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Real Estate Class > Vocabulary Words For State Exam Review-1 > Flashcards

Vocabulary Words For State Exam Review-1 Flashcards

1
Q

Principle of Progression:

A

A valuation principle that says having a nicer, more expensive home near-by can increase the value of a property.

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2
Q

Federal National Mortgage Association (FNMA):

A

“Fannie Mae” is a popular name. For this federally charted corporation which creates a secondary market for existing mortgages. FNMA does not loan money directly, but rather buys DVA, FHA and Conventional loans.

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3
Q

Functional Absolence:

A

Loss in value resulting from functional problems caused by age or poor design.
ie. a property with one car garage in a four bedroom house.

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4
Q

Subject to:

A

Situation in which a buyer take title to property but existing loan stays in the name of seller-seller is primary liable for the loan.

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5
Q

Material Fact:

A

is defined as anything that would affect 1) the value of the property or 2) a buyer/tenant’s decision to purchase/lease the property or how much to offer to purchase or lease the property.

Examples of material facts that must be disclosed include structural problems with the house, soil problems, a leaking roof, unpermitted construction, neighborhood noise problems, and anything else that a buyer would deem to be important

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6
Q

Special Warranty Deed:

A

A deed in which the grantor warrants only against defects that occurred only during ownership. No warrants in clear title before their ownership.

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7
Q

Bundle of Rights:

A

Legal rights of the real estate title holder-includes right of possession, right of control, right of exclusion, right of enjoyment, and right of disposition.

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8
Q

Lawful Object:

A

A contract must be legal. If a contract has an illegal purpose, it is void.

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9
Q

Contract for Deed

A

A contract for the sale of real estate under which the sale price is paid in periodic installments by the purchaser,….actual title is hold by the seller until final payment.

A Contract for Deed is a way to buy a house that doesn’t involve a bank. The seller finances the property for the buyer. The buyer moves in when the contract is signed. The buyer pays the seller monthly payments that go towards payment for the home.

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10
Q

CC&R’S

A

Covenants, Conditions and Restrictions:
Condominium documents that serve as the operational procedures describing the rights and prohibitions of the co-owner in a condominium association.

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11
Q

Implied Contract

A

An agreement created by actions, no written record nor verbal agreement..

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12
Q

Balloon Loan

A

Also known as amortized loan. At the end, borrower must refinance or pay off remaining balance- at end of term-loan is due.

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13
Q

Impounds

A

Account maintenance by the mortgage company to collect recurring cost of insurance and tax payments that are necessary for you to keep your home but are not technically part of the mortgage.

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14
Q

Leasehold Estate:

A

A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property, a leasehold estate is typically considered personal property.

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15
Q

Capitalization Rate

A

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

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16
Q

Township

A

The principal unit of the rectangular survey system. A township is a square with six mile sides and an area of 36 sq miles.

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17
Q

Client

A

When an agency relationship is created that involves fiduciary duty.

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18
Q

Encroachment

A

An encroachment is an unauthorized intrusion onto a neighboring property through the creation or extension of a physical structure (including flora) above or below the surface of land.

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19
Q

Inverse Condemnation

A

Inverse condemnation occurs when a government takes a property for public use that greatly damages the value of the plaintiff’s property.

Is a term used in law to describe a situation in which a person takes actions against against the government for taking their private property but failing to pay compensation as required but the 5th amendment….

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20
Q

Eminent Domain:

A

Eminent domain refers to the process by which the government may seize private property with proper compensation, but without the owner’s consent.

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21
Q

A listing agreement is an

A
  1. Unilateral or bilateral contract
  2. Employment contract
  3. Contract to find a buyer for a property
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22
Q

Encumbrance:

A

Anything which affects or limits the fee simple title property.

An encumbrance is a claim against an asset by an entity that is not the owner. Common types of encumbrances against real property include liens, easements, leases, mortgages, or restrictive covenants. Encumbrances impact the transferability and/or use of subjected properties.

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23
Q

Variance

A

A zoning variance provides a property owner with the legal permission to build structures or use land in ways that are contrary to existing local zoning .

Is an exception to the rule that will not affect the rest of the community

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24
Q

Land is subject to an easement is said to be

A

Encumbered

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25
Q

Easement

A

An easement is the grant of a nonpossessory property interest that provides the easement holder permission to use another person’s land.

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26
Q

Quitclaim Deeds

A

Are a form of voluntary conveyance of a property without any warranties. Adverse possesion

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27
Q

Prepayment Penalty

A

An agreement between a borrower and a bank or mortgage lender that regulates what the borrower is allowed to pay off and when, for example; many mortgages allow up to 20% of loan balance to be paid off each year.

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28
Q

Abstract

A

Is the history of all recorded documents that affect the title.

Written history of property.

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29
Q

Accretion

A

Gradual build up of soil; person gains title to added land built up on property.

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30
Q

The Illinois Human Rights Act prohibits discrimination against the federally-protected classes, plus which of the following?

