SC REAL ESTATE EXAM REVIEW (2022/2023) ALREADY PASSED

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SC REAL ESTATE EXAM REVIEW (2022/2023) ALREADY PASSED how often do realtors renew licenses ✔✔every 2 years by June 30th which I the end of the fiscal year how many hours of continuing educatio... n do you need ✔✔8 hrs every 2 years how long do you need to wait to reinstate your license after it is revoked ✔✔1 yr can a broker in charge be over move than 1 branch office at a time ✔✔yes broker in charge, receives earnest money at start o acceptance/written acceptance offer, how long does he have to deposit it ✔✔48 hours, excluding bank holidays and weekends coastal zone management-erosion of two things that affect the set back lines ✔✔sand dunes and beach front landlord tenant act-what essential service does he provide access to ✔✔heat--hot/cold water-- electricity latent material defects what do not count are not included ✔✔stigma defects psychological death or manor of death virus not transmitted through house offsite hazards sex offender broker in charge has a duty to notify the real estate commission when a sales person moves ✔✔yes when is it legal to represent both buyer/seller ✔✔dual agency form is signed by both clients who doesn't have to have a real estate license ✔✔owner attorney trustees/receivers forrester government employee can you do property management with a real estate license ✔✔yes when you receive a deposit, where do you deposit to ✔✔trust account 4 main disciplinary actions that the RE Comm can take against realtor ✔✔revocation fine up to 1000 per violation suspension public reprimand dispute of earnest money, what does BIC do? ✔✔hold money until dispute is resolved by written agreement or court order what kind of damages does earnest money cover ✔✔liquidated damages if a licensee wants to transfer companies by mail ✔✔transfer form sign it and new BIC. Send in old license, thy will send new license///////can be done online in sc, net/price listing illegal ✔✔yes potential grounds for disciplinary action ✔✔fraud forgery comingling---- steering blockbusting redlining what is the max against someone selling real estate without a license ✔✔up to 500 and or up to 6 months in jail under homestead act, 3 groups that qualify for discount? ✔✔62 age elderly disabled legally blind 3 main exceptions of to our duty of confidentiality ✔✔court order consent defend if a buyer chooses not to be represented ✔✔a customer what state legislative act lets local govt zone ✔✔enabling acts if seller agrees to allow selling agent to keep any dollar amount over certain price ✔✔net listing a buyer signs agreement and it doesn't matter who procures the sale ✔✔exclusive buyer agency agreement example of a general lien ✔✔judgement what specific lien are not recorded in public record ✔✔property taxes special assessments in an appraisal, when we apply the 3 approaches to value ✔✔reconciliation- 3 approaches to value 3 approaches to value ✔✔sales comparison income cost approach under lead paint act, it applies to houses built before? ✔✔1978 buyer has how many days to test for lead paint ✔✔10 days under the superfund act, what are the 3 types ✔✔strict liability joint/several retroactive what if new terms are made to contract, what should we make client do ✔✔initial and date what kind of title does the buyer get when entering into a binding contract ✔✔equitable title an option contract binds the.... ✔✔seller under statute of fraud, contracts must be in what form to be enforcable ✔✔in writing on the contract, it states that "time is of the essence" if one party is not ready which party to can declare breach ✔✔whatever party is ready what events will terminate a selling agreement ✔✔death of seller substantial destruction of property mutual release expiration date loss of title confidentiality is part of fudiciary, what else could it be worded as? ✔✔loyalty where does the common law common law come from ✔✔England but now court decisions buyer's agent tells the wrong zoning ( fudiciary duty) ✔✔reasonable care if the type of property has no limit on use when it is inheritable ✔✔fee simple if property is deeded as a recreational use only ✔✔determinable fee if you have a planned development.....what is the other name used? ✔✔Planned Unit Development MASTER PLANNED COMMUNITY if a senior citizen wants to get cash out of a house, what can they apply or ✔✔reverse mortgage if loan is not fully amortized, what will the last payment be? ✔✔balloon payment or the client usually refinance if the interest is paid after the period after it is earned? ✔✔in arrears adjustable rate mortgage is tied to an economic indicator ✔✔index if tenant puts in bookshelves, can they remove them at the any time, even at the end of the lease? ✔✔yes, they are considered trade fixtures what are the 4 tests for a fixture of a property ✔✔annexation adaptation intention agreement in a land contract, when does the seller give the legal title to the buyer ✔✔after final payment what are the 3 requirements to receive commission ✔✔license written agreement sale a lease agreement states that tenant can stay until landlord gives notice? ✔✔tenancy at will in a sale and lease back agreement, the buyer becomes ✔✔landlord/lessor buyers agent to keep buyer informed of new potential properties ✔✔disclosure what FED law requires the lender to state finance charges as an a interest rate ✔✔truth in lending act or as also known Regulation Z if seller is killed in an accident, what happens to the agreement ✔✔it is terminated if you are listing agent, seller signed buyers agreement, what should happen next? ✔✔return signed contract to buyer's agent what is the first step to cost approach? ✔✔estimate costs to what replacement/reproduction of improvements what fed law requires lender to provide a statement of all fees and charges ✔✔RESPA real estate settlement procedures act A conveys a life estate to B, when B dies, C gets the property. What does C have in the life o B ✔✔C has remainder interest What kind of liens can be searched by public record. what can you find? ✔✔mechanics lien easements mortgage heirs buyer makes offer, what happens to the earnest money if offer is revoked ✔✔it is returned who has stronger possession on deeds, recorded or unrecorded deed? ✔✔recorded deed what does a squatter not have to show that he has received from the owner? ✔✔permission A, B & C are joint tenants with right of survivorship. A & B allow C to sell to D then B dies. What are A & D? ✔✔A & D are tenants in common if state want to aquire a piece of property for a road, what is this called? ✔✔eminent domain under civil rights act of 1968, may a private social club restrict club lease or sale ✔✔yes----this is called open membership the listing agent listed a parcel was smaller than listed. Could they be liable? ✔✔yes what type of property does the seller has to complete the seller disclosure ✔✔residential for or under previously occupied 4 ways to deal with risk in property management ✔✔avoid control retain transfer if a contract is signed under diress? ✔✔voidable if deed contains 5 covidents/warranty (5 star general) ✔✔general warranty deed if agent channels away or to a certain area, based on protective status ✔✔steering primary feature of joint tenancy ✔✔right of survivorship independent contractor- realtor ✔✔is self employed form of tenancy that expires on a certain date ✔✔tenancy of years if home lacks of indoor plumbing it suffers from ✔✔functional opsolence depreciation approach ✔✔physical functional external if property is grandfathered out of current zoning ✔✔non conforming use if investors are talking about of return o property in certain area ✔✔capitalization rate what events can terminate an offer ✔✔revocation acceptance death destruction of property expiration/lapse of time rejection/counteroffer what type of deed will cure a cloud on a title ✔✔quit claim deed bitsy's home is smallest home in larger home area. what does she benefit from ✔✔progression what can zoning enforce/say? ✔✔set back line use coverage height density building materials appraiser is appraising is a restaurant, which approach should be used in appraisal ✔✔income what type of inspection should buyers get ✔✔home inspection may a lender refuse a loan to a member of a protected group with poor credit ✔✔yes civil rights act of 1866, unique on no acts of ✔✔racial discrimination if agent states on no they are moving into neighborhood ✔✔blockbusting (Paul Revere) if lender discriminates against marital status or age or public assistance ✔✔ECOA equal credit opportunity act may real estate agent give discounts to a member of his ethic group ✔✔no jones vs mayer (supreme court ruling) ✔✔Race if condo discriminates against man with minor children ✔✔familia status based upon scope of authority, what is a property manager ✔✔general agent under ADA, employees applies to what kind of employees? ✔✔15 or more employees standard title insurance, does it cover parties with possession with unrecorded rights ✔✔no under landlord tentant-15 days leaving dwelling without no reason or no rent ✔✔abandonment when license is revoked how long to reapply ✔✔1 year 