Sue CA Real Estate Principles Flashcards
Study CA
1
Q
A.D.A.
Americans with Disabilities Act
A
Prohibit housing discrimination
2
Q
A.P.R.
Annual Percentage Rate
A
Total % rate cost of loan; includes actual interest rate, plus all other fees;
3
Q
Acceleration Clause
A
Allow lender to call the debt due and payable immediately upon failure to meet the terms of contract
4
Q
Accession
A
Add
5
Q
Accession
A
Trade fixture installed by business while under Lease; Removable before lease expires; After lease expires, ownership goes to Lessor
6
Q
Actual Authority
A
- specifics of the particular job defined in the contract
- duties may/may not be spelled out, bur are expected
7
Q
Ad Valorem
A
Add Value; Property Taxes
8
Q
Add-Ons
A
Amounts added to existing fees, rates, or margins to accommodate file abnormalities
9
Q
Addendum
A
Addition to an already existing contract
10
Q
Addendum v. Amendment
to contract
A
Amend=Change
Addendum = Add-On
Novation = New
11
Q
Adjustable Interest Rate
A
Changes up or down according to the financial climate, at predetermined adjustment dates
12
Q
Advanced Committment
A
Commit by Mortgage Lender to make or buy loan for a state amount on a property within a specific period of time subject to Borrowers ability to qualify
13
Q
Affiant
A
Affidavit; Evidence
14
Q
Agency
A
Relationship between parties to a transaction; Principal/Broker relationship;
Cannot be created by unsolicited offer;
15
Q
Agency Agreement
A
Contract that creates an agency relationship
16
Q
Agency Disclosure
A
Form disclosing agency relationships for 1-4 unit residential sales;
17
Q
Airspace
A
Above earth’s surface for an indefinite distance, as allowed by gov’t controls;
Part of definition of real estate
18
Q
Alloidal Land System
A
real property;
Individual hold clear Legal Title, but use if or lose it;
Old style land grant used this
19
Q
Alluvium
A
rocks & soil that slide down side of montain
20
Q
Alquist-Priolo Equake Fault Act
A
Regulates development of land in earthquake fault zones; Construction requirements are stricter than normal; Full disclosure to potential buyers;
21
Q
Amortize
A
Periodic payments of principle and interest, reducing the amount of debt
22
Q
Annual Mortgage Stmt
A
IRS-1099. $ Amt interest, property taxes, and remaining balance
23
Q
APN
A
Identifying number assigned by Conty Tax Assessor’s OFfice
24
Q
Apparent Authority
A
Implied Authority to act, even though person does not have authority
25
Applicant
Borrower for loan
26
Appraisal
Estimate value of property, based upon recent sales and current listing of comparable properties
27
Appraisal
Written report providing determnation of vlaue of a specified real property on a given date
28
Appraisal Process
Sales comparison;
| Three Comp properties are the norm;
29
Appraisal Steps
Highest/Best use will generate highest value;
30
Appreciation
Increase in value
31
Appropriate
Take
32
Appropriation
| and Prior Appropriation Doctrine
Right of government to regulate water;
Prior appropriation doctrine states that water rights are determined by priority of beneficial use. This means that the first person to use water or divert water for a beneficial use or purpose can acquire individual rights to the water.
33
Appurtenance
Follows with the property; Have particular use 9 ie private water co)
34
Arms-Length-Agreement
No favoritism; Assumption that unrelated parties enter into contract on terms given nor more favorably to an average person unknown to them;
35
Assessment
Tax value of property
36
Assets
Anything of value, including money
37
Assignment
Transfer rights and obligations of a contract to another party
38
Associate Licensee
| Agent
Representative of a Broker; Broker is the legal rep of the Principal
39
Assumption
Financing arrangement where the Buyer takes over the existing mortgage
40
Authorization
Written statement by a Borrower, giving permission to release information to the Agent of record
41
Avulsion
Fall Off
42
Award Letter
Social Security sends letter to recipient indicating how much $ they will receive annually
43
Balloon Note
Mortgage or loan that is amortized for a long period of time, but becomes due and payable in a shorter period of time
44
Banruptcy
Legal method of dispensing with debts throug court proceedings
45
Baselines
East-West lines that run through a reference point; Rectangular Survey Method (aka Township and Range Survey System aka U>S> Gov Survey System);
Paired w use of North-South Meridian lines.
46
Baselines
| Rectangular Survey Method aka Township, Range, Gov Survey System
E-W Baselines;
| N-S Meridian lines from specific reference point;
47
Benchmark
Metal places in tofu cities throughout the U.S.;
| Basis for elevation heights
48
Beneficiary
Lender in a Trust Deed loan;
| Trustee oversees loan payments, notify of default
49
Bequest
Gift of personal property in Will;
Legator - Gives
Legatee - Receiver
50
Bi-Weekly
Every two weeks payments
51
Bilateral
Two-sided agreement, both parties committing to perform an act
52
Bilateral Contract
Both sides exchange promises to perform
53
Bill Of Sale
Used for transfer PERSONAL PROPERTY
54
Bldg Permit
Granted by local gov; Inspections in phases; Fully signed inspections constitutes completion of building
55
Bonus Income
Irregular income based upon production or employer revenue targets
56
Breach Of Contrect
Failure of any party to contract to fulfill obligations
57
Broker
Person acting as Fiduciary on behalf of Principal;
| Licensed by State real estate regulatory department
58
Building Code
Protect health and safety of persons in the community; conform to Master Plan: design, construction, size, #units
59
Bundle of Rights
(of Real Property Ownership)
S.E.E.P.C
```
Manage/Control
Possess
Exclude
Enjoy
Sell
```
60
Buydown
Mortgage where interest rate is reduced for a set period of time based upon an up-front fee paid at Close of Escrow
61
Buyer Representation Agreement
| Exclusive
Agent will get paid even if another Agent write a Purchase Offer for the Buyer; Buyer liable to pay Agent out of their own pocket,
62
CA BRE 2780-2782
Law that Broker must follow fair housing laws;
| Disciplinary action against Broker
63
CA Civil Code 54-55-1
Protect handicapped and disabled against discrimination
64
CA RE Commissioner
Runs CA DRE;
Appointed by Governor;
Sets Administrative policy of the DRE;
Regulate Licensees
65
CA Real Estate Licensee
Working under Broker;
| Valid 2 year period;
66
Cancellation Clause
| "Contingencies"
Allows either party to cancel contract based upon inability to meet specific conditions;
67
Cap
Max interest rate allowed to be charged on ARM loan
68
Capacity
Legal capacity which allows party to enter into a contract knowinling and with capability to fulfill terms
69
CCR's
Guidelines and rules set up by HOA to manage the entire property and define rules for use of common spaces
70
Chain of Title
History of documents which transfer Title of real property
71
Chattel
Personal Property, movable; anything not Real Property
72
Chattel
| Personal Property
Anything not real property that is movable
73
Civil Rights Act 1968
| Fed Fair Housing Act; TItle VIII
Prohibits housing discrimination: race, color, religion, sec, handicap, familial status, national origin
74
Civil Rights Acts
| 1966, 1977, 1981, 1982
Protec individuals who are denied property
75
Clauses In Real Property Purchase Contracts
| AFRAID LP
```
Acceleration
Foreclosure
Redemption
Alienation
Impound
Defeasance
```
Lien
Prepay
76
Client
| Principal
Person who hires another to act on thier behalf;
77
Closing
Conclusion of transaction:Settlement; delivery of Deed; Disburse funds; File/Record documents
78
Closing Agent
Escrow Officer or Attorney; Assures all documents signed, properly executed and recorded, and funds disbursed
79
Closing Costs
All Costs to a Buyer, Seller, Borrower associated with trnasaction: Escrow fees, title, appraisal, credit report, taxes, insurance, prorate items; Agent fees.
