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Real Estate > Real Estate TPs > Flashcards

Real Estate TPs Flashcards

0
Q

Heterogeneous ?

Non homogeneous ?

A

Lack of uniformity ( also called Uniqueness)

no two land is the same…and so real property is discerned as non homogeneity.

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1
Q

What are the economic characteristics to real property?

A

Scarcity
Location
Improvement
Permanence of investment

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2
Q

Highest and Best use land?

A

Possible use of a property that would produce the greatest net income.

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3
Q

Regulation Z?

A

Implements the “Truth in Lending Act” requiring credit institutions to inform borrowers of true costs of obtaining credit.

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4
Q

Personal property?

A

Anything that is NOT nailed, glued,bolted, screwed or tacked.

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5
Q

What is NOT required for it to be a valid deed?

A 
Acknowledgement (notarized)
Witnessed
Amount of consideration
Recordation
Dated
Sealed
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6
Q

What is provisional broker?

A

A real estate licensee who performs real estate activities under the provision of a BIC

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7
Q

Machinery act of North Carolina?

A

Adjustments reflect current market value every eight years.

Optional every fourth year horizontal adjustment.

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8
Q

Real property?

A

Anything that is nailed, bolted, tacked,screwed or glued.

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9
Q

Law of specific performance?

A

The party harmed by the breach can ask the judge to force the breaching party to carry out the terms of the contract rather than sue for monetary damages.

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10
Q

Situs?

A

A personal preference of people for one location over another.

Usually discrimatory.

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11
Q

North Carolina vacation rental act?

A

Statute establishes uniform rules for landlord tenants and their agents involved in the handling of short term rentals under ninety days.

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12
Q

Improvements?

A

Anything you do to add value to the property is called an improvement.

All improvement to the land stays with the land.

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13
Q

Four economic characteristics to real estate?

A

Scarcity
Location
Improvement
Permanence of investment

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14
Q

What dictates highest and best use?

A

Zoning…

But highest and best use of land may change.

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15
Q

Accretion?

A

Addition of land…deposited of soil

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16
Q

North Carolina condominium act of 1986?

A

In new sales, consumer protection has seven days to cancel.

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17
Q

What is agricultural fixture?

A

A fixture attached to the leased property and used by a tenant farmer but is considered the landowners real property.

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18
Q

Appurtenances?

A

A right, a privilege, or an improvement belonging to, and passing with the land.

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19
Q

Avulsion?

A

Loss of land ….earthquake, flood, volcanic action, or the sudden change of the course of a stream?

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20
Q

Bundle of legal right?

A 
Disposition
Exclusion
Enjoyment
Pocession
Control
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21
Q

Condominium ownership?

A

Absolute Ownership to the Airspace…

Undivided interest in the common elements with other condo unit owners

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22
Q

Cooperative ownership?

A

Title is held by a trust or corporation.

Owners are shareholders of the corporation.

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23
Q

Erosion?

A

Loss of land …..wearing away of land

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24
Q

Demand?

A

The amount of goods people are willing and able to buy at a given price.

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25
Q

Estovers?

A

the right life tenant to use the property’s resources to provide for needed repairs.

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26
Q

Fee simple absolute?

A

Absolute ownership
Indefinite in duration
Freely transferable and inheritable

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27
Q

Fee simple Defeasible?

A

Defensible fee estate….
An estate which the holder has the fee simple title
That may be terminated upon an occurrence or a non- occurrence of a specific event.

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28
Q

Fee simple determinable?

A

So long as….a prescribes land use.

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29
Q

Fee simple with condition subsequent?

A

Prohibits a specific condition on the property.

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30
Q

Fixture?

A

Personal property that has been converted to real property.

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31
Q

Foreshore?

A

Land between average high tide and average low tide.

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32
Q

Freehold estate ?

A

Ownership is for an indeterminable length of time.

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33
Q

Fructus naturales?

A

Plants that does not need annual cultivation….considered real property.

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34
Q

Future interest?

A

Persons present right to the interest in real property that will not result in pocession or enjoyment until sometime in the future.

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35
Q

Joint tenancy?

A

A concurrent form of ownership of real property between two or more parties who have been named in one conveyance as joint tenants. Ownership may not be equal. Right to survivorship is not automatic,

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36
Q

Lateral support?

A

The support of a parcel of land receives from adjacent land. A neighbors duty to support adjoining land in its natural state.

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37
Q

Life estate?

A

Limited in duration to the lifetime of its owner or some other designated person or persons.

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38
Q

Life tenant?

A

Person in the life estate

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39
Q

Littoral rights?

A

Lake and oceans….

Ownership to the average high water mark

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40
Q

Chattel?

A

Personal property

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41
Q

Modular homes?

A

A dwelling consisting of rooms or units built off site…but becomes real property as soon as it is built on land.

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42
Q

Non freehold estate?

A

Leasehold estate..

Tenant’s right to occupy real estate during the time of the lease , generally considered a person property interest.

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43
Q

NC condominium Act?

A

Condominium is created and established when the developer of the property executes and records a declaration of its creation in the county where the property is located.

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44
Q

PUD planned unit Developement?

A

A planned combination of diverse land uses, such as housing, recreation, and shopping, in on contained development and subdivisions….

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45
Q

Proprietary lease?

A

A lease given by the corporation that owns a cooperative apartment building to the shareholder’s right as a tenant to an individual apartment.

Coop

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46
Q

Pur autre vie?

A

For the life of another.
Life estate with a measured by the life of a person other than the grantee.
Home used for the family of a sick child.

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47
Q

Reliction?

A

Addition of land…

Recession of water uncovers land

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48
Q

Remainder interest?

A

A future interest in real estate…

Life estate to one party and a remainder to another

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49
Q

Reversionary interest?

A

A future estate that the grantor holds while granting life estate to another.

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50
Q

Rights of survivorship?

A

Tenancy by entirety…
A concurrent form of ownership reserved for property owned by husband and wife.
Rights of survivorship is mandatory…making the surviving spouse owner in severalty immediately upon death of spouse.

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51
Q

Riparian rights?

A

Owner’s rights in land that borders a steam, river or lake?
Access to the water…
Un-navigatable ….to the center
Navigatable ….to the edge of the water

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52
Q

Severalty?

A

The ownership to real property by only one person…..

Sole ownership.

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53
Q

Subjacent support

A

Supports the surface of the land by the land’s subsurface….

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54
Q

Tenancy by entirety?

A

Concurrent form of ownership reserved for property owned by husband and wife….
Rights of survivorship is mandatory .
Making the surviving spouse the owner in severalty.

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55
Q

Tenancy in common?

A

Concurrent form of ownership in which each owner holds an undivided interest in real property.
Ownership interest can be unequal and the right to survivorship is not allowed.

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56
Q

Time share ownership?

A

Any right to occupy a unit of real property during 5 or more separated time periods over a period of five years.

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57
Q

Emblements?

A

Growing crop…produced annually

Fructus industriales …..personal property

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58
Q

Uniform Commercial Code UCC?

A

Uniform all laws relating to commercial transaction.

Including chattel mortgages..when chattel is purchased on credit,

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59
Q

Waste?

A

An improper use or abuse of a property by the possessor who holds less than fee ownership.such as a tenant.

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60
Q

Total circumstance test?

A 
Where courts decide if item is a fixture.
Intention of the annexor
Relationship of the annexor
Method of annexation
Adaptation to real estate.
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61
Q

Severance?

A

To take real property and make it personal property.

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62
Q

Accession?

A

When the tenant leaves trade fixture behind…it become the property of the owner….by the process of accession.

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63
Q

Freehold estate?

A

Estate of indeterminable length, such as those existing for a lifetime or forever…..ownership.
Fee simple absolute
Defeasible fee estate
Pur autre vie
Ordinary conventional life estate….does not pass by inheritance.

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64
Q

Fee simple absolute?

A

Ownership with no limits

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65
Q

Fee simple Defeasible?

A

Qualified fee estate….