7 licensed realtors 2 not licensed 1 licensed ✔✔real estate commission designation agency ✔✔is best contract who doesn't have to have a license ✔✔owners attorney trustee/receiver forresters govt employees PUD ✔✔planned unit development or master planned community disposition DEEPC ✔✔right to transfer exclusion "" ✔✔right to invite or exclude enjoyment "" ✔✔free from possession "" ✔✔right to occupy control "" ✔✔personal property PETE ✔✔police power eminent domain taxation escheat OLD CAR ✔✔obedience loyalty disclosure confidentiality accounting reasonable care commingling funds ✔✔cannot do, must be placed into a trust account BIC-Vicarious liability ✔✔they are liable or what sub agent does can delegate all duties how many states use the lien theory ✔✔23 states how many states use the title theory ✔✔27 states title theory provides more protection to the ✔✔lender if a buyer defaults on loan, lender must go to court in a ✔✔lien theory different levels of license status ✔✔active inactive lapsed cancelled suspended revoked 8 hr classes needed for renewal, to renew inactive, the fee is 2 times of the renewal fee age of property manager and how many hours of classes ✔✔18 and 30 hrs, no post classes needed age of salesman and how many hours of classes ✔✔18 and 60 hrs pre licensing and 30 hrs post licensing how many years of experience does a broker have before they get their license ✔✔3 years as a salesman when is a sales comparison approached used ✔✔in residential-pulled comps, less than 1 year old--preferably 6 months or less, weighted analysis=final value when is the cost approached used ✔✔church/school--est of cost or replacement or reproduction, deduct for depreciation, add land value when is the income approach used ✔✔commercial--estimate potential gross annual income, deduct for estimated vacancy and rest loss, deduct operating expenses, annual net operating income, cap rate Contracts- valid ✔✔offer acceptance consideration competent parties legality of purpose (missing one of the above points, voids contract) contracts-enforceable ✔✔statute of frauds statute of limitations voidable ✔✔fraud diuress coercion minor mentally ill intoxicated under the influence in south Carolina, real estate license law is administered by the ✔✔S.C. Real Estate Commission the south Carolina real estate commission has the authority to ✔✔make and enforce the rules by which all real estate licensees must abide the S.C. Real Estate Commission may investigate a licensee for all the following reasons EXCEPT ✔✔a written complaint submitted by an agent about a cooperative commission arrangement in S.C., which of the following would need to be a licensed real estate broker ✔✔person who employs fewer than three agents a real estate license is required for all the following activities EXCEPT ✔✔reselling a personal mobile home if engaged in real estate activities, which of the following persons are exempt from the real estate licensing program ✔✔attorneys at law if within scope of duties for a client the office mgr for a local office is responsible for the following activities, coordinating the flow of paperwork, preparing forms, hiring and supervising clerical personnel. the office mgr is ✔✔exempt from real estate licensing requirements in S.C., application for any real estate license must ✔✔be completed before taking the written exam in S.C., the following are requirements for obtaining a broker's license EXCEPT ✔✔having been actively engaged as a licensed salesperson for at least 5 years an applicant for a real estate license in S.C. must ✔✔respond within 60 days to the commission if notified of unsatisfactory credit a salesperson must complete which of the following course to renew his or her license ✔✔2 hrs of law update and 6 hrs of core and or elective courses in S.C. an unlicensed real estate assistant may perform which of the following activities ✔✔prepare and distribute flyers and promotional materials all of the following are true about nonresident licensees EXEPT that they must ✔✔take all education course requirements in S.C. a nonresident license applicant must file with the S.C. Real Estate Commission a ✔✔irrevocable consent to suits and actions under S.C. law, which of the following is exempt from continuing education requirements for license renewal ✔✔age 65 and has been in real estate for 25 years a licensee who wishes to manage condominiums ✔✔can have a provisional real estate license which of the following is correct regarding an applicant for BIC ✔✔may be exempt by the commission from the education requirements in S.C., an office/company policy ✔✔must contain the policy on fair housing the BIC of a real estate company becomes mentally incapacitated. what is the status of the company ✔✔it will continue to operate under an associate licensee for up to 6 month with commission approval what is mandatory for biennial continuing education ✔✔two hours of core hours are due biennially if a licensee pays the renewal fee but has not fulfilled the mandatory education ✔✔place the license on inactive status until the education requirements are completed a buyer broker delivers an offer to purchase and an earnest money check to the listing broker. the seller will not be able to see the offer for a week. when must listing broker deposit, the earnest money check into escrow account ✔✔withing 48 hrs of ratification, excluding Saturdays, Sundays and bank holidays in S.C. all of the following would be grounds for revoking a brokers license EXCEPT ✔✔agreeing with a seller to accept a listing for more than the normal commission rate in S.C., a broker may have his or her license suspended or revoked for all of the following actions EXCEPT ✔✔depositing earnest money into the firm's escrow account which of the following actions is legal and not a violation of license law ✔✔having the buyer client pay the commission when advertising real property, real estate licensees ✔✔must indicate that the ads were placed in the name of the real estate company in S.C. real estate commissions are ✔✔negotiable between the seller/buyer and broker commissions earned by a broker in real estate sales transaction ✔✔are determined by agreement of the broker an his or her principal a broker signs a listing agreement with the seller. the agreement contains the following clause "if the property has not been sold after three months from th edate of signing the agreement will automatically continue for an additional 3 month periods thereafter until the property is sold" ✔✔is illegal in SC regarding listing agreements in SC, which of the following could result in the suspension in revocation of a person's license ✔✔no specific termination date upon obtaining the listing, a broker or licensed salesperson is obligated to ✔✔give the person (s) signing is legible, signed, true and correct copy a person who believes that the have been illegally discriminated against may file a complaint with the SC ✔✔human affairs commission or HUD a housing discrimination charge must be filed with the SC Human Affairs Commission within ✔✔6 months when a BIC has his her license suspended for 2 years, what effect does this have on the associate brokers and salespeople affiliated with the BIC ✔✔their licenses must be returned to the RE commission a broker intends to open a branch office in a neighboring town. the broker applies for a branch office in a neighboring town. the broker applies for a branch office license, giving the name that clearly identifies its relationship with the main office. the broker names a licensee as the branch manager. under these facts, could the broker receive approval for the branch office ✔✔yes, if the RE commission approves the broker being BIC of two offices an associate broker is not satisfied with her present RE company and has decided to become associated with another. Before the associate broker can begin actively selling for the new company, the ✔✔assoc broker license, along with the proper fee and form signed by the new BIC an the old BIC. then must be sent to SC RE commission who in turn sends the new license to the second broker in any real estate transaction that a broker negotiates, the broker is not required to ✔✔inform the buyer of his opinion of the condition of the seller's title of the property which of the following are not necessary for a net listing broker to be entitled to a commission ✔✔a contract sale between the buyer and the seller a broker is convicted May 1st of possession and distribution of a controlled substance and it took place out of state. on June 13th the broker calls the SC RE commission and leaves a message informing them of the incident. based on these facts, what is true? ✔✔both the conviction and the broker's failure to notify within 10 days violate RE commission regulations how is a broker's commission determined in a real estate transaction ✔✔it must be stated in the listing agreement and is negotiated between the broker and the seller a licensee may have a license revoked if the licensee ✔✔fails to inform the tenant that the security deposit will be held by the owner of the property, not the management company all of the following are protected