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Real Estate Test > Pt2 > Flashcards

Pt2 Flashcards

1
Q

How much is 1 Sq mile

A

640 acres

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2
Q

Comparative market analysis

A

Study home sales and listings in neighborhood to establish list price/offer range

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3
Q

Net operating income

A

used on income property it is the income minus te operating expenses (utilities, taxes, insurance, legal and maintenance) NOT debt service (mortgage/interest) or depreciation

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4
Q

Capitalization rate

A

expected return in percent which is used to divide into NOI
ex: NOI (net income) of $50000 and cap rate of 10% is 500000/.10

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5
Q

Equity

A

the value minus your debt
(increases as debt is paid off)

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6
Q

loan to value

A

refers to what percentage of the property value is borrowed
*75% LTV means 75% of the propery value is borrowed
*Property worth $150000 times 75% is $112500 loan

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7
Q

How much is one point

A

1%

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8
Q

Amortization

A

Process of paying a loan back over some number of years (amort = to kill off… “to kill of loan”)

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8
Q

PITI

A

Principal (amount to loan)
Interest
Taxes
Insurance

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8
Q

Down Payment

A

Amount of equity required by a lender

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9
Q

Net to seller

A

sales price minus costs to seller of selling (commission title insurance, taxes, etc.)

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10
Q

Prepaids

A

2 month insurance and taxes

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11
Q

cash flow

A

depreciation, interest NOT included.
loan payments, maintenance/repairs, real estate taxes ARE included

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12
Q

Personal to Real Property

A

Attachement

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13
Q

Real Property to Personal

A

Severance

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14
Q

Economic Characteristics of Real Property

A

Scarcity
Situs
Fixit
Modification

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15
Q

Scarcity

A

Limited Supply in Area

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16
Q

Situs

A

Location, Location, Location

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17
Q

Fixity

A

Long term investment (immobile and indestructible)

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18
Q

Modification

A

improvements change value (good or bad)

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19
Q

Immobility

A

Land surface and improvements attached

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20
Q

Indestructibility

A

land can not be destroyed, investment is stable and long term

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20
Q

Metes and bounds

A

distance and direction **has a point of beginning

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21
Q

Government Rectangular survey

A

Made up of
principal meridians
base lines
range lines
Township lines
**Makes survey system

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22
Q

Range lines

A

6 miles apart parallel to principal meridians

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23
Q

Township Lines

A

6 miles apart parallel to base lines

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24
Q

size of township

A

6 square miles, 36 miles

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25
Q

section

A

36 in a township, 1 mile by 1 mile
640 acres
**Numbering starts on NE

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26
Q

Length of a mile

A

5280 ft

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27
Q

5280 ft

A

one mile

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28
Q

Fractional sections and government lots

A

along rivers EX: corner of KS

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29
Q

Plats

A

legal description in urban areas

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30
Q

Escheat

A

the right of a government to take ownership of estate assets or unclaimed property in the event there are no heirs or beneficiaries.

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31
Q

Encumbrance

A

a claim against an asset by an entity that is not the owner. Common types of encumbrances against real property include liens, easements, leases, mortgages, or restrictive covenants. Encumbrances impact the transferability and/or use of subjected properties.

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32
Q

lis pendens

A

“litigation pending”
encumbrance created by law
notice in public records of a pending lawsuit involving title to or possession of the real estate

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33
Q

Judgement Lien

A

a court ruling that gives a creditor the right to take possession of a debtor’s property if the debtor fails to fulfill their contractual obligations
General and involuntary

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34
Q

Tax lien

A

failure to pay taxes

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35
Q

Mechanic Lien

A

Failure to pay carpenter or someone who did work

specific and involuntary

**Covers cost of materials and services provided

legal claim against a home or other property to guarantee payment

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36
Q

How to calculate the amount of real estate taxes on a property

A

multiply the assessed value by the tax rate

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37
Q

Freehold estate

A

a type of real property ownership that has no fixed duration of the leasehold.

