PSI EXAM Flashcards
Mutual Agreement
One of the requirements for a valid contract also called Meeting of the Minds
Take-out-Loan
Long-term loan taken out after construction is completed.
Interim Loans
Construction loans that are short term, that are set up to last only during the construction phase of a building project.
FHA Loan Insurance
Reimburses lenders for losses caused by borrower default.
Special Assessment Taxes
- Paid by only those who benefit from the improvements.
- Assessed on a front-foot basis.
- Paid in installments over a period of years.
Township
6 miles by 6 miles
36 square miles
Amortization
is the process of liquidation of a debt.
Amortization is the gradual repayment or retiring of a debt by means of systematic payments of principal and interest over a set period so that at the end of the period there is a zero balance.
Validity of a Deed
1) Be in writing
2) Signed by Grantor
3) Have a Grantor competent to convey title
4) Identify the Grantor and Grantee
5) Words of Conveyance
6) Adequate description of the property
7) Delivered to the Grantee
Assessed Value
Value used by tax assessor
Market Price
Market price is the actual price paid.
Market Value
The listing price of the property
Purchase Agreement
A contract that legally binds two or more parties together, to specific obligations, that create a legally binding contract between the buyer and the seller.
Variance
An individual seeking to be excused from the requirements of zoning ordinance.
Lien
A legal claim on an asset.
Promissory Note
A promissory note must contain an acceleration clause and a prepayment clause.
Partition
A legal way to dissolve the relationship when parties don’t voluntarily agree to its termination.
Recorded Easement
Easement transfers with the property and will show as an encumbrance in the title work. The seller doesn’t need to disclose. Easements transfer with the sale and may not be removed by seller/buyer.
Void
A contract that does not have a legal objective is void. A void contract is not binding or enforceable by the parties.
Essential Elements of a Contract
1) Legally competent Parties
2) Agreement (Meeting of the minds)
3) Legal Objective
4) Consideration
CALL
Escrow Agent
Escrow agent represents all parties to the transaction, escrow is not subject to the control of just one of the parties and is not voidable by either party.
Radon Mitigation
Radon is a mineral found in the soil. Radioactive gas.
Ex: Pressurizing and venting basements, along with covering exposed soil and sealing foundation walls.
Radon causes lung cancer.
-Created during the natural decay of radioactive uranium.
An offer to purchase real estate becomes a contract when signed by
buyer and seller
MLS
Multiple Listing Service
SARA
Superfund Amendments Reauthorization Act
Amendment to CERLCA
SARA added innocent landowners to have immunity from legal liability
Recording (protects)
Recording of instruments in the county records protects the GRANTEE. It protects the interests of the purchaser.
Assignment Contract
Sets the terms for how items within the contract being assigned will be handled.
Appraisal
“opinion of value” An appraiser estimates market value.
Principal of Substitution
No buyer will pay more for something if there is a suitable alternate of equal or lesser price.
Valuation approaches are based on the principal of substitution.
Buffer Zone
A strip of land separating one land use from another.
Concurrent Tenancies
All concurrent tenancies have the unity of possession.
FHA
FHA insures, but does not make or buy, loans made by lenders. A borrower pays an insurance premium for FHA insurance.
Economic Life
The estimated period over which an improved property may be profitably utilized so that it will produce a yield over and above the economic rent attributable to the land.
Economic life can’t be greater than physical life.
Economic life refers to how long it is profitable to keep it standing.
Transfer Tax
Transfer taxes are based on the sales price and charged when the new deed is recorded, showing the transfer of ownership.
Servient Estate
Burdened by the easement. Easement appurtenant is irrevocable.
Consideration
A promise to deliver a service is called consideration.
Consideration is money, promises, or something of value.
Trade Fixture
Personal property belonging to the tenant.
Universal Agency
Allows the agent unlimited power to bind and act for the principal.
Easement Appurtenant
It may be terminated by the dominant tenement via quitclaim deed.
Puffing
Making a statement that anyone would know is an exaggeration and can’t be proven. Schools, crime rate, walking score can all be verified.
Option
Option restricts the optionor to selling the property to only the optionee during the option period, it is an encumbrance on the title. Voluntarily.
Express Contract
A written contract is an express contract. Valid listing contracts are express, bilateral agreements.