classes under the S.C. Fair Housing ACT EXCEPT ✔✔sexual preference a landlord has a no pets policy but someone that has a service dog wants to rent from them. ✔✔the S.C. fair housing act specifically prohibits the landlord from refusing to rent due to the no pets policy an agent's license renewal fee has been returned for insufficient funds, the SCRECommission ✔✔may take disciplinary action against the indvidiual under what circumstances can a broker keep personal funds in an escrow account? ✔✔a minimum amount to keep the account open monies received by a broker for a rent on a property must be ✔✔placed in the escrow account a RE co has a property mgmt. division. in this situation, what are the regulations regarding escrow accounts ✔✔a minimum of 1 escrow account is required a classified ad is considered is considered illegal by the SC RE commission when it ✔✔has a phone number but no more information continuing education is required by the SCRE commission ✔✔to protect the public after revocation of a license, a new license may not be issued ✔✔until proof is submitted of trustworthiness and honesty the SC real estate Commission is empowered to ✔✔suspend or fine a licensee for infractions for a SC licensee to remain on inactive status ✔✔if he pays biannual fees what legal recourse does an individual have if discriminated against in SC? ✔✔file a complaint within 180 days to the SC Human Affairs commission the SC fair housing laws provides protection from discrimination for all of the following EXCEPT ✔✔age the SC RE commission has set guidelines for the agency and agency disclosure form. a broker wishes to set these guidelines ✔✔a broker must ensure that each buyer is given the agency disclosure form if a provisional license is violated, the licensee might be subject to ✔✔temporary restraining order a listing broker knows that the 5 year protection for the town to include construction of a parkway that will border the property. what disclosure does the realtor owe the client ✔✔full disclosure because it is a material act a BIC fails to renew his license by June 30th but continues to engage in RE dealings ✔✔500 fine or/and imprisonment upon conviction SC requires some documents be retained by the BIC for a certain period of time ✔✔5 years for leases a buyer becomes a client of a broker at the time of ✔✔buyers agency agreement is signed by buyer and the broker a licensed broker, procures a ready, willing and able buyer for his seller principal. The seller accepts the buyers offer in writing then experiences a change of heart and withdraws the acceptance. In this situation ✔✔the broker is entitled to collect a commission a buyer prospect is interested in seeing a house listed with the real estate company, but does not wish to enter in a buyer agency agreement. a salesperson from the real estate company can show the buyer an in-house listing ✔✔even if the buyer remains a customer all of the following provisions are included in the SC RE Commission rules regarding listing agreements EXCEPT ✔✔a listing agreement must be accompanied by a qualified expert's report of the property's condition a buyer is interested in seeing a house listed with XYZ realty but does not wish to enter into an agency relationship. A salesperson from LMN can show the buyer the house is ✔✔XYZ realty obtains the seller's written consent to the sub agency a salesperson represents a seller who does not want sub agency or disclosed dual agency When prospective buyers ask to look at the property, the salesperson must ✔✔not show them the property unless they are customers six months after a buyer bought a house, the roof leaked during a rainstorm. when the house was listed, the seller told the broker that the roof leaked but they agreed not to tell any prospective buyers. the broker claims that the buyer never asked about the roof ✔✔the buyer can sue the broker for nondisclosure required by license law a broker entered into a listing agreement with a seller. another broker, who has been working with a buyer, learns of the property through MLS. The second, cooperating broker could, with the listing broker's permission represent ✔✔the seller as a subagent a broker decides to sweeten an MLS listing for a property by making a blanket offer of sub agency. is the broker's action acceptable ✔✔yes, if the seller agreed to the sub agency a brokerage's relationship with a buyer client or customer must be determined ✔✔at the time of the first substantial contract S.C. license law requires that the ✔✔broker keep all information that the seller has provided confidential a buyer has indicated self representation on the agency disclosure form. does the sales agent owe this buyer any duties? ✔✔yes, they buyer is owed fairness, honesty and accurate information in all dealings in S.C. when may an agent divulge client confidential information? ✔✔if required by law a buyer agency agreement must contain all of the following EXCEPT ✔✔notification of intent to cancel after expiration date in S.C. a buyer's agent may ✔✔offer properties the client has interest in to other potential purchasers a registration of each time share sold must be filed with the S.C. ✔✔Real Estate Commission what type of tax relief is available under the SC homestead act for a person who is over 65 ✔✔50,000 reduction in tax appraised value a tenant vacated the property because the landlord refused to fix the hot water heater. this is called ✔✔constructive eviction in S.C. which of the following activities regarding security deposits may result in legal penalties to the landlord ✔✔retaining the security deposit until the tenant gives a forwarding address what obligations does the smoke detector law impose on a landlord in a duplex ✔✔to provide and maintain smoke detectors under the S.C. consumer protection code, a purchaser may ✔✔elect to use the family attorney for the closing a seller terminates a listing with a broker. what fiduciary responsibilities are required for the broker after the termination ✔✔confidentiality and accountability survive the contract disclosed dual or designated agency would most likely occur in a ✔✔company which does not practice sub agency consent to disclosed dual agency ✔✔can be withheld by either party before a specific transaction 20 yrs ago, a homeowner obtained a 30 yr mortgage loan to purchase a home. the loan was 9.275 %. the homeowner is prepared to pay off the loan early. based on the facts, which of the following statement is true in S.C. ✔✔the lender is not permitted by S.C. statute to charge the homeowner a prepayment penalty on loans more than 150,000 in S.C. the landlord may terminate the rental agreement if a tenant fails to pay rent within how many days of the scheduled due date ✔✔5 days confidentiality can be breached in all of the following situations EXCEPT when ✔✔another client may benefit placing a company "For Sale" sign on a property is ✔✔prohibited without a signed listing agreement a tenant pays rent and a security deposit. what are the regulations regarding the deposit of these funds? ✔✔both rent and security deposit can be deposited into the same escrow account legal descriptions using the government survey system are not generally used in ✔✔the original 13 states In the sale of property, there is often confusion over whether an item is a fixture or personal property. What is the best way to avoid this confusion ✔✔specify questionable items of property in the written sales contract a major difference between freehold an nonfreehold estates is that all freehold estates ✔✔are in indeterminable duration although states make specific laws governing water rights and the rights in the land that borders water, most states follow one of the two basic doctrines regarding water rights. most common law is riparian rights what is the other doctrine that is used ✔✔prior appropriation a legal easement can be created by any of the following EXCEPT ✔✔merger of the titles an EIS, environmental impact statement ✔✔protects the impact on the environment of a proposed project an escheat occurs when ✔✔a property owner dies without heirs or a valid will an appraiser must be licensed or certified to handled federally relate work on residential property valued more than ✔✔250,000 3 identical homes in one area were listed at the same time where a market is on constant demand. what house would have sold for the lowest price ✔✔the first sold in helping a buyer select a lender with good credit, tax returns and documented salary, the might recommend a mortgage banker instead of a mortgage broker for all of the reasons EXCEPT ✔✔more variety of loan programs available which of the federal law regulates the advertisement of lender's credit terms ✔✔regulation Z which of the following consumer's would be able to derive the most benefit from a reverse mortgage ✔✔a couple in their late 60s who need to tap their home equity to help cover their expenses but do not want to sell their house according to the truth in lending act, any trigger terms are used in ad, all of the following disclosures must appear in ad EXCEPT ✔✔prepayment penalties and rebates a broker, acting as agent for seller, presents