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TREC Test > Real estate Test > Flashcards

Real estate Test Flashcards

1
Q

Defeasance

A

A defeasance clause is a mortgage provision indicating that the borrower will be given the title after all mortgage payments are met

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2
Q

The TREC commission board members make up and tenure

A 
9 members 
Serve 5 years
3 from each “grand division”
7 must be affiliate brokers for 5 years+
2 must be from non-RE industry
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3
Q

Due on Sale Clause

A

Stipulates that the full balance of the loan may be called upon sale or transfer of ownership / property.

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4
Q

Acceleration clause

A

Term that duly matured the performance due from a party breaching contract

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5
Q

Habendum clause

A

“To have and to hold” clause- defines the type of interest and rights to be enjoyed by owner

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6
Q

NFIB

A

National Flood Insurance Program is a federal funded flood program for the country

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7
Q

Lot and block survey

A
  • uses govt rectangular surgery
  • metes / bounds description
  • also called plat reference
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8
Q

Appraisal approach types

A

Sales comparison

Cost approach

Income capitalization

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9
Q

Sales comp approach appraisal

A

Comps in area with sq ft and design

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10
Q

(appraisal) Cost approach

A

Cost to build from the ground up (typically new builds / green homes)

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11
Q

(Appraisal) income capitalization approach

A

Income potential from NET vs Overhead

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12
Q

7 steps in Appraising

A 
1- identify the problem
2- determine work scope
3- anazlyze use / market / economy
4- collect / analyze databanks
5- analyze listings and prior sales
6- reconcile value indicators and develop final opinion of value
7- communicate results to clients
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13
Q

Tax lien

A

Lien from not paying RE Taxes - involuntary / specific

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14
Q

Mortgage lien

A

From not paying loan;

Voluntary / specific

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15
Q

Judgement Lien

A

Due to some kind of court decision / order

Involuntary / specific / general

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16
Q

Tenants in Entirety

A

Married couples ONLY;

Can’t be sold without both agree

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17
Q

Joint tenant

A

Same as above - BUT - partners buy properties together, AT the same time, equal partners, can NOT leave to heirs on death- but CAN SELL to whoever, as long as it before death.

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18
Q

Tenants in common

A

Property owners who own something together in equal parts.

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19
Q

Mechanics Lien

A

Contractor puts it on for work done to house - Involuntary / Specific

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20
Q
  • Caveat Emptor State (still meet YOU)
A

It is the buyer’s responsibility to perform due diligence on the property but the seller must answer truthfully and honestly about the property.

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21
Q

Caveat Emptor State

A

It is the buyer’s responsibility to perform due diligence on the property but the seller must answer truthfully and honestly about the property.

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22
Q

Lending Risk

A

Equal parts of Borrower (ability to pay back) and Property (value / collateral)

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23
Q

Civil Rights Act of 1968

A

No discrimination from race, color, national origin, and religion protected classes and prohibits housing and housing financing discrimination.

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24
Q

ECOA (Equal Credit Opportunity Act) of 1974

A

prohibits discrimination based on any protected class (age, race, color, religion, sex, national origin, marital status, public assistance income)

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25
Q

Interstate Land Sales Full Disclosure Act (ILSFDA or ILSA)

A

protect consumers from fraud from sales of land, usually in boondocks- administered by CFPB,

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26
Q

Truth In Lending Act (TILA

A

protects consumers against unfair credit and lending practices, requiring loan officers to provide loan schedule for you to shop around.

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27
Q

(URLTA) Uniform Residential Landlord Tenant Act

A

Allows tenants to make repairs assuming they give adequate time & a heads up that they would repair and deduct from their rent, provided receipt.
—- tenant says “windows broke, can you fix?” Time passes, landlord don’t fix, tenant fixes, deducts from rent.

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28
Q

RESPA section 8

A

Prohibits payments of kickbacks and other fees that drive up costs to consumers

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29
Q

Sherman Anti Trust Act (1890)

A

Prohibits anti-competitive agreements and unilaterally monopolizes the market : Administered by the DOJ. Can be 100mil for Corporations, and 1mil for individuals.

30
Q

CAN-SPAM Act of 2003

A

Controlling the Assault of Non-Solicited Pornography And Marketing.

31
Q

Fair Housing Act of 1968

A

It outlaws: Refusal to sell or rent a dwelling to any person because of race, color, disability, religion, sex, familial status, or national origin. NOT COVERED: age, sexual orientation, employment status.

32
Q

The Lanham Act -

A

aka the “trademark act” of 1946; allows companies to sue their competitors for making deceptive ad claims.

33
Q

Market Allocation

A

When 2 agents/ agencies agree on territory split to focus. Form of monopoly and is ILLEGAL.

