Real Estate Q's Flashcards
Main difference between the terms real estate and real property is that only real property includes
improvements
Littoral Rights
Property bordering a stationary body of water, such as a lake or sea. In contrast, riparian rights belong to the owner of property bordering a flowing body of water.
The land and improvements, and all legal rights, powers, and privileges of real estate ownership are called
real property
Readily movable property
personal property
To sell personal belongings such as household furnishings, one would most likely use a document called a
bill of sale; sales contracts and purchase offers are used in the sale of real property
The legal notice that a lawsuit is pending affecting title or possession of a specific property is a
lis pendens
Involuntary lien
occurs through a legal proceeding in which a creditor places a claim on real and/or personal property to obtain payment of a debt
Ownership of rights that belong to the owner of property bordering a flowing body of water are
riparian rights
A reference to a lot and block number can be generally found on
municipal tax maps and various deeds
Metes and bounds
Can be recognized by the fact that the description starts at a point of beginning. It is created from a survey of the property by a licensed surveyor.
Ownership, possession, and control of a property that is contingent upon living and lost at death define a
life estate
Ownership for an undetermined length of time is called a
freehold estate
Estate for years
An estate for a fixed time period.
Estate at sufferance
When a person does not leave the property after a lease has expired.
Fee simple estates and life estates are two examples of
freehold estates, which describe ownership for an undetermined length of time
periodic estate or tenancy
type of leasehold estate that renews itself automatically if no notice is given
Alienation
transfer of property
Periodic estates and estates for years are what type of estates?
leasehold
pur autre via
similar to a life estate except a person’s life interest will last for the life of another person instead of their own
The right of occupancy to a cooperative is evidenced by a
proprietary lease
A cooperative apartment purchase differs from other types of property transactions because
a cooperative purchase involves purchasing an interest in a corporation and purchasing shares of stock
escheat
reversion of an intestate decedent’s property to the state
lien
A type of encumbrance, a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. Ex: mortgage, judgement, and property taxes
easement by prescription
is obtained by the use of land without of the owner’s permission for a legally prescribed length of time
easement by condemnation
easement created by government’s right of eminent domain
easement in gross
refers to a type of commercial easement, ex: utility pole
surveyors and appraisers fees in relation to property development are
indirect costs
costs for labor and materials are
hard or direct costs
impact fees
made to the municipality by a developer for infrastructure and other requirements
arm’s length transaction
the parties act independently and have no relationship to each other, they are not relatives
plottage value of land
combining two or more parcels of land into one tract that has more value than the total value of the individual parcels
the appraisal approach to value that considers the price to reproduce a property when it was new
cost approach
Which appraisal approach to value is the most applicable approach for appraising single-family residential properties?
sales comparison approach to value, which takes other very similar properties and adjusts their value to come up with a value for the subject property
income approach to value
estimates the potential gross income, requires an estimate of net operating income of the property, is based on the principal of anticipation
properties such as schools, hospitals, and government office buildings are generally appraised using the
cost approach because there are few comparables and the properties are not income-producing
Reproduction Cost vs Replacement Cost
reproduction cost is the cost to produce an exact duplicate of a building while replacement cost does not produce an exact duplicate
A value estimate of real property is a(n)
appraisal of single-family home
Feasibility studies, highest and best use studies, and land utilization studies are all forms of
evaluation studies
Two elements used to derive the gross rent multiplier
comparable sales price and rental income for the property, Gross Rent Multiplier (GRM) = Sale Price / Potential Gross Income
functional obsolescence
results from defects in the efficiency or functioning of a property such as a two-story residential property with only one bathroom
Which appraisal approach to value depends most heavily on replacement value?
Cost
sales comparison approach vs comparative market analysis
Adjustments are generally made only when using the sales comparison approach. The sales comparison approach is used by appraisers as one method of valuing residential property. The comparative market analysis is generally used by real estate agents to find a listing price for a property.
In the sale of a real estate investment, the taxpayer is taxed on the
gain or profit; the time value of money calculates the value of an asset in the past, present, or future and is based on the premise that the original investment will increase in value over a certain time
Tax Depreciation
A deductible allowance from net income of property when arriving at taxable income.
An appraisal performed by a licensed or certified appraiser is required for all real estate-related financial transactions except those with a transaction value
$250,000 or less
Certified General Appraiser
can appraise all types of real property
If a municipality dies not have the services to support a new development, the municipality may impose a
moratorium - delay in allowing development of property that is imposed only for public welfare
Permission to use the land in a way that is not normally allowed by the dimensional or physical requirements of the zoning ordinance.