Where occurrence or non occurrence of a specified event will defeat the estate

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66
Q

Fee simple Defeasible….subject to condition subsequent?

A

Action of the owner….

Can take back through court.

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67
Q

Fee simple Defeasible….determinable ?

A

“So long as”

Automatic reversion.

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68
Q

Estates that are not inheritable?

A

Conventional life estate….

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69
Q

Life tenant has to pay?

A

Ad valorum tax and special assessment

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70
Q

Three forms of Concurrent ownership?

A

Tenancy in common
Joint tenancy
Tendency by the entirety.

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71
Q

Time share 5/5/5?

A

Five times
Five years
Five days to cancel
Pubic offering statement before contract.

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72
Q

Specific Liens?

A

Specific lien is secured by specific parcel of property.
Mortgage….voluntary
Real property tax, assessment, mechanic liens…..involuntary

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73
Q

Townhouse ownership?

A

Owner holds the fee title to their unit and the ground beneath.
Horizontal ownership.
Frequent use of party wall in row houses.

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74
Q

Manufactured homes?

A

Mobile homes or house trailers…built under HUD regulations with a permanent chassis.
Considered personal property until the hitch, wheel and axil are removed.
File at DMV.

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75
Q

Creating an easement!

A

Express….an easement is commonly created by written agreement
Implied
Operation of law

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76
Q

Express grant?

A

Easement can be created by written agreement between parties establishing the easement rights
NC statues of Fraud…..require easement to be in writing to be enforceable.

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77
Q

Express reservation?

A

Easement can be creator by the grantor in a deed of conveyance by reserving an easement over the sold land.

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78
Q

Easement by necessity ?

A

Ingress and egress……..they cannot be land locked.

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79
Q

Easement by prescription?

A 
Period of time....prescribed 20 years
Continuous
Exclusive
Without owners approval
Visible, open and Notorious
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80
Q

Condemnation?

A

Process of condemnation….

Eminent domain….a government has the right to take property for pubic use.

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81
Q

Machinery Act?

A

Regulates standards for real property taxation, standards of tax assessment , standards for tax appraisal and requirement for tax exemption.

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82
Q

Horizontal adjustment occurs every……years?

A

4 .years

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83
Q

Annual Budget /accessed value=tax rate?

How do you find the annual tax?

A

Assessed value/100 times the rate= annual tax

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84
Q

Metes and bounds?

A

Distance metes….N and S

Direction bounds E and W

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85
Q

Recorded plat system….lot and block ?

A

Subdivision plat map.

Contract and deed

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86
Q

Reference to a recorded deed.

A

Earlier deed to identify the property.

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87
Q

Survey….for encumbrance?

A

Must be done by a surveyor

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88
Q

Mechanic liens?

A

120 days must file claim after the last date of finished work
180 days to file from the after the worker last finished labor or material

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89
Q

Trade fixture?

A

Article installed by tenant under the terms of the lease and remove able by the tenant before the lease expires.

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90
Q

Deed?

A

Written instrument by which an owner conveys right, title and interest to the parcel of real estate to another.

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91
Q

Valid conveyance?

A 
In writing
Legal capacity
Word of conveyance
Legal description
Signed by the grantor
Must be delivered to a voluntary accepted by the grantee.
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92
Q

In a valid conveyance , what is not required?

A 
Witness
Dated
Amount of consideration
Acknowledge.....notarized
Recorded
Sealed
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93
Q

General warranty deed has four covenant ?

A 
Seisin...actual transfer of title
Encumbrance
Enjoyment
Warranty forever
Ex...craftsmen tools
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94
Q

Special warranty deed? Has two warranty?

A

Grantor received title
Warranty that property was in encumbered by grantor
Ex….best buy warranty

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95
Q

Quit claim deed?

A

No express or implied covenant or warranties

Could on the title

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96
Q

Bargain and sale deed….

A

Lowest form of protection on the deed.

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97
Q

How do you solve for Excise tax?

A

$1 for every $500 of sale price……round up to whole $amount

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98
Q

Under involuntary alienation, what does Escheat mean?

A

Intestate…..dies without a will.

Property passes to the state….for the state to allocate the moneies.

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99
Q

Adverse possession?

A 
Open
Continuous
Exclusive
Adverse
Notorious
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100
Q

Adverse possession with color of title 7 years?

How many years for no color on title?

A

20 years.

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101
Q

Who performs an abstract of title?

A

A attorney….searches 30 to 60 years

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102
Q

Suit of quiet title

A

If there is a gap in the chain….you must file a court action called the suit of quiet title

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103
Q

Title?

A

Ownership to the land

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104
Q

Under the title search, what does Marketable Title act do?

A

30 years trace of chain of title

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105
Q

Connor act?

Title

A

Documents are not valid as third party unless they are recorded.
DEAM OIL

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106
Q

Is North Carolina a pure race state?

A

Yes…except mechanic liens.

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107
Q

Constructive notice?

A

Pubic notice to pertain to the interest of the property by recording, or filing all documents.

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108
Q

Under voluntary alienation, Elements not required for conveyance?

A

Deeds do not need to be witnessed, dated, amount of consideration, does not need to be acknowledged, recorded or sealed.

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109
Q

Under general warrantee deed, What is the covenant of quiet enjoyment?

A

Grantor guarantee the grantee title to be good against third party.

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110
Q

What does a special warrantee deed warrantee?

A

Warrantees that the grantor received a title.

And that the property was not encumbered by the grantor.

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111
Q

What does the Quit claim deed guarantee?

A

Does not guarantee.

Frequently used when there is a cloud on the title.

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112
Q

What is a Bargain and sale deed?

A

Out from the back of a car….no guarantees ever

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113
Q

Alienation?

A

Act of transferring property to another.

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114
Q

What are the informal reference to real property?

A

Street address

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115
Q

Deed of gift must be recorded by when..?

A

By two years or it becomes void.

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116
Q

Under involuntary alienation, the government has the right called eminent domain and thought the process of condemnation but there are three necessary conditions, what are they?

A

Benefit the public
Must be compensated
Property owner will be protected by due process of law.

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117
Q

In NC is also called quick take method of condemnation, what does that mean?

A

When authorized by law, title and procession of private property can be immediately transferred to public authority.

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118
Q

Under involuntary alienation, lien of foreclosure?

A

Liens are foreclosed
Property is sold
Proceeds pay off debt.

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119
Q

Under involuntary alienation,what are the requirements for adverse possession?

A 
Open
Continuous
Exclusive
Adverse
Notorious
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120
Q

Transfer of title of will?

A

The gift of real property is called devise
The one who receives real property is called devisee
Gift of personal property….bequest
And the on who receive personal property, is called a beneficiary.

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121
Q

Under land use control, the state has the right to create and adopt regulations necessary to protect the public health, safety, and the general welfare of the citizens….through?

A

Police power.

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122
Q

Public land use control include?

A 
Planning
Zoning
Subdivision regulations
Building codes
Environmental protection legislation
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123
Q

Original land use control is given to NC legislation then passed through?

A

The enabling act

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124
Q

Excise tax?

A

Sale price/ 500

Times 1$ ….round up to the nearest whole dollar.

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125
Q

Title search?

A

Examination of pubic records to obtain a chain on the title.

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126
Q

Conditional use permit, sometimes called special use permit allows nonconforming in the interest of the public….?

A

Examples….schools and churches.

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127
Q

Agents duty to disclose zoning?

A

Need to disclose if roads are public or private.
Subdivision regulations
Street disclosure laws
Protective covenants

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128
Q

Subdivision regulations?

A

Land is divided into two or more lots

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129
Q

Interstate Land sales Full disclosure Act of 1968?

A

Subdivision lots file statement of records and register the details of the land with HUD.
Exempted are those who have less than 25 lots.

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130
Q

Those with more than 25 lots, what do they need to furnish prospective buyers with?

A

Distance over paved roads to ear by community
Number of homes currently occupied
Soil conditions affecting foundations and septic system
Type of title the buyer receives
Existence of liens
Pior to signing a lease or sales contract.

