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Real Estate > Real Estate Sales Exam > Flashcards

Real Estate Sales Exam Flashcards

1
Q

Sherman Antitrust Act 1890

A

prohibits monopolistic practices (ie, price fixing, boycotting)

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2
Q

market allocation

A

agreement among competitors to divide market (violates antiturst provision)

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3
Q

group boycotts

A

when competitors get together and agree not to do business with someone

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4
Q

tie-in arrangement

A

requirement to buy one product or service on condition that you buy another product or service (ILLEGAL)

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5
Q

special agent

A

only handle one activity like selling property

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6
Q

general agent

A

handles a range of activities on behalf of a client (ie property manager)

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7
Q

universal agents

A

represent client on behalf of all real estate matters

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8
Q

principal

A

person you represent as an agent

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9
Q

customer

A

other party or third party

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10
Q

dual agency/limited agency

A

buyer and seller are represented by the same real estate agent

must get informed consent to represent both parties

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11
Q

transactional brokerage

A

broker represent neither buyer nor seller seller but can complete a transaction and be paid for it

(ie, broker bringers buyer and seller together, negotiates the deal and handles paperwork)

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12
Q

agency disclosure

A

given in writing and identifies who real estate agents represent

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13
Q

express agency

A

both parties state intention to enter into agency relationship

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14
Q

implied agency

A

created through the actions of the two parties

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15
Q

agency by estoppel

A

when principal doesn’t stop an agent from performing duties giving impression agency relationship has been established

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16
Q

agency by ratification

A

created by accepting circumstances that created the agency after the fact

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17
Q

agency coupled with an interest

A

agent has interest in the property that’s being sold

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18
Q

exclusive right to sell listing

A

exclusive right to sell - always paid

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19
Q

exclusive agency listing

A

exclusive right to sell - only paid if sold

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20
Q

open listing

A

agreement with any broker - only paid if sold

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21
Q

net listing

A

broker hired to sell property for certain amount - broker keeps any amount more than net price (illegal in NY)

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22
Q

option listing

A

clause in listing agreement gives broker right to buy the property

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23
Q

multiple listing service

A

marketing service that permits brokers to share listings with other brokers

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24
Q

Relationship between agent and principle

A
  1. Fiduciary - agent faithfully represents interests of the principal
  2. Accounting - client money kept in separate bank account
  3. Care - agent use their best efforts and skills on behalf of their clients’ interest
  4. Confidentiality - all information kept confidential
  5. Disclosure - reveal any information that would benefit your client
  6. Loyalty - put client interest above your own
  7. Obedience - follow instructions from principal unless illegal
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25
Q

commingling

A

combining client money with brokers money

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26
Q

conversion

A

using client money for agent’s personal use

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27
Q

latent defects

A

problem with property wouldn’t know under normal inspection

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28
Q

material defects

A

specific issue with property that may have a significant, impact on the value of the property

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29
Q

stigmatized properties

A

events that make the property less desireable ( ie, murder/suicide)

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30
Q

Megan’s Law

A

requires registration of sex offenders with the police, neighbors

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31
Q

puffing

A

exaggerating benefits of property

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32
Q

fraud

A

intentional misrepresentation to sell property

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33
Q

negligent misrepresentation

A

don’t disclose something because you don’t know but you should have known

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34
Q

When do agents get paid?

A

When broker produces a ready, willing and able buyer.

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35
Q

Ending an agency relationship

A
  1. Completion of agreement
  2. Expiration of agreement
  3. Destruction of property
  4. Taking property through eminent domain
  5. Bankruptcy
  6. Agreement by both parties
  7. Death or incompetence
  8. Renunciation/revocation - one party desires to end agency relationship
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36
Q

1866 Civil Rights Acts

A

no race discrimination NO EXCEPTION

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37
Q

1968 Fair Housing Act

A

prohibits race, religion, origin, sex, handicap and family status discrimination

Some exceptions to discriminations:

Exceptions:
1 - age (housing may be restricted to people 55 years old if majority of residents are 55 and older)
2 - owner-occupied housing - multifamily housing of 2-4 units where one of the units is occupied is exempt from fair housing laws
3 - private clubs
4 - public-law occupancy standards - restricts maximum people can occupy
5 - religious organization
6 - single-family housing - sale or rental of single-family house if owner doesn’t own more than 3 units at one time

