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broker
one who acts as an intermediary on behalf of others for a fee or commission
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brokerage
the bringing together of parties interested in making a real estate trensaction
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market
a place where goods can be baught and sold at a price established
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salesperson
a person who performes real estate activities while employed by or assocoated with a license real estate broker
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supply and demand
when supply increases and demand remains stable, prices go down
when demand increases and supply remains stable, prices go up
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appraisal
the process of estimating a propertys market value based on estimated methods and the appraisers professional judgment
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property manager
a person or company hired to maintain and manage property on behalf of its owner
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magement agreement
the terms of the individual contract between owner & manager
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financing
the business of providing the funds that make real estate transactions possible
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subdivision
the splitting of a single property into smaller parcels
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improvement
a structure erected on a site to enhance the value of the property
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off-site
water lines and storm sewers
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inspector
conducts a thourough visual survey of a propertys structure,systems, and site conditions and prepare an analytical report
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counseling
providing clients with competent independent advise based on sound professional judgement
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5 catagories of real estate property
- 1. residential-multi/single fam
- 2. commercial-business and parking
- 3. industrial-warehouse, factories, power plants
- 4agricultural-farm, timberland,orchard
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most impact on market value
- 1. uniqueness-no two alike
- 2. immobility-fixed on land
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factors affecting supply
- 1. labor force
- 2. construction costs
- 3. government control
- 4. government financial policies
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factors affecting demand
- 1. population
- 2. demographics
- 3. employment and wages
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land
the earths surface extending downwards to the center of the earth nd upwards to infinity, including permanent natural objects such as trees and water
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real estate
land at, above and below the earths surface, plus all things permanently attached to it whether natural or artificial
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real property
the interests, benefits, and rights that are automatically include in the ownership of land and real estate
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bundle of rights
right of:
- 1. possession
- 2. control within the law
- 3. enjoyment (use prop in any legal manner)
- 4. exclusion (keep others from property)
- 5. disposition (sell, will, transfer)
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surface rights
the right to use th surface of the earth
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subsurface
the rights to the natural resources lying below the earths surface
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water rights
special common law rights held by owners of land adjacent to rivers, lakes, or oceans and are restrictions on the rights of land ownership
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personal property
all property that can be owned without distruction of structure
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emblement
annual plantings or crops of wheat, corn, vegetables, and fruit
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severence
real prop bcomes personal prop. ex. a growing tree, owner cuts down, sevring from property
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annexation
converting personal propety to real propert. ex. mix cement, stone & sand into concrete and make into walkway
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fixture
personal property that has been so affixed to land or building that becomes part of the real prop.
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trade fixture
an article owned by a tenant and attached to a rental space or building or used in coducting a business
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situs
people preferences for one area over another based on history, reputation, convnience and scenic beauty
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accession
acquiring title to additions or improvements to real prop. as a esult of annexation of fixtures or the accretion of deposits along banks of stream
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air rights
the right to use the open space above a property, usually allowing the surface to be used for another purpose
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appurtenance
a right, privilege or improvement belonging to, and passing with the land
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4 characteristics of real property
- 1. scarcity-rare commodity
- 2. improvements
- 3. permanence of investment-drainage,electricity, water, sewerage,etc
- 4. location and area preference
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3 physical chara. of real prop.
- 1. immobility
- 2. indestructibility
- 3. uniqueness
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laws affecting real estate
- 1. contract
- 2. general prop
- 3. agency
- 4. R.E. Lic.
- 5. Fed Reg
- 6. zoning & land-use
- 7. fed., state., & local reg
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basic cost of owning a home
- 1. Principle and Interest
- 2. Taxes
- 3. Insurance
P.I.T.I.