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38
Q

Leasehold estate

A

right to live somewhere the duration of the lease

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39
Q

Deed Vs Title

A

Deed is the paper
Title is the right

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40
Q

Types of deeds

A

General Warranty - Greatest protection
Special Warranty - limited warranty
Quitclaim - no warranty

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41
Q

Highest form of ownership

A

Fee simple absolute

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42
Q

Recording of deed

A

must have public record of deed

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43
Q

zoning ordinances

A

regulate and control the use of land

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44
Q

PUD

A

planned unit development

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45
Q

nonconforming use

A

“granfathered in” if a property was there before the zoning ordinances were in place

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46
Q

amendement

A

zoning law can be changed

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47
Q

variance

A

a zoning exception

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48
Q

Government Powers

A

PETE
Police powers
Eminent Domain
Taxes
Escheat

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49
Q

Appurtenant easements

A

transfer with the title - belong to the land. “run with the land”.
*must be ADJACENT to each other

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50
Q

Negative easements

A

prevent an owner from using the property in some manner

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51
Q

Positive easements

A

allow a person to use another’s property for some stated purpose

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52
Q

privilege to use the lad of another for a specific purpose

A

license

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53
Q

deed restrictions

A

conditions or limitations placed in a deed by the owner when the property is transferred from one to another

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54
Q

easement in gross

A

Given to a person to enter someone’s land for a specific purpose. Expires at the death of easement owner. Has a servient but no dominant tenement

55
Q

easement by prescription

A

acquired when a claimant uses another’s land for a period of time
*uninterrupted use of property for specific time (5-10 years)
*Continuous use of property
*must be adverse use, without the owner’s consent
*must be visible, open and notorious use, so that owner can easily learn of it

56
Q

lien

A

a claim or charge against property to enforce payment of money

57
Q

lienor

A

party holding the lien

58
Q

lienee

A

party who has property encumbered by the lien

59
Q

general lien

A

claim against ALL of the person’s property. real AND personal
*inheritance tax, IRS liens, judgments

60
Q

specific lien

A

claim against specific property
*such as mortgage, mechanic’s lien, real estate taxes

61
Q

Voluntary lients

A

Made with owner’s consent
*mortgage

62
Q

Involuntary liens

A

Created by law and do not require the onwer’s consent
(can be statutory or equitable)

63
Q

Statutory liens

A

involuntary, created by state laws

64
Q

Equitable liens

A

Created by the court
*ensure fairness and justice

65
Q

Equitable right of redemption

A

allows the owner to redeem property before the tax sale

66
Q

statutory right of redemption

A

may be exercised after the tax sale

67
Q

special assessment

A

tax on specific parcels of real estate to pay for local improvements
**Like sidewalk, repaving streets, etc

68
Q

correction line

A

every 4th township

69
Q

Gide meridian

A

every 4th range line

70
Q

Range

A

east and west of Principal meridian

71
Q

Princiapl meridian

A

north and south

72
Q

base lines

A

east and west

73
Q

which section is set aside for school purposes

A

section 16

74
Q

township lines

A

run parallel to base lines

75
Q

spot survery

A

when a survey shows the location and size of buildings on a property

75
Q

datum

A

level surface from which elevations are measured

76
Q

benchmarks

A

bronze markers paced through US as reference points of elevation above sea level

77
Q

ordinary life estate

A

based on the life of the owner.
If A gives B an ordinary life estate. B is the “owner” continues until B passes

78
Q

Pur autre vie

A

life of another. If A gives B a life estate, it ends when A passes

79
Q

what can an ordinary life Tennant not do

A

commit waste - damage, deteriorate, abandon property

80
Q

remainder interest

A

when an estate passes to a third party named in the deed.

81
Q

Reversion

A

If no remainder, the estate reverts (reverses) back to original owner. If owner has died, goes to heirs.

82
Q

Curtesy

A

a legal life estate - husband’s life estate of his deceased wife’s property

83
Q

Dower

A

a legal life estate - wife’s life estate of her deceased husband’s property

84
Q

Conventional life estate

A

can be either ordinary or pur autre vie
*Created by the actions of a grantor

85
Q

Legal life estates

A

created by law

86
Q

Riparian rights

A

extent of ownership depend if water is navigable.
If no, extends to center of the water
If yes, Extends to high-water mark at water’s edge

86
Q

Littoral rights

A

rights of an owner of property along a large body of water that is not flowing - such as an ocean or lake. usually extends to high-water mark

87
Q

Prior appropriation

A

apply in states where water is scare - ownership and use are controlled by state, not owner next to water.

88
Q

Accretion

A

gradual addition of land by nature

89
Q

Alluvion

A

New deposits of land as a result of accretion
*Land owner is entitled to all additions

90
Q

Erosion

A

gradual loss of land through the natural forces of nature

91
Q

Avulson

A

Sudden removal of land by forces of nature

92
Q

Reliction

A

Gradual subsiding of water, leaving additional land.