80
Cloud
Lien, encumbrance against property which is defective Title; must clear to change ownership
81
CLoud on Title
Anything which gives rights to another person other than the owner of Real Property; ie easement or right to cross
82
Co-Mingling
Place funds from clients into personal account; OR using Trust Funds for personal funds
83
CO-OP
Type of CORP ownership, shares allow occupy one unit and common areas.
84
Co-Op
```
Corp holds real property;
Owners hold stock, not Title, no Deed;
Each owner receives exclusive Lease for their unit;
Taxes against Corp;
Not real property;
Each owner shares loan, not mortgage;
Blanket Insurance on building;
Owners insure personal property separately;
```
85
Codicil
Valid change in Will prior to death
86
Commission
Fee paid to Agent for transacting business for another; Usually a % of the total transaction amount
87
Common Interest Subdivisions
Buyer owns individual lot plus shared common interest ownership;
88
Community Property Laws
Defines property acquired during marriage, as well as property owned seperately prior to marriage
89
Comp Approach, Appraisal
Three Comps are the norm;
Bracketing is at least one Comp has greater sq ft and one Comp has lesser sq ft;
Usually on low- to mid priced properties
90
Comparable Properties
| Comps
Appraisers use recently sold (or for sale) properties that are similar as a measure to help determine value of real property
91
Condition
Issues or concerns that must be resolved; Underwriter will allow Close of Escrow only upon acceptance of conditions
92
Condition Precedent
Deed restriction, preceding transfer of ownership; must be addressed in order to obtain ownership
93
Conditional Use
Zoning waiver which allows either non-conforming use or exemption;
Grants permission to use land for a purpose other than generally allowed in that district
94
Condo
Owner has s Titles: on for air space inside his condo, one for common areas;
Each owner responsible for property taxes on their unit
95
Conformity, Appraisal
Reasonable degree of economic and social similarity exists in an area, creating maximum value for properties in the area
96
Consideration
Exchange something of value: money, services, love or other property; Confirms an obligation to perform the contract
97
Consideration
Sufficient amount of deposit $ to cover losses in the event of cancellation or default
98
Construction Loan
Mortgage loan obtained for the purpose of borrowing funds to construct or renovate a building
99
Contract
Agreement between parties to perform or not perform an act; Or a promise.
100
Contract Employee
Independent contractor, self-employed working under the direction of Broker
101
Contract of Sale
Binding agreement between Seller, Buyer to transfer property under specific terms;
Seller holds Title until all debt paid;
102
Contractual Obligation
The PROMISE that party to a contact akes when signing a contract
103
Contribution, Appraisal
Value that a particular amenity adds to a property
104
Control
Right to control use of the property as they choose;
| One of the BUndle or Rights
105
Conventional Loan
Mortgage loan made throught usual lender channels
106
Conversation Log
Written record of all conversations and communications with all involved ina project, particularly a mortgage-loan application
107
Conversion
Converting client's funds into personal funds is a FELONY
108
Conveyance
Transfer or property from one party to another
109
COO
| Cert of Occupancy
Written authorization by local gov allowing structure to be inhabited; usually new construction
110
Corporeal Rights
Visible;
Possessory;
Touch;
Tangible
111
Cost Approach, Appraisal
Determine value by estimating cost to build improvements NEW;
112
Cost of Funds Index
| COFI
Index or mortgage which is based on the amount a bank pays its savings account customers for use of their savings funds
113
Counter-Offer
Original offer is declined (voided); Seller in turn makes an Offer by changing terms; Counter becomes valid only if accepted
114
Credit Auth
Written consent; Needed to compile a complete credit package
115
Credit History
7 Years of credit history; liens and bankruptcy 10 yrs
116
Credit Score
Rating number devised base upon current and past credit history;
117
Datum
Original horizontal plane in NYC Harbor;
| Base upon which sea level height is measured
118
Debt-Ratio
% of income monthly income obligated to payment of debt
119
Deed
Document that transfers Real Property;
120
Deed of Trust
Legal instrument, pledging property as security to guarantee debt paid in full; Lender holds Title until debt paid
121
Deed-In-Lieu-Of-Foreclosure
Transfer Deed to Lender, in exchange for elimination of mortgage debt and costs
122
Default
Fail to fulfill contract
123
Defeasance
Borrower gets legal Title after all payments are met
124
Defeasance Clause
Removes Lien when debt is paid in full;
| Reconveyance Deed is issued to Mortgagee (Owner)
125
Deficiency Judgement
Judgement against person for amount remaining due even after foreclosure and sale of property
126
Define Valid Deed
```
Legal Address
Consideration
Granting clause
Grantor signature
Grantee accepts Title
How Title taken by Grantee
Exceptions/Restrictions
```
127
Demand
Request for Amount due for debt payment
128
Deposit
$ security to show intent to bind a Contract for Sale
129
Depreciation
Decrease in value
130
Description
Legal description not req'd, but must be adequate to positively identify the subject property
131
Devise
Give realty upon death;
132
Devisee
Receiver of real property by Will
133
Devisor
Giver of real property by Will
134
Discipline Broker/Agent
