a field and are also considered personal property
T/F: A “freehold estate” means ownership
True
2 types
Fee simple - inheritable
Life Estate
T/F: In “Fee Estate” the word fee means inheritable
True
Inheritable
Example: fee simple estate
Is a Life estate inheritable?
No
T/F: In a life estate with reversion, once the person with the life estate with reversion dies, the property goes back to original owner
True
When owner dies, not inheritable. Goes to original owner
Life Estate in Remainder
When life tenant (current person) dies, property goes to the remainder man (rather than original owner) who is usually a family member of orginal owner
T/F: An appurtenant easement gives a neighboring property owner the right to go in and out (ingress and egress)
True
An appurtenant easement gives a neighboring property owner the right to go in and out (ingress and egress)
T/F: An easement in gross is primarily for entities such as utilities and railroads.
True
T/F: A life estate can be sold; however, the person who bought the property will eventually lose it when the life tenant dies
True
T/F: A mortgage is given voluntarily to a lender in order to secure a note.
True
A “voluntary” lien is placed on a property by the owners themselves. A mortgage is given voluntarily to a lender in order to secure a note.
T/F: A mechanic`s lien takes priority based on the date the work was started
True
T/F: A mechanic`s lien takes priority based on the date the work was ended
False
A mechanic`s lien takes priority based on the date the work was started
Mortgagee
Lender
“Mortgaee” ee like “Money”
Lender has money
Mortgagor
Borrower
“Mortgagor” or like “poor”
Mortgagor is poor and needs to borrow $
Are discount points based on the loan amount or the sales price?
Based on loan amount
1 point = 1%
T/F: In order to have a valid mortgage, there must be a debt (promissory note) and a pledge of property (mortgage document)
True
In order to have a valid mortgage, there must be a debt (promissory note) and a pledge of property (mortgage document)
Is Mortgagee lender or borrower
Lender
What is reversion
Reversion is the right of an owner to get a property back after the end of a life estate or lease
What is redemption
Redemption is the right to “buy back” your property from whoever bought it at a foreclosure sale.
What is a lender escrow account for
A lender`s escrow account is for holding prepaid taxes and insurance.
When the time of year comes for the taxes and insurance to be paid, the lender pays the money out of escrow on behalf of the borrower.
T/F: The defeasance clause in a mortgage voids the security once the loan is paid off
True
The defeasance clause in a mortgage voids the security once the loan is paid off
T/F: Private mortgage insurance (PMI) is required on conventional loans when the borrower puts less than 20% down.
True
Private mortgage insurance (PMI) is required on conventional loans when the borrower puts less than 20% down.
T/F: A wraparound mortgage is where the seller sells the property keeping the existing mortgage in place and loans extra money to the buyer.
True
A wraparound mortgage is where the seller sells the property keeping the existing mortgage in place and loans extra money to the buyer. The buyers new mortgage covers the existing mortgage and extra money loaned from the seller to the buyer.
T/F: A purchase money mortgage is when the seller finances all or part of the loan for the borrower.
True
A purchase money mortgage is when the seller finances all or part of the loan for the borrower.
T/F; A net lease is where the tenant pays expenses such as taxes and insurance.
True
A net lease is where the tenant pays expenses such as taxes and insurance.
T/F: Both FHA and VA loans require a certificate of eligibility
False
Only VA loans require a certificate of eligibility
Which of the following would transfer legal use but not ownership of a property? ANSWERS A » A deed restriction B » An encroachment C » An easement D » A lien
C » An easement
An easement is a legal right to cross over a property without owning it. (A) A deed restriction is placed by a private property restricting certain uses of a property, such as certain types of roofs or fences. (B) An encroachment is trespassing on another`s property, such as building a fence on a neighbor’s property. (D) A lien is a money encumbrance (burden) on a property, such as a tax lien
What is used to describe the right of the lessor to reclaim a property once a lease expires?
ANSWERS A » Redemption B » Reversion C » Repossession D » Reverse annuity
B » Reversion
(B) Reversion is the right of an owner to get a property back when someone else`s rights expire. Redemption (A) is an owner’s right to buy a property back after foreclosure. Repossession (C) is when a loan company takes a secured property back upon default. Reverse annuity (D) is a type of loan.
T/F: Automatic listing renewals are now allowed in Illinois as long as the owner is given a right to terminate at least annually with no more than 30 days prior written notice.
True
Automatic listing renewals are now allowed in Illinois as long as the owner is given a right to terminate at least annually with no more than 30 days prior written notice.