an offer to buy from the broker's fellow college roommate. the broker knows the buyer will pay more but still lowballed the offer. what should the broker do ✔✔tell the seller that the buyer will pay more a realty firm just entered into an agreement to represent a home builder in the sale of a new subdivision and has several potential buyers and purchasers. the agency has a relationship with ✔✔the builder which of the following real estate contracts in a service contract ✔✔a listing agreement a salesperson lists a property with a contract that allows for subagency and dual agency the sales person is ✔✔an agent to the broker and a subagent to the principal state laws differ on whether a buyer is entitled to know ✔✔a suicide that occurred in the house last year what critical aspect of the property inspection process must licensees convey to prospective buyers ✔✔need for inspections to be completed within the time stated in the contract houses built before 1978 may have dangerous levels of lead. because of this, some fed agencies such as FHA ✔✔require the buyer to acknowledge disclosure of the presence of any known lead paint unrepresented buyer asks the seller agent that if he should get a property inspection. how should they respond ✔✔if you feel it is in your best interest, please do so a broker has brought a ready, willing and able buyer to the seller. in most listing contracts, the broker has earned commission when ✔✔the seller accepts the offer a prospective buyer made an offer to purchase a property. the owner responded with a counteroffer. while the buyer was reviewing, he received a better offer from another buyer. the owner can accept the second offer if ✔✔the owner withdraws the counteroffer before it is accepted a company agrees to lease a property to be used as a gambling casino, state prohibits gambling. this contract would legally defined as ✔✔void a licensee has an agency representation agreement with a buyer. when showing another company's listing, what obligation does the licensee have to the seller and listing broker at the other company? ✔✔disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer under the terms of their listing contract, the owners may sell their house themselves and pay no commission. what kind of contact do they have ✔✔exclusive agency listing alex, who is 14 inherits property. a buyer makes an offer and alex accepts the offer. ✔✔a buyer cannot legally compel Alex to sell a bunch of realtors are together and the subject of commissions came up. what is this in violation of ✔✔Sherman Antitrust Act antitrust laws prohibit competing brokers from all of the following EXCEPT ✔✔receiving compensation from both the buyer and the seller without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes are among the lowest of the area. before closing, it is determined they are much higher. they buyer could seek to rescind the contract basis of ✔✔misrepresentation a minority couple was looking for a house. salesperson has properties that they qualify for but avoids showing them or not even mentioning them but shows them in an area with low price and intergrated neighborhoods. this is called ✔✔steering which restrictive covenant would be considered illegal ✔✔a covenant that restricts selected parcels within a defined subdivision the buyer is assuming the mortgage presently on the property of 110,000. what is the adjustment at closing ✔✔credit buyer 110,000, debit seller 110,000 3 people buy a house as tenants in common. Subsequentily, two of the owners want to sell, but the 3 discouranges each potential purchaser. The two owners who wish to sell the house can ✔✔file an action for partition against the 3rd owner an owner hired a construction company to build a swimming pool in a new home. The owner failed to pay the bill once the work was completed and placed a lien on the property , the lien is on the property ✔✔mechanics lien a deed restriction is applicable to all the activities of ✔✔all owners, present and future a landlord wishes to build a neighborhood grocery store on a busy street in an area that is zoned for residential use. Which of the following would most likely to be used to obtain permission for this store ✔✔conditional use permit or zoning variance ordinances that specify construction standards are ✔✔building codes if all other factors are equal, in which location is a parking lot likely to bring the highest sales price ✔✔business district zoned for a six story office building if an older building cannot be air conditioned, it is an example of ✔✔functional obsoliescence a prospective seller asks a salesperson to recommend a listing price for a property. the salesperson should suggest ✔✔a competitive market analysis to determine the property's value a competitive market analysis takes into consideration ✔✔square footage of the subject property a competitive market analysis is most often used for ✔✔setting a listing price when preparing a market data estimate of value, which of the following categories of adjustment is NOT essential ✔✔the original cost of the building a borrower has defaulted on the mortgage, the mortgage contains an acceleration clause. this permits the lender ✔✔demand immediate payment of the entire note the FHA functions MOST like ✔✔an insurance company even after an offer ha been accepted and is binding, the buyer and seller may still choose to sign mutual release papers rather than proceed to closing. Which of the following circumstances would NOT give either party a justifiable reason to insist for a mutual release ✔✔the buyer finds a better property for better terms under the common law of agency, licensees owe the broker with whom they are associated all of the following duties accept ✔✔indemnification a broker supplies the financing for a projects to build condos with the stipulation that he has the exclusive right to sell the completed condos. which of the following best describes this relationship? ✔✔agency coupled with an interest the day after a broker's listing on a house expired, it was listed with another broker offered into the MLS. Several days later, a 3rd licensee called the first broker and asked for the key to show the house. The broker should inform the caller that ✔✔he is not longer the listing agent to what party or parties does the broker owe the fiduciary duty of care ✔✔the party or parties employing the broker an agency relationship between a property owner and a property manager are usually created by ✔✔a management agreement what is the duration of a home warranty coverage ✔✔as disclosed in the contract that offers the warranty a seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should ✔✔tell the seller to disclose the termite treatment on the property disclosure statement a seller's statement in a property disclosure document mean ✔✔the owner is disclosing known latent defects a gross lease can be best defined as one where the tenant pays. as a part of the rent ✔✔no operating expenses of the leased space when a listing broker is preparing an offer to purchase for a buyer customer, contingencies involving inspections or approval by a 3rd party should ✔✔have a short deadline failure of a real estate agent to comply with the Fair Housing practices of punishable by ✔✔license revocation and criminal prosecution an equal hosing opportunity notice must be ✔✔displayed in the brokerage office during the listing representation, the seller questions the amount of commission to be paid and is told ✔✔the amount of commission is negotiable an owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68000 and the broker's commission. to the nearest dollar, what should the selling price be to net her 45000? ✔✔121505 a buyer wants to purchase a home for $160000 with a15% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase ✔✔25720 an investment property returns 12% of its value or $21000 annually. what is the value of the property ✔✔175000 MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller(s) name(s) and social security numbers and ✔✔the sale price in most states forclosed property is sold through ✔✔public auction even with title insurance, the policyholder may still suffer losses arising from ✔✔land use change due to zoning ordinances to be valid, every deed must ✔✔be executed by the grantor prorations ✔✔all prorations are based on a 360 day year, depending upon instructions from your exam. most are debited to the seller. deed stamps ✔✔debit seller/credit broker. 