Deed
Deeds transfer ownership.
A written instrument that transfers ownership interest in real property during the lifetime of the owner.
Zoning Ordinance
Control the use of private land through several kinds of restrictions.
Reproduction/Cost Approach
Used for buildings/not land
Senior Benefits
Residents of a development for elderly must all be over 62yrs old or 80% of the units are occupied by one person over 55yrs old.
Bill of Sale
Document used to transfer title to personal property.
Bankruptcy (in contracts)
Terminates ALL contracts
Counteroffer
They always terminate the original offer/previous counteroffer.
Exclusive right-to-sell
The broker will be paid a commission regardless of who sells the property, including the owner.
Lease/Purchase Contract
A lease/purchase contract is initially a lease, but is also a binding sales contract that requires the buyer to buy the property with the agreed to term within the period specified in the lease/purchase contract.
Commission
Earned when a ready, willing and able buyer at the seller’s listing terms is found.
Finance Charges
Includes:
- Loan Fees
- Finder’s Fees
- Service Charges
- Points
- Mortgage Insurance Premiums
- Interest
Tax
Assessed value x Tax Rate = Annual Tax
Straight Loan
Payments of only interest during the loan period and a lump sum payment (balloon payment) at the end of the term
Earnest Money
Not legally necessary. It is used as liquidated damages if the buyer is in default. Depositing is based up state laws.
Broker may not disburse funds without permission of all parties.
Fair Housing Act | Protected Classes
FRESH CORN Familial Status Race Equal Sex Handicap Color Opportunity Religion National Origin
Timeshare
Buy undivided interest in real property, with a right to use the facility for a fixed or variable time period.
Lot & Block Method
Identifies land by reference to lot and block numbers appearing on maps and plats of recorded subdivided land. “Uses plat map”
Mill Rate
The rate of taxation expressed as thousandths of a dollar.
The Do Not Call List
Applies to both in-state and interstate telephone calls. Parties must have made an inquiry within the past 3 months to allow solicitation.
Specific Performance
Action brought in court to compel a party to carry out the terms of a contract.
Ad Valorem
Means “according to valuation”
It is used by tax assessor to set property values for taxation.
Improvements
In real estate, improvement is everything artificial or constructed that is attached to the land.
Federal National Mortgage Association (FNMA)
FNMA was created to increase the availability of credit for housing by purchasing FHA loans made by banks.
FNMA buys property loans to keep the market liquid.
Seisin
A deed covenant that states that the grantor owns the property and has the right to convey it.
Truth-in-Lending Law
requires lenders to inform borrowers about finance charges.
Package Mortgage
- The interest rate is higher than through conventional installment financing.
- one loan from one lender for a number of items
Ranges
The column of townships running north and south is numbered according to its distance from the principal meridian.. and is referred to as
Principal Meridian
The main North and South line in a government survey from which townships are located.
Promissory Note
Evidence of the debt and promise to repay the debt. The note is NOT the security for the debt.
Section
A township has 36 sections. One section is 1 mile by 1 mile.
Tiers
East-West rows of Townships are called Tiers.
Lease Option
A lease agreement in which the tenant has the right to buy the property within a specified period of time.
Lock-in Clause
Prohibits prepayment altogether, for a specified period.
Suit for Specific Performance
Specific performance is an action brought in court to compel a party to carry out the terms of a contract.
Deficiency Judgment
When the foreclosure sale of a property produces LESS than the amount needed to pay the costs and expenses of the foreclosure action.
To satisfy the obligation incurred by the foreclosed mortgage.
Fiduciary
A licensee acting on behalf of a property owner.
AKA an agent.
Replacement Cost
Cost of building a property of equivalent utility with the same or similar materials.
Trust Account
Hold funds not belonging to the firm. May include: rent, security deposit and earnest money.
EBR
For an EBR to exist, the consumer must have made an inquiry with the company within 3 months before the call.
Reconciliation
The appraiser’s weighing of each property and approach to value.
Fannie Mae
Primary responsibility is to maintain an active secondary market for mortgage.
Fannie Mae is a quasi-public private corporation.
Transfer Tax
Transfer taxes are based on the sales price and are charged when the new deed is recorded, showing the transfer of ownership.