T/F: Interest does not need to be paid on security deposits unless the apartment had 15 or more units
False
It’s 25 or more units
Interest need not be paid unless there are 25 or more units in the complex.
Which principal meridians are located in IL
3rd and 4th only
The 3rd and 4th are located in Illinois, while the 2nd, 3rd, and 4th describe property in Illinois. The 2nd principal meridian is located in western Indiana.
Which acronym/law has to do with environmental protection?
CERLA
Comprehensive Environmental Response Compensation and Liability Act
(EPA supervises this law)
T/F: Commission is always negotiable
True
Never a standard commission
T/F: Licensees are usually employees of their sponsoring broker (as opposed to independent contractor)
False
Usually IC, not employee
Is the vacancy rate usually part of a property management agreement?
No
Since it usually changes from year to year based on market
When does tenant pay taxes/insurance: net lease or gross lease
Net lease
with net, tenant pays taxes/insurance
usually for commercial tenants
A retail tenants lease is based on a percentage of overall sales, what kind of lease would this be
Percentage lease
would be % lease
Assignment of Lease
Way to transfer lease
both parties are still liable
T/F: When a lease is assignment, only 1 party is now liable
False
both parties still liable
(subleasing is when only the original tenant is liable)
With sub leasing, which parties are liable to the landlord
Only the original tenant
Lease assignment when both parties liable
Constructive Eviction
When place is uninhabitable, tenant can leave without being liable for rest of rent payments
When do u not have to pay capital gains on sale of real estate
When owner occupied, principal residence for 2 of past 5 yrs, and profit less than $250k ($500k if married)
Does executory phase mean the contract has been completed?
No it means contract is pending
executed means completed
Are contracts feely transferable or assignable to other parties
Yes
unless there is a clause that says no
Is an address a legal description?
No
addy not description
1 “section” what?
1 section = 1sq mile (or 640 acres)
Agent Rashad owns all his property in an Illinois land trust. When purchasing unlisted property, he must:
Glossary Terms
Land
A » disclose his status as a licensee before making an offer
B » disclose his status as a licensee anytime before closing
C » not make any disclosure, unless he so chooses
D » not make any disclosure, as it would violate trust laws
A » disclose his status as a licensee before making an offer
He must disclose any anticipated interest up front to the seller.
T/F: Illinois requires records to be kept a total of five years, and most recent two years of closed transaction files to be kept at the office.
true
Illinois generally requires records to be kept a total of five years, including all active and pending, as well as the most recent two years of closed transaction files to be kept at the office. Previous records may be stored offsite.
Salvador recently completed his Illinois real estate class. How long does he have to pass the state exam?
2 years
he has 2 years
Broker Fernando has been licensed for 3 years. For his next broker license renewal he will need 12 hours of continuing education. Which of the following statements is true regarding his required continuing education?
A » 4-hour core class, 8 hours of electives
B » 6 hours of any core classes, 6 hours of electives
C » 3 hours of Core A, 3 hours of Core B, 6 hours of electives
D » No continuing education is required until year 4
A » 4-hour core class, 8 hours of electives
Brokers must take a specific 4-hour core class plus 8 hours of electives. One hour of the electives must cover sexual harassment.
Purchasers of Time Shares have how long to cancel after signing?
5 days
Purchasers have five business days to cancel and must get their money back within 20 days.
T/F: Earnest money must be deposited into escrow the next business day after all parties have signed the contract.
True
Earnest money must be deposited into escrow the next business day after all parties have signed the contract.
T/F: Oral leases for less than one year are enforceable in Illinois.
True
Oral leases for less than one year are enforceable in Illinois.
Which approach to value is best to use in estimating the value of vacant land?
Sales comparison approach
The sales comparison or market data approach is best used on vacant land and residential property. (A) The income approach is best used on income producing properties. (B) The cost approach is best used on special purpose properties like churches. (D) The rent approach is not a valid term.
T/F: The primary purpose of a deed is to prove ownership
False
Used to transfer title
A deed is the instrument by which ownership of a property is transferred from one person to another, while a title is evidence of that ownership.
The list of previous owners from whom the present real estate owner derives his or her title is known as the ______
Chain of Title
The “chain” links together the successive owners of a property from the most recent to the original recorded title holder. In addition, it notes other relevant information such as mortgages, judgments, liens, death of title holders, inheritors and so forth.
When handicap ppl move out of apartment, they might have to restore the wide doorways, that were installed for them to the original size.
Falso
Since the width of the door will not in any way be detrimental to future tenants, there is not a requirement for the original width of the doors to be replaced by the handicapped tenant.