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131
Q

What are Building codes?

A

Minimum construction standards

Building permits and certificate of occupancy

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132
Q

What’s the purpose of the American Disability Act ?

A

Facilitate accessibility and mobility by ramp construction, safety rails,wider doors and other accommodations.
ADA does not apply to residential housing.

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133
Q

Under land use control Extra territorial jurisdiction?

A

Municipality’s right to regulate development in areas adjacent to but not part of the city’s corporate limits.
Power extends 1-3 miles from the corporate limits depending on population.

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134
Q

What are the three types of legal description of real property in NC?

A

Recorded plat map
Metes and Bounds
Reference to a recorded deed

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135
Q

Agent?

A

A person authorized to act on behalf of another

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136
Q

What is a principal?

A

One who hires….client.

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137
Q

What is customer ?

A

The third party to whom some level of service is provided by an agent of another.

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138
Q

The agent works for the…..?

And with….?

A

Client

Customer

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139
Q

Brokerage?

A

Business of bringing buyers and sellers together.

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140
Q

What is caveat emptor?

A

It’s buyers beware…

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141
Q

Universal agent?

A

One who acts on your behalf….

Do anything that the principal would do.

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142
Q

Under land Use control, what is a legal nonconforming use?

A

Grandfathered in.

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143
Q

Special agent?

A

Authorized to represent the principal in only one specific act.

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144
Q

Express agreement?

A

Is an oral or written agreement

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145
Q

Implied agreement?

A

Principal and agent without formal agreement to agency, act as if one exist.
NC ….implied agreement is not permitted.

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146
Q

Agency relationship can be terminated upon the death of the principal….but contracts???

A

Can not be terminated…..

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147
Q

When does the “Working with Real Estate Agent” brochure must be presented and discussed?

A

No later than first substantial contact.

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148
Q

General agent?

A

Representing the principal related to a particular business or activity.

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149
Q

What is first substantial contact?

A

When conversations between licensee and consumer shifts from facts to confidential information.

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150
Q

What is a subagent?

A

One who is employed by an agent.

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151
Q

What is a contract?

A

Legally enforceable promise between legally competent parties

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152
Q

A contract must be?

A 
Voluntary
An agreement or promise
Made by legally competent parties
Supported by legal consideration
About a legal act
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153
Q

What is an express contract?

A

When the parties state the terms and show their intentions and words to that effect. May be either oral or written.

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154
Q

What is an Implied contract?

A

The agreement of the parties is demonstrated by their action or conduct.

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155
Q

Bilateral contract?

A

Both parties promise to do or refrain from doing something; one promise is exchanged for another. “I will do this and you will do that.”

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156
Q

Responsibility of Agent?

A 
Loyalty
Obedience
Accounting
Disclosure
Skills....LOADS
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157
Q

Unilateral contract?

A

One party makes a promise to induce a second party to do something. “I will do this if you do that.”

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158
Q

In which ways are Common Law Agency relationship is created ?

A 
Written listing contract
Buyer agency agreement
A dual agency contract
A property management contract
In house brokerage
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159
Q

What legal effects does a void contract have?

A

No legal effect.

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160
Q

What is a valid contract?

A

Has all legal elements and is fully enforceable.

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161
Q

What is a void contract?

A

Lacks one or all elements and has no legal forces or effects

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162
Q

What is a voidable contract?

A

Has all legal elements but may be recoded or disaffirmed

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163
Q

What is an unenforceable contract?

A

Has all legal elements but is enforceable only between parties.

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164
Q

Valid contract?

A

Binding and enforceable on both parties.

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165
Q

Four elements of a valid contract.

A
  1. Legally competent parties… 18 of age… of contractual capacity.
  2. Mutual assent or deliberate agreement… Offer and acceptance… Meeting of the minds.
  3. Legality of object.
  4. Consideration
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166
Q

What is consideration?

A
  1. That received by the grantor in exchange for a deed.

2. Something of value that induces a person to enter into a legally enforceable contract.

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167
Q

Name two types of auctions.

A
  1. Auctions with reserve…

2. Auctions without reserve… Also called absolute auction.

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168
Q

Assignment?

A

Transfer rights or duties under contract to a third party.

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169
Q

Novation?

A

Another way to avoid the terms of an existing contract without breaching that contract… Substitution of contracts…paper.

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170
Q

Partial performance?

A

Discharge of contract.

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171
Q

Does an auctioneer have to have a real estate license?

A

Yes, auctioneer license plus real estate license.

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172
Q

Substantial performance?

A

In which one party has substantially performed the contract but does not complete all the details exactly as the contract requires.

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173
Q

What legal effect does a voidable contract have?

A

Valid but may be disaffirmed by one party. “Any type of misrepresentation.”

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174
Q

Mutual agreement?

A

Parties agree to cancel.

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175
Q

Operation of law?

A

Voiding of contract by a minor as a result of fraud or the expiration of the statue of limitation.

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176
Q

What are the three things to be entitled to collect a commission?

A
  1. Agent must be actively licensed.
  2. Under a valid written agency agreement.
  3. Produce ready, willing and able buyer.
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177
Q

What are the three types of listing agreements?

A

Open listing.
Exclusive agency listing.
Exclusive right to sell listing.

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178
Q

Impossibility of performance?

A

In which an act required by the contract cannot be accomplished.

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179
Q

Open listing?

A

Seller retains the right to employ any number of brokers as agents… Non exclusive type of listing… Seller can sell property without the aid of any brokers,

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180
Q

Exclusive agency listing?

A

One broker is specifically authorized to act as the exclusive agent of the principal.

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181
Q

What is “time is of the essence”?

A

Performed by 5 PM of specified date.

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182
Q

MLS?

A

Multiple listing services.

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183
Q

Agency confirmation?

A

Disclose agency relationship.

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184
Q

What is an offer to purchase?

A

Offer to purchase has an offer, acceptance, and communication.

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185
Q

What is the mailbox rule?

A

Parties cannot revoke the offer once the acceptance is mailed.

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186
Q

Exclusive right to sell listing?

A

One broker is appointed to sole agent of the seller and is given the exclusive right to represent the property.

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187
Q

What is an installment land contract?

A

An installment land contract is not only a sales contract but also a financing instrument. It’s also called contract for deed.

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188
Q

What are the five breaches of contract?

A
  1. Compensatory damage.
  2. Liquidated damages… Earnest money deposit is considered liquidated damages
  3. Consequential damage.
  4. Specific performance.
  5. Rescission… Five days rescission for timeshare purchase or seven day right of rescission for new condominium purchase.
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189
Q

Residential rental agreement act?

A

The primary purpose of this act is to ensure that only habitable residential units are rented. The act does not apply to transient quarters.

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190
Q

Self help eviction?

A

The only possible legal eviction remedy that is provided for by statute through the court system.

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191
Q

Tenant security deposit act?

A

The maximum amount of security deposit allowed… Two weeks rent for week-to-week. One and a half months rent for month to month. Two months rent for longer than month to month.

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192
Q

Where does the security deposit need to be deposited to?

A

Trust account with an insured North Carolina bank.

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193
Q

What is a dual legal personality of a contract?

A
  1. Privity of estate

2. privity of contract… Privity means mutual or successive relationship to the same rights of property.

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194
Q

Offers and sales contract has … Provisions?

A

19

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195
Q

Tenants of government subsidized low income housing is called?

A

Section 8 housing.

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196
Q

Estate from period to period?

A

Created when landlord and tenant enter into an agreement that continues for a specific period being automatically renewed for an indefinite time.

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197
Q

In North Carolina the minimum notice of termination period are?

A

Week to week tenancy… Two days
Month to month tenancy… Seven days
Year to year tenancy… One month

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198
Q

Four elements of a valid lease?

A

Mutual agreement
Consideration
Capacity to contract
Legal objectives

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199
Q

If the landlord claim against the tenant security deposit cannot be determined within thirty days, they will be provided an interim accounting with a final accounting no later than?