Business & Professions Code;
Calif Civil Code;
RE Commissioner Rules & Regs
135
Disclosure
Statement made revealing information
136
Disposal
Right to dispose or encumber property at will
137
Distributor
(Distributor/Administrator-Intestate)
(Executor - with Will)
Court Appointed person to carry out intestate distribution of real and personal property of Testator/Testatrix
138
Duress
Force or threat
139
Easement
Right of use;
140
Easement by Prescription
| Prescriptive Easement
Person uses property of another for access; Open; Notorious; Hostile; Continuous
141
Easton v Strassburger
Agent provide "list of defects, known & what should be known";
Ca TDS came out of this
142
Emblements
Cultivated crops are personal property, unless spelled out in Listing Agreement to be appurtenant
143
Eminent Domain
Gov take property for public use
144
Encroachment
Physical extension onto another's property;
| Unlawful use of another's proerty
145
Encumbrance
A lien or claim against a property, which may affect cloud on Title
146
Enforcement of RE Laws, Rules
DA Where violation occurred;
COmmissioner no authority to $ fines;
Commission disputes handled by local Board of Realtors or arbitration;
147
Eq Credit Opp Act
| ECOA
Federal Law; Credit avail to all
148
Equitable Title
Use & Enjoy; When there is a loan or mortgage on property, Buyer holds only Equitable TItle; If default, Equitable Title holder gets appreciation; Legal Title after paid in full;
149
Equity
Value property - loane = equity
150
Escheat
Revert to State by order of law;
| No Title acquired
151
Escrow
Third party to transaction handles signing docs, accounting and disbursement of funds; in CA Escrow handles transactions
152
Escrow Account
| impound
Funds deposited to a third party to pay property taxes and insurance
153
Estate at Sufference
Tenant remains after end of term; If rent is accepted, it becomes Estate-from- Period-To-Period
154
Estate for Years
Lease for specified period of time
155
Estate from Period-To-Period
Renewable agreement to lease for specified terms; Month-To-Month or Year-To-Year.
156
Estate in Remainder
Ownership held by person other than original Granter; May confer Life Estate on One person, and different person Remainderman
157
Estate in Reversion
Held by original Grantor of Life Estate, property returns to original Grantor upon the death of designated person
158
Estate-At-WIl
Lease with no end date
159
Estoppel Agreement
| Implied Agency aka Ostensible Agency
Person declares that an Agent is representing them; Agent has perceived authority to act; Principal bound by Agent's actions
160
Estover
right of tenant to use wood of ower in lease situation for own needs only
161
Exclusion
Right to allow or prohibit access to property; One of the Bundle of RIghts
162
Exclusive Agency Listing
Unilateral contract between Broker and Principal ; Allows Seller to find their own Buyer without being required to pay comission to Broker
163
Exclusive Auth and Right to Sell
*Most common List Agreement; Broker always paid no matter who procures the Buyer; Express Contract can be written or verbal
164
Exclusive Buyer, Agency Agreement
Buyer pays Agent, even if no house found; Bilateral
165
Executed
Signed; Closed
166
Executed Contract
Completed; All contingencies are met.
167
Executory Contract
Bilateral, which has not been fully performed
168
Express Agreement
| Express Contract
All parties acknowledge agreement has been reached; Written or verbal intent
169
Fair Lending Act
State of CA anti-discrimination real estate lending law
170
Fair Market Value
willingness of Buyer and Seller; Comparison of recently sold is 9-12months
171
Fannie Mae/FNMA
Fed purchases loans from Lenders to free-up case for additional loans
172
Federal Anti-Discrimination Laws
```
Civil Rights Act 1866
Fair Housing Act 1968
Title VIII 1968
Fair Employment & Hous Act (Rumford Act)
Civil Rights Hous Act 2006
Unruh Civil Rights Act
```
173
Federal Lending Laws
Housing Fin Discrim Act 1977
| Holden Act
174
Fee Simple
Ownership rights with no restrictions; **Most common form of real property ownership
175
Fee Simple
| Freehold Estate
Ownership rights to real property without restrictions;
Undetermined amount of time;
Most common form of real property ownership
176
Fee Simple, Defeasible
Ownership with conditions or limits which could defeat claim to property; Cloud on TItle
177
FEMA
Fed Agency handles natural disasters; determines flood and hazard zones for Mortgage industry
178
FHA
Federal Housing Admin, div of HUD: Insures and guarantees mortgages made by private Lenders/Banks
179
FHA Loan
Insured by HUD to protect Lender; Buyer protected from foreclosure by HUD ability to assume position of Lender
180
Fiduciary
Act on authority given by Principal; Cal Bre Broker is the agent; Licensee is Sub-Agent
181
Fiduciary
| Agent
Party hired to perform service for a fee; Use authority from the Principle;
182
Fiduciary
| Easton v Strassburger
Broker responsible to inspect the property; Disclose what is known and what should have been known
183
FIrst Right of Refusal
Agreement that gives Buyer the right to purchase or not purchase the property prior to the property being offered to another party
184
First Trust Deed
First; Primary loan secured by real property
185
Fixtures
```
Anything of use permanently attached to real property;
5 tests:
Method of attachment
Adaptability
Relationship of Parties
Intent when installing item
Agreement between parties
```
Trade fixtures: still personal property if removed without substantial damage to premises
186
Floor
Minimum Amount an adjustable rate can be for the life of the loan
187