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coinsurance
a clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage generally equal to at least 80% of the propertys actual replacement cost
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equity
the interest of value that an owner has in property over and above any indebteedness
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homeowners ins. policy
a standardized package insurance policy that covers a residental real estste owner against financial loss from fire, theft, public liability,and other common risks
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replacement cost
the construction coat at current price of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original
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liability coverage
coverage for injuries or losses sustained within the unit
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agency
the specisl relationship between a real estate licensee and the person he or she represents
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law of agency
the rights and duties of the principal and the agent
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express agency
an agency relationship based on a formal agreement between the parties
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express agreement
an oral or written contract in which the parties state the contracts terms and express their intentions in words
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agency coupled with an interest
an agency relationship in which the agent is given an estate or interest in the subject of the agency
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agent
one who acts or has the power to act for another
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buyers agent
a residential real estate broker or salesperson who represents the prospective purchaser in a transaction
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customer
the third party or nonreprsented consumer for whom some level of service is provided
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designated agent
a licensee authorized by a broker to act as an agent for a spacific principal in a particular transation
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fiduciary relationship
a reltionship of trust and confidence
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general agent
one who is authorized by a principal to represent the principalin a specific range of matters
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subagent
the agent of an agent
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principal
the individual who hires the agent
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universal agent
a person empowered to do anything the principal could do personally
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special agent
represents principal only for special occasions, such as the sale of a house
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subagency
created when one broker, usually the sellers agent, appoints other brokers (with the sellers permission) to help perform client-based functions on the principals behalf
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dual/limited agency
the agent represents two principals in the same transaction
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designated agency
a process that accomidates an in-house sale where two different agents are involved
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undiscolsed dual agency
where a broker may not intend to create a dual agency
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agency statutes
- 1. exercise reasonable care
- 2. obey clients direction
- 3. acount for all money and property received
- 4. promote the clients est interest at all times
- 5. disclose material facts
- 6. perform according to erms of brokerage agreement
- 7. keep confidential all cofidential info rec. from client
- 8. comply with terms of statutes
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puffing
exaggeration of propertys benefits
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latent defect
a hidden structural defect that wouldnt be discovered by ordinary inspection
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implied agency
imply that they have mutually concented to an agency relationship
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implied agreement
a contract in which the agreement of the parties is demomstrated by their acts and conduct
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listing agreement
a contract between an owner and a r.e. broker by which the broker is employed as aent to find a buyer for the owners reale stateon the owners terms
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antitrust laws
law making illegal certain private conspiracies formed to minimize competition
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commission
payment to a broker for services rendered
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Do Not Call Registry
managed by fed. trade commission that lists the phone number of consumers who whish to limit amount of telemarketing calls
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Elelctronic Signatures in Global and National Commerce Ace (E-Sign)
an act that makes contracts (incl. sisnature) and records legally enforceable regardless of the medium in which they are created
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electronic contracting
integrating information in a r.e. transaction between clients, lender, and title and closing agents electronically
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employee
someone who works for an employer and jas employee status
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independent contractor
someone retained to perform a certain act but is subject to control by another only til the end result and not on the way the act is performed
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Internet Listing Display Policy
a policy from the NAR that allows all MLS data, and respects the rights of property owners and their listing brokers to market a property as they wish
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minimum level of service
some states require licensees some amount of service to a client
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procuring cause
the effort that bringd about the desired result
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ready, willing and able buyer
one who is prepared to buy proprerty on the sellers terms and is ready to take posititive steps to consumate the transaction
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Uniform Electronic Transaction Act (UETA)
sets forthe rules for entering into an enforceable contract using electronic means
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internet advertising
- 1. must include licensees name, office address and broker affiliation
- 2. must disclose their status as brokers or agents on each page
- 3. only a salespersons name without the sponsoring brokers name is prohibited
- 4. must be true representation and not be misleading
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disclaimer
indicate the material on their site is soley for imformational puproses and that no warranties or representations have been made
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Web site management tools
tools that help assess the effectiveness of Internet marketing by providing statitics on the number of view, visites and other data
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3 purpose of license laws
- 1. est. basic requirement for real estate lic.
- 2. defining which activities require lic.