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38
Q

improvement

A

Adding structures and improvements to the land add to its value and use

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39
Q

real property

A

anything can’t be moved

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40
Q

personal property

A

anything movable (furniture, car) and goes with owner when they move

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41
Q

fixture

A

personal property that becomes real estate and stays on property when owner moves

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42
Q

bundle of rights

A

right to use, occupy, mine, farm, give and restrict use

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43
Q

freehold estate

A

own real estate, indefinite time

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44
Q

fee simple absolute

A

complete form of ownership no limits/conditions on use

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45
Q

fee simple defeasible

A

own with limitations:

1 - fee simple subsequent - “but if” property used for any other purpose ownership is terminated
NOTE: NOT AUTOMATIC REVERSION

2 - fee simple determinable - “as long as” conditions are met or automatically revert back to owner (ie. property donated to county park with nature trails stopped being used for that purpose)
NOTE: AUTOMATIC REVERSION

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46
Q

life estate

A

last a lifetime for the person receiving life estate

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47
Q

Pur autre vie

A

lifetime of another person rather then the person receiving the life estate (ie, give your nephew’s mother pur autre vie to live in the house for as long as your nephew is alive)

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48
Q

reversionary interest

A

upon death house reverts back to you or heir if you die

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49
Q

community property

A

during marriage, right of spouse to 50% of property acquired during marriage

Does not exist in New York.

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50
Q

dower and curtesy

A

spouse has right to real property owned by other spouse after death. New York does not recognize

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51
Q

homestead

A

protect family members against losing their homes to general creditors attempting to collect on debts. New York does not recognize a homestead estate.

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52
Q

leasehold interest

A

right to use land for certain time

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53
Q

leased fee interest

A

landlord’s right of use of property and the right to lease to others

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54
Q

littorial rights

A

lake, ocean, sea own the land only up to the high-water mark. Government owns land below that point.

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55
Q

appurtenant to the land

A

go with the land when you sell it

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56
Q

riparian rights

A

rivers and streams

navigable - owner’s property extends to the high-water mark
non-navigable - owns the land beneath the stream to the stream’s midpoint

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57
Q

sole ownership/tenancy in severalty

A

ONE OWNER and passes to heir upon death

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58
Q

tenancy in common

A

2 or more people each person has percentage share that can be transferred

Note: NO SURVIVORSHIP PASSES TO HEIR

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59
Q

joint tenancy

A

two or more plp, if one person dies other person automatically get title (common in marriage)

Note: joint tenant can sell shares to another person. new owner becomes TENANT IN COMMON

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60
Q

remaindermen

A

third party to receive title to the property upon the death of the life tenant (example, Mr. Jones leaves his home to his second wife with the provision that, after her death, it will pass to his daughter Sara from his first marriage. So, during Mrs. Jones’ lifetime, Sara owns a remainder interest)

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61
Q

Tenancy by the entirety

A

Ownership reserved exclusively for husband and wife.

NOTE: SIGNATURE OF ALL OWNERS TO SELL PROPERTY

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62
Q

separate property

A

propertyacquired by an individual prior to marriage,

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63
Q

deed of trust

A

agreement between a lender and a borrower to give the property to a neutral third party who will serve as a trustee. The trustee holds the property until the borrower pays off the debt

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64
Q

co-op

A

own shares of a corporation

NOTE: PROPRIETARY LEASE

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65
Q

condo

A

gets deed to individual unit

NOTE: TENANTS IN COMMON

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66
Q

planned unit development (PUD)

A

mixed use building owner owns land beneath it

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67
Q

encumbrance

A

limitation on use of property

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68
Q

leins

A

unpaid debt against property

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69
Q

priority of liens

A

liens that gets paid first when property is sold

  1. Tax liens
  2. Mortgage liens
  3. Mechanics and judge liens
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70
Q

voluntary lien

A

willing (owner takes out a mortgage)

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71
Q

involuntary lien

A

unwilling (for not paying taxes)

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72
Q

specific lien

A

attaches to only one property

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73
Q

general lien

A

attaches to a number of properties or personal property

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74
Q

Indicate whether liens are specific or general and voluntary or involuntary

A
  1. Tax lien (specific lien and involuntary)
  2. Mortgage lien (specific lien and voluntary)
  3. Mechanics lien (specific and involuntary)
  4. Judgement lien (general and involuntary) - placed against real and personal property
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75
Q

lis pendens

A

notice of potential lawsuit resulting in lien

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76
Q

easement

A

right to use another person property

dominant tenement - person receiving the benefit
servient tenement - property being used

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77
Q

appurtenant easement

A

right to use adjoining property that transfers with the land.