A

Sixty days from termination of tenancy and delivery of possession of the premise to the landlord.

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200
Q

Estate for years?

A

Tenancy for years… A definite period of time whether for years, months, weeks, or even days is called and estate for years.

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201
Q

Constructive eviction?

A

If the landlord fails to keep the premise fit, the tenant can invoke the protection of the common law doctrine of constructive eviction… Tenant has the right to cancel the remainder of the lease and vacate premise without penalty.

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202
Q

What is the first step in taking over management of any property?

A

Property management agreement with owner.

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203
Q

What does property management not do?

A

Depreciation schedule
Pay IRS for owner
Reinvest profits
Capital improvement

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204
Q

Promissory note?

A

Agreement to repay a debt.

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205
Q

What is the function of a property manager?

A

To preserve the value of the investment property while generating income as an agent for the owner.

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206
Q

What is another name for a mortgage?

A

Deed of trust… The document that pledges the property to the lender as collateral for a debt.

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207
Q

Deed of trust?

A

Is another name for a three party security instrument.

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208
Q

Property management shall not?

A

Negotiate the amount of security deposit

Negotiate lease or rental agreement on behalf of owner.

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209
Q

What are the three elements of a promissory note? (IOU)

A

Term
Promise to pay
Signature of the borrower

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210
Q

Acceleration clause?

A

The lender has a right to accelerate the maturity of the debt to declare the entire debt plus accrued interest and costs due payable immediately.

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211
Q

Prepayment penalty clause?

A

When a loan is paid in installments over a long term, the total interest paid by the borrower can exceed the principal of the loan. Borrowers pay a prepayment penalty against the unearned portion of the interest.

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212
Q

Lien theory state?

A

Borrower retains both legal and equitable title

Borrower retains equitable title and conveys legal title to a trustee until the debt has been satisfied.

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213
Q

Federal law prohibits lenders from charging a prepayment penalty on…?

A

FHA insured and VA guaranteed loans.

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214
Q

Due on sale clause is also known as…?

A

Alienation clause… Provides that on sale of property by the borrower to a buyer who wants to assume the loan, the lender has the choice of either declaring the entire debt to be due and payable immediately.

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215
Q

Interest-only mortgage is also called…?

A

Term loan… Principal to be paid in full at the end of the loan term. Example…construction loan…highest risk loan to the lender.

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216
Q

Name three parties in the deed of trust?

A

Beneficiary
Grantor
Trustee

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217
Q

What is a conversion option?

A

Lender may offer conversion option which permits the mortgage to be converted from an adjustable rate to a fixed rate loan.

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218
Q

What is a distribution of proceeds after foreclosure?

A

To pay all costs of the sale including court costs or trustee fees, legal fees, advertising fees, and so on.
To pay any outstanding real estate or personal taxes or assessments.
To pay the mortgages.
To pay off any liens.
To pay any surplus equity to the borrower.

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219
Q

Statutory right of redemption?

A

Defaulting borrowers usually have a chance to redeem their property called redemption.

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220
Q

Lenders In North Carolina are not permitted to charge a prepayment penalty on any residential loans with a balance of…?

A

150,000 or less that is the first lien of the borrower’s primary residence.

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221
Q

How many people are on the RE Commission board?

A

9

222
Q

Three of the RE commission has to be?

A

Must have RE license.

223
Q

Two of the RE commission has to be?

A

Unlicensed

224
Q

Adjustment period?

A

Establishes how often loan rate may change… Common adjustment periods are one year ARM, three year ARM, five year ARM, or some combination. (Adjustable Rate Mortgage)

225
Q

Every three years, —–come on, —— come off?

A

3/3

226
Q

Who elects the chairman of the commission?

A

It’s members

227
Q

Compensation?

A

Anything of valuable consideration

228
Q

Statutory redemption period after auction, what is the upset bid period?

A

Ten day period

229
Q

Can an unlicensed assistant host an open house?

A

No.

230
Q

Can an unlicensed assistant solicit a sale?

A

No

231
Q

At dose 7/1/1 mean in Real Estate Commission board?

A

7 elected by the governor
1 selected by the senate
1 selected by the house

232
Q

How long is their term?

A

3 years

233
Q

What is a mortgage banking company?

A

They make real estate loans with the intention of selling them to investors and receiving a fee for servicing the loans.

234
Q

Mortgage brokers?

A

Mortgage brokers locate potential borrowers, process preliminary loan applications, and submit the loan applications to lenders for final approval.

235
Q

What is Ginny Mae (GNMA)?

A

Government national mortgage association. Only buys FHA and VA loans.

236
Q

Does an auction crier need a license?

A

No

237
Q

Freddy Mac (FHLMC)?

A

Federal home mortgage corporation. Buys conventional loans.

238
Q

VA guaranteed loans?

A

Mortgage loan on approved property made to a qualified veteran by an authorized lender and guaranteed by the department of veterans’ affairs. Need certificate of eligibility.

239
Q

How many member are on the commission?

A

9

240
Q

Fanny Mae (FNMA)?

A

Federal national mortgage association. Buys all types of loans. Conventional, FHA, VA. It’s a quasi-governmental entity.

241
Q

Blanket mortgages covers?

A

More than one parcel of land and is used to finance subdivision development.

242
Q

Wraparound loan is also known as?

A

Overriding or all-inclusive mortgage. Enables a borrower who is paying off an existing mortgage to obtain additional financing from a second lender or the seller.

243
Q

Open-end mortgage acts as?

A

Line of credit or equity line.

244
Q

Purchase money mortgage?

A

Is owner financing given at the time of purchase to facilitate the sale and refers to the instrument given by the purchaser to the seller who takes back a note and mortgage for part or all of the purchase price.

245
Q

Footing?

A

Foundation rests on footing. Lowest part of construction.

246
Q

Floor framing consists of?

A

The sill (the lowest horizontal part of framing), floor joists (which are attached to the sill), grinders (which rest on top of piers), subfloor (attached to the system of joists and grinders)

247
Q

Equal credit opportunity act (ECOA)?

A

Prohibits lenders and others who grant or arrange credit to consumers from discrimination against based on race, color, religion… Lender must inform all rejected credit applicants in writing within thirty days.

248
Q

Package loan?

A

Package loan includes not only real estate but also fixtures and appliances installed on the premise.

249
Q

The overhang of a roof is called?

A

Eave.

250
Q

What is sheathing?

A

Added to the wall framing to insulate the house from the elements.

251
Q

What kind of roof is a barn roof?

A

Gambrel roof.

252
Q

Roof framing consists of?

A

Ceiling joists (attached to the top plate of the wall and carries the weight of the roof), rafters (the sloping members of the roof frame, connecting the ceiling joists and the ridge boards), ridge boards (highest part of construction)

253
Q

Eave is made of three parts?

A

Fascia board (gutters are attached), soffit (air ventilation), frieze board (decorative)

254
Q

Wall framing consists of?

A

Studs (vertical lumbers spaced about sixteen inches apart), sole plate (connects to the studs of the flooring), top plate (connects the studs to the ceiling frame), header (two pieces of lumber joined together to form a beam gives extra support to wall framing where window or door will be positioned)

255
Q

Insulation value of material is expressed as?

A

R value. The higher the R value, the more resistant the material is to transferring heat.

256
Q

What is HVAC?

A

Heating ventilation and air conditioning system

257
Q

What is the most efficient type of heating system?

A

Forced hot air

258
Q

What kind of roof is used near the coastline?

A

Saltbox

259
Q

North Carolina building code requires an R value of?

A

R 19 for floors, R 13 for walls, R 30 for ceilings.

260
Q

What is the most popular style of roof?

A

Gable

261
Q

Anyone who contracts to construct a building for more than thirty thousand dollars must obtain?

A

General contractors license from the state

262
Q

The four characteristics of value are?

A

Demand, utility, scarcity, transferability

263
Q

Market value?

A

Is a reasonable opinion of a property’s value; market price is the actual selling price of property; costs may not equal ever market value or market price.