3.70 per $1000 or 1.85 per $500 of a sales price., always round up tax proration ✔✔debit seller/credit buyer in closing statement interim interest ✔✔debit buyer/credit broker insurance ✔✔debit buyer/credit broker title insurance ✔✔debit buyer/credit broker insurance ✔✔debit buyer/credit broker normal debited items at closing for seller ✔✔existing mortgage note assumed loan accrued interest deed preparation deed stamps satisfaction piece recording commission termite/furnace letters garbage proration discount points prorated taxes prorated water and sewage prorated rent carpet allowance va repairs re-inspection fees seller receives amount or net proceeds to seller normal debited items at closing to buyer ✔✔purchase price interim interest attorney's fees service charge loan origination fee recording fees credit report appraisal PMI title insurance tax escrow mortgage insurance MIP (FHA Insurance) homeowners insurance VA funding fee discount points builder coverage annual homeowner or hazard insurance escrow balance on assumption closing home inspection normal debited items to broker ✔✔earnest money how many square feet are in an acre ✔✔43650 how much is the fee for deed stamps ✔✔3.70 per 1000 or 1.85 per 500 legal descriptions using the government survey system are NOT generally used in ✔✔the original 13 states the difference between tenancy in common and joint tenancy is that with tenancy in common, when a co owner dies ✔✔his undivided interest passes to his heirs although states make specific water right laws and its rights in land that borders water, most states use either riparian or littoral rights. the doctrine of prior appropriation is MOST likely used or followed by states where ✔✔water is scarce a judgment has been properly recorded. any subsequent purchasers, whether they actually examined the record or not, have been given ✔✔constructive notice a property is encumbered by the first mortgage of 60000 and a second mortgage of 23500. the property has just been sold at a forclosure auction to a speculating investor for 88000. assume all of the costs of the forclosed sale are included in these balances. which of the following statements is false regarding the distributing of funds ✔✔the second mortgagee will receive nothing unless he forced the forclosure building codes are ✔✔ordinances that specify construction standards a deed restriction is applicable to the activities of ✔✔present and future owners and environmental impact statement typically describes the effects of the proposed projects on factors such as ✔✔public health and safety a commercial property lost value because a recently constructed highway moved traffic away from the property. this is an example of ✔✔economic or external obsolesence a formal appraisal will always be required when the ✔✔lender wants to sell the mortgage in the secondary market the day after a broker's listing expires, it was listed by another broker and offered in MLS. several days later, a 3rd licensee called the first broker for the key to show the home, what should the broker say ✔✔he is no longer the listing agent a salesperson lists a property with a contract that allows for sub agency and dual agency. the salesperson is ✔✔agent to the broker and subagent to the principal to what party or parties does the broker owe fiduciary duty of care ✔✔the party or parties employing the broker what critical aspect of the property inspection process must licensees convey to prospective buyers ✔✔need for inspections to be completed within the time stated in the contract the dept of housing and urban development stimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some federal agencies, such as FHA ✔✔require the buyer to acknowledge disclosure of the presents of any known lead paint while an agent is showing a listed property, the seller and the buyer enter into an oral agreement for the purchase of the home. if a dispute over the terms arises later, the agreement may be unenforceable because ✔✔the agreement does not comply with the statute of frauds a licensee has an agency representation agreement with a buyer when showing another company's listing, what obligation does the licensee have to the seller and the listing broker to the other company ✔✔disclose the agency relationship when arranging the showing and disclose material information about the buyer if presenting an offer an express contract is created ✔✔when parties to the contract state clearly what they will do or will not do. implied contract is created ✔✔by the actions of the parties. bilateral contract is created ✔✔when one in which two parties each agree to do something. unilateral contract is ✔✔a one sided contract exclusive right to sell listing agreement ✔✔requires that compensation be paid to the broker regardless of who sells the property, the broker or the property owner. exclusive agency agreement ✔✔in which a fee is owed to the broker only if the broker sells the property. open listing agreement ✔✔an owner agrees to pay a fee to any broker producing a successful buyer. exclusive buyer agency agreement ✔✔buyer agrees to pay the agent whether or not the agent finds the buyer the house that the purchaser buys. exclusive agency buyer agency agreement ✔✔buyer is obligated to pay the agent only if the agent produces a property that the buyer buys. open buyer agency agreement ✔✔he will pay any agent who finds him a property a contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22000 on or before December 31st. this is called ✔✔an option contract a broker has brought a ready, willing and able buyer to a seller. in most listing contracts, the broker has earned his commission when ✔✔the seller accepts the offer a gross lease can be best defined as one where the tenant pays, as a part of the rent ✔✔no operating expenses of the leased space antitrust laws prohibit competing broker from all of the following EXCEPT ✔✔receiving compensation from both the buyer and the seller a landlord may legally refuse to rent to a prospective tenant if the tenant ✔✔has been convicted of selling illegal drugs an investment property returns 12% of its value or 21,000 annually, what is the value of the property ✔✔175000 a buyer is obtaining a full amortized loan in the amount of 140000. the bank will give him a loan for 15 years at 5% or 30 years at 6%. to the nearest dollar, what is the difference between these two loans? ✔✔267 a lender will make an 80% loan to value loan on a property that is appraised for 72250 and sells for 73500. if the buyer has save 14450 for a down payment, how much more will he need in order to make the down payment required under the terms? ✔✔he needs an additional 1250 when the buyer forfeits the contract ✔✔the seller declares the contracted forfeited and the seller typically is entitled to keep whatever earnest money there is. when the buyer rescinds the contract ✔✔after a buyer defaults, the seller declares the contract rescinded. they buyers money is returned when the buyers refuses to go ahead with the contract, the seller can ✔✔file suit for specific performance when the seller refuses to go ahead with the ✔✔the buyer can rescind the contract and basically let the seller off the hook, also can file suit for compensatory damages and file suit for specific performance what is the purpose of filing suit for specific performance ✔✔this type of lawsuit is to designed to make the other party go through with the deal. what is the purpose of filing suit for compensatory damages ✔✔the party feels that they suffered because of the default in contract a title may be transferred by ✔✔voluntary alienation (selling), involuntary alienation (loss of title) will or descent (heirs) a voluntary alienation may be accomplished by ✔✔gift, sale or dedication involving some type of deed requirements of a valid conveyances ✔✔legally capable grantor grantee granting clause habendum clause consideration property description limitations grantor's signature special warranty deed ✔✔a property that was not encumbered during time of grantor's ownership......used by trustees, executors and corporations general warranty deed (5 star general) ✔✔provides the greatest protection, the sellers is bound by the 5 following covenants seizing against encumbrances quiet enjoyment further assurance warranty forever bargain and sale deed ✔✔grantor covenants that the title is valid but may or may not warrant against encumbrances or promises to defend against clams of other parties "as is" deed in trust ✔✔trustor conveys real estate administrators deed ✔✔when there is no will, this can be used. when someone dies, the court appoints an administrator executor's deed ✔✔named in will to dispose of the deceased persons assets reconveyance deed ✔✔when a loan secured by a trust has been paid in full sheriff's deed ✔✔used to transfer property sold by the court to satisfy a judgement tax deed ✔✔used to convey title to property sold for delinquent taxes title passess upon delivery ✔✔and acceptance of the deed transfer by involuntary (liens alienation may occur ✔✔eminent domain escheat tax sale foreclosure forclosed sale(liens) adverse possession accretion avulsion testate ✔✔person dying having a will intestate ✔✔person dying without a will devise ✔✔gift of real property in a will bequest ✔✔gift of personal property fee simple fee simple absolute indefeasible fee ✔✔most complete form of ownership without limitations on rights of ownership, except for public and private restrictions on what can be done with the property fee simple qualified estate fee simple defeasible estate ✔✔has some limitations on it. #fee simple condition precedent-ownership aka title, wont pass from one person to another until a particular condition is met. #fee simple condition subsequent-estate is a situation in which the grantor(original owner) can reclaim property if some condition