Forebearance
Act of Lender extending time for repayment of debt or delay foreclosure action
188
Foreclosure
Act by Lender to claim ownership of property when a Borrower has failed to meet commitment or has defaulted on loan
189
Fraud
intent by the party to deceive the other parties to a contract
190
Fraud
| Actual Fraud
Known intent by a party to deceive other parties to a contract
191
Fraudulent Misrepresentation
Intentional Fraud or Negligent Misrepresentation are results of carelessness or negligence, not done with criminal intent
192
Freddie Mac
| FHLMC
Federal Home Loan Mortgage Corp; Gov agency to buy mortgages from Lenders to facilitate Lenders using funds for more loans
193
Full Disclosure
Disclose material facts of a real estate transaction; Fair dealing
194
Future Covenants
Guaranty provided by Seller with a Warranty Deed; Promise to correct any problems with Title;
195
General Agent
Broker hired to perform ongoing jobs; A Property Manager is a General Agent
196
General Plan
| Zoning Laws
Zoning Laws are primary method used to implement General Plan;
Police Powers enforce zoning;
Goal: protect public health, safety, welfare;
define traffic & transportation routes; estimate & set standards population density & future growth
197
Gift Deed
A Deed that is used to transfer ownership of real property when no $ involved;
"Affection" is the "Good Consideration"
198
Good Faith Estimate
Federal mandated form used to disclose closing costs to Borrowers;
Must be delivered to Borrower within 72 hours of loan App; Cannot exceed 5% of original loan estimate
199
Grant
Convey Title
200
Grant Deed
Give ownership to another
201
Grantee
Recipient
202
Granting Clause
I hearby grant
203
Grants Deed
Document used to Grant (Give) Title
204
Groundwater
Topmost limit of percolating water
205
Hazard Insurance
Protection of real property against loss due to fire, storm, natural or accident
206
Heir
| Distributee - no will
Person who receives property; via intestate succession
207
HOA Cert
Form providing info about COndo, PUD or Coop project
208
Holden Act
| Housing Finan Discrim Act 1977
CA Code; Financial institutions prohibited from discrimination
209
Home Mortgage Disclosure Act
| HMDA
CA health and safety code;
| Lenders must meet specific criteria and report loans made by census tract number
210
How to terminate Easement?
Release by Dominant tenant
Obvious intent by Dominant to Abandon Easement
Merge Dom & Servient tenancy
Court Order
211
How to Terminate List Agreement wo Penalty:
Death of Broker or Principal;
Joint Agreement to Terminate;
Destruction of Property;
212
HUD 1
Final statement of closing costs;
| Prepared by Escrow office
213
HUD Assignment
Transfer FHA mortgage to HUD to protect Borrower form foreclosure
214
Implied Contract
Created throug action, not by writing
215
"IN-Defeasible" Estate
No conditions on estate
216
In-File Credit Repor
Un-audited credit report; unverified
217
Inchoate
| Inchoate Dower
Incomplete;
Rights contingent upon an event;
Spouse's imperfect interest to husband's real property while both are alive in non-community property state;
Becomes perfect upon his death;
218
Inclusionary oning
Agreement between gov agency and developer to provide housing provisions per the agreement
219
Income Averaging
Total all income for period of time and divid by number of months;
220
Incorporeal Rights
Invisible;
Non-Possessory;
Can't touch
Intangible
221
Increasing Returns, Appraisal
Improvements that add MORE value to the property than the improvement cost;
Opposite is true for Decreasing Returns;
222
Index
Basis for deterimining interest rate (actual cost of funds) that investor will pay to the Borrower that will in turn be loaned to consumer
223
Inherent Authority
Duties Agent needs to perform even though they are no specified in Employment Contract
224
Innocent Misrepresentation
simple mistakes with no intent and little harm;
225
Installment Contract
Contract for Deed
Land Contract
Owner Will Carry (OWC)
Bill of Conveyance
226
Intentional Fraud
| Fraudulent Misrepresentation
Misrepresentation of a material fact which is intended to deceive another, does actually deceive another,and which causes harm to the one deceived.The law allows punitive damages. Most serious type of false statement in contract law
227
Interest Income
| Dividend
Income from interest such as savings account or investment
228
Interpleader Action
Request to BRE for conflict during escrow to be settled
229
Intestate
No Will
230
IRS 1065
Income of business owned as partnership
231
IRS 1120
Fed tax form reporting income from ownership of a Corp
232
IRS 95-01
| IRS 4506
Form authorizing verification of AGI claimed on Federal tax return
233
IRS Extension
beyond April 15 filing deadline
234
IRS Schedule A
```
Personal expenses itemized: medical
mortgage interest
property tax
education
donation
work-related expense
```
235
IRS Schedule B
Itemize dividend and interest income
236
IRS Schedule C
Income from Sole Proprietorship
237
IRS Schedule D
Income: Capital Gain or Loss from investment
238
IRS Schedule E
Income; earned from rental or royalty
239
IRS Schedule K-1
Individual income: partnership
240
Joint Tenancy, w Survivorship
Title pass to heir unencumbered by secured debt;
One Title at same time of 2 or more Owners;
Can sell w/o permisson, new owner Title as Tenant in Common;
Property interests terminate at death;
Corp cannot hold as Joint tenant, bc Corp is a perpetual entity;
241
Joint Tenant
property ownership
Two+ persons
Undivided interest
Right of Survivorship
242
Judgement
Debt ordered to be paid by court of law
243
Jumbo Loan
> max determined by FNMA and FHLMC
