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Real Estate NJ by Jawad > Terms/Words to know > Flashcards

Terms/Words to know Flashcards

1
Q

Dower

A

a wife’s life estate interest in her husband’s property

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2
Q

Curtesy

A

a husband’s life estate interest in his wife’s property

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3
Q

Real estate can be defined as

A

land and everything permanently attached to it

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4
Q

The distinguishing feature of a defeasible fee simple estate is that…

A

it may revert to a grantor if the prescribed use changes

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5
Q

a distinct feature of a joint tenancy is that joint tenants

A

cannot will their interest to a party outside the tenancy

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6
Q

There are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property B is said to be which of the following in relation to property A?

A

Servient estate

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7
Q

In a case of foreclosure, which lien will always be paid first?

A

Tax liens

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8
Q

What does the “chain of title” to a property mean?

A

A chronology of successive owners of record

list of people who owned the home in the past

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9
Q

The Uniform Residential Landlord and Tenant Act fundamentally attempts to…

A

encourage fairness and simplicity in lease forms and provisions

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10
Q

Syndicate

A

Group of investors who combine funds to buy, develop, and/or operate a property. They keep investing in more properties if successful

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11
Q

Joint Venture

A

Group of investors who combine funds, similar to Syndicate, but only for 1 Project. They do not keep working together on additional projects.

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12
Q

Opportunity Cost

A

The return that an investor could earn on capital invested with minimal risk

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13
Q

General partnership

A

A syndicate in which all members participate equally in managing the investment and in the profits or losses it generates

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14
Q

Limited partnership

A

Invest $ in the property but do not participate in operating the property. Only responsible for their original investment… if there’s a loss on the property – the general partners are responsible for any debt exceeding your initial investment

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15
Q

How do you calculate Taxable Income?

A

Net Amount - Interest & Depreciation

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16
Q

Are there pre-payment penalties in New Jersey?

A

NO

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17
Q

Deductions - you can deduct your T.I.P.P. - what does the T.I.P.P. stand for?

A
  • Taxes
  • Interest on mortgages
  • Prepayment penalties (none in NJ)
  • Points
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18
Q

What are Capital Improvements

A

Ex: putting on an addition, paving a driveway, replacing a roof, adding central air conditioning, and rewiring the home

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19
Q

What is CASH FLOW

A

The amount of money you have left after every expense (including your mortgage payment) is paid

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20
Q

The Four principal types of Investment are

A

Money, Equity, Debt, Real Estate

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21
Q

TAXATION: the “Adjusted Basis” is

A

The cost of the investment plus capital improvements, less depreciation

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22
Q

Can principal payments on your Mortgage be deducted from taxes?

A

NO, only your Interest payments may be deducted for tax purposes

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23
Q

How much is the Capital Gains tax exclusion?

A

Up to $250,000 for a single seller and $500,000 for a married couple can be excluded from gains tax every Two Years

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24
Q

Pre-Tax Cash Flow =

A

= (NOI - Debt Service)

  • NOI: net operating income
  • Debt Service: periodic principal and interest payments
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25
Q

Are “Real estate, Real Property, and Realty’ all the same?

A

YES

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26
Q

Real Estate Taxation: You have to adhere to “PETE”:

A
  • Police Power (zoning, health dept)
  • Eminent Domain (the right for them to take away your property for gov’t use
  • Taxation (gov’t has right to tax you)
  • Escheat (if you pass away with no heirs, gov’t sells your house and takes your money
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27
Q

“Equalization” is used to…

A

minimize discrepancies

28
Q

How long does it take for you to go into Tax Foreclosure when you don’t pay your taxes…?

A

6 months. Taxes are always the #1 Lien on the property, placed every year on January 1.

29
Q

Dual Agency

A
  • 2 Agents from one SAME broker represent the buyer/seller (ex: 2 agents from Weichert)

** It’s not dual agency if there’s 1 agent from 1 broker and 1 agent from another brokerage, even though they’re under the same franchise name **

30
Q

What is ad valorem taxation

A

Property tax, based on assessed value.

o Ad valorem tax is levied annually on the taxable value of a property in order to help fund government and public services

31
Q

What is ‘Tax Base’?

A

The total of all assessed values in a jurisdiction excluding exemptions

32
Q

Tax Rate - What is the Millage Rate?

A

Take the millage rate and multiply by .001 (two decimals to the left)

** Think of “MiLLage” with 2 L’s, so you move the decimal 2 spots to the ‘L’eft

33
Q

How do you calculate the Tax Rate Derivation?

A

Divide tax requirement by the tax base

** Think of “Derivation” as “Divide” so you have to divide the tax requirement by tax base (tax “base”, “base” on the bottom of the division)

34
Q

How is the individual tax bill assessed?

A

Individual Tax Bill = RATE x Taxable Value

Taxable value: (assessed value minus exemptions and adjustments)

35
Q

ETHICS: Fair Housing Act: “Racist Realtors Can Never Have Financial Success” (What does R.R.C.N.H.F.S stand for in regards to discrimination)

A 
Race
Religion
Color
National Origin
Handicapped 1988
Familial Status 1988
Sex (as a gender) 1974
36
Q

RESPA =

A

Real Estate Settlement Procedures Act

37
Q

Reg Z ->

A
  1. APR - Lender has to disclose this
  2. Interest Rates - no triggering
  3. Right of rescission - 3 days to cancel
38
Q

“TRID” ->

A

Truth in lending
Respa
ID - Integrated Disclosure

^ “TRID”

39
Q

Condominium is

A

an ownership of a unit of airspace plus undivided interest in common elements

40
Q

A Co-Op is

A

an ownership of a share in a corporation, plus proprietary lease in unit

** Owners potentially liable for expenses of entire co-op. Creditors may foreclose on entire property**

41
Q

What is a lien?

