vocab Flashcards
Principle of progression
A valuation principle that says having nicer, more expensive homes nearby can increase the values of a property
Federal National Mortgage Association (FNMA)
“Fannie Mae” is the popular name for this federally chartered corporation, which creates a secondary market for existing mortgages, FNMA does not loan money directly, but rather buys DVA, FHA, and conventional loans.
Functional obsolescence
Loss in value from functional problems caused by age or poor design
Dual agent
When a real estate licensee works with both the buyer and the seller.
Subject to
Situation in which a buyer takes title to property but the existing loan stays in the name of the seller, so the seller is primarily liable for the loan
Material fact
fact that a reasonable person would think was relevant to decision being made
Special warranty deed
A deed in which the grantor warrants only against defect that occurred during their ownership ( the grantor of a special warranty deed does not provide a warranty or guarantee against any defects in clear title that existed before their ownership
Bundle of rights
legal rights of the real estate title holder. includes the right of possession, the right of control, the right of exclusion, the right of enjoyment and the right of disposition.
Lawful object
A contract must be legal. If a contract has an illegal purpose, it is void
Contract for deed
A contract for the sale of real estate under which the sale price is paid in periodic installments by the purchaser, who is in possession and holds equitable title, although actual title is retained by the seller until final payment.
CC&Rs
Covenants, conditions, and restrictions. Condominium documents that serve as the operational procedures describing the rights and prohibitions of the co-owners in a condominium association
Implied contract
An agreement created by actions of the parties involved, but there is no written record nor any actual verbal agreement. An implied contract is a legal substitute for a contract that is assumed to have been drawn.
Unenforceable Contract
Contract which cannot be enforced in a court of law-
Impounds
Account maintained by the mortgage company to collect recurring costs such as insurance and tax payments that are necessary for you to keep your home, but are not technically part of the mortgage
Leasehold estate
A tenants right to occupy real estate during term of a lease, generally considered to be a personal property interest
Capitalization rate
The rate of return a property will produce on the owner’s investment
Township
The principal unit of the rectangular survey system. A township is a square with six-mile sides and an area of 36 square miles
Enforceable contract
An Agreement that can be implemented in court
FHA
The Federal Housing Administration was created by the National Housing Act of 1934 with the intention of regulating the rate of interest and the terms of mortgages that it insured in order to make home ownership more accessible
Taxation
Financial charge (or some other type of levy imposed) upon a taxpayer by a governmental organization
Mortgagor
Entity giving the promissory note that serves as evidence of the debt. The borrower is known as the mortgagor
Fee Apraisor
Self-employed appraiser who charges a fee for each appraisal he does
Earnest Money Deposit
Deposit made to a seller representing a buyer’s intention to purchase a home in “good faith”
General Agent
Agent who has the authority to perform any and all acts required for a job or business
Special Assessment
A tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement, such as a street or sewer
Trust deed
Three-party system of securing a promissory note with a trustor, trustee and Beneficiary
Open Listing
Unilateral contract in which multiple agents can be employed to find a buyer. If the owner finds a buyer, no commission is paid
Redlining
Discriminatory practice of mortgage lenders in which they draw “red line” around portions of a map to indicate or neighborhoods where they don’t want to make loans
Equitable title
The beneficial interest of a person whom equity regards as the real owner but the legal right vests with another.
Cost (Replacement) Approach
Method of estimating the value of property by adding the appraiser’s estimate of the replacement cost of the building to estimated land value and subtracting depreciation. It is most commonly used to appraise special purpose properties. It sets the upper limits of value and is most appropriate for the appraisal of new property.
Laches
An equitable doctrine used by the courts to bar a legal claim or prevent the assertion of a right because of undue delay, negligence, or failure to assert the claim or right
Encroachment
When a neighbor is using land which they not own
Competent or capable Parties
All parties entering into a contract must be “legally fit” (having the necessary age, ability and authority to accomplish any given acts or duties) for the contract to be valid.