244
Junior Lien
Debt or obligation against property, subordinate to primary loan/lien and taxes against property
245
Land
Soil/earth and all substances below; land extends to center of the earth
246
Landlocked
Surrounded by property owned by others; No ingress or egress
247
Law of Descent & Distribution
| Intestate
Chain of real property intestate inheritance, varies by each state;
Distributor - Giver
Distributee - Receiver
248
Lawful Objective
Purpose and terms of contract are legal
249
Laws Relating To Housing Discrimination
Lending Discrimination
```
TItle VIII
Federal Fair Housing
Act
Unruh
CA Code 54-55
Civil Rights Act
CA Fair Lending Act
CA Equal Credit
Opportunity Act
```
250
Legal Description
Description of property filed with County Recorder's Office
251
Legal Impossibility
Contract or portion which cannot be met because it requires an illegal act
252
Legal Non-Conforming
Property does not fit the zoning, but is allowed because of special allowance or grandfathered bc of prior use
253
Lender Req'd Disclosures
```
Equal Credit Opp Act (ECOA)
Auth to acquire Borrower Credit Report
CR disclose to consumers
Right to receive copy of appraisal
Patriot Act - track money
Servicing Disclosure Stmt from Lender
Privacy Policy Disclosure (Graham-Leach-Bliley Act)
Mortgage Loan Origination Agreement
Mortgage Loan Origination Agreement
PMI/Adjustable Rate Disclosure
HUD pamphlets:
Settlement Cost
Equity Line
ARM's
```
254
Less-than-Freehold
Lease;
| Specified period of time
255
LIBOR
| London Interbank Offered Rate
Index often used for ARM mortgages, which adjust every 6 months
256
License to Land
Permission to use land and protect from liability;
Not an easement;
can cancel at any time
257
Lien
Claim against property for payment of debt;
Mortgage most common lien
Priority of Liens: tax, judgement, assessment, sewer, other
258
Lien Theory
Mortgage/Note creates a lien on property to secure payment of debt
259
Life Estate
Right to Use and Possess the property for the durations of life of designated person or persons;
260
Life Tenant
Holder of Life Estate
261
Life--Cycle, Appraisal
Neighborhoods change between cycles of Regression and Progression
262
Limitations
Used to create Fee Simple Defeasible ownership;
Limits automatically transfer ownership upon an Event: two types
Special Limitations and Executory Limitations;
Will not revert to Grantor
263
Lis Pendens
Legal action Pending
264
Littoral
Standing or Still body of water;
| Bordering owners property
265
Lot And Block
| aka Subdivision System
Method of property description;
| Lot, block and tract
266
LTV
| Loan to Value
% of total value owed
267
Margin
Used in ARM loan;
| Limit how much an interest rate may adjust
268
Mechanics Lien (CA)
Must be filed within 60 days from filing of Notice of Completion or Cessation, or if neither are filed, within 90 days from completion of the work. Action to enforce due 90 days after recording of claim.
269
Median Income
Average income for established area
270
Mello-Roos
Buyer can sue Seller for failure to disclose; Seller can file suit against Listing Agent; 3-day right of Reccission, after notice
271
Meridians
| Rectangular Survey Method aka Township, Range, Gov Survey System
N-S lines from specific reference point;
| E-W Baselines
272
Metes and Bounds
Metes: distances
Bounds: natural or artificial boundaries
273
Mineral Rights
Found beneath surface that have fugitive or fluid nature;
| Oil, gas, gold, coal, iron, gems
274
Mortgage Loan Disclosure Stmt
| MLDS
Similar to Good Faith Estimate of CLose Costs; It is very detailed and preferred in CA
275
Mortgage Pricing
Determine interest rate and other costs and add-ons
276
Mortgagee
Lender becomes Payee
277
Mortgagor
Trustor
Borrower
Payor
278
Mutual Agreement
| Consent
Meeting-Of-The-Minds;
| Parties Must Agree to All Terms
279
Mutual Agreement
(Meeting of the Minds)
(Consent)
Parties to contract must agree to all terms
280
Mutual Recission
Agreement by all to cancel transaction;
| Bilateral
281
Mutual Water Co
Common source of water in Subdivision; Individual property owners each own equal share of stack, equal right to use of water
282
Negative Amortization
| Neg Am
ARM loan when at some period, the payment is insufficient to cover monthly interest payment due; Shortage is applied to balance of loan
283
Negligent Misrepresentation
False statement of fact due to ignorance;
| that has the effect of inducing someone into a contract.
284
Net Listing
Brokers commission to be any amount in excess of Sellers sale price
285
No-Income No-Assets
| NINA
Loan program that determines credit based on Borrower credit history and subject property only.
286
Non-Arms-Length Transaction
All partied related
287
Note
| TrustDeed
Loan, which holds Title in Trust;
| Trustee can take legal action for non-compliance of terms
288
Novation
New Contract
289
Nuncupative Will
Deathbed will; Not valid
290
Offer and Acceptance
In CA, counter offer constitutes new offer and previous offer is null;
Can't go back to previous offer;
Date of Final Acceptance, will be date of Purchase Agreement
291
Offer To Purchase
Written offer the (unilateral) purchase real property.
| Becomes contract one accepted by both parties (bilateral)
292
Open Listing
| Non-Exclusive
Open to any Broker who procures a Buyer,
| Seller pays only the procuring Broker
293
Option Listing
Listing Agreement allows Broker to purchase the property;
Full disclosure of anticipated profit is required
294
Origination Fee
One time charge made as commission for securing mortgage loan
295
Owner Will Carry
(OWC)
(All Inclusive Trust Deed)
(A.I.T.D.)