264
Q

BTU?

A

British thermal unit is a measurement of heat

265
Q

CMA?

A

Comparative market analysis

266
Q

Certificate of occupancy?

A

Is needed when construction has been completed in a safe, satisfactory manner.

267
Q

Substitution?

A

Several items with essentially the same amenities and utilities are available, the item with the lowest price will attract the most demand.

268
Q

Conformity?

A

Maximum value is realized if the use of land conforms to existing neighborhood standards. Common mistake is referred to as overbuilding the neighborhood.

269
Q

Anticipation?

A

Value can increase or decrease in anticipation of some future benefit or detriment.

270
Q

Highest and best use?

A

Maximum rate of return. Subject to change.

271
Q

Supply and demand?

A

Value of the property will change if the supply decreases and the demand either increases or remains constant - and vice versa.

272
Q

Four forces affecting property value?

A

Social forces, economic forces, political forces, and physical forces (environmental).

273
Q

Eight steps an appraiser takes?

A 
State the problem
list data
gather and record and verify data
determine highest and best use
estimate the land value
estimate value by each of the three approaches (comparison, cost, and income)
reconcile estimated value
report the final value estimate
274
Q

The cost approach?

A

Value is based on the principle of substitution, which states that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property.

275
Q

Depreciation?

A

Loss in value for any reason.

276
Q

Appraisal process?

A

Specific data and general data

277
Q

Sales comparison approach, also known as market data approach?

A

Estimate of value is obtained by comparing the subject property with recently sold comparable property.

278
Q

Contribution?

A

Value of any component of a property is defined by what its addition contributes to the value of the whole (over improvement)

279
Q

In depreciation Economic obsolescence?

A

Incurable only. Caused by factors outside of the subject’s property, economic (environmental or external), also known as locational obsolescence.

280
Q

When the cost of the asset is depreciated evenly over a useful life, this is called?

A

Straight line method

281
Q

Depreciation is assumed to occur at an even rate over a structure’s?

A

Economic life

282
Q

In depreciation, Functional obsolescence?

A

Curable physical or design features that are no longer considered desirable. Incurable currently undesirable physical design features that cannot be remedied easily.

283
Q

Age life method?

A

Uses the effective age of a building and the economic life.

284
Q

In depreciation, Physical deterioration?

A

Curable repairs that are physically possible will result in increase in appraised value. Incurable repairs to major structural components of a building which deteriorate at different rates may not be economically feasible.

285
Q

What are the physical characteristics of real property?

A

Immobility
Indestructibility
Uniqueness (heterogeneity)

286
Q

What are the two types of land use controls?

A

Private….deed restrictions

Public…..zoning, subdivision codes, highway, interstate and building codes

287
Q

What is a Fee simple estate?

A

One who holds the sticks….bundle of rights

Legal relationship between the owner and the property.

288
Q

What is capitalization rate?

A

Rate of return a property will produce on the owner’s investment.

289
Q

Income capitalization approach to value is known as?

A

Income approach based on present worth of the future rights to income

290
Q

Three types of appurtenant right?

A

Surface
Subsurface and
Air rights.

291
Q

What is an appurtenances?

A

Tangible and intangible right that go with the land.

292
Q

Littoral rights are?

A

Lakes and ocean
Ownership to the mean of the high water mark.
Between thigh tide and low tide…..foreshore is owned by government.

293
Q

What are the bundle of rights?

A 
Disposition
Enjoyment
Exclusion
Possession
Control
294
Q

Annexation?

A

Changing personal to real property

295
Q

Doctrine of prior Appropriation?

A

First come first serve….must prove that it is beneficial

296
Q

Riparian rights are ?

A

River rights
Non navigable…own to the center, unrestricted use but no damage up or down stream.
Navigable…..own to the edge

297
Q

Agricultural fixture are considered?

A

Real property

298
Q

When does Aunt IRMA come into play?

A 
When there is  a question if things are real or personal property?
Intention
Relationship
Method
Adaptation
299
Q

Severance?

A

Making real property to personal property

300
Q

Fee simples Defeasible….?

A

Some string attached to the fee simple ownership.

301
Q

Fee simple estate?

A

Complete ownership…to the bundle of rights.

302
Q

Abandoned trade fixture becomes the landlords property through?

A

Process of Accession

303
Q

Conventional life estate?

A

Fee simple estate
Is not inheritable…..life tenant.
Ends with the death of the person to whom the estate is granted.

304
Q

Fee simple Defeasible…..condition subsequent?

A

“But if you”….condition to the person
Reversion art interest goes back to the grantor.
Must prove the screw up.

305
Q

Fee simple absolute?

A

Highest form of fee estate…

No limitation on ownership

306
Q

Non freehold estate?

A

Lease hold estate

307
Q

pur Autre Vie?

A

Fee simple estate
For the life of another….life tenant
Is inheritable….for the measuring life.

308
Q

Fee simple Defeasible…..determinable?

A

“So long as” …land use is already determined.

Reversion art rights is automatic.

309
Q

Condominium ownership?

A

Paint to paint
Share common area as TIC
Air space.

310
Q

Types of ownership?

A

Ownership in severalty …..sole ownership
Or two or more owners;
Tenancy in common ….each hold equal possession and rights….individual bubble (one for all)
Absolute right to partition ….has to be sold at one time.
Inheritable
Joint tenancy…..ownership is equal …rights to survivorship.
Bubble contained in one bubble. (All for one)
Has to come in at the same time.
Not equal shares….can be sold but not inheritable.
Tenancy by entirety …..marriage is the PITTS
Possession is equal
Interest is equal
Title
Time
Survivorship

311
Q

Freehold estate?

A

An estate in land in which ownership is for an indeterminable length of time in contrast to non- freehold estate (leasehold estate)

312
Q

What is an encumbrance?

A

Claim or charge against real property.

313
Q

Timeshare?

A

5 days to cancellation period

If cancelled….refund buyer w/in 30 days from purchase.

314
Q

What are the four unities of Joint tendency?

A

Possession
Interest
Title
Time

315
Q

When is the tax due?

A

Sept 1st

316
Q

Liens?

A

A charge against property for security of debt.

317
Q

Planned unit development PUD?

A

Flexible zoning…burkdale village.

318
Q

How many sq feet are in an acre?

A

43,560

319
Q

When does unpaid tax become a lien…

A

January 1

320
Q

Specific liens?

A

Voluntary…..mortgage
Deed of trust liens

Involuntary…..
real property tax
Specific assessment
Mechanic liens

321
Q

FROG?

A

Finished room over garage…
1/2 room has to be be 7 feet, 6’4” under beams and ducts
At least 5 feet or it doesn’t count.

322
Q

Calls in metes and bounds?

A

Direction NS

Turn EW

323
Q

Revenue stamp?

A

Excise tax

324
Q

What’s a deed?

A

A deed is used to transfer title.

325
Q

Common wall is viewed as an?

A

Easement

326
Q

In a township of 6x6, a 1x1 mile section…..

Each section has how many acres?

A

640

327
Q

What is a title?

A

Proof of ownership

328
Q

Adverse possession is known as ?

A

Squatter right

329
Q

Police power of city/county?

A

Building construction codes
Environmental protection legislation
Government subdivision regulations
Zoning

330
Q

Special purpose deed?

A 
Deed in lieu of foreclosure
Guardian deed
Committee deed
Trustee deed
Deed executed pursuant to court order
Reconveyance  deed....after the debt is paid off
331
Q

To claim adverse possession…..

A 
Open
Continuous
Exclusive
Adverse against the owners wishes
Notorious....owner knows about it
332
Q

Connor act?

A 
Record documents to be enforceable  against 3rd party
Deed
Restrictive covenant
Easement
Assignment 
Mortgage
Option contracts
Installment land contract
Leases exceeding 3 years
333
Q

Adverse possession required period?

A

7 year….color on title

20 years if no color on title

334
Q

Legal non conforming use?