34
Q

3 Properties of Land

A

Immobility, Indestructibility, and Uniqueness (non-homo).

35
Q

Subprime Credit Ratings

A

B-, C- and D- and Below (basically a shitty credit score 619>under)

36
Q

Brownfield Site

A

Property, development, expansion, reuse, which is made complicated by the presence of potentially toxic pollutants / chemicals u/ substances

37
Q

Undisclosed Dual Agency

A

Illegal in US

38
Q

Contracts should be written in PLAIN LANGUAGE ?

A

Yes

39
Q

General Agent

A

agent with the broad responsibility to handle all the details of a specific transaction.

40
Q

Special/Specific Agency

A

most agents in a real estate transaction. Limited scope and responsibility.

41
Q

Blockbusting

A

Inducing the sale of properties in a neighborhood by threatening that members of a minority class will move in and lower property values.

42
Q

Redlining

A

When lenders refuse to offer a mortgage to borrowers in a specific area based on area demographic.

43
Q

Steering

A

The act of guiding people to or away from an area based on membership in or away from a protected class.

44
Q

LEAD BASED 1978 AND OLDER

A

Federal law doesn’t require lead abatement work, and buyers may negotiate to have more than the requisite 10 days to perform lead inspections, but the EPA pamphlet “Protect your family from Lead in your home” must be provided to prospective buyers, and that’s the listing agent’s responsibility.

45
Q

Tar Form Series 600

A

Amendments / addendums / blank amendments

46
Q

Tar Form Series 700

A

Special stipulations

47
Q

RF404

A

Residential unimproved lot

48
Q

RF401

A

Existing Home purchase

49
Q

RF403

A

New home construction in subdivision

50
Q

CF 401 (commercial Form)

A

Commericial zoned property (buy a strip mall)

51
Q

VA / FHA loans are funded how?

A

through federal funding fee charged to most borrowers

52
Q

How to qualify for VA loan?

A

proof of income and good credit score to qualify for VA loan. based on “residual” (leftover) income and debt:Income ratio. No more than 31% housing ratio, 43% debt obligation, and 500 minimum credit score.

53
Q

VA entitlements / stipulations

A
  • entitlements = 36k / up to $144k loan amount
  • must be owner occupied
  • VA closing costs can be negotiated
  • VA guaranteed 25% to lender
  • VA appraiser gives “CRV” ~> Certificate of Reasonable Value

-

54
Q

loan estimate revision=

A
  • upon interest rate change,
  • switch to fixed rate loan,
  • down payment amount change,
  • property appraisal reveals increase in value.
55
Q

Loan Estimate form

A

helps consumers compare loan terms to find loan that meets their needs

56
Q

Application / mortgage timelines

A

3 days response time. Expires 10 biz days for borrower.

57
Q

Reverse Redlining

A

Charging borrowers in a specific area MORE based on demographics

58
Q

NAR Code / Ethics Article 3

A

Cooperate with other agents. Except when interfering with their own client’s interests.

59
Q

NAR code / ethics and stds / price preamble:

A

National interests requires the appropriate use of LAND

60
Q

Fee Simple absolute

A

Highest form of estate ownership, meaning it’s complete and not limited by any condition

61
Q

Fee simple defeasance

A

Conveyance of properties that has conditions in it

62
Q

Junk Fax Prevention Act of 2005

A

Makes it illegal to send unsolicited commercial solicitations to businesses without permission or established relationship.

63
Q

Clayton Act

A

Furthered the Sherman act by prohibiting mergers

64
Q

Vacant Land

A

“Dead money”

65
Q

Unilateral rescission

A

When both parties agree to cancel the contract, and one party is mainly responsible.

66
Q

Special Use Permit

A

purposed use already meets conditions already in Ordinance.

67
Q

Comprehensive Master Plan

A

developed by planning board members

68
Q
  • Bargain and Sale Deed
A

bargain and sale deed guarantees that the grantor has title, but does not guarantee that the title is free of defects. The bargain and sale deed is used at a sheriff’s foreclosure sale auction or at a tax auction. Basically you are buying land and don’t know if there are any encumbrances on the land, unless stated in the deed. A bargain and sale deed can contain warranties and covenants if they are stated specifically in the deed. A bargain and sale deed with covenants guarantees that the buyer is buying a property that is free and clear of indebtedness.

69
Q
  • Grant Deed
A

Grant Deeds are similar to warranty deeds and contain the following two guarantees:

  • That the property has not been sold to anyone else.
  • There are no encumbrances other than those disclosed by the seller (grantor) to the buyer (grantee).
70
Q
  • Security Deed
A

security deed transfers legal title to a lender during the term of the security of a note in connection with a mortgage.

TREC Test (1 decks)

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