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78
Q

easement in gross

A

right to use another person’s land for as long as the owner owns that land or the holder of the easement dies (ie, utility company)

NOTE: BENEFITS PERSON RATHER THAN PROPERTY

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79
Q

easement by necessity

A

court order to permit someone to gain access to property

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80
Q

easement by prescription

A

action of person implied permission from owner - continuous and open use gives person right to use property

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81
Q

In order to terminate an easement:

A
  1. agreement or release
  2. merging - Joining of two properties (A buys B’s property)
  3. abandonment - use it or lose it
  4. need no longer exists
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82
Q

license

A

temporary right for specific use of property

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83
Q

covenants

A

conditions on use of property

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84
Q

laches

A

loss of right to enforce deed restriction

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85
Q

enroachment

A

unauthorized/illegal use of someone’s property involves court action to resolve dispute

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86
Q

adverse possession

A

someone uses your property for a long period of time, you may end up losing the property or having your rights to the property restricted.

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87
Q

zoning ordinance

A

rules tells you what you can build, where you can build it, how much you can build for each district

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88
Q

zoning district

A

area designated for certain use (housing, shopping…)

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89
Q

variance

A

request to deviate from current zoning requirements. If granted, it permits the owner to use his land in a way that is ordinarily not permitted by the zoning ordinance

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90
Q

subdivision

A

one piece of land that is separated into 2 or more pieces of land

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91
Q

eminent domain

A

allows government to purchase private land for public use and compensate owner

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92
Q

inverse condemnation

A

owner sues the government because they failed to compensate owner

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93
Q

escheat

A

when no heirs or will property goes to state

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94
Q

intestate

A

dying without a will

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95
Q

title

A

means ownership

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96
Q

deed

A

voluntarily transfer title to real estate

NOTE: DEED IS VALID UPON DELIVERY AND ACCEPTANCE

NOTE: ACKNOWLEDGEMENT REQUIRED FOR RECORDATION BUT NOT FOR VALIDITY

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97
Q

statue of frauds

A

law requires deed/contracts be in writing to be enforceable

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98
Q

full covenant and warranty deed

A

provide most protection and warranties by the grantor to the grantee

a. seisen - guarantee the grantor is the owner of the property
b. quiet enjoyment - no on can come and claim ownership of the property
c. encumbrances - has no easement or lien
d. further assistance - grantor provide documents that comes with title
e. warranty forever - grantor pay all costs to clear up title problems in future

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99
Q

grant deed

A

written proof that an individual owns a property.

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100
Q

bargain and sale deed

A

has no warranties and gives no protection to grantee (often used in foreclosure and tax sales)

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101
Q

quitclaim deed

A

used to clear up title problems provides no warranties

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102
Q

metes and bounds system

A

description uses directions and distances

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103
Q

rectangular survey system

A

uses squares and rectangles determined by longitude and latitude

  • Range - North-South area between consecutive meridians.
  • Tier - East-West area between two parallels.
  • Township - Area enclosed by the intersection of two consecutive meridians and two consecutive parallels.

Method of calculating the acreage of a parcel is as follows:

  1. Multiply the denominators of the fractional descriptions together.
  2. Divide 640 by the resulting number.

SE 1/4 of Section 8:
640/4 = 160 acres

W 1/2 of the NW 1/4 of Section 8

640/(2x4) = 80 acres

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104
Q

lots and blocks/recorded plat system

A

uses map of subdivisions and divides into blocks and lots

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105
Q

In the rectangular survey method, how large is a township in square miles and how large is a township section?

A

A township is 36 square miles and a section is one square mile or 640 acres.

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106
Q

title search

A

search ensure no liens on property

107
Q

marketable title

A

seller required to provide evidence of title

108
Q

testate

A

died with a will

109
Q

clouded title

A

missing link in the chronology of owners

110
Q

abstract of title

A

written, chronological summary of the property’s title records and other public records
affecting rights and interests in the property.