- 3. acceptable standards of conduct and practice for lic & enforcing those standards
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7 technologies
- 1. computers/laptops
- 2. internet/web sites
- 3. email
- 4. virtual communication-chat rooms, bulletin boards, etc
- 5. cell phones
- 6. digital camers
- 7. PDA-communication
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5 Antitrust Violations
1. price fixing 2. group boycotting 3. allocation of customers 4. allocation of markets 5. tie-in agreements
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unbundling services
- 1. helping seller prepare prop. for sale
- 2. performing competitive mark analysis and pricing
- 3. assisting marketing property using MLS and any web site
- 4. drafting purchase sales aggrement and helping w/negotiations
- 5. assisting w/closing transactions
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buyer-agency agreement
a principle-agent relationship in which the broker is the agent for the buyer, with fiduciary responsibilities to the buyer
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competitive market analysis (CMA)
a comparison of the price of recently sold homes that are similar to a listing sellers home in terms of location, style and amenities
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exclusive-agency listing
a listing contract under which the owner appoints a real estate broker as is or her exclusive agent for a designated period of time to sell the property, on the owners stated terms
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exclusive-right-to-sell listing
a listing contract under which owner appoints a broker as his/her exclusive agent to sell property on owners stated terms, and agrees to pay the broker a commission when propery is sold whether by broker, wner or another broker
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market value
most probable price property would bring in an arms-lenght transaction under normal conditions on an open market
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multiple listing service (MLS)
marketing organization compose of members brokers that share listing in hopes to procure ready, willing and able buyers for propertys quicker than on their own
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net listing
a listing based on the net price the seeller will receive if property sold
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open listing
a listing contract which the brokers commission is based on the broker producing a ready, willing and able buyer befor the property is sold by the seller or another broker
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option listing
listing with a provision that gives the listing broker the right, not obligation, to purchase the listing property within a certain time
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accretion
the increase or addition of land by the deposit of sand or soil washed up naturally from a river, lake, or sea
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appurtenant easement
an easement that is annexed to the ownership of one parcel and allows the owner the use of the neighbors land
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avulsion
the sudden tear away of land, as by earthquake, flood, volcanic action, or sudden change in the course of stream
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comdemnation
a judicial or administrative proceeding to exercise the power of eminent domain, which the government agency takes private property for public use and compensates the owner
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deed restrictions
clause in a deed limiting the future use of a property
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easement
a right to use the land of another for a specific purpose, such as for a righ-of-way or utilities
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easement by condemnation
and easement created by the government or gov agency that has exercised its right under eminent domain
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easement by necessity
and easement allowed by law as necessary for full enjoyment of a parcel of r.e.
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easement by prescription
an easement acquired by continuous, open and hostile use of the property for the period of time prescribed by state law
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easement in gross
an easement that is not created for the benefit of any land owned by the owner of the easement but that attachs personally to the easement owner
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eminent domain
the right of a gov or municipal quasi-public body to acquire property for public use through a court action called condemnation
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encroachment
a building or some part of it that extends beyond the land of the owner and illegally intrudes on some land of and adjoining owner or street or alley
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encumbrance
anything that may diminish the value or use and enjoyment of a property
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erosion
the deminishing of property by the elements
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escheat
the revision of property to the state or county in cases where a person dies without heirs capable of inheriting or prob is abandoned
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estate in land
the degree of interest a person has in real property
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fee simple
the highest interest in r.e. recognized by the land
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fee simple absolute
the maximum possible estte or right of ownership of eal property continuing forever
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fee simple defeasible
an estete which the holder has a fee simple title that may be divested upon the occurnce or nonoccurrence of a specified event
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fee simple simple determinable
a fee simple este qualified by a special limitation
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freehold estate
and estate in land in which ownership is for an indeterminate length of time
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future interest
a person present right to an interest in real property that will not result in possession or enjoyment until some time in the future
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homestead
land that is owned and occupied as the family home
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leasehold estate
a tennants right to occupy r.e. during the term of lease, generally considered to be a personal property interest
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legal life estate
a form of life estate established by state law which come into affect when dower, curtesy and homestead occur.