A

Grandfathered in….

335
Q

Variance?

A

Zoning exception….ask for a change

336
Q

Extra terrestrial jurisdiction?

A

Buffer zones
City pop below 10,000…1 mile out
10-25k …..2 miles
More than 25k….3 miles out

337
Q

Subdivision street disclosure act?

A

Must disclose private or public

338
Q

What is PITI

A

Principle interest + tax+ insurance ( monthly)

339
Q

Subdivision exception?

A 
Minimum 10 acres each
No public street right of way use.
Grandma owns all the 2 acres
No public street right of way
No more than 3 lots
340
Q

New licensees eight hours of CE by?

A

By second renewal

341
Q

When does post licensing classes need to be done by?

A

One by your first anniversary. All three by third anniversary. Can take all three your first year but not at same time.

342
Q

What is PITII in qualifying ration?

A

Principle + interest + tax+ hazard Insurance+ mortgage insurance

343
Q

Doctrine of prior appropriation?

A

Used in states with scarce water, first come first served basis, must prove the use to be beneficial (ie: crop irrigation)

344
Q

Emblements?

A

Tenant grown crops produced annually

345
Q

What’s the acronym for bundle of rights?

A

DEEPC

346
Q

Uniform commercial code

A

Dishwasher remains personal property until paid for.

347
Q

Chattel?

A

Personal property

348
Q

Total circumstance test?

A

Legal test to determine if item is a fixture. Aunt Irma.

349
Q

In Fee simple condition subsequent, former owner…?

A

Retains right of re-entry.
Need to prove screw up.
Does not automatically revert.

350
Q

In fee simple determinable former owner…?

A

Automatically reverts.
So long as
RE-entry rights are future interest.

351
Q

What is it called when abandoned trade fixture becomes landlord’s property?

A

Accession

352
Q

What must a life estate tenant do?

A

Make repairs on property, not destroy (waste) the property, pay taxes and special assessments, pay interest on debt but not on principal. Note, life estate can either be inherited or die with the tenant depending on the type of estate.

353
Q

What is a suit of partition?

A

Ability to sell it back to the other tenancy In common or sell the whole business and divide it up.

354
Q

In conventional life estate, tenant has rights to?

A

Mortgage or sell their life tenancy.
Receive rents.
Cut timber, sell crop for personal use or maintain property (estover rights)
Not answerable to holder of future interest with regards to use.

355
Q

What are the four unities of joint tenancy?

A

Possession,interest, time, title (PITT)

356
Q

REIT (real estate investment trust)?

A

Investments are intrastate and have North Carolina blue sky law regulate.

357
Q

What is the right of survivorship?

A

When one owner of a joint tenancy dies, ownership reverts to other owners,

358
Q

Condominiums share of common area as?

A

TIC tenancy in common

359
Q

What is blue sky law?

A

Full disclosure

360
Q

Timeshare is defined as?

A

Share of time (interval ownership).
Occupied five or more separate time periods.
Over at least five year period.
Has a five day cancellation.
Public offering statement required, no later than contract execution.
If canceled, refund buyer money within thirty days from purchase.

361
Q

Homestead exemption act?

A

Limited exemption 35k

60k if 65 or older.

362
Q

Taxes due?

A

September 1st

363
Q

Excise tax is also called?

A

Revenue stamps

Deed tax

364
Q

Checks?

A

Used to correct for earth curvation.

365
Q

Marketable title act?

A

Chain of title for thirty years clean title. Title search.
Abstract of title.
Opinion of title.

366
Q

Heated living area criteria?

A

Half the room has to be seven feet. Sloped ceilings five feet and over. Underbeams six foot and four inches. Measurement from exterior wall at six inches from interior wall.

367
Q

In condominium common walls are?

A

Easements

368
Q

Seven required elements for valid conveyance?

A 
Legal capacity.
Writing.
Grantor and grantee identified.
Legal description.
Signed by grantor.
Voluntary acceptance by grantee,
Adequate words of conveyance "granting clause"
369
Q

Acronym for valid deeds?

A

AWARDS

370
Q

Highest form of protection for grantee?

A

General warranty deed

371
Q

Highest form of protection for grantor?

A

Quit claim deed (no warranty deed)

372
Q

Covenant of quiet enjoyment?

A

Assures good title against those attempting to claim superior title.

373
Q

What is a bargain and sales deed?

A

Quit claim deed outside of North Carolina.

374
Q

In bargain and sales deed, can warranties be added?

A

Yes

375
Q

What is the acronym for adverse possession?

A

OCEAN

376
Q

What is holographic will?

A

In North Carolina a hand written will is legal.

377
Q

What is intestate?

A

Dying without a will.

378
Q

What is escheat?

A

When a person dies intestate with no heirs.

379
Q

What is the Connor act?

A

Record documents to enforce DREAMOIL.

380
Q

Why record a title?

A

To make a valid deed enforceable.

Gives constructive notice. “Property is yours”

381
Q

Extra terrestrial Jurisdiction, the buffer zone is?

A

1 mile for population under 10k
2mile for population 10-25k
3 miles for population over 25 k

382
Q

Is down zoning legal?

A

Yes and no compensation has to be made.

383
Q

Historical preservation, if you would like to make changes, you need to file for a ?

A

Certificate of appropriateness

384
Q

What is a variance?

A

Doesn’t change the use , just how it is implemented.

Asking for a variance to change the set back line.

385
Q

Do homeowners insurance cover floods?

A

No.

386
Q

At what level is the subdivision regulations handled?

A

Handles in the local level

387
Q

Subdivision Street Disclosure Act?

A

Must disclose all private and public streets

The street may be up to NCDOT std, but still not State maintained

388
Q

Interstate Land Sales Full Disclosure Act?

A

Deals with land sold across state line.
Deals with also rental unit across state lines
Property report at least 3 days prior to contract
7 days to rescind with property report
2 years to rescind without property report.

389
Q

Can homeowners be fined for violating the CCR’s in a subdivision.

A

Yes and they can be asked to remove the violating items as well.

390
Q

CE need to be done by?

A

2nd renewal

391
Q

1st post licensing needs to be done by?

A

1st anniversary

392
Q

Under common law of agency, can there be implied agency?

A

Yes, but not in NC.

393
Q

In NC, can there be implied agency?

A

No, but under common law of agency, you can.

394
Q

Under general partnership, personal liability is?

A

Unlimited.

395
Q

Can you present an offer on behalf of a buyer customer?

A

Yes, I can fill out forms for the customer and present an offer.

396
Q

What is a Procuring cause?

A

The effort that began a chain of events that brings about the desired results.
Under an open listing, the broker who is the procuring cause of sales receives the commission.

397
Q

NC Good Funds Settlement Act?

A

Attourney may not disperse funds, nor record unless the collected funds are good.

398
Q

Can listing agents have an oral agreement?

A

No, it has to be in writing from inception.

399
Q

Can a buyer agency have an oral agreement!

A

Yes, but it needs to be reduced to writing before offer.

400
Q

Dual agency?

A

When there is a conflict of interest because you are representing both buyer and seller.

401
Q

What is self dealing?

A

Must be disclosed due to a undisclosed dual agency.

Ex….selling of a family home

402
Q

Designated agency is allowed in Firm but who cannot be in designated agency?

A

A BIC and the provisional broker.

Ones who know confidential information known about the other client.

403
Q

Undisclosed dual agency can lead to?

A 
Working for both buyer and seller and they don't know it
Will not be paid
Lose your license
Rescinding of Contract
Sued
404
Q

If first substantial contact is done over the phone, you must tell the the disclosure rules and send the brochure by mail by?

A

Within 3 calendar days

405
Q

The brochure must be given to all SALES, not?

A

All RE transaction…..just all RE SALES transactions

406
Q

What is the acronyms for fiduciary right?

A 
LOADS
Loyalty
Obedience
Accounting
Disclosure
Skill, care and diligence
407
Q

What is puffing…

A

Exaggerated opinion

408
Q

Do all agents need to disclose material facts?