111
Q

suit to quiet title

A

court action (lawsuit) intended to establish or settle the title to a property, especially during a disagreement on the title

112
Q

Real Estate Settlement Procedures Act (RESPA)

A

protects consumers who borrow money for residential property; prevent kick-backs and referral fees

113
Q

Truth in Lending Act (TILA)/Regulation Z

A

disclose details regarding the costs and terms of any loan they apply for so they can make an informed decision about their credit, loan, and which lender they would rather use.

114
Q

credit

A

amount owed to buyer or seller for which was already paid

115
Q

debit

A

something buyer or seller owes

116
Q

accrued item

A

seller owes buyer money

117
Q

prepaid item

A

paid for in advance; so the buyer will owe the seller part of the payment.

118
Q

real estate transfer tax/revenue stamps

A

In New York the amount of the tax is $4.00 per $1,000 of purchase price.

Examples

Sale price of the property is $575,000. Transfer tax is $2,300.

$575,000/$1,000 = $575
$575 x $4 = $2,300

119
Q

habendum clause

A

“to have and to hold”

120
Q

Whose signature is required for deed to be valid?

A

Grantor

121
Q

constructive notice

A

noticed provided by recording of deed in public records

122
Q

New York City Real Property Transfer Tax (RPTT)

A

For non-residential properties, the tax rate is 1.425 percent for properties of $500,000 or less and 2.625 percent for properties over $500,000.

The NYC transfer tax applies to any property that sells for more than $25,000.

$575,000 x 1.425% = $8,193.75

123
Q

voluntary alienation

A

ownership of property transferred voluntarily

124
Q

consideration

A

deed is gifted no money exchanged

125
Q

avulsion

A

sudden loss of land naturally (earthquakes, landslides, and mudslides)

126
Q

erosion

A

gradual loss of land (river or ocean erosion)

127
Q

accretion

A

gaining land (sand added to the beach or soil deposited by river)

128
Q

foreclosure

A

losing property involuntarily to pay debt (unpaid mortgage loan/property taxes)

129
Q

forfeiture

A

lose title to property by not following conditions on deed

130
Q

partition

A

legally divide property between people

131
Q

will

A

document that outlines how persons property will be distributed after death

132
Q

laws of descent

A

when there is no will property passes to “intestate succession” to heirs according to state law.

133
Q

Probate

A

way that a will is legally processed (surrogate court)

134
Q

express contract

A

parties state and agree to enter into contract verbally/writing

135
Q

implied contract

A

created by the actions of the parties suggesting an existence of an agreement

136
Q

bilateral contract

A

both parties exchange promises for something in return

137
Q

unilateral contract

A

only one party promises to do something, provided the other party does something

ie, The seller agrees to sell to the buyer for $1M if the buyer want to buy it. The buyer is free to buy or not to buy.

138
Q

5 elements of valid contract:

A
  1. Competent parties - be of legal age, sober, sane
  2. Mutual agreement - terms of contract must be understood by both
  3. Lawful object - it is legal
  4. Consideration - agreed to selling price (monetary or non-monetary)
  5. In writing
139
Q

void contract

A

does not meet elements of valid contract

140
Q

voidable contract

A

valid contract but can be cancelled by one party

141
Q

statue of limititions

A

you have 6 years to file lawsuit

142
Q

binder

A

agreement where buyer put down earnest money deposit as evidence of their good faith and intention to complete the transaction.

143
Q

option agreement

A

seller is obligated to sell you property but buyer not required to buy

144
Q

installment sales contract

A

used to purchase property between seller (vendor) and buyer (vendee) without immediately paying full price and without maintaining a mortgage

145
Q

Ways to end a contract:

A
  1. Performance - contract fulfilled by both parties
  2. Infeasability - can’t be performed legally impossible to perform
  3. Mutual agreement - both parties agree to cancel
  4. Operation of Law - legal issue arises that cancels contract
146
Q

Breach of contract

A
  1. Rescission - one party decides not to fulfill obligation
  2. Forfeiture - seller declares contract forfeited and seller keep money buyer already gave
  3. Suit for damages - monetary damages because buyer defaulted on contract
  4. Suit for specific performance - forces the buyer to buy the house
147
Q

assignment

A

someone takes over contract obligation ORIGINAL PERSON NO LONGER RESPONSIBLE

148
Q

lease

A

agreement to use space for certain amount of time in exchange for rent

149
Q

estate for years

A

commercial property leases. Definite start and end date.

