Real Estate U exam Part 1 Flashcards
covers part 1 of the RealEstateU course
Provides a visual layout of a subdivision using tracts, totl acreage, lot size, etc
Plat
Hospitals, Jails, Libraries, Public Schools
Community Facilities
Used to determine max allowable sqft on property
Floor Area Ration (FAR)
What are the symptoms of Carbon Monoxide exposure?
Headaches, drowsiness, nausea, dizziness, chest pain
What are the symptoms of Formaldehyde exposure?
Neurological issues, myeloid leukemia, sinonasal cancer, nasopharangeal cancer
These types of storage tanks are excluded from federal UST regulations, but may have state requirements
Underground oil heating tanks
Laws that cover lakes, rivers, springs, streams, and underground wells
Safe Water Drinking Act (SWDA)
An area where trash is buried with a liner and has anti-contamination procedures in place
Landfill
Active whether items are on or off
Electric Fields
Only active when items are turned on
Magnetic Fields
A mineral fiber that is dangerous when able to be scraped or ground into a powder.
Friable Asbestos
A foam that is sprayed into small, oddly shaped spaces
Urea Formaldehyde Foam Insulation (UFFI)
A gas that is heavier than air, and is the highest leading cause of cancer
Radon
Cools by absorbing heat as vapor in low pressure & released under high pressure, causing a depletion of the stratospheric ozone layer.
Clorofluorcarbons (CFCs)
sections are numbered Right to Left, then down and Left to Right, and repeated through all 36 sections
Township Sections
a.East to West
b.North to South
a.Baselines
b.Meridians
Lengths and Measurements used to legally describe a property
metes
Boundaries used to legally describe a property
bounds
professional who lays out details of subdivisions using blocks
Licensed Surveyor
Most accurate way of identifying property
Legal Description
describes location of land w/ grid lines cut into squares using prime meridians, base lines, guide meridians, townships, standard parallels, sections
Government Survey
1 mile squared in acres
640 acres
a quarter quarter section
40 acres
plotted sections containing number, lot & block in subdivision
Lots & Blocks
6mi x 6mi or 36sqmi
Territorial Subdivision
36 miles at 1sqmi
Township
Oldest system of land measurement in the US
Metes & Bounds
Appropration, Expropriation, Condemnation
Terms that are included under Eminent Domain
Right to restrict activity or use of property on someone else’s land
Negative Easement
the person who retains the life estate interest
Life Tenant
How can you find deed restrictions on a property?
by doing a title search
gives landlocked parcel access to the public road
Easement by Necessity
Rent increases based on what is agreed upon in the lease
Graduated Lease
a. Single Net Lease
b. Double Net Lease
c. Triple Net Lease
a. Rent & Property taxes
b. & Insurance
c. & Maintenance, etc.
How can one remove deed restrictions from a property
by going to court for a judge’s ruling
Gives municipal inspectors right to enforce building codes
Police Power
Judgement lien, tax lien, mechanics lien, etc
Types of involuntary liens
right to transfer property via a will at death
devisable
when a lessee finds a new tenant to take over their lease
sublease
possible judgement when neighbor has been using claimants property for a long time
adverse possession
right of owner to sell/transfer property to someone else
Alienable
property taxes on this type of lease are calculated based on the size of the space
Double Net Lease
landlord pays taxes, maintenance, and operating fees
Gross Lease
Rent for this type of lease is based on tenant’s sales
Percentage Lease
land decreaes & water increases
erosion
tenant pays base rent plus taxes, insurance, & maintenance
Triple Net Lease
transfer of easement to another party by owner & current easement
Easement by grant
legal preferences for how liens are handled at sale of land
Priority
land increases & water decreases
Accretion
holdover tenancy
Estate at Sufferance
leasehold w/no set time period & ability for any to end it
Estate at Will
Owner dies w/o heirs & property reverts to the state
Escheat
tenant of home is responsible for property taxes, maintenance, property insurance
Life Tenant
Conditions, Restrictions, and Covenants
Deed Restrictions
Right to use of river & streams on or bordering property
Riparian Rights
open, hostile, & continuous use of a sub estate by the dominant estate
Easement by prescription
the type of interest the lessee has in a leasehold estate
personal property interest
aka Judgement lien
aka equitable lien
Easement by condemnation
Eminent Domain
The process when property taxes are not paid
a lien is placed, then foreclosure can be filed, followed by a forced sale
police power that limits how much landlords can charge for rent
rent controls
how long can ground leases last
99 years
leasehold with set period but no end date (month to month)
Periodic Estate
unwanted use of owners land by neighbor
encroachment
used to hold money for property taxes or to hold money before a sale is completed
Escrow account
gives permission to cross land
Affirmative easement
loss of land by action of bordering water
Avulsion
leasehold set for definite period of time
Estate for years
right of way/ use of another’s property
easement
the money or valuable item exchanged in a sale or lease contract
Consideration
a lien is a type of
encumbrance
distinguishing feature of joint tenancy
right of survivorship
Types of buildings that can be structured as a cooperative
apartment buildings
how can a tenant in common transfer their share of property
executing a deed of transfer, leaving property in a will or a trust
what kind of ownership does a condo resident have of their unit?