isn't met after the title has been passed #fee simple determinable-title remain with the new owner as long as conditions of ownership are being met. life estates ✔✔#ordinary life estate-in which the length of time of the estate interest is the lifetime of the person receiving the life estate. example-husband wants to let 2nd wife live in house until she passes, then left to his heirs, his children life estate pur autre vie ✔✔for another life-the length of the life estate in this case is for the life time of the 3rd party rather than the person actually receiving the life estate some state have legal life estates ✔✔#community property-which is the right of a spouse, entitling him or her to one half of the interest in real property that was acquired during a marriage #curtesy-right of the husband to a portion of real property that is owned by his wife #dower-which is the right to a portion of real property that is owned by her husband #homestead-grants the family home a certain level of protection of creditor's during a owner's lifetime leasehold interest or estate ✔✔is the tenant's interest in the real property. remember, the tenant hold the rights assigned by the lease leased fee interest or estate ✔✔owner's or landlord's interest in the real property. remember, the landlord hold the fee or title to the property littoral rights ✔✔granted to the owners of property that border a bay, a large lake, the ocean or a sea. they have an unrestricted right to use the water and ownership of the land up to the average or mean high water mark riparian rights ✔✔rights of property owners who own land abutting rivers and streams. doctrine of prior appropriation ✔✔is state specific and is when water is scarce. this basically places the right to control water resources in the hands of the state rather than the property owners tenancy ✔✔means having an interest In a piece of real estate sole ownership or tenancy in severalty ✔✔owning real estate by yourself tenancy in common is a form or ownership in which tow or more people own property together. ✔✔#undivided ownership-the land itself is not physically divided into or split between multiple owners #equal or unequal shares-the percentage of ownership interest of each party need not be equal, so one person can have 50% share and two others have 25% shares #sale without permission-any owner can sell his or her share without having to receive permission to do so from the other owners. the new owner is the tenant in common with the previous owners #no right to survivorship-if one owner dies, she leave her share to her heirs. joint tenancy is a form of ownership with special features for two or more people ✔✔#unity of interest-means that each owner has the same interest in the property. (joint tenancy) #unity of possession-like tenancy in common, each owner's interest is in an undivided property. although interest in the property maybe divided, the land and building if any, may not be divided #unity of time-joint owners all take title to the property at the same time. a later owner cannot be added to the joint tenancy as a joint tenant unless new documents are executed. #unity of title-that all joint tenants names are on the deed together tenancy by the entirety ✔✔form of co ownership specifically geared toward protecting the interest of married couples by providing a right of survivorship. a form of joint tenancy. another unique feature of tenancy by the entirety is that neither spouse can sell his or her share without doing so together (divorce) Community property ✔✔#may be sold or mortgage or joint action #separate mortgage may be sold or mortgaged by person owning it #no right of survivorship exists Property owned by third party and coveys it to the trustee ✔✔The trustor Person who receives the property and administers it on behalf of the beneficiary ✔✔The trustee Corporation ✔✔Treated like an individual when it comes to real estate Partnership ✔✔#two or more people or companies combining to do business #either limited or general Two issues that are considered disadvantages of cooperative ownership ✔✔#shared liability #cooperative board approving newcomers Condominium ownership ✔✔Which you own as a tenant if severalty. And you share as a tenant in common of the land under and around your unit Encumbrances ✔✔#financial claims against real estate-liens #limitations on the use of property-easements, encroachments, restrictions Lien attached to real estate can limit ownership in different ways ✔✔#can be sold against your will to pay off a debt... Mortgage....taxes #show up when you sell your property Voluntary lien ✔✔A mortgage is the most common Involuntary lien ✔✔Taxes Specific lien ✔✔Attaches to one property General lien ✔✔Attaches to multiple properties Tax lien ✔✔# placed on property for unpaid taxes. #government agencies get paid first #water and sewer can be added to this group #unvoluntary lien Mortgage lien ✔✔# a voluntary specific lien. Mechanics lien ✔✔#for work completed but not paid for. #this is involuntary and specific Judgement lien ✔✔#involuntary and general #result of court action encumbrance ✔✔is a right or interest in a piece of real estate that belongs to someone other than the property owner liens ✔✔financial claims against the real estate limitations on the use of the property ✔✔#easements #encroachments #restrictions priority of liens ✔✔real estate tax is 1st priority, all other liens usually are paid off in the order they were recorded in the local office of records appurtenant easements ✔✔benefits a neighboring property. easement appurtenant is the same thing #surface easement #underground easement #overhead or aerial easement easements in gross ✔✔this benefits another person rather than a piece of property. utility easements easements by necessity ✔✔a court order creates an easement to permit someone to gain access to a property easement by prescription ✔✔created by the actions of one person against the interests of another person. this is related to adverse possession ending easements ✔✔#an agreement or release-person who possesses the easement agrees to give up or release the person across whose property the easement exists #by merger-joining of the two properties #by abandonment-use it or lose it #need no longer exists license ✔✔is a temporary right to do something on someone else's property deed restrictions ✔✔limitation on the use of the property that appears in the deed to your property and is put there by another person. it is typically called a private land use restriction. this binds current and future owners encroachments ✔✔is the unauthorized or illegal use of someone's property by another person adverse possession ✔✔someone claiming ownership of your real estate because of how they are using it. master plans ✔✔most municipalities create a master plan or comprehensive plan #capital facilities-municipality takes inventory and analyzes its publicly owned buildings and parks #demographics-population characteristics of the municipality #housing-municipality examines its current and future housing inventory #infrastructure-refers to roads, sewers, water lines, and other physical facilities #land use-areas of land within the municipality are examined, usually on a map zone ordinances ✔✔zoning code, is a set of rules that control what property in the municipality can be used for and regulates where on the land any buildings will be located. #special permit use-variation from the requirements of the zoning ordinance for an individual piece of property #nonconforming use-established structure --accessory buildings or building separate from the main building of a property that support or are related to the main buildings --accessory uses are uses that are related to but a little different from the principal use of the property subdivisions ✔✔a piece of land that has been divided into two or more pieces of land. #must adhere to zoning laws subdividers ✔✔created subdivisions, developers. individual pieces of property are called lot or parcels. a subdivision must be approved, subdividers can sell the entire subdivision to a developer or builder. a subdivder can also sell individual lots with the promis to eventually put in roads, etc. developer ✔✔develops the subdivision. density zoning ordinance ✔✔permits overall density within the subdivision, which means the same total number of lots on the same overall size property as allowed by the zoning ordinances cluster zoning ✔✔goes one step further than density zoning, it clusters or groups lots together in a relatively small area to preserve a certain portion of the property as open space. interstate land sales full disclosure act ✔✔was acted in 1968 to minimize fraud and dishonest dealings in the interstate land sales market. administered by HUD eminent domain ✔✔#land must be for legitimate public purpose, road, park, sewer line #fair price must be paid to the owner #government must follow all legal procedures, they must exercise due process seisin ✔✔guarantee that the grantor is the owner special warranty deed ✔✔only has 2 warranties- that the grantor is the seisin and that nothing was done to affect the title during the