150
Q

Periodic estate

A

residential property. no definite period of time. Could be month to month, week to week, or year to year

151
Q

estate at will

A

landlord allows tenant to occupy premises no definite period of time

152
Q

estate at sufferance

A

landlord suffers when tenant stays because landlord wants them to leave

153
Q

8 covenants in a lease:

A
  1. Capacity to contract
  2. Demising clause
  3. Description of the premises
  4. Clear statement of term
  5. Specification of rent and how it is to be paid
  6. In writing
  7. Signatures
  8. Delivery
154
Q

gross lease

A

tenant pay rent and landlord pay the property’s operating expenses, including utilities, repairs, and
maintenance

155
Q

net lease

A

tenant pays rent and all property expenses (common in commercial space)

156
Q

graduated lease

A

rent payments start at a fixed amount but increase as the lease term matures.

157
Q

ground lease/land lease

A

tenant owns building and landlord own the land

158
Q

percentage lease

A

minimum monthly rent plus percentage of gross earned by business (retail stores)

159
Q

proprietary lease

A

leash gives to owner of co-op

160
Q

Lease can terminate for:

A
  • Term expiration
  • Notice
  • Voluntary agreement
  • Property destruction
  • Condemnation
  • Foreclosure
  • Breach of contract
161
Q

rentable space

A

space tenant pays for when renting commercial space and takes into account common space

162
Q

useable space

A

square footage tenant is allowed to use exclusively

163
Q

Safe Drinking Water Act (SDWA)

A

regulate drinking water supply

164
Q

asbestos

A

can be dangerous when inhaled cause lung cancer

165
Q

lead

A

dangerous if enters the bloodstream

166
Q

radon

A

odorless radioactive gas

167
Q

sick building syndrome

A

building with high level of contaminants

168
Q

mold

A

fungus that grows under moist condition

169
Q

UFFI

A

thermal insulation material no longer used

170
Q

Underground Storage Tanks

A

leaking UST can seep into soil and contaminate groundwater

171
Q

CFC’s

A

gas contains carbon, chlorine and flourine atoms (cause of ozone depletion)

172
Q

sales comparison approach

A

used in single family houses (property being appraised with recently sold comparable (equivalent) properties. )

173
Q

cost approach

A

unique properties like church (for recently built property get costs from development and construction)

174
Q

income approach

A

investment properties like office buildings (estimate value of properties that produce income )

175
Q

reproduction cost

A

cost to construct an exact duplicate of the subject structure at today’s costs

176
Q

replacement cost

A

cost to construct a structure with same using todays materials (used for historical structures)

177
Q

4 methods of estimating reproduction/replacement cost

A
  1. square footage method
  2. unit-in-place method - cost to construct building by estimating installation costs
  3. Quantity survey method - more detailed break down all components of building
  4. Index method - know original construction costs
178
Q

Physical deterioriation

A

normal wear and tear of building as it ages

179
Q

curable deterioration

A

adds value to building (paint job)

180
Q

incurable deterioration

A

damages to structure of building to costly to repair

181
Q

functional obsolescence

A

design flaws

182
Q

external obsolescence

A

depreciation caused by factors related to land itself and always incurable (ie, gas station adjacent to single-family house)

183
Q

straight-line method

A

Straight Line Basis = (Purchase Price of Asset - Salvage Value) / Estimated Useful Life of Asset

184
Q

capitalization rate

A

Income ÷ Value = Capitalization rate

185
Q

Estimated value

A

Net Operating Income (annual) ÷ Capitalization Rate = Value

as capitalization rate goes down value goes up

186
Q

Calculating income

A

value x capitalization rate = income

187
Q

substituion

A

buyer who buys least expensive house available to satisfy his needs

188
Q

promissory note

A

agreement to repay loan according to certain terms and conditions

189
Q

mortgagor vs. mortgagees

A

borrower is the mortgagors and bank is the mortgagee

190
Q

mortgage

A

financing instrument that creates a lien against a property.