Fee Simple
What happens to a joint tenant’s share of a property at their death?
The share of the property passes to the other named joint tenant
Who can own property in severalty?
an individual, business entity, or trust
Who can own property in severalty?
an individual, business entity, or trust
What is the interest in property of a spouse whose name is not on the title?
Marital Interest
What is the definition of ownership in severalty?
one person owns all the rights associated with ownership of property
What are residents of a cooperative responsible for?
Utilities and interior maintenance of their unit
What kind of trust comes into being at the point of the grantor’s death?
testamentory trust
what is the legal proceeding that officialy severs co-ownership of property
Partition
What are the transfer rights of an owner in severalty?
To lease to, sell to, or put a mortgage on the property
this evidences a cooperative residents ownership rights
a certificate for shares of stock in the cooperative
individuals who inherit property or other assets from a trust
beneficiaries
for instance: siblings who own a divided portion of the entirety of a parcel of land
tenants in common
property acquired by one spouse that is not designated as separate ownership
community property
the type of ownership that a condo resident has of their unit
fee simple
Cooperatives are usually managed by
a board of directors
Reasons to create a trust include:
to limit federal and state estate taxes, to avoid probate, to prepare for blended families
tenants by the entirety include:
married couples
Terms for a person creating a trust include:
Settlor, Grantor, Trustor
How is the public made aware of a property transfer through a deed?
By recording it with the county clerk, it is counted as public knowledge
What is the purpose of a notary seal on a deed?
It ensures that the parties signing the deed are who they claim to be.
Who may file an involuntary lien against a property?
a judgement or creditor
why would a statutory lien be filed on a property
when there are unpaid assessments that were stated in the bi-laws and covenants
written report of a chain of title
abstract of title
a lien on all real estate in that county owned by the debtor
general lien
what kind of deed is in place when a mortgage deed is in default & goes to foreclosure
Deed under Power
how do corporations convey property through a deed
via a designated representative
what may cause a break in the chain of title
a seller who was not a buyer in a previous deed
What is one thing all parcels of real estate have in common
title history
What is the purpose of a lien
to ensure a creditor is paid, either by the debtor or through the sale of the property
the party selling or conveying real property
grantor of deed
what is the purpose of a deed
conveys and proves ownership of the property
what is constructive notice
the process of recording a deed with public records thereby making the record public knowledge
to complete the transfer of real estate, what must happen with the deed?
it must be handed to the buyer/grantee
what type of lien is a mortgage
a voluntery lien
a conveyance of real estate, clear of liens
warranty deed
when the court awards money to the claimant that puts them into the same financial position they were in prior to the breech of contract
compensatory damages award
a complete contract that has been laid out in writing
express contract
when is the doctrine of impossibility most often applied
when the property is destroyed or rendered unusable
who has the duty to perform in good faith
it is mutually binding by both parties
a listing agreement that is illegal in most states
net listing agreement
how does the court see it when one party does not say ‘yes’ to an offer
as a rejection
who has legal capacity to sign a contract
an adult with full understanding of the contract
clause that warns parties that failure to meet contract parameters within a certian period of time may cause a breech
time is off the essence clause
Under the statute of frauds, a contract for sale of land must be
a written contract
what are the 4 essential elements of a contract
offer & acceptance, consideration, legal purpose, & legal capacity
what is the most common way a contract can discharge
full performance of the contract
why might a court need to interpret a contract
if it is poorly drafted, one party sues the other for failure to perform, or here is a disagreement btwn parties
a real estate contract is commonly described as
an express, bilateral contract
when the court orders someone to do or not do a certain action
injunction
a listing agreement where the listing agent receives any $ amount over a price set by the seller
a net listing agreement
how can an otherwise valid contract become void
if a law is passed that makes the purpose of the contract illegal
these are potential awards in a contract suit
Recission
Injunction
Compensatory damages
Expectation damages
Reformation
Specific Performance
RICERS
what are examples of an assignment
selling a mortgage loan, selling a subway token, assigning a lease to a new tenant
The most common cause of default by homeowners
not paying on-time payments
buying back one’s property after a judicial sale
Redemption
clause allowing lenders to increase or decrease interest rates at any time without notice
escalator clause
In title theory states, who maintains the legal title on a home
The trustee maintains it until the debt is paid in full
the collateral used on a deed of trust
The home itself is used as collateral
Failure to uphold a duty or promise, or to discharge an obligation
Default
An obligation to pay the remaining owed debt after the home is sold for less than the loan owed.