Deed owned by seller until Buyer pays mortgage in full; Seller carries the load as Lender
296
P&L
| Profit & Loss
Gross income and expenses of business
297
Payment Shock
When new PITI payment amount increases by 60%
298
Perc Test
Test to measure water absorption rate of soil
299
Percolating Water
Underground water not classified as a stream
300
Personal Property handled by Will
Legator - Giver
| Legatee - Receiver
301
PITI
Principle
Interest
Taxs
Insurance
302
Plat Map
Subdivision Map, outlines measurement of each parcel
303
Point
% interest rate, or other charges;
Payment made by Borrower to the Lender in exchange for a reduced interest rate
304
Possession
Right to possess/use the property at will
One of "Bundle or RIghts"
305
Power of Attorney
Authorize another to sign on one's behalf; Specific POA for one transaction only; General POA for most other transactions
306
PRELIM
Prelim Title Report; Prior to obtaining TItle Insurance on sbujec tproperty
307
Prepaid Rental Listing Service License
Issued by CA DRE;
| Renewable every 2 years
308
Prepay Penalty
Charge due to Lender if Borrower pays loan off prior to due date
309
Prepayment Clause
Terms which set out fees if Borrower wants to pay debt prior to maturity date
310
Prescription
(Easement by Prescription)
(Easement by Necessity)
Right to use or travel (Easement) across property that belongs to another person;
Usually unrecorded, unless court determines it should be recorded to give Constructive Notice; Becomes accepted use after 5 yr continuous, open use;
Cloud on Title
311
Primary Residence
Person's home where they live more than 6 months per year
312
Principal
Person that hires another to act on their behalf
313
Prior-To-Funding
Conditions and Docs that must be approved/accepted by Lender before they FUND mortgage
314
Prior-To_Docs
Conditions and Docs that must be approved/accepted by Lender before they provide loan documents
315
Process Loan
Assembling entire mortgage loan file in order to obtain loan
316
Progression
Property of lesser value increases in value, strictly based upon the location being surrounded by improved properties
317
Property Manager
Broker hired to manage property; Employment contract manager working under Broker
318
Public Recording System
County Recorders Office receives documents for purpose of giving public notice and maintain original form of the document; Information is PUBLIC; Recorded claim is more secure for th owner
319
PUD
Planned Unit Development; Common areas owned by all homeowners
320
Puffing
Act of stating property is more desirable than it is
321
Purchase Offer
| Deposit Receipt
Contract between Buyer and Seller, defines terms of transaction
322
Qualifying Ratios
% of income for housing expense is the front-end debt ration and % obligated to housing; All other consumer debt is the back-end debt ration
323
Quiet Enjoyment
Enjoy or live on property without disturbance from others
One of Bundle Of Rights
324
Quit Claim
Deed that forfeits or releases ownership claim
325
Quit Claim Deed
Deed that quit any claim; Constructive notice that the Grantor no longer has any claim to property; Can QuitClaim an Easement
326
Rate & Term
Refi loan: used to change interst rate or other terms, without taking cash out of equity; Up to $2000 cash remaining for Borrower
327
Rate Sheets
Defines Lender loan programs avail
328
Real Property
| Real Estate
Interest in land and appurtenant fixtures;
329
Rebate
credit granted to a borrower by a lender that can be used to pay third party settlement charges and/or to fund the borrower's escrow account. Rebates are the opposite of points, which are payments made by the borrower to the lender
330
Recission
Repeal
331
Reconveyance Deed
Lender Reconveys the Title of property back to the Borrower, when the loan has been paid in full
332
Recording
Record a Deed; Constructive Notice
333
Rectangular Survey
| Township and Range Survey; US Gov Survey
Descriptions of land:
| E-W Baselines and N-S Meridians, from specified reference point
334
Redlining
Denying loans on properties located in low income and otherwise unfavorable areas;;
FHA, VA, Conventional loans
335
RegZ: Fed "Truth In Lending"
Fed: entire costs of a mortgage loan stated as APR and Total Cost over life of loan
336
Relection
Addition of land by receeding water
337
Remainderman
person who inherits or is entitled to inherit property upon the termination of the estate of the former owner. A remainderman holds an interest in the remainder and will become its possessor at some future time.
338
Residential Mortgage Credit Report
(RMCR)
(Standard Factual Credit Report)
An audited credit report, which has been fully verified to be correct
339
RESPA
| RE Settlement Procedures Act
Fed Law requires Lenders to provide full disclosure of estimated settlement costs to mortgage Borrower; Easy to directly compare different mortgage products
340
Restricted RE Licensee
BRE receives a complaint against a real estate licensee who is alleged to have violated the real estate law or the commissioners regulations;
Licensee basically loses their "due process" rights (right to a hearing for example) if another complaint or violation arises;
341
Restrictive Covenants
CCR's: Limit use of Property for benefit of community:
342
Reversionay Holder
Holder of Estate in Reversion
343
Right of Recission
Fed mandate consumer protection that allows Borrower to cancel mortgage within 3 days of signing loan only REFI docs
344
Right of Survivorship
Passes ownership to the Surviving Co-Owner; Joint Tenancy or Community Property, with Survivorship
345
Riparian Rights
Rights of property bordergin flowing water (rivers and streams)
346
Road Maintenance Agreement
Document with terms defining responsibilities of all parties that share private road or driveway
347
Rumford Act
| Ca Fair Employ/Housing Act
Prohibit housing employment discrimination; Age, sex, race, color, religion, ancestry, national origin
348
Safety Clause
Clause in Listing Agreement which allows Listing Broker to reserve any potential Buyers they has been working with at the time the listing expires; Seller still owes the Broker a commission
349
Schedule of Real Estate Owned
| Sch REO
Disclosure form that lists all property owned by a Borrower and details costs, income and current status
350
Section
1 sq mile = 640 acres
5280 ' x 5280 '
208.2' x 208.x '
36 Sec = 1 Township = 6 sq mi
351
Section 32
Gov regulation that requires disclosure if loan costs >8% of loan amount
352
Self-Employed Income Analysis
FNMA form to assist in analysis of self-employment income
353
Seller
Must hold LEGAL TITLE to sell
354
Seller Guarantees under Warranty Deed
Present Covenants: Right of Ownership, Right to Convey, and No Encumbrances
355
Servicer
Entity who manages and maintains all records of a loan
356
Settlement
| Closing
Complete all docs and exchange funds to complete transaction. CA closing handled by Escrow Officer
357
Severance
turn real property into personal property
358
Sheriff's Deed
Deed provided to Buyer of property sold through Execution Sale to satisfy a Judgement; Used when Mortgage instrument was Lender;
Similar to Trustee's Deed;
359
Standard Subdivision
Individual Buyers of lots do not share a common interest
360
Stated Income