191
Q

satisfaction of mortgage

A

When a mortgage is paid in full, the lender will issue a certificate

192
Q

mortgage assumption

A

taking over an existing mortgage

193
Q

mortgage repayment plans

A
  • Straight (Interest-only) - Monthly payments are allocated only to interest.
  • Amortized - A borrower makes a periodic (usually monthly) payment of principal plus interest.
  • Balloon payment - A loan that has one large final payment due when the loan matures.
  • Adjustable-rate - Interest rates change periodically, usually every one, three or five years.
194
Q

conventional loan

A

most common type of loan and secure down-payment of 20%

195
Q

acceleration clause

A

protect the lender in case buyer defaults and enables lender to require entire debt to be repaid immediately

196
Q

points

A

additional interest charged. Points are percentage of the loan amount.

197
Q

escrow account

A

account held by the bank on behalf of borrower used to pay taxes and insurance on property

198
Q

primary market

A

where consumers go to get a mortgage loan (commercial banks, credit union, insurance companies, mortgage broker…)

199
Q

secondary market

A

financial institutions where banks sell the mortgages to get more money to lend

200
Q

mortgage broker

A

bring buyer and lender together

qualifications:
-minimum of two years of credit analysis or underwriting experience with an exempt organization, mortgage banker, mortgage broker
or licensed lender
-submit a surety bond ranging in amount between $10,000 and $100,000,

201
Q

mortgage banker

A

provide own funds for mortgage financing

qualifications:
-existing line of credit of at least $1M
million provided by a banking institution, an insurance company or a similar credit facility approved by the
Superintendent of Banking.
-provide an original mortgage banker bond in the amount of $50,000 furnished by a surety company authorized to conduct business in New York or execute a deposit agreement with a pledge of securities or funds in the amount of $50,000.

202
Q

secondary mortgage market

A

buys loans from banks and other lenders

Fannie Mae and Ginnie Mae (FHA and VA loans) - when borrowers don’t have enough for downpayment
Freddie Mac Farmer Mac (conventional loans)

203
Q

FHA loan

A

They insure loans made by approved lending institutions,

204
Q

Veterans Affairs

A

opportunity for veterans to purchase a home with no money down.

205
Q

State of New York Mortgage Association

A

below-market interest rate mortgages

to low-and- moderate-income households who must be first-time homebuyers except in target areas

206
Q

loan to value ratio

A

appraised value x LTV percentage = mortgage amount

sale price - mortgage amount = downpayment amount

207
Q

blanket mortgage

A

loan covers more than one piece of property

208
Q

construction loan

A

finance construction project

209
Q

home equity loan

A

borrower uses the equity of his or her home as collateral

210
Q

open mortgage

A

loan can be paid back any time without prepayment penalty

211
Q

purchase money mortgage

A

buyer borrows from the seller in addition

to the lender.

212
Q

wraparound mortgage

A

allows a borrower who has an existing loan to get another loan from a second
lender without paying off the first loan.

213
Q

package mortage

A

loan covers real estate and personal property

214
Q

reverse annuity mortgage

A

lender is making payments to the borrower

215
Q

shared equity mortgage

A

participation mortgage in which the lender shares in the appreciation of a mortgaged property if and when the property sells.

216
Q

Rural housing services

A

helps low-to-moderate-income rural residents

to purchase, construct, repair, or relocate a dwelling and related facilities

217
Q

fixed rate mortgages

A

interest rates do not change

218
Q

adjustable rate mortgages

A

interest rate is subject to change and tied to index

219
Q

First month interest on loan

A

$150,000 for 25 years at 4 percent interest:

150,000 X 0.04 = $6,000
$6,000/12 = $500 (1st month interest)

220
Q

Principal owed after first payment

A

$150,000 for 25 years at 4 percent interest. The monthly payment is $792.

150,000 X 0.04 = $6,000
$6,000/12 = $500 (1st month interest)
$792 - $500 = $292
$150,000-292 = $149,708 principal owed

221
Q

Total interest on loan

A

$200,000 for 30 years at 4% interest. Monthly payments are $954.83.