a deficiency judgement
The party responsible for recording the mortgage process
A title agency will likely handle it, but the responsibility is the lenders
What is the best type of loan for someone who will not live in the home long-term.
Interest-only loans (also known as a straight loan) are good for the short-term. The borrower will have a lower monthly payment, but they must pay back the entire loan amount when they sell the property.
the difference between a home loan and a mortgage
mortgage is the legal process, while a home loan is the financing for it.
How long does the judicial foreclosure process take?
three to four months, depending on state laws
what happens in a non-judicial foreclosure?
The trustee involved will sell the home at an auction. The home may revert back to the lender if no buyer is found.
How does the world know that propety is transferred through a deed?
by recording the deed in the county real estate records
Why does the date on the deed matter?
to know the order of when the property was conveyed to determine owndership and lien rights
An express contract with all of the required elements was written up and signed by both parties, however there was no notary present. Is the contract valid?
No, the notary seal makes it legal
Promises regarding ownership and title to the propery made by the owner
warranties
In general, what gives a lien highest priority?
the lien recorded first has highest priority, unless a state law says otherwise
What happens to real estate when the owner dies?
Property passes to the owner’s estate
Upon the purchase of a parcel of real estate and a title insurance policy, the buyer finds an unpaid tax lien on the title from before closing. What is their next step?
make a claim on the title insurance policy to pay off the lien
Upon the purchase of a parcel of real estate and a title insurance policy, the buyer finds an unpaid tax lien on the title from before closing. What is their next step?
make a claim on the title insurance policy to pay off the lien
a written explanation of the boundaries of a property in relation to the neighboring real estate
legal description
What causes a person to lose their real estate in bankruptcy?
Trustee takes the property to pay off debts
A general lien covers what property?
all real estate in that county owned by the debtor
How are deeds and other real estate records maintained?
Deeds are catalogued by book and page based on their order of recoding by the county real estate records clerk
What is constructive notice?
by recording a deed in the public land records, everyone is deemed to have notice of the recording of the deed, even if they physically don’t see it.
Which type of deed offers the least amount of protection for the buyer?
Quitclaim deed
A lien that is placed automatically due to lack of payment of assessments per a condo’s covenants and state laws.
Statutory Lien
How is a property conveyed from a deceased person to their heirs, when there is a will?
By executor’s deed, according to the will
What is covereed by an extended coverage title insurance policy?
Matters, such as liens, not found in a search of the written title records
the power used by the court to involuntarily convey real property
Equity Power
What type of deed should be used to convey property along with its associated mortgage lien?
Quitclaim Deed
What is special about a tax deed?
tax deeds are superior in the chain of title to nearly all other types of interests
How does a judgement lien cause involuntary alienation?
Property is sold by judgment creditors to pay off debt
when the court awards a non-breaching party a money award that places them in the same financial position they were in prior to the breached contract
Compensatory damages award
A seller asks an agent to help him sell his house. The seller finds a buyer themselves, an the agent receives a commission from the sale. What type of listing agreement did they make?
exclusive right to sell listing
A complete contract that has been reduced to writing
an express contract
A contract that lacks consideration
a void contract
If a party does not respond “yes” to an offer, what does the court consider the party’s response to be?
a rejection
When an expert in their field buys something they know to be quite valuable for significantly less than it is worth, the sale can be considered void on what grounds?
Unconscionability
A seller asks an agent to help sell their house. The seller finds a buyer themselves and the agent does not receive a commission from the sale. What type of listing agreement did they make?