Application that allows income to be stated and not verified
361
Steps of Subdivision
Development submit application to DRE w Financial status of project
Commissioner prepares:
Prelim Public Report
*Conditional PR
Public Hearing
Final PR, one lot at a time, valid 5 yrs from date of issue;
* Developer can begin advertising and taking Reservations for lots upon release of CPR; Receipt of evidence that Buyer received copy of the CPR must be kept by Developer for 3 years
362
Sub-Agent
Usually Buyer's Agent is Sub-Agent to the Listing Agent
363
Subdivision Land Law
Administered by Dept of Real Estate, under RE Commissioner;
| Applies to 5 parcels or more, up to 160 acres;
364
Subdivision Map Act
| CA Code
Rules for Subdivision of 2 or more contiguous parcels; Follow Master Plan; Developer puts in utilities, streets, sewers; Coordinate design with Mater Plan;
Ensure public use areas are part of each new Subdivision
365
Subsequent Ratification
| Authorization
Agreement that is subsequent to, after the action
366
Substitution, Appraisal
Property which is similar is used to determine value/price of a property; Comp must have Closed Escrow within a reasonable time prior to establish usable market value;;
367
Successor-In-Interest
Primary Residence;
| Successor resided in home 6 months prior, currently resides in home
368
Sufficient Consideration
Enough consideration to make contract binding
369
Survey
Measure of real property to determine property lines; Plat Map is the result of a survey
370
Suspense
Loan app put on hold by Underwriter; Insufficient docs or info to determination is loan app approved or declined
371
T-Bill
Index for loans that adjusts annually
372
Tacking
Use of Prescriptive Easement or Adverse Possession to acquire TItle
373
Take-Out Loan
Term used for automatic transition to long term mortgage, after use of short-term construction loan
374
Tax Deed
Deed used to transfer ownership to successful bidder of a Tax Default Sale
375
Tenant In Common
Owners have seperate ownership, which each can convey;
Interest can be unequal;
Sell w/o permission;
376
Terminate Power of Attorney
Death of Principal;
Attorney in fact refusal to comply;
Inability or incompetence to complete agency;
377
Third Party
Usually refers to potential Buyer; One with whom the Broker-Agent conducts business on behalf of the Principal
378
Time is of the Essence
All time frames allowed for in the contract must be given consideration and adhered to
379
Timeshare
One unit/one week/year;
| Leasehold or fee simple;
380
Title
Ownership of the property which is done through a conveyance called a Grant
381
Title Abstract
history of ownership, conveyances, liens, encumbrances
382
Title Theory
Trustee holds title of property to secure payment of debt
383
Township
6 mi x 2
| 36 sq miles
384
Transfer Disclosure Statement
| TDS
CA for required by law;
| Notify of defects with property; Soon as practical; Before close of Title
385
Transmittal Summary
| 1008
Form used to summarize the loan transaction
386
Treaty Guadalupe Hidalgo
US/Mexico treaty at end of Mex-Am War 1848; Gives Mexican Citizens property rights already held by them in American lands; Added some Mexican laws such as Community Property
387
Trust Deed
Lender holds Title until debt paid in full; TD is primary form of real estate financing in CA; Trust Deed is given from the Trustor(Borrower) to the Beneficiary(Lender); Real property held as security for loan
388
Trust Fund Account
Neutral checking account reserved for funds of clients only;
389
Trustee
Third party hired to maintain Trust accounts; Oversee loan payments and notify Lender of any defaults
390
Trustee's Deed
Deed used to transfer ownership to successful Buyer at Foreclosure Sale or Bankruptcy Sale
391
Two types of Title for full ownership
Equitable Title
Legal Title
392
Underground Water RIghts
Same as mineral rights; Right to use water beneath their own land, only for their use on their property
393
Underwriter
Person employed th Lender to determine creditworthiness of a loan file according to Lenders requirements
394
Undivided Interest Subdivision
Tenants in Common all have non-exclusive right to use the entire property by all of the owners (ie vacation sire with shared amenities)
395
Undue Influence
| Unfair Advantage
One party to RE transaction has knowledge of the property that the other does not have
396
Unenforceable Contract
Contract illegal, cannot be enforced
397
Unilateral Contract
One side makes a promise; Listing Agreement is Unilateral, until offer acceptance changes it to Bilateral
398
Unruh Civil RIghts Act
| CA code 51-52
Protects from discrimination; Same classes as Fed Fair Housing Act
399
Valid Contract
Mutual Consent
Legal Capacity
Consideration
Lawful Objective
400
Valid Contract
```
Written
Consideration
Description of Land
Date/Place
Terms/Clauses
```
401
Variance
Permit allowing exception or inconsistency to zoning laws, which cause hardship
402
Vendor
Seller
403
Void Contract
Illegal; No legal effect
404
Voidable
Contract that may be voidable if it has been violated by fraud, misrepresentation or breach
405
Warranty Deed
Guarantee by Seller that there is Clear TItle and Right TO Sell;
Present Covenants and Future COvenants, which give the Seller's promise.
406
Warranty Deed
Convey Title;
Guarantee against outside ownership claims;
Free and clear of any outstanding liens, mortgages, or other encumbrances
407
Water
Part of real property, water classified as littoral (standing) or riparian (stream)
408
Water Table
Topmost limit of percolating water from below the surface of the ground;
409
Acre
43,560 sq ft
160 sq rods
4,840 sq ud
208.71 x 208.71'
410
Acre foot
VOlume of material needed to cover an acre of land one foot deep
411
Acreage Zoming
Zoning that reduces residential density by requiring large lots
412
Act of God
Act attributed to nature without human interference
413
Action in REM
Action seeking a judgment against a property to determine its status
414
Abatement
Decrease in worth or amount;
| Usually applies to taxes or rent
415
Abrogation
Recission, revocation ro annull of contract by mutual consent of parties, or for cause
416
Absolute Net Lease
Tenant pays all expenses including capital expenses and ajor repairs
417
Absorption Analysis
Study of # units that can be sold or leased over a period of time in a defined location
418
Absorption Bed
aka Leach field
419
Absorption Period
Time required to put in use property at prevailing rates
420
Absorption Rate
Rate at which a type of property is put to use in the market
421
Abstraction, Appraisal
Method of valuing land, where the improvement is deduction from sale price
422
Abutter's Rights
Reasonable right to light, air and visibility that a property enjoys from another
423
Acclerated Depreciation
A method of cost write-off in which depreciation allowances are greater in the first few years of ownership than in subsequent years. This permits an earlier recovery of capital and a faster tax write-off of an asset; For property put into service after 1/1/81.
424
Accord and Satisfaction
discharge of an existing obligation by acceptance of a substitute agreement in which the creditor accepts less than the full amount owed as satisfaction of the debt.