$954.83 X 360 = $343,738.80
$343,738.80 - $200,000 = $143,738.80

222
Q

deed in lieu of foreclosure

A

buyer voluntarily signs the property over to the lender by executing a deed to avoid foreclosure

223
Q

estoppel certificate

A

statement that shows how much is due on the loan

224
Q

alienation clause

A

the borrower has to pay off loan in full immediately upon sale of the property

225
Q

ad valorem

A

taxed based on value of property

226
Q

special assessment

A

taxes collected against a particular group of properties used for infrastructure improvements

227
Q

assessed value

A

market value x assessment ratio = assessed value

market value of property is $200,000. In community that assesses at 50% of market value the assessed value is $100,000.

$200,000 x 0.50 = $100,000

228
Q

Taxes due

A

assessed value of the property x tax rate = taxes due

Property has an assessed value of $60,000 and a tax rate of 40 mills.

60,000 x 0.040 = $2,400 taxes

Taxes due using equalization rate

Property is assesses at $40,000 equalization rate for county taxes is 1.5. The county tax rate is 10 mills.

$40,000 x 1.5 = $60,000
$60,000 x (.01) = $600

229
Q

tax deed

A

legal instrument for conveying title when a property is sold for nonpayment of taxes. The application for a tax deed causes the taxing agency to institute a tax sale or tax foreclosure.

230
Q

assessment ratio

A

property is assessed at 50% of its market value. 50% is assessment ratio

231
Q

in rem

A

city takes foreclosure action against property rather than you

232
Q

net operating income

A

describes the net income produced by a specific property after all
expenses have been deducted from the gross receipts.
Several factors affect the net operating income.
 Market rent
 Vacancy
 Expenses

233
Q

pro forma

A

financial statement of building potential income and expenses

234
Q

Math conversions

A 
1 foot = 12 inches
1 yard = 3 feet
1 mile = 5,280 feet
1 square yard = 9 square feet
1 acre = 43,560 square feet
A section = 640 acres
A section = 5,280 feet
1 cubic yard = 27 cubic feet
235
Q

blockbusting

A

encourage people to sell their home creating fear of another race entering neighborhood

236
Q

steering

A

encouraging people to move or stay away from neighborhood

237
Q

redlining

A

lendor will no make loans in certain locations

238
Q

datum

A

measures elevation

239
Q

novation

A

new lease agreement replaces old one

240
Q

progression

A

positive effect that larger houses have on smaller houses

241
Q

regression

A

negative effect smaller houses have on larger houses

242
Q

fee simple determinable

A

estate that will end automatically when the stated event or condition occurs.

NOTE: AUTOMATIC REVERSION OCCURS

243
Q

special warranty

A

warranties only for the ownership period of the grantor

244
Q

general warranty deed

A

provides general warranties back to the beginning of time

245
Q

surrogate court

A

court that handles wills

246
Q

Contract for sale of property is said to be

A

executory until the closing whereupon it is executed

247
Q

Chloroflourocarbons are associated with

A

air condition equipment

248
Q

What vacancy rate is potential gross income calculated

A

0%

249
Q

Vacancy and collection loss is subtracted from

A

potential gross income

250
Q

Net operating income

A

expenses - effective gross income = NOI

251
Q

Gross Rent Multiplier (GRM)

A

sales price / gross rent

252
Q

Total monthly payment on an amortized loan includes

A

principle, interest, taxes, insurance

253
Q

equitable right of redemption with respect to tax sales comes

A

before tax sale

254
Q

statutory right of redemption respect to tax sales comes

A

after the tax sale

255
Q

A protest against high taxes should be brought to

A

elected officials

256
Q

tax deduction

A

deducted from incomes before taxes

257
Q

tax credit

A

deduct from taxes

258
Q

You’re selling the NW1/4 of the SW 1/4 of the S1/2 of the W1/2 of Section 31. How many square feet of land are you selling?

Remember:
A section = 640 acres
1 acres = 43,560 sq. feet

A

Answer:

  1. 1/4 x 1/4 x 1/2 x 1/2 x 640 = 10 acres
  2. 10 acres x 43,560 = 435,600 sq. feet
259
Q

Value adjustments

A
  • If comparable is better than subject = subtract adjustment from comparable
  • If subject is better than comparable = add adjustment to comparable
260
Q

Jones vs. Mayer

A

regulate the sale of private property to prevent racial discrimination (13th Amendment abolishing slavery)

261
Q

market approach

A

value of an asset based on the selling price of similar assets.

262
Q

dedication

A

voluntarily give property to government

263
Q

public grant

A

government gives property to private individuals

Real Estate (6 decks)

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