A

A financial burden on the property

42
Q

What is an Encumbrance?

A

aka “mortgage” … a “cling” on the property that lowers the value of a property

43
Q

Seller’s Property Condition Disclosure (SPCD) Form contains what?

A

it contains the seller’s attest of the property’s condition at the time of contracting for sale.

  • must be transmitted to buyer by a state-stipulated deadline*
  • Required to be completed with Sale of contract*
  • If seller answers ‘no representation’ - seller cannot be held liable as no position was taken.*
  • Buyer must acknowledge receipt when given the completed form*
44
Q

What kind of interest does the buyer own after a real estate sale contract is signed by the principal parties?

a) Legal Title
b) Lienholder interest
c) Remainder interest
d) Equitable title

A

d) Equitable title

45
Q

What parties must be identified in a sale contract?

a) Only a seller
b) Seller and buyer
c) Seller, buyer, and agent(s)
d) Seller, buyer, and title company

A

b) Seller and buyer

46
Q

To create an enforceable option-to-buy contract, there must be an exchange of:

a) a promise to sell and a promise to buy
b) valuable consideration and a right to buy
c) valuable consideration and a promise to buy
d) a down payment and a post-dated contract for sale

A

b) valuable consideration and a right to buy

47
Q

An option-to-buy is:

a) not assignable unless the contracts specifically allows assignment
b) never assignable
c) assignable, with seller permission
d) assignable unless the contract prohibits assignment

A

d) assignable unless the contract prohibits assignments

48
Q

Foreclosures: Judicial Foreclosure: What is a deficiency judgment?

A

judgment by court on borrower to forfeit other property to pay off any shortfalls from foreclosure

49
Q

Foreclosures: Strict Foreclosure

A

court orders legal transfer of title directly to lender without public sale

50
Q

Foreclosures: Deed in lieu of foreclosure

A

‘power of sale’ granted to lender; no suit; no deficiency judgement; NO REDEMPTION PERIOD AFTER SALE

51
Q

Foreclosures: Non-judicial foreclosure

A

‘power of sale’ granted to lender; no suit; no deficiency

52
Q

Land Use: What is a master plan

A

A land use plan for a municipality, county, or region which incorporates community opinion, the results of intensive research, and the various land use guidelines and regulations of the state. Acts as a blueprint for subsequent zoning ordinances and rulings

Know that its for a municipality/county/region, not the for the State*

53
Q

What is a quitclaim deed used for?

A

QuitClaim Deed: Commonly used to transfer property to another person, as a gift. (Usually done in Marriages, or between Family Members)

Since this is considered a “gift” they don’t pay taxes for transferring the property

54
Q

What is the Metes and Bounds method?

A

describes perimeter by landmarks, monuments, distances, angles
Usable within the rectangular survey system

Starting at Point of Beginning (POB), follow perimeter, return to POB

55
Q

What is the Lot and Block System? (Recorded Plat Method)

A

used to describe properties in residential, commercial, industrial SUBDIVISIONS

Tracks of land divided into LOTS, then grouped into BLOCKS

56
Q

What are the dimensions of a township?

A

6 miles by 6 miles

57
Q

How many sections are in a township?

A

36 sections per township. 1 section = 640 Acres

58
Q

What is a contract?

A

An agreement between two or more parties who have a “MEETING OF THE MINDS”, and have pledged to perform (or refrain from performing) some act

  • a valid contract is legally enforceable by meeting certain requirements of contact law
59
Q

The key things a Contract needs to be Valid:

A
  • competent parties
  • voluntary act of good faith
  • mutual consent
  • valuable consideration
  • legal purpose
60
Q

Conveyance Contract Requirements:

A
  • must be in writing
  • must contain legal description
  • must be signed by one or more parties
  • exception: per Statute of Frauds, leases for one year or less may be verbal and still be enforceable
61
Q

Are contracts assignable?

A

They are assignable UNLESS expressly prohibited… or if the contract is a personal service contract (Listings not assignable)

62
Q

Bilateral vs Unilateral contract

A

Bilateral: both parties promise to perform
Unilateral: one party performs only if other party performs

63
Q

Express vs Implied Contract

A

Express: all terms expressly agreed to
Implied: unintentional agreement deemed to exist due to terms implied by actions

64
Q

Executed vs Executory Contract

A

Executed: fully performed
Executory: performance yet to be completed

65
Q

Misrepresentation and Fraud: What is “puffing”?

A

The licensee boasting about property’s benefits

they are “puffing” the property’s benefits

66
Q

What is a subagency?

A
  • outside brokers and agents who help the listing agent
  • listing broker’s own agents
  • (disallowed in some states)
67
Q

What can the buyer do if a seller defaults in a sale contract?

A

The buyer can cancel, or sue for damages or specific performance (ex: buyer’s deposit)

Real Estate NJ by Jawad (1 decks)

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