An exclusive agency listing
The type of contract between an agent and their brokerage firm stating that the agent will receive commissions on their sales and not a salary wage.
an independent contractor agreement
a contract between a minor and an adult is considered
a voidable contract
The statute of frauds requires what kind of contracts to be in writing?
Contracts involving the sale of land
Offer, rejection, counteroffer, and acceptance altogether can be called:
bargaining, a meeting of the minds, and/or contract negotiation
A seller asks several real estate agents to help sell their house. A buyer is found and no one receives a commission check. What type of listing agreement was made?
An open listing
When a court orders a party to perform the exact obligations set forth in the contract
A specific performance award
This is not grounds for voiding a contract
a breach of contract
A provision in a contract that provides damages to one party in the event that an act of god prevents completion of the contract
liquidated damages provision
A contract that lacks an essential element
an unenforcable contract
When a party agrees to do something they aren’t legally obligated to do, or refrain from doing something they have the right to do.
legal detriment
when a party threatens another party in order to persuade them into doing something
coercion
When one person agrees to take on the duties and benefits of another’s contract
Assignment
What type of real estate contract does not usually mention a purchase price?
A lease
where can one go to find the record of deed and title?
The registrar of deeds or county recorder
A trustee in a non-judicial state says a borrower must make payment in full. Does the borrower have recourse?
they may be able to pursue renegotiation of the loan, refinancing of the loan, or a sale of the home. Some lenders may allow for catch-up of payments.
What is a secured loan?
A loan backed by some type of collateral, usually the value of the home itself.
How do discount points help with lowering the monthly payment of a home loan?
Paying interest upfront in the form of points will reduce the monthly payment
What is the benefit of a mortgage-backed security to a home buyer?
With mortgage-backed securities, lenders sell loans in packages across the country, making it possible for borrowers in low-income areas to qualify for loans
If a borrower pays off their home right away, will they still pay interest on the home?
Yes, they will still have to pay closing costs and prepayment penalties
How do lenders in the primary mortgage market profit from the home buying process?
Interest rate fees and secondary market security bundles
Is it likely that a home buyer would have an unsecured loan for buying a home?
no, nearly all home loans are secured loans
How can a lender help a borrower who is struggling to remember to make their tax payments?
The lender can collect taxes and insurance along with the mortgage loan payments and hold them in escrow to make the payments
What does it mean to have a loan with an escalator clause?
It means the lender can increase or decrease the interest rates at any time with notice
who services the mortgage in a lien theory state?
The lender
Who handles the process in a deed of trust when there is a default on the loan?
The Trustee
What happens when a homeowner in a lien title state is behind on the morgage payments?
The lender can take legal steps to foreclose on the loan
Aside from paying the monthly payment, what does the mortgagor promise to do?
They must meet all duties outlined in the morgage document.
If a house fails to sell at auction, can the defaulted borrower have the home back?
They may be able to obtain a new loan from a new lender to purchase the home from the previous lender, who takes possession in this case.
How much is one point in interest worth?
One point is worth one percent of the borrowed amount
If a homeowner is moving but doesn’t want to sell their home, what can they do transfer the loan to another person?
They must get approval from the lender for the Assumption Clause
Who has priority over the value of a home sold in a foreclosure sale?
The priority of the liens are outlined with the recording of the mortgage
Why does the Fed increase rates?
to grow profits and to control inflation, to build the economy
In a non-judicial foreclosure, who holds the title up until the auction?
The trustee
How can one avoid foreclosure in a non-judicial situation?
They can work with the trustee to catch up on debts and follow all requirements set by the trustee
What type of foreclosure involves the court system?
Judicial foreclosure
How can a borrower who is behind on payments determine their options in order to avoid foreclosure?
The lender will send a letter outlining what the homeowner must do to avoid foreclosure.
Does a homeowner always maintain legal title for a home?
No, in title theory states, the trustee maintains it until the debt is paid in full
Is catching up on loan payments enough to avoid foreclosure?
Not always, sometimes lenders fees must be paid if it is possible to get caught up.
Who is the trustor in a deed of trust?
The home buyer
Who holds the deed for the property in a lien theory state?
The homeowner
What will happen to a homeowner in the event of a non-judicial foreclosure?
The trustee involved will sell the home at an auction. The home may revert back to the lender if no buyer is found.
What is the first step in getting a home for a potential buyer?
Securing a home loan/getting pre-qualified
A legally binding promise to pay
Promissory Note
What is the job of a trustee in real estate
The trustee holds the legal title of the property until the debt is paid off
Will a lender allow a buyer to buy a duplex to rent half out to a friend?