T/F: Regulation Z (Eg. can’t say downpayment w/o other info) applies to individuals selling their own home
False
Regulation Z requires disclosure of all financing terms and conditions if an interest rate, downpayment or other enticement is featured in an ad. However, Regulation Z applies only to institutions, not individuals selling their own property.
For example this would be okay:
An owner advertised “beautiful acreage; only $5,000 down; owner will personally finance down payment.”
Does the ADA apply to ppl with AIDS
Yes
applies to aids
T/F: Agency is always formed by compensation
False
Agency must be arranged before compensation and is not formed by compensation.
Who is the largest mortgage purchaser in the secondary market?
Fannie Mae
Fannie Mae stands for the Federal National Mortgage Association (FNMA). It was established by the National Housing Act specifically to start the secondary mortgage market, thus attracting more investors and funds to help support home ownership.
________ refers to the process whereby banks and other lenders make mortgage loans to consumers for the purpose of quickly selling those loans on the secondary market.
Warehousing
The “warehousing” occurs when individual loans are bundled, often with a common element such as the size of the mortgage or credit worthiness of the borrowers, and sold as a single unit.
In most states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain the property. This right is called ______ right of redemption
Statutory right of redemption
This right of redemption is called “statutory” because it is legally mandated by law, as opposed to a custom lenders could follow or not at their option.
T/F: Agency coupled with an interest is legal in Illinois.
True
Agency coupled with an interest is legal in Illinois.
T/F: The word freehold means ownership of some kind. A non-freehold estate is a leasing situation.
True
The word freehold means ownership of some kind. A non-freehold estate is a leasing situation.
T/F: All Internet advertisements need to include the licensee’s name, company name/address, and geographic location.
True
All Internet advertisements need to include the licensee’s name, company name/address, and geographic location.
T/F: Only the Managing Broker can hold licenses of brokers.
True
Only the Managing Broker can hold licenses of brokers.
Does the Property Disclosure Act obligates the seller to make a specific investigation or inquiry in an effort to complete the disclosure statement.?
No
The Act does not obligate the seller to make any specific investigation or inquiry in an effort to complete the disclosure statement.
eginning after the 2013 renewal, individuals renewing or obtaining a MANAGING broker’s license must complete how many CE credit hours?
24 hours
Managing broker 24 hours
Beginning after the 2013 renewal, individuals renewing or obtaining a managing broker’s license must complete the 24-hour broker management continuing education course each renewal period.
T/F: Income of any type–whether alimony, child support, freelance work or a second job–only needs to be disclosed if the applicant is relying on it to qualify for the loan.
True
Income of any type–whether alimony, child support, freelance work or a second job–only needs to be disclosed if the applicant is relying on it to qualify for the loan.
T/F: Once a payment is made by the IDFPR, the license of the offending broker is automatically terminated
True
Once a payment is made by the IDFPR, the license of the offending broker is automatically terminated, and he may NOT try to restore the status of his license until he has repaid IN FULL all the money to the fund, plus interest.
T/F: A owner might bring a “quiet title” action to correct a minor mistake in the property description or to remove an easement that’s been unused for years.
True
A owner might bring a “quiet title” action to correct a minor mistake in the property description or to remove an easement that’s been unused for years. Additionally, they are used when a third party tries to asset some right to the property through a dubious claim. The suit “quiets the mouth” of that person and establishes a clear title.
Formula for gross rent multiplier
Property value divided by the monthly rent
This is used as a quick, short-hand “guesstimate” for a property’s approximate value. Far more detailed calculations are necessary to determine a complex property’s market value (e.g., shopping center.)
T/F: A buyer has to pay private mortgage insurance if they did not have a 20%+ down payment
true
A buyer has to pay private mortgage insurance if they did not have a 20%+ down payment (unless they have a VA or FHA loan).
How many acres in sq mile
640
640 acres in sq mile
Any changes in managing brokers, branch or principal offices MUST BE reported in writing to IDFPR within ____ days after the change.
15 days
Any changes in managing brokers, branch or principal offices MUST BE reported in writing to IDFPR within 15 days after the change.
T/F: If you are buying a home with a mortgage, you do not have a right to cancel the loan once the closing documents are signed. If you are refinancing a mortgage, you have until midnight of the third business day after the transaction to rescind (cancel) the mortgage contract.
True
If you are buying a home with a mortgage, you do not have a right to cancel the loan once the closing documents are signed. If you are refinancing a mortgage, you have until midnight of the third business day after the transaction to rescind (cancel) the mortgage contract.