425
Acquisition Appraisal
Estimate of value due to Owner for property taken by Emminent Domain
426
Actual Cash Value
$ current cost of an improvement, less depreciation
427
Actual Damages
Damages a court of law recognizes, as result of a wrong
428
Actual Depreciation
Loss in value to a structure;
| Due to physical, functional, econimic forces
429
Terminate Easement
| ADAM E
```
Abandonment
Destruction
Adverse Posession
Merger
Express Agreement
Lawsuit
Estoppel
Excessive Use
```
430
Add-On Interest
Interest Borrower pays on the principal for duration of loan
431
Adjustable-Rate Loan
Interest rate tied to Index
432
ARM
Mortgage loan with interest rate subject to change
433
Adjusted Cost Basis
Deducting cost of capital improvements from original sales price
434
Adjusted Sales Price
Sales price of comparable property if it possessed all the characteristics of subject property
435
Adjustment Period
Time between interest rate adjustments in an ARM
436
Administrator/ - atrix
Person appointed by court to administer estate of person who died intestate
437
Administrator's Deed
Used by Administrator of intestate to transfer property
438
Advance Commitment
"Take-Outloan commitment
439
Adverse Use
Access and Use of proerty without consent
440
Advisory Opinions
Appraisal Standards Board offers advice for resolution of appraisal issues
441
Aeolian Soil
Soil composedof materials deposited by wind
442
Affidavit of Title
Same as Warranty Deed;
| Affidavit dy Seller
443
Afforestation
establish a forest, stand, or tree crop on an area not previously forested
444
After-Acquired title
Title accepted by a grantor after his or her previous conveyance
445
After-Tax Cash Flow
| ATCF
cash flow remaining from the net operating income after paying income taxes, debt service, and loan repayments
446
Age-Life Depreciation Rate
| Straight-Line
Appraisal of building depreciates at a fixed rate over its life;
Total economic Life/Divided by Current Age
447
Agency by Estoppel
By Words or Actions
448
Agency By Ratification
Principal agrees with act, after the fact
449
AIDA Formula
| Marketing
```
Advertising:
Attention
Interest
Desire
Action
```
450
Alienation Clause
requires the borrower to pay the balance of the loan in a lump sum after the property is sold
451
All-Inclusive Trust Deed
| AITD
deed of trust securing payment of an obligation owing under a prior deed of trust. See Wrap-Around Mortgage
452
Allocation Method, Appraisal
Allocation made by using a ratio comparing building value to the total price (or value)
453
Alloidal Tenure
ownership may be complete except for those rights held by government; Contrast: Feudal tenure
454
Feudal Tenure
Req'd performance of a service to live on the land; Landlord still owns the land; Land returned to use of Lord, when there was no heir
455
Allowance, Vacancy and Collection Loss
% of gross lost due to vacant unit and collection loss
456
ALTA
Buyer's Title insurance, extended from Lenders Alta policy.
457
ALTA
title insurance policy issued by title insurance companies which expands the risks normally insured against under the standard type policy to include unrecorded mechanic’s liens; unrecorded physical easements; facts a physical survey would show; water and mineral rights; and rights of parties in possession, such as tenants and buyers under unrecorded instruments.
458
Amenities
tangible and intangible benefits attributable to the property; Not easy to measure in monetary terms
459
AMERICAN LAND TITLE ASSOCIATION (ALTA)
An association of land title companies that promotes the safe and efficient transfer of ownership and interest in real property and provides information to consumers, while maintaining professional standards and ethics.
460
AMERICANS WITH DISABILITIES ACT
1990 law that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications
461
AMORTIZATION
liquidation of a financial obligation on an installment basis; also, recovery over a period of cost or value;
Level payment loan
462
Assemblage
Process of putting several smaller lots together under one owner to increase total value
463
Assessment Ratio
Assessed Value / divided by Market Value
464
Attachment
Real or personal property seized by court (lawsuit) in order to: acquire jurisdiction, compel appearance, or secure payment of a debt
465
Attorney in Fact
Person operating under Power of Attorney
466
Attornment
Tenant acceptance of new Owner or Landlord
467
Attractive Nuisance
Object or condition which will attract and harm children (ie unfenced pool)
468
Aviation Easement
Near airport, limits the height or structures anad trees
469
Back-End Ratio
Ratio of all fixed debt/ divided by Gross Income
470
Back Title Letter
Letter from Title Insurance company to an attorney, who examines the Title for insurance purposes
471
Back-to-Back Escrow
Concurrent sale of one property, while purchasing another
472
Baltimore Method
Early appraisal method used to determine value of a corner lot
473
Bankers Rule
Standard 30 calendar days is used to calculate prorated items
474
Bare Title
Title conveyed using Deed of trust, in which Trustee holds Title without rights to ownership
475
Bargain and Sale Deed
grantor warrants that grantor has done nothing to harm or cloud the title.
476
Bargain Sale
Sale of propert for less the market value
477
Base Rent
Minimum rent due ina % lease arrangement
478
Basic Industry
An Industry that attracts income from outside the community
479
Basis
Adjusted Cost Basis
Cost Basis. Dollar amount assigned at time of acquisition;
| Adj Basis: after applying capital improvements, depreciation, etc
480
Before-And-After Method
Amount of compensation due to owners of land partially taken through condemnation;
Value of remaining property is the difference between before and after.
481
Before-Tax- Cash Flow
| BTCF, Pre-Tax Cash Flow
Net Op Income less debt service, prior to income tax deduction
482
Bench Mark
Local survey monument used to establish elevation to Mean Sea Level
483
Betterment
Capital improvement on property which is a desirable
| asset, compared to repairs where the original character is unchanged
484
Bilateral Instructions
One set of escrow instructions signed by both Selelr and Buyer
485
Binder
Two meanings:
Down payment for purchase of real estate;
Notice of coverage on an insurance policy
486
Bitumen
Asphalt residue
487
Black Liquor
Byproduct of paper production process, can be used as source of energy
488
Blended Rate
Interest rate of newly refinanced loan, greater than old loan rate, but less than current market rate
489
Blighted Area
Serious decline in real property values in an area
490
Blind Advertising
Advertising that does not disclose that the party is a licensee acting as an agent
491
Board Foot
Volume measure of lumber, equal 144 inch cubed
492
Board of Equalization
State Tax board, ensures local property tax is uniformly assessed
493
Board of Governors
Created by Fed Reserve to regulate banking system