A

Yes….

409
Q

Is Meth lab a material Fact?

A

Yes

410
Q

Is sex offenders a material Fact?

A

No

411
Q

Is AIDS a material Fact?

A

No…..They are a Protected class.

412
Q

What does the Sherman Antitrust Act prohibit?

A

Working with other firms to….
Price fixing
Market allocation
Group boycotting

413
Q

What is the do not call list?

A

Addresses interstate calls….
You can call up to 18 months, your past clients
After that you need written permission if they are on the do not call list.

414
Q

Elements of a valid contract?

A

Reality of contract
Mutual assent
Unforced meeting of the mind

415
Q

Contracts are voidable of….?

A

If a contract is between a minor….fails the Statute of Frauds

416
Q

Parol Evidence Rule?

A

Takes precedence in handwritten statements over preprinted portions

417
Q

Is earnest money….a consideration?

A

No

418
Q

Earnest money is a ?

A

Good Faith Deposit.

419
Q

Contract Clause?

A

Clause used in contract.

420
Q

Forfeiture clause…?

A

Forfeiture clause… One forfeits something to the other party
(Earnest Money)

421
Q

Exculpatory clause….?

A

a hold harmless clause( exculpate..to clear guilt or blame)

422
Q

Indemnification Clause…?

A

one party compensate the other for loss of damages

423
Q

Contingency clause?

A

Some event must be done or else all parties are released from the contract.

424
Q

Compensatory breach will lead to?

A

Additional money

425
Q

Liquidation breach will lead to ?

A

Loss of earnest money

426
Q

Types of Listing agreement?

A

Open listing….everybody’s sign in the front lawn
Exclusive agency listing….broker sign in front lawn but the owner has the right to sell.
Exclusive right to sell listing…..1 sign ….broker will be compensated regardless of who sells the the property

427
Q

Is list price required for a listing?

A

No, it is not required per NCREC because of auctions

428
Q

What can Terminate of Listing?

A 
Completion
Bankruptcy of seller
Destruction of property
Brokerage OOB
Mutual consent
Breach of either party
End of agreement...definite start and stop
429
Q

Residential property Disclosure?

A

Must be furnished to residential sales, exchange, option and sale under a lease with option to purchase.

430
Q

Residential Property Disclosure statement does not have to be presented to?

A

First sale of a dwelling that has never been occupied or lease with option to purchase where the lessee occupies or intends to occupy dwelling

431
Q

Can the Residential Property Disclosure be altered or amended in any way?

A

No

432
Q

Can a buyer agency be created orally?

A

Yes in an open buyer agency and non exclusive agency but it must be reduced to writing before offer.

433
Q

Civil Right Act of 1866?

A

Must not discriminate due to race…….NEVER

434
Q

Fair Housing Act?

A

Regulates the sales or rental of residential dwellings and residential vacant land sales.

435
Q

What is FRESH CORN?

A 
Under Fair Housing Act.....
Famile stàtus
Race
Equal
Sex
Handicap
Color
Opportunity
Religion
National origin
436
Q

Equal opportunity Act?

A

Applies to lenders….requires notification within 30 days if loan is not approved

437
Q

Exemptions to Federal Fair Housing Act?

A

FSBO
Doesn’t own more than 3 homes at a time
Rental where owner is occupying 1-4 family home
Sale of non profit for non commercial purposes
No discriminating advertising used
No RE agent involved

438
Q

Blind ads….

A

Advertisement without name of agent or firm.

439
Q

In a Due Diligence Fee/ Due Diligence Period….when must an agent give the seller the $?

A

Within 3 business days…

440
Q

When must the Earnest Money Deposit be given to the firm trust account….

A

3 banking days if its cash

3 banking days after contract if in Check

441
Q

In an OTP&C …..agent must?

A

Confirm agency status in the OTPC

442
Q

When do I have a binding contract?

A

Sign sealed and delivered…across the wall

443
Q

Due Diligence period is “time is of the essence”

By what time of the specified date…..

A

5pm

444
Q

Installment land contract is also called?

A

Contract for deed…..equitable Title….not a legal title (ownership not given)

445
Q

Purchase Money Mortgage….?

A

Conventional mortgage….legal title….ownership

Gets the deed right up front

446
Q

Option contract…?

A

Seller must sell if buyer wants to buy

447
Q

Lease purchase?

A

Bilateral contract….no option, you are purchasing…

448
Q

Lease option?

A

Unilateral agreement….lease with the option to buy.

449
Q

Residential Rental Agreement Act?

A

Landlord has the responsibility for fit and habitable residential unit to be rented.

450
Q

Do CO2 detectors need to be installed in all rental property?

A

Yes

451
Q

What is another name for residential eviction?

A

Judicial eviction
Actual eviction
The only way to evict the tenant

452
Q

What is a constructive eviction?

A

When a tenant has the right to move out due to landlord not making repairs

453
Q

All security deposit refunds must be…?

A

Itemized by 30 days and finalized by 60 days.

454
Q

NC Vacation Rental Act?

A 
Vacation purpose
Less than 90 days
Requires all agreement to be in writing
Travel agent referral fee is allowed
Can be evicted 24 hours
455
Q

Estate for years?

A

Definite start and stop
Automatic termination…no notice needed
Tenants can become holdover after stop date.

456
Q

Estate from period to period?

A

Initial agreement for specific period
Automatic renewal for a successive period.
Example month to month after estate for years.

457
Q

Termination of lease?

A

Week to week…..2days
Month to month….7days
Year to year….1month

458
Q

Estate at will….?

A

No money is exchanged

No notification required.

459
Q

Estate at sufferance?

A

Landlord suffers…holding over against the wished of the landlord.

460
Q

Gross lease?

A

Flat rate per period

461
Q

Net lease?

A

Tenant pays for maintained, taxes, insurance

462
Q

Percentage or Retail lease?

A

Fixed amount plus percentage of gross net sales

463
Q

Rent is paid in advance? In a HUD how do you deal with it in case of sale of the rental property?

A

DS/CB pro-rated amount

464
Q

Escalation clause? In an index lease

A

In an index lease…..
Index goes down…..lease goes down
Index goes up……lease goes up

465
Q

Non disturbance clause?

A

Protects the tenant if landlord does not pay their mortgage

466
Q

Do property management broker need a license?

A

Yes

467
Q

Property management agency?

A

Contract between broker and owner.

468
Q

Property management relationship?

A

Employee/ employer

469
Q

Can property Management offer concession?

A

Yes

470
Q

What is concession?

A

Enticement for tenants…..with permission from owner.

471
Q

What do property management brokers DO NOT DO?

A 
Establish depreciation schedule
Give legal advice
Pay owners personal /business income tax( can pay RE property tax)
Reinvest owners personal money
Decide on and make Capitol improvements
No financial advice
472
Q

Property management….4 areas of maintained?

A

Preventative
Corrective
Routine
Construction

473
Q

In property management, what is the most important responsibility?

A

Owners objective.

474
Q

Under American with Disability Act, If you employ more than 15 people….?

A

you must make reasonable accommodation….”equal access for all”

475
Q

ADA exemptions?

A

Property covered under Federal Fair Housing Act FFHA

Property that is exempt form FFHA

476
Q

Property management have …….days to report accounting?

A

45

477
Q

A unlicensed agent can show rental property if they are ?

A

employed by the management company.

478
Q

What is another name for a mortgage?

A

Deed of trust….secures a note

Home is the collateral for mortgage

479
Q

Lien Theory State?

A

Two way agreement between borrower and lender.
Lender given the right to sell property
Borrower retains legal and equitable title
Ex. SC

480
Q

Title Theory State?

A 
Three way agreement
Lender...holds the promissory note
Borrower....equitable title
Trust....naked title
NC
481
Q

Due on Sale clause….?

A

Known as the Alienation Clause….prevents the loan to be assumed …kicks the acceleration clause into affect.

482
Q

Acceleration Cause…..?

A

Upon sale of home….mortgage due immediately.