grantor's ownership and if a problem did exist, the grantor will correct it grant deed ✔✔only used in a few states and provide limited warranties. gives no protection to the grantee quitclaim deed ✔✔no warranties to the granty and gives no implication on how much or how good the grantor's title to the property is. it conveys to the grantee only that much ownership interest that the grantor may have. this also allows to clear up a cloud on a title trust and reconveyance deeds ✔✔this is s trust deed, deed of trust. trustee's deeds ✔✔given by a trustee when ownership of property held by a trust is conveyed. ex. a child owns a property held in trust until reaches legal age court-ordered deeds ✔✔result of legal proceedings, an executor's deed in the case a deceased person's estate or a sherrif's deed in the sale of property seized y local unit of government town or the bank. metes and bounds ✔✔legal description uses specific locations, distances, and compass directions to describe the boundaries of a piece of property. this is clearly stated in the deed. it was formed by the original 13 colonies rectangular survey system ✔✔(government survey system) based on a system of lines that form rectangles and squares throughout the United States. #quadrangles-24 miles square #townships-divisions of a quadrangle, 6 miles square #sections-divisions of a township-1 square mile and have an area of one square mile 640 acres #quarter sections- formed by dividing a section into 4ths that are delineated by their direction from the center of the section. lot and block system ✔✔the recorded plat system, the recorded map system, the lot block tract system. illegal ways to describe property ✔✔#using the property's address #tax assessor's parcel number providing marketable title ✔✔#abstract of title #certificate of title #title insurance #torrens system-proper registration of title removing liens ✔✔some liens can be satisfied at time of closing, ex. mortgage, home equity, tax lien examining encumbrances ✔✔limitations on the owner's use of the property meeting the conditions of the sales contract ✔✔making sure everything has been taken care of, inspection, termite bond, repairs if necessary RESPA ✔✔real estate settlement and procedures act #required reading the hud booklet must be given to anyone applying for a mortgage loan #estimated costs-the lender must give the borrower a good faith estimate of all settlement costs #closing settlement statement, used to be called a HUD form 1 #prohibited kickbacks-respa prohibits any unearned fee. example-an inspector who pays a fee to a lendor for recommending him to perform home inspections for one of the bank's customers dedication ✔✔voluntary transfer from an individual to a government public grants ✔✔grants from the government involuntary alienation ✔✔property lost or taken possession ✔✔#actual #adverse #claim #continuous #hostile #notorious #open foreclosures ✔✔losing your property involuntarily to pay a debt--usually unpaid mortgages and unpaid taxes forfeiture ✔✔by disobeying something in the deed partitioning ✔✔legal preceding that is undertaken to divide a piece of property laws of descent ✔✔no will but still has heirs an express contract ✔✔parties agree to what they will or will not do implied contract ✔✔example-owner selling house, realtor brings buyer, draws up contract and gets it under agreement, it is implied in contract that they will receive commission a bilateral contract ✔✔when parties agree to do something. exchanging promises an unilateral contract ✔✔one sided contract listing agreements ✔✔#exclusive right to sell-requires commission to the broker, whomever sells the home #exclusive agency agreement-a fee is owed to the broker only if he sells #open listing-owner agrees to pay a fee to whomever sells the home buyer agency agreements ✔✔#exclusive buyer agency agreement-requires the buyer pays a fee even if he does not buy or buys a different house that the realtor did not find. #exclusive agency buyer agency agreement-buyer will only pay a fee if realtor finds a home for the buyer to purchase #open buyer agency-will pay any realtor that finds the property an option in real estate ✔✔terms in an agreement in which a seller agrees to sell property to a buyer at an agreed to price within a certain time frame if the buyer wants to buy it discharging a contract ✔✔#performance-ideal way to end a contract because all parties hae fulfilled their obligations, times is of the essence #assignment and delegation-someone else takes over or is assigned the obligations of the one of the parties to the contract #death- #impossibility of performance-where the action that was contracted cannot be performed legally, can possibly be impossible. #mutual agreement-both parties to the contract agree to cancel it #novation-is a situation in which a new contract with different terms. the new contract can be between the same parties or between one of the parties of the original contract and a new party #operation of law-type of situation can relate to some legal issue that arises that cancels the contract...example based on fraud #partial performance-discharging a contract for partial performance refers to an acceptance by one party of incomplete work by the other party and an agreement that the incomplete work will constitute fulfillment of the terms of the contract #rescission-is when one party decides not to fulfill its obligations under the contract #substantial performance-one party may force payment from the other party. lease ✔✔between two parties for possession and use of a particular space usually for a certain length of time estate for years ✔✔lease agreement with a definite start and ending date periodic estate ✔✔also called a periodic tenancy, occurs when the original agreement doesn't contain any definite period of time example- month to month lease. a periodic estate can be created when an estate for years ends and then tenant does not move out and the landlord continues to accept the rent, the tenant may be referred to as a holdover tenant estate at will ✔✔landlord allows the tenant to occupy the premises, but there is no definite period of time when the arrangement will expire. an owner about to sell a building may allow a tenant to occupy an apartment under this arrangement. estate at will can be terminated at any time with proper legal notice estate at sufferance ✔✔occurs when a tenant who had legal right to occupy the premises continues to occupy the space after the right of occupancy has expired. typical provisions of a lease ✔✔#legally competent parties #mutual agreement #legal objective #consideration #agreement in writing what is contained in a lease ✔✔#description #terms of lease #amount and date of rent payments #provisions for rent increases #security deposit #how the premises can be used #whether or how improvements can be made #provisions outlining maintenance responsibilities #details for destruction of premises #provisions for occupancy limits #provisions for or against subleasing #termination on sale clause #right of quiet enjoyment #any options gross lease ✔✔tenant pays the same rent each month and the landlord pays all the building expenses, such as maintenance and taxes ground or land lease ✔✔where someone rents an empty piece of land specifically to erect a building on it. these leases tend to be long term and often exceed 50 years or longer. tenant owns the building and the landlord owns the land. usually requires the tenant to pay all property expenses....taxes....utilities.....and maintenance. similar to a net lease. net lease ✔✔tenant pays the building expenses on top of the base rent. percentage lease ✔✔usually has a minimum monthly rental charge plus a percentage of the gross earned by the business. proprietary lease ✔✔is a least that is given to the owner of a cooperative apartment. the owner doesn't own the actual apartment itself but rather share in the corporation that owns the building types of eviction ✔✔#actual eviction-landlord sues for possession of the premises #constructive eviction-when the landlord's actions are such that the premises become uninhabitable. rentable space ✔✔space that a tenant pays for when renting non residential space. usually has more square feet than the tenant is entitled to use. rent is stated as so many dollars per square foot annually useable space ✔✔square footage that the tenant is allowed to use exclusively environmental impact statements ✔✔this protects the area and the public of something being built out of proportion asbestos ✔✔#leave it alone if it is in good shape and doesn't appear to be disintegrating or deteriorating in such a way that the fibers and dust are escaping into the air #remove it should only be done in accordance with experts who follow procedures established by the EPA and your state #deal with it-called encapsulation is sealing the asbestos in place. a professional does all evaluations and work with dealing with asbestos radon ✔✔odorless, colorless, tasteless, radioactive gas produced by the decay of natural materials such as rocks that are radioactive. it tends to accumulate in areas with poor outside air circulation such