Variance
The Interstate Land Sales Full Disclosures Act regulates developers of subdivisions of
25 or more lots offered across state lines
Cluster Development
occurs when buildings are built closer together to preserve open space (parks, trails, swimming pools, etc.)
The document that permits occupation of a structure by tenants or owners is called a(n)
certificate of occupancy
What is the rate at which at house appreciates?
New value – old value = change in value
What is the rate at which at house depreciates?
Old value – new value = change in value
Interstate Land Sales Full Disclosure Act
Developers offering 25 or more lots across state lines must provide a property report to the prospective buyer and a statement of record to HUD
A permitted deviation from the dimensional or physical requirements of current zoning
Variance
Special use permits
must be granted with special permission by the planning board/legislative body
requires all documents that create a interest in real estate to be in writing
Statute of Frauds
States if landowners are lax in protecting their rights, they may lose them
Doctrine of Laches
an element that is friable and can cause lung cancer when released in the air
asbestos
element that is radioactive and measured in picocuries
radon
Law that seeks reimbursement from responsible parties that have caused hazardous waste
Comprehensive Environmental Response, Compensation, and Liability Act
Federal org that oversees navigation, floor control, and dredging projects
US Army Corps of Engineers
HUD
Department of Housing and Urban Development; administers funding for projects related to housing
What happens next after an environmental impact statement for a development is completed?
A public comment period and public hearing
The only true and impartial standard for setting assessments is
market value
in rem
this legal proceeding occurs when an action is brought against the real property directly and not against an individual and his personal property
The tax rate is determined by the amount of the
tax levy
tax rate = __ / __
tax rate = tax dollars required/taxable assessed value
appropriation
occurs when a government agency sets aside funds for a certain purpose
tax map
type of map, drawn to scale, showing all of the real property parcels in a city, town, or other assessing units
the division of property and school tax monies so that school districts, counties, towns, and cities in the different municipalities all pay their fair share of the tax levy
Apportionment
A percentage of a property’s market value. This figure is used for property tax purposes and ultimately determines how the total tax is shared among property owners.
Assessment
Tax Levy
The amount that the municipality must raise by taxes is the tax levy. The difference between proposed expenditures and revenues from various sources such as state and federal aid determine the tax levy.
The giving of something, which need not be monetary value, as an inducement to contract
Consideration
Mortgage Contingency Clause
States that the contract is contingent upon the purchaser’s receipt of a mortgage commitment. If the purchaser does not obtain a commitment by a certain date, the contract may be canceled and the deposit returned to the seller.
Penalties for extremely bad behavior by a party and for fraudulent advantage taken by one party over another
punitive damages
most typical example of liquidated damages
forfeiture of earnest money
Fraud vs Misrepresention vs Mutual mistake
Fraud - intentional deceit
Mutual mistake - mistake of a material fact by both parties, causes the contract to be voidable but not void
Misrepresentation - unintentional misstatement of facts
When the parties to the contract have definitely agreed to all terms and conditions, the contract is known as
Express
Law that requires all contracts that create an interest in real estate be in writing to be enforceable in court is the
Statute of Frauds
Cooperative Contract of Sale vs Proprietary Lease
A contract of sale that is specifically for the transfer of cooperatives is generally used for the sale of cooperative property. The proprietary lease documents the interest and regulations of the owner’s interest in the cooperative.
Any improper control or influence by one person over another.
Undue influence
The threat of violence or placing a person in fear of his/her safety.
Duress
Fraud vs Misrepresentation
Fraud is the intentional misstatement of facts. Misrepresentation is the unintentional misstatement of facts.
Subprime Lenders
Provide loans to borrowers who are risky candidates for repayment
Actual conveyance of the title to a disinterested third party during the payment term
Title Theory
Property condition disclosure forms are completed by
Seller
Legacy vs Devise
Legacy is personal property given to someone by a will. Real property transferred at death is a devise.
The seller accepts a purchase money mortgage from the buyer. On the closing statement this amount appears as a
seller debit
In reference to condominiums and cooperatives, what defines an assessment?
Payable to the homeowner’s association for maintenance of the common elements
Condensed history of a property’s title
Abstract of Title
What is the long term (12+ months) capital gains tax for property owners in the 15%+ tax bracket?
15%, home sellers may be eligible to exclude of up $250,000 (single) or $500,000 (married) of the capital gain on the sale of a residence if they owned and resided in the home for at least two of the last five years before the sale