483
Q

Full amortized fixed rate mortgage?

A

Regular payment toward principle ….over time, you pay off principal

484
Q

Partially amortized fixed rate mortgage?

A

Interest only….construction loans….after 5 years….pay off the whole loan.

485
Q

Adjusted rate mortgage ARM?

A 
Adjustment period 
1/1, 3/1, 5/1
Tied to government index US T bill
Has a cap
Contains an escalation clause
486
Q

Payoff statement is also known as the ?

A

Reduction certificate

487
Q

Writ of attachment?

A

Non physical encumbrance
Flagging the property
Directs sheriff to sell property to satisfy judgment.

488
Q

Par rate definition?

A

Lenders yield ….discount points.

1 dp for 1/8 %

489
Q

Hypothecation?

A

Pledging ones home for collateral

490
Q

Equitable redemption?

A

Borrower can buy back by paying in full all debt owed.

491
Q

Statutory redemption….?

A

10 day upset bid….NC 5% more ….sets the the new 10 day upset…..will continue and while in process….the original owner can pay up prior to finalization.

492
Q

Deficiency Judgement..?

A

When foreclosure comes up short

493
Q

Foreclosure process?

A

Notice of hearing
Notice of sale
Report of sale
Trustee’s deed

494
Q

Subject to purchase?

A

Buyer is not liable to repay debt

495
Q

Loan assumption?

A

Buyer takes responsibility….seller may be secondary liable…..
created through NOVATION

496
Q

North Carolina Housing Finance Agency primary purpose?

A 
Create affordable housing opportunities for first time NC buyer
Less than or equal to 89k
Down payment assistance available
100% financing on VA and USDA loans
FHA 96.5%
497
Q

Fannie Mae…..?

A

Conventional, FHA and VA loans

498
Q

Freddie Mac…FHLMC?

A

Conventional and S&L associations

499
Q

Conventional loans?

A 
Need 
primary mortgage insurance  (PMI) greater than 80% LTV
PMI protects lender not borrower
Covers top 20-30%~of loans
Purpose to make lenders whole only
% of loan due at closing
500
Q

FHA insured loan?

A

FHA insures the loan
1-4 owner occupied units only
Property needs to be appraised by FHA approved appraiser
No peer payment penalty….but need 30 day notice

501
Q

VA guarantee loans?

A

Applicant must apply for a COE certificate of eligibility
And a VA issues CRV certificate of reasonable value

No prepayment penalty
Non A may assume the loan but the veteran remains liable

502
Q

FHA allows ……to be financed into the loan?

A

Closing cost

503
Q

VA loans allows……. To be financed into the loan but not closing cost?

A

Funding fee

504
Q

VA allows …..% financing?

A

100%

505
Q

Qualifying ratio?

A

Front ratio….PITI, HOA, PMI divided by MGI

Back ratio……PITI, HOA, PMI, recurring obligation divided by MGI

506
Q

Trigger terms?

A

Number without explanation of how that number is possible

507
Q

Regulation Z?

A

Truth in lending act…requiring credit institution to inform borrowers of the true cost of obtaining credit.

508
Q

RESPA protection?

A

Good faith estimate….within 3 days of loan application

Settlement cost and You brochure within 3 days of loan application

509
Q

RESPA does not require…….to close?

A

An attorney

510
Q

Footing is the lowest part of?

A

Construction

511
Q

Sil is the lowest part of ?

A

Framing

512
Q

Ridge board is the highest part of?

A

Construction

513
Q

Fascia is where the…… Is attached to?

A

Gutter

514
Q

Soffit is where the …..are?

A

Vents

515
Q

Frieze…..is ?

A

Ascetic purpose

516
Q

Muntin separates ?

A

Glass panes

517
Q

Mullion separates?

A

Parallel panels of windows

518
Q

Eave….

A

Hang over the roof

519
Q

What is Percolation?

A

It’s the soil absorption test

520
Q

What is the most efficient heating?

A

Warm forced air

521
Q

Roofing….what is the most common?

A

Gable

522
Q

What is a barn roof called?

A

Gambrel

523
Q

What kind of roofing is in coastline?

A

Salt box

524
Q

Building codes are made by?

A

State but informed in local levels

525
Q

What is a platform frame?

A

2x4 goes up from the bottom until the top 1st floor.

526
Q

Balloon framing?

A

Stud goes from the bottom of the first floor all the way up to the roof and 2nd floor is nailed to it on the outside.

527
Q

Value depends on?

A

Demand
Utilization
Scarcity
Transferability

528
Q

Basic economic principles affecting value?

A

Increase or decrease in returns
Improvements either increase or decrease in value
Plottage….sum is greater than parts
Progression/ regression
Small homes benefit from big homes and visa versa
Anticipation/ change
Contribution

529
Q

The appraisal process rely on two areas?

A

Specific…about the house

General….about the area

530
Q

Sales comparison approach?

A

Take from the rich and give to the poor.

531
Q

Uniform Residential Appraisal report?

A

Reconciles the three approaches.
The sales comparison approach
The cost approach
The income capitalization approach

532
Q

Sales comparison approach is the?

A

Most reliable

533
Q

The cost approach will give you?

A

Value determined by the replacement or reproduction cost
Takes into account of depreciation
Tends to produce the highest value
Land doesn’t depreciate

534
Q

The income capitalization approach?

A

Present value determined by the potential future income.
Improvements may increase return on rent
Uncle IRV
GRandMA

535
Q

Under Income Capitalization Approach, Potential gross income?

A

Rate. x Value

536
Q

Income Capitalization breakdown?

Uncle IRV

A

PGI. (Potential Gross Income)
–V&C. (Vacancy &Collection Losses)
————–
EGI. (Effective Gross Income)
– OE. (Operating Expenses)
————–
NOI. ( Net Operating Income)
– DS. ( Debt Services)
———BTCF/ CTO. (Before Tax Cash Flow/ Cash Trow Off)

537
Q

ROI( Return On Investment) X down payment?

A

Equity dividend rate problem or cash on cash ratio?

538
Q

ROI Return On Investment…is also called?

A

Cash on cash

Equity dividend return…what kind of return do I get for my money

539
Q

What is an easement?

A

Right to use without ownership

540
Q

Good Faith Estimate is required by?

A

RESPA

541
Q

Good faith Estimate of settlement cost will be ready in within…?

A

3 days of loan application

542
Q

RESPA offers a brochure called?

A

“Settlement Cost and You” within 3 days of loan application.

543
Q

RESPA does not apply to ?

A

Commercial property

544
Q

RESPA does not require…. To close?

A

An attorney

545
Q

Income Capitalization Approach to determine value?

A 
Potential Gross income
– vacancy /collection losses
Effective Gross Income
– all operating expenses
Net Operating Income
546
Q

Homeowner Tax deduction, in the year you acquired , you an deduct?

A

Interest payment
Prepayment penalty
Acquisition loan discount points
Loan originating fee

547
Q

What can be deducted from purchase price to obtain the Capital Gain?

A

Purchase price (Basis)
+ Closing Cost ( Cost Basis)
+ Cap Improvement
+ Special assessment

– recap dep.( home office tax deduction)
–ins( insurance proceeds)
–portion sales of property( sold easements)

548
Q

Tax Free Gain?

A

Single $250,000

Married $500,000

549
Q

In tax benefits, vacation Home usage has to be?

A

14 days or 10% of rental time rule….which ever is greater.

550
Q

Tax deferred exchange?

A

1031 like kind exchange

551
Q

Tax benefit on Real Estate Investment, of you can find a replacement?

A

45 days from closing….you’ve identified it
Close 180 days from closing.
“Time is of the Essence”

552
Q

Break even Analysis?

Des it pay

A 
One payment is 500
Other payment is 300 but cost 3%
The difference is 200
But it cost 3% of the cost of home.... $275,000
275,000x .03= 8250

8250 divided by 200 = 41.25
It would take 42 months to make up the difference

Real Estate (5 decks)

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