Unilateral Contract
An agreement in which person makes a promise - for example, an open listing
listing
Employment contract between principal and broker where the broker is paid by the principal to find a buyer.
Prepayment Clause
Allows a penalty to be enforced if a mortgage is paid off early
Servient Tenement
The land burdened by the easement
Marginal Tax Rate
Percentage of tax applied to your income for each tax bracket in which you qualify. In essence, the percentage taken from your next dollar of taxable income above a predefined income threshold. It is applied to the nearest dollar of taxable earned income.
Value
The current worth of owning a particular property, or what someone would pay for it in a fair transaction. Its original cost has no relevance to its value
Exclusive Agency Listing
Employment contract where the seller agrees to pay a broker commission if any agent/broker finds a buyer. But if the owner sells it themselves, the broker gets no commission
Sherman Anti-trust Act
Federal Law that promotes free market competition by prohibiting any contract, trust, or conspiracy in restraint of interstate or foreign trade
Joint Tenancy
Concurrent ownership with unities of Time, Title, Interest and Possession (TTIP). Has right of survivorship, meaning if one joint tenant dies, the surviving joint tenants take the remaining interest.
Grant Deed
A deed that included two implied warranties: 1. The grantor has not already given the title to another person; and 2- The estate has no undisclosed encumbrances. It is not necessary to record the deed. Grant deeds are considered officially executed when signed by the grantor.
Subordination Clause
A clause in an agreement which states that another agreement will take priority over it. Allows a mortgage to be added at a later date which will take priority over an existing mortgage, such as when an owner re-finances a piece of property that already has a second mortgage, and the re-financing lender requires the second mortgage provider to ass a subordination cause which gives the re-financing loan priority over the second mortgage. Subordination is the act of yielding priority
Multi-Family Residential Use
An R-3 zone is for Multi-family Residential use
Protection Period Clause (Safety Clause)
Clause which protects the listing broker’s commission if the owner sells to a buyer procured by the broker, even after the listing agreement has ended. The name of the potential buyer(s) should be documented in writing at the end of the listing period. This is not a time to find a new buyer.
Interest
Amount charged to a borrower for the privilege of using the lender’s money. It is effectively rent on money.
Usury
The practice of charging more than the rate of interest allowed by law.
Contingencies
A provision or condition in the purchase of real estate requiring a certain act to be done or an event to happen before the contract becomes binding
Reconveyance deed
A deed which indicates that the borrower is released from a mortgage debt and transfers the property title from the lender (or beneficiary) to the borrower. Most commonly issued when a mortgage has been paid in full.
Exclusive Listing
Employment agreement in which a specified agent earns a commission if a property is sold within a specified time frame. The specified agent will generally earn a commission, even if another licensee finds a buyer. If two exclusive listings are signed, the seller may have to pay two commissions.
Easement in Gross
Easement which attaches to an individual (person or entity). There is no dominant tenement- for example, the power company’s right to access utility lines.
Graduated payment Adjustable Mortgage (GPAM)
Allows for the deferment of certain principal payments. Typically, this means that payments on a loan start a lower monthly payment and increase over a specified time frame
Earnest Money Deposit
Deposit made to a seller representing a buyer’s intention to purchase a home in “good faith”. An earnest money deposit says to the seller: “Yes, I am serious about buying your house and I’m willing to put my money where my mouth is.” It can be cash, a promissory note, checks, a postdated check, or any items of value.
Net listing
Employment contract in which seller pays the listing broker all purchase price proceeds over and above a minimum figure required by the seller
Life estate Pur Autrie Vie
An interest in real property that lasts the length of someone’s life (who is not the life tenant). It is a type of freehold estate because it is indefinite in duration. When the “measuring life” ends, title reverts to the original owner (reversion) or a remainderman.
Police Power
The government’s right to regulate conduct or property to protect the health, safety, welfare, and morals of the community. Includes regulations like zoning laws
Statute of Frauds