93
Q

Estate for years

A

Definite period of time. There is an end to the lease

94
Q

Periodic Estates

A

From period to period. no expiration date. Goes for an indefinite period

95
Q

Tenancy at will

A

indefinite period, can be terminated b either party. “can live here until mother moves in”

96
Q

Tenancy at sufferance

A

Tenant wrongfully remains in possession of property after right to stay has expired

97
Q

Variable lease

A

allows for future changes in the amount of rent
*can be graduated or index

98
Q

Graduated lease

A

allows for rent changes at predetermined future dates

99
Q

Index lease

A

rent change is based ona common index

100
Q

Ground lease

A

long-term lease (generally 50+ years) Net lease. tenant pays the building operating expenses

101
Q

Lease purchase

A

tenant leases property for a period of time with the intention of purchasing the property at a later date

102
Q

Sale- leaseback

A

oner sells property where the business is located to an investora nd then leases the property back. The seller benefits because it frees up capital – the rent can be deducted as a business expense. The buyer benefits because it has a stable tenant and a favorable return on investment (walgreens)

103
Q

Assignment

A

all remaining terms of he lease are transferred

104
Q

Ownership of severalty

A

sole ownership

105
Q

Joint tenancy

A

ownership by 2 or more people with right of survivorship. When one co-owner dies, share goes to surviving co-owner

106
Q

Tenancy by entirety

A

Between husband and wife “one person”. Terminated by the death of either spouse, divorce or mutual agreement

107
Q

Community Property

A

Property bought together, is shared equally. anything before stays separate

108
Q

Limited liability company

A

LLC. Owners have limited liability, avoid double taxation , no restrictions who can be in then. Good for small businesses

109
Q

Joint Venture

A

created for single project for a limited time or when project is finished. It is then dissolved

110
Q

Living trust

A

Created during the trustor’s lifetime
*avoids probate after death

111
Q

Land trust

A

real estate

112
Q

Testamentary trust

A

created by will after the property owner’s death

113
Q

Intestate

A

Person dies without a will

114
Q

descent

A

the state determines the disposition of the property after one dies without a will
Involuntary alienation

115
Q

Adverse Possession

A

someone uses property for period of time earns rights
Provisions: use, hostile, open (well known to others - could be easily acknowledged)

116
Q

Accession

A

additions to the land through natural or human causes

117
Q

Seisin

A

gives assurance that the grantor has the power and authority to convey title and has the type of ownership interest that is being conveyed by the deed

118
Q

Constructive notice

A

legal notice, information that has been made public

119
Q

Actual notice

A

direct knowledge of information a person has actually gained by reading, seeing or hearing

120
Q

Inquiry notice

A

notice that could be presumed by law when a situation exists that indicates a reasonable person would make further inquiries

121
Q

Perfecting title

A

clearing any clouds on title

122
Q

Quiet title lawsuit

A

can be initiated to remove clouds on the title

123
Q

Owners policy

A

*insures the amount paid for the property
*may include exceptions for claims that could be determined from physical inspection of the property
*Not assignable

124
Q

Lenders policy

A

*insures for the loan amount and decreases as the loan is repaid
*Has no exceptions for claims that could be determined from physical inspection of the property
*Assignable

125
Q

Standard policy coverage

A

protects against defects found in public records

126
Q

Extended Coverage

A

Insures against standard risks plus defects found only by inspection of the property or by survey, unrecorded liens and easements, mining claims, water rights and rights of parties in possession of the property

127
Q

Escrow closing

A

Escrow agent is appointed to handle all the closing actives without the parties present

128
Q

Escrow agent

A

neutral third party who coordinates the closing activities

129
Q

Percolation tests

A

if property is not connected to public sewer system, test determines the rate of effluent absorption by the soil from septic system

130
Q

RESPA

A

Real Estate Settlements Procedures Act
*prohibits kickbacks and referral fees. provides consumers with info about the costs associated with their real estate transaction
*1-4 unit residential property - condo/cooperatives

131
Q

Fraud

A

The intentional misstatement of a fact

132
Q

Misrepresentation

A

The unintentional misstatement of facts

133
Q

Seller disclosure agreement

A

A listing by the seller of any property defects

134
Q

Antitrust laws

A

laws designed to protect free competition

135
Q

Caveat emptor

A

the concept that buyers make purchases at their own risk

136
Q

Latent defects

A

hidden defects in the property

137
Q

Procuring cause

A

something done by the broker that resulted in completion of the sales transacion

Real Estate Test (2 decks)

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