as basements. it may spread through a building by heating and air ducts and it is believed to cause lung cancer. if found, remedy is to introduce some kind of ventilation GRM gross rent multiplier ✔✔technique for estimating value is based on the idea that a property can be calculated as a multiple of the gross rent. gross rent x (factor GRM)=value estimate GRM-the gross annual rent rather than monthly income capital approach ✔✔net operating income (I) divided by capitalization rate (R)=value (V) estimating the net operating income determining the capitalization rate applying the IRV to arrive at a value estimate net operating income (NOI) ✔✔#estimate the potential gross income #subtract a vacancy and collection loss figure from potential gross income #estimate all building expenses and subtract them from the effective gross income #subtract the estimated expenses from the effective gross income determining the capitalization rate(similar to the rate of return) ✔✔net operating income (I) divided by sales price= capitalization rate applying the formula to estimate value ✔✔net operating income (I) divided by capitalization rate (R)=estimated value (V) calculating income ✔✔value (V) x capitalization rate (R)= net operating income (I) $300000 x .08=$24000 points on a mortgage ✔✔1% of the loan amount $100,000 x .02= $2,000 types of mortgages ✔✔#conventional-meet certain guidelines that can be set by the lend but often comply with the standards set by fannie mae #conforming loan-loan meets the criteria necessary for it to be sold in the secondary mortgage market. #nonconforming loands-doesn't meet the criteria of the secondary mortgage market, these loans may be made by lenders under specific circumstances and may require extra requirements from the borrower to meet, but they cannot be sold on the secondary mortgage market. primary mortgage market ✔✔#commercial banks and savings and loan associations-sometimes collectively referred as to institutional lenders. one of the most principal places the average consumer goes to get a loan #credit unions-average homebuyer, depending on the amount of assets upon which they can rely and the interest rates they charge #insurance companies-this is more for large projects #investment groups-individuals or companies that pool their money together to make mortgage loans #mortgage banking companies-set up by investors specifically to make mortgage loans, they don't generally offer other banking services. #pension funds-managers may lend money from their fund's assets for the construction of large real estate projects or purchases secondary mortgage market ✔✔federal reserve system is a player in the financial markets that affect the availability of money for real estate mortgage loans. has two factors #reserve requirement for banks-imposes on banks to maintain a specified amount of their assets as reserve funds in cash. reserve funds may not be used for loans. #discount rate-how the Fed controls the flow of money. the secondary mortgage market which buys loans from banks and other primary lending institutions collects, packages and pool (all mean the same thing) the main players in the secondary mortgage market are directly and indirectly associated with the federal government. #fannie mae- charted by congress.... VA and FHA loans #ginnie mae-government national mortgage assoc- govt agency administered by the US dept of Housing and Urban development. works primarily with fannie mae in the secondary mortgage market #Freddie mac-federal home loan mortgage corp is owned by corporation that also provides secondary market for mortgages. it sells bonds to raise funds to purchase morgages #farmer mac-fed agricultural mortgage corp serves as a secondary mortgage market for farm homes blanket mortgage ✔✔is a loan that covers more than one piece of property construction loan ✔✔is made to finance a construction project home equity loan ✔✔line of credit, based on how much is the house worth and what is still owed open mortgage ✔✔can be paid back at any time without a prepayment penalty open end mortgage ✔✔after a loan has been paid down it can be reopened to borrow against it package mortgage ✔✔is a loan that covers real estate and personal property being sold with the real estate purchase money mortgage ✔✔loan used to buy real estate sale leaseback ✔✔is not actually a mortgage, but can be a source of project financing and a mean of obtaining the equity in a property. shared equity mortgage ✔✔allows the share of the profit on the property to be given to someone else in return for help purchasing the property. temporary loan ✔✔interim financing, bridge loan, swing loan, gap loan....is used when funds are needed for a short period of time to complete a real estate transaction. wraparound mortgage ✔✔a new mortgage wraps around an old mortgage. this is used when the old mortgage wont be paid off at the tie of the sale of the property fixed rate mortgages ✔✔throughout the lifetime of the loan, the interest rate and the amount of the monthly mortgage payments do not change. what does change, in an amortized loan, is the amount of principal and interest in each monthly payment. adjustable rate mortgages ✔✔ARM- is a mortgage for which the interest rate is subject to change during the life of the loan. a borrower's rate at any point in time can change but is subject to two limits that are called caps or ceilings #annual cap-interest rate can be adjust upward in any given year, example if you have a 2 percent ceiling per year and the interest rate you have currently is 7 and rates go up to 10, the highest yours can go to is 9%. #lifetime cap-gives protection so it limits on how high the lender can let your interest rate go to. ##a prepayment cap can also be put in place in an ARM, meaning that even if therate adj reach their max each yer, if the resulting monthly payment increases to more than the specific amount, the payment cap keeps the payment within reasonable limits amortized loan ✔✔most popular type of loan. also called a direct reduction loan. example rate 6.44 mortgage is 150,000 25 years 150 x 6.44=$966 this is the monthly payment to pay off the principal and interest at the same time. straight loan ✔✔this is a term loan. payment of interest only during the term of the loan. at the end, a single payment of the principal is required. partially amortized loan ✔✔combination of amortized and straight loan. at the end it will be a balloon payment due growing equity mortgage GEM ✔✔fixed interest rate but payment of principal increases more than normal amortization over time. this allows the borrower to pay off the loan faster equitable redemption ✔✔in the event of a nonpayment of the debt, depending on the state, the borrower may have a right to equitable redemption, meaning that the borrower may pay off the debt before the sale of the property in foreclosure. the right to redeem the property after the sale is called a statutory right of redemption deed of in lieu of foreclosure ✔✔friendly foreclosure, the buyer voluntarily signs the property over to the lender by executing the deed to avoid foreclosure mortgage assumption ✔✔takes place when a new party takes over the obligations of another person's mortgage debt and does require approval of the lender. an alienation clause in the mortgage loan agreement helps lenders prevent or control this. estoppel certificate or reduction certificate ✔✔state showing how much the person who assumes an existing mortgage actually is assignment of a mortgage ✔✔is the change in the person or institution to whom the debt is owed on a mortgage without changing the terms of the loan. this is essentially a change in the lender truth in lending act ✔✔regulation z #amount of payment #finance charge amount #down payment #number of payments #terms of the loan, that is how long the loan is for *****if trigger terms are mentioned in an ad, then it must also contain the following information..... #APR #cash price #down payment needed #number, amount and due dates of all payments #total of all payments need to be made tax rate in mills ✔✔a mill is one-tenth of a cent (.001). ways to figure it out millage divided 1,000= mill rate expressed in dollars or cents of tax per dollar assessed valuation 40 mills divided 1000=.040 40 mills = .040 60,000 (assessed value) x .040=$2400 in taxes tax exempt properties ✔✔government owned properties partial tax exemption ✔✔#senior citizens #veterans area of a square ✔✔length x width=area 100 ft by 100 ft 10,000 sq feet 150 ft x 80 ft=12000 sq ft 1 yard ✔✔3 ft 1 mile ✔✔5,280 ft 1 sq yard ✔✔9 sq feet 1 acre ✔✔43560 a section- ✔✔1 sq mile or 640 acres 1 cubic yard ✔✔27 cubic feet area of a triangle ✔✔1/2 base x height=area volume of anything ✔✔length x width x height=volume area of a circle ✔✔diameter is a straight line drawn through the center from one side of the circle to the other and the radius is half of the diameter building a circular patio, that is 16 ft in diameter 3.1416x8(squared)=area 3.1416 x (8x8)=201.06 sq feet examples of percent ✔✔800% 8 80% .80 8% .08 .8% .008 .08% .0008 8.5% .085 [Show More]

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