A

The easiest way to remember this is by using the acronym MAMA-SO. Unfavorable military discharge does NOT include dishonorable
Marital Status
Age
Military Status
Ancestry
Sexual Orientation
Order of protection

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31
Q

Reciprocity

A

If you hold a real estate license in an Illinois reciprocal state, no classroom or coursework is required. The only requirement will be for you to take the state specific portion of the licensing exam.

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32
Q

1031 Exchange

A

Exchanging like-kind property for like-kind of property, resulting in a deferral of capital gain tax; also called a tax-free exchange

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33
Q

Accounting

A

A client level duty relating to account of earnest money, actions. Etc

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34
Q

Accurate

A

A client level duty relating to disclosure of all material defects(including latent or hidden defects) to any customer. Ex leaky roofs, Leakey basements

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35
Q

Acknowledge

A

Occurs when a document, such as a deed is signed by the sellers in the presence of a notary public, acknowledging that is a voluntary act.

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36
Q

Usury Laws

A

Are designed to protect the borrower.
Usury laws set the maximum interest that a lender can charge.

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37
Q

Regulation Z

A

Applies to residential loans.

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38
Q

Homestead Rights

A

Single $15000
Married $30000

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39
Q

Timeshare Ownership

A

Would be the most evidenced by tenancy in common-different owners owning one unit.

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40
Q

A Cooperative

A

Involves owning stock of a corporation that gives a person a property lease right in an apartment.

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41
Q

Fee Simple Title

A

Ownership to their units.

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42
Q

Emblements

A

Growing crops in the field; allows the seller to come back and harvest after the sale.

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43
Q

Severance

A

Converting real property into personal property.

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44
Q

Tenancy in Common

A

Two people own property-one dies, the heirs receive the property.

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45
Q

Joint Tenancy

A

Carries the right of survivorship.

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46
Q

Appurtenances

A

Runs with the land_A Right, privilege, or improvements that passes with the land. natural appurtenances will be trees, water and streams, man made appurtenances will be houses and fences

A right or privilege or improvement that is permanently attached to the land.

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47
Q

A mortgage lien

A

Is an encumbrance not an appurtenance.

48
Q

Easement

A

Gives someone else the right to use part of your property while you still retain ownership rights.

49
Q

Servitude

A

Is the right to use the land of another(such as an easement or license)

50
Q

Life Tenant

A

When a tenant dies, the property goes to the current tittle holder; either back to the original grantor, or a third party remainder man.

51
Q

Mortgage Lien

A

Is a voluntary lien, placed on property by the owners themselves…..to secure a note.

52
Q

Mechanic’s Liens

A

Take priority, based on the date work was started.

53
Q

Graduated Payment Mortgage

A

Usually has gradual increases for the first few years and then levels out.

54
Q

Deed in Liew of Foreclosure

A

An agreement whereby the lender receives the deed to a property from the defaulting borrower rather then foreclosing-this is referred to as voluntary alienation, this does help save the borrowers credit.

55
Q

An Estoppel Certificate

A

States the current loan balance on note; used especially when notes are sold to others.

56
Q

A Quit Claim Deed

A

Is where the seller makes no promises whatsoever-This would protect the lender from future title claims
-Quitclaims protect the grantor or seller, not the grantee or buyer.

57
Q

Involuntary Alienation

A

Means to transfer something with out an owners deed.

58
Q

Redemption

A

Is the right to “buy back” your property from whoever bought it at a foreclosure sale.

59
Q

Why is a mortgage recorded?

A

To protect the lender.

60
Q

Actual Notice

A

A situation where a person has actual or personal knowledge of a transaction, etc

61
Q

Ad Valoren

A

Based on value.

62
Q

Administrator

A

Court appointed person to oversee state distribution of deceased; only applied when one dies intestate ( with out a will)

63
Q

Sherman Anti-trust Laws

A

To ensure a fair and competitive business environment in the market place.
Price fixing provisions….

64
Q

Loan Origination Fee

A

Would show as a debit to the buyer and no record for the seller. The buyer pays for the loan originators fee.

65
Q

Chattel

A

Real personal property

66
Q

Avulsion

A

Sudden tearing away of land

67
Q

Reliction

A

Water reduces, new land is acquired.

68
Q

Appurtences

A

Run with the land.

69
Q

Free Hold Estate

A

Unlimited in duration/ownership.

70
Q

Fee Simple Estate

A

Absolute ownership, not free from all encumbrances ie. taxes

71
Q

Fee Simple Defeasable

A

Has a condition that can cause loss of title.

72
Q

RESPA

A

Would apply to 1-4 family residential dwelling.

73
Q

Economic Absolence

A

A change in flight patters that caused a loss in property value.

74
Q

A Bill of Sale

A

Is used to transfer the ownership of personal property.

75
Q

Bilateral

A

Promise to promise.

76
Q

Consideration

A

Can be anything of value that is behind exchange for the purpose of the contract. This is often money, but it doesn’t need to be. Anything “valuable” “good”, “sufficient” and adequate.