An Assignment of Rent allows for this and is laid out at the time that the loan is secured.
What happens to the equity on a home once the house is sold?
After the home loan is paid off, the remaining value is paid to the seller
a purchaser shall have the right to cancel the purhase of a time-share or campground membership until midnight of the ______ day following the date on which the purchaser executed the purchase contract
5th
How many hours of approved study must one complete in order to take the Pennsylvania Real Estate Exam?
75
Agreements btwn Broker and Principal, or btwn Broker and Consumer, if the consumer is required to pay a fee and the agreement must be in writing, require all of the following statements:
- A statement identifying any possibility that the broker, or employee of the broker, may provide services to more than one consumer in a single transaction.
- A statement describing the purpose of the Real Estate Recovery Fund.
- A statement regarding any possible conflicts of interest and the duty to continue to disclose any.
Examples of violations of the “Pennsylvania Human Relations Act” that could lead to imposition of a fine and/or the suspension or revocation of your license:
- giving false info for purposes of discrimination in the rental or sale of housing
- Accepting listings on the understanding that illegal discrimination in the sale or rental of housing is to be practiced
- Making distinctions in the locations of housing or dates of availability of housing for purposes of discrimination in the rental or sale of such housing.
The name of the act that governs much of the practice of real estate in Pennsylvania is the:
Real Estate Licensing and Registration Act (RELRA)
An advertisement by a broker about “sales volume” or “productions” shall refer only to closed transactions. What is a “closed transaction”?
either a listing sold or a sale made after a fully executed deed is delivered
An exclusive listing agreement must contain all of the following:
- The commission, fees, or other compensation expected on the sale or lease price
- The sale or lease price
- The duration of the agreement
Violaions of RELRA can be classified as _____ or _____
Unlicensed activity or violations of the rules and regulations of RELRA
If a sales agreement is conditioned upon the ability of the buyer to obtain a mortgage, it shall contain all of the following:
- The deadline for the buyer to obtain the morgage
- The maximum interest rate of a mortgage
- The type of mortgage
Any prize, gift, award, or bonus offered in relation to the offering of sale of real property must include, for all prizes offered, a statement of _____
Fair Market Value
How many days maximum do you have to notify the Commission after you change your employer/broker?
10 days
How many years must you work as a licensed salesperson in the state of Pennsylvania before you can take the Broker’s exam?
3 years
These are things that may happen if a claim is filed against you with the Real Estate Recovery Fund and a settlement is reached with the victim:
- Your license is suspended on the date the claim is paid.
- A petition is filed with a court to enter judgment against you for the amount of the claim paid on your behalf.
- You must repay the funds, plus interest, before your license can be reinstated.
an advertisement by a licensee for the solicitation, sale, or offering for sale of real estate that employs lotteries or contests, or that offers prizes, certificates, gifts, or free lots shall contain all of the following:
- a description of each prize, certificate, gift or lot offered
- limitation on the number of prizes, certificates, gifts, or lots offered
- the prerequisites for receiving each prize, certificate, gift or lot offered
How many hours of commission approved continuing education must one take in order to renew their real estate salespersons license every 2 years?
14 hours
Can a broker’s escrow duty be waived or altered by an agreement between the parties to the transaction, between the broker and the parties, or between the broker and other brokers involved in the transaction?
No
Each of the following persons are members of the Commission
- Three members who shall be persons representing the general public
- The Director of the Bureau of Consumer Protection, or their designee
- Commissioner of Professional and Occupational Affairs
- Five licensed real estate brokers, including one cemetery broker
A person who owns or manages a business, which collects rental information for the purpose of referring prospective tenants to rental units or to the locations of such units, is known as:
A rental listing referral agent
This is used to compensate victims of fraud, misrepresentation, or deceit by a salesperson, broker, or anyone else holding a real estate related license
Real Estate Recovery Fund
The Commission could impose a fine, suspend, or revoke your license if you fail to keep real estate records for how many years?
3 years
After a disciplinary hearing, a report must be submitted to the Commission after which time the Commission may do any of the following:
- Request additional testimony
- Adopt the findings in the report
- Enter its conclusions of law and order
All of these are reasons your license could be suspended or revoked:
- Using misleading or untruthful advertising
- Making any substantial misrepresentation
- Obtaining by false representation or fraudulent act or conduct