77
Q

A land contract

A

Is also referred to as installments contract as well as contract for deed.

78
Q

In a land contract or contract for deed..

A

The seller who retains the fee simple title is referred to as the vender-(seller always called the vendor)

79
Q

Contract for Deed

A

Is owner financing where the buyer makes payments directly to the seller.

80
Q

Bounds

A

Markers, in a metes and bounds description.e.g stake, well etc.

81
Q

Breach

A

Where a party to a contract does not perform according to the terms of the agreement.

82
Q

Civil Rights Act of 1866

A

Banned all racial discrimination

83
Q

Civil Rights Act of 1968

A

Banned discrimination in residential real estate on the basis, color, religion, national origin, sex, handicap, or familial status.

84
Q

Special Assessment Tax

A

Is a real estate tax and if not paid, the property could be auctioned off. This tax is for improvements that affect certain properties. E.g sewers, sidewalks and gutters.

85
Q

Buffer Zone

A

Separates two incompatible areas.

86
Q

Purpose of master plan

A

Is a plan for the cities future growth.

87
Q

Leasehold Estate

A

Means ownership of some kind.

88
Q

Non-free hold estate

A

Is a leasing situation.

89
Q

Net lease

A

Is where a tenant pays expenses such as taxes and insurance.

90
Q

Gross Lease

A

Is where the landlord pays expenses, taxes, assessments, insurance, etc

91
Q

Graduated Lease

A

A lease where the payments can go up or down but are pre-determined.

92
Q

A person bought a rental property for $43,750. It was assessed for tax purposes at a value of $39,950 with an assessment rate of $1.50 per $100 (15 mills). What would be the monthly tax assessment amount to the nearest cent?

A

$39,950 x 1.5% = $599.25 divided by 12 = $49.94.

93
Q

A buyer bought a property for $60,000 which had an appraisal of $58,000. If the lender charged 1 1/2 discount points, with the borrower receiving a 90% loan, how much were the points?

A

A lender makes a loan on the lower of sale price or appraisal. Discount points are computed based upon the actual loan amount. In this case, the lower of the two figures is $58,000 x 90% = $52,200 for the loan x 1.5% = $783 for the discount points.

94
Q

Equitable interest

A

Is the type of interest the buyer receives in the property after the seller accepts the offer.

95
Q

Truth in-Lending Laws are also referred to as:

A

Regulation Z

96
Q

A lender charging an interest rate that is higher than allowed by laws would be violating

A

Usury laws

97
Q

The Equal Credit Opportunity Act prohibits discrimination based on(bans credit discrimination based on:Race, color, religion, national origin, sex, age and marital status)

A

A person being a senior citizen- A persons age cannot be used for discrimination in making a loan, assuming the person is of legal age.

98
Q

Right of Rescission

A

Allows for a party to rescind or back out of a contract. On many loans, a borrowers has a 3-day right to rescind (back out). However, there is no right of rescission with a real estate sales contract.
There is a 3-day rescission on home improvements loans.

99
Q

Partially amortized loan

A

There are generally smaller payments than a fully amortized loan because one only partially pays down the loan balance over the term.

100
Q

Package Mortgage

A

Uses real and personal property as security.

101
Q

Addendum

A

In addition made to an original contract.e.g., adding the requirement that a roof be repaired. Also, sometimes referred to as amendment.

102
Q

Title insurance policy lists

A

All recorded defects against the title.

103
Q

What does a standard title insurance policy insure against?

A

Any recorded title defects or liens

104
Q

An assumed loan in real estate transaction would appear on the closing statement as a:

A

Debit to the seller, credit to the buyer.

105
Q

Arms-Lenghth Agreement

A

Refers to an agreement arrived at under no undue pressure

106
Q

Capitalization Approach

A

An approach to value best used on income producing properties such as shopping centers, apartment complexes, etc. This approach uses the net operating income and a capitalization rate to estimate the value. Also referred to as the income approach.

107
Q

Chronological Age

A

Actual Age

108
Q

Competitive Market Analysis

A

(CMA) What an agent uses in trying to find a value for a piece of property; a residential agent analyzes sold properties, currently for sale properties, and expired listing properties in an effort to determine a renga of value for a particular piece of property.

109
Q

Conformity

A

Properties should conform to the neighborhood to maintain the greatest value.

110
Q

Contribution

A

Value of improvement is equal to what it adds to total value.

111
Q

Cost Approach

A

An approach to value best used on special purpose properties, such as churches and hospitals; the approach values a property by determining the current replacement cost, less depreciation, plus the current land value.

112
Q

Cubit Foot Method

A

A way to determine current replacement cost by taking the cubic footage(length times width height) of a property times a cost per cubic foot.

113
Q

Decreasing Returns

A

Money spent on improvement does not add at least that much or more to the total value.

114
Q

Demand

A

An element of value; must be wanted.

115
Q

Economic Life

A

Number of years item is profitable; economic life is shorter than physical life.

Real Estate Class (19 decks)

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