- dower-the life estate wife has in r.e. of her deceased husband
- curtesy-an identical interest a husband has in r.e of deseased wife
- homestead-family home is protected from creditors during occupants lifetime
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license
a privilage or right granted to a person by a state operate as a r.e. broker or salesperson
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lien
a right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor
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life estate
an interest in real or personal prop. that is limited in duration to the lifetime of its owner of some other designated person/s
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littoral rights
a landowners claim to use water in large navigable lakes and oceans adjacent to his/her property
the ownership rights to the land bordering these bodies of water up to the high-water mark
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party wall
a wal that is located on or at a boundary line between two adjoining parcels of land and is used or is intended to be used by the owners of both parties (duplex)
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police power
the gov's right to impose laws, statutes and ordinancs including zoning ordinances and building codes, to protect the public health, safety and welfare
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prior appropriation
a cnept f water ownership in which the landoowners right to use available water is based on a gov-administered permit system
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remainder interest
the remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior estate, such as when an owner conveys a life estate to one part and the remainder to another
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reversionary interest
the remnant of an estate that the grantor holds after granting a life estate to another person
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riparian rights
an owners rights in a land that boarder on or includes a stream, river, or lake.
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tacking
adding or combining succesive periods of continuous occupation of real property by adverse possessors
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taxation
the process by which a government or municipal quasi-ublic body raises monies to fund its operation
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common elements
parts of a party that are necessary or convenient to the existence, maintenance and safety of a condominium or are normally in common use by all of the condo residents
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community property
a system of property ownership based on the thory that each spouse has an equal interest in th property acquired by the efforts of either spouse during marriage
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condominium
the ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies
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cooperative
a residential multiunit building whose title is held by a trust or corporation that is owned by and operated for the benefit of persons living within the building
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co-ownership
title ownership held by two or more person
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corporation
an entity whose rights of doing business are essntially the same as those of individual
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general partnership
a typical form of joint venture in which each general partner shares in the administration, profits, and losses of the corperation
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limited partnership
a business arrangement where the operation is administered by one or more general partners and funded, by large, by limited or silent partners who are responsible for losses only to the extent of their investment
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joint tenancy
ownership of r.e. between two or more parties who have been names in one conveyance as joint tenants
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joint venture
the joining of two or more people to conduct a specific business enterprise
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Limited Liability Company (LLC)
combines the most attractive features of limited partnerships and corporations which offers flexible managment structures without the complicated requirments of limited partnerships
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syndicate
two or more people or firms joined together to make and operate a real estate investment
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severalty
a form of ownership were title is held by one individual
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trust
a form of ownership where a third individual holds title for the benefit of another
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tenancy in common
form of co-ownership where each tenant holds an undivided fractional interest in the party which doesnt have to be equal (30/30/30, 20/50/30, etc)
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4 forms of co-ownership
- 1. tenancy in common
- 2. joint tenancy
- 3. tenancy by the entirety
- 4. community property
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right of survivorship
upon death of a joint tenant, his/her interest does no pass to heirs or according to will rather the entire ownership remains in the surviving joint tenant(s)
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4 unities to create joint tenancy
- 1. Posession
- 2. Interest
- 3. Time
- 4. Title
PITT (Hint)
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What can terminate Joint Tenancies?
a joint tenancy is destred when any one of four unities of joint tenancy is terminate.
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tenancy by the entirety
a form of ownership where each spouse has and equal, undivided interest in the property
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what are the methods of terminating Tenancy by Entirety? (J's DAD)
- Judgment Sale
- Death
- Agreement
- Divorce
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separate property
real or personal property that was owned soley by either spouse before the marriage
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partnership
an association of two or more persons who carry on a business for profit as co-owners.
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town house
any type of housing connected by common walls
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partition
the division of co-tenants interest in real property when the parties do not all voluntarily agree to terminate co-ownership (takes place in court)
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legal description
one that is sufficiently specific that an independent surveyor could locate the exact dimensions of the property being described
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3 methods to describe real estate
- 1. metes and bounds
- 2. rectangular (or gov.) survey
- 3. lot and block (recorded plat)
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metes and bounds description
a legal description of a parcel of land that ggins at a well-marked point and follows the boundaries, using direction and ditances around the tract, back to the place of beginning (a complet square or circle)
ends where it starts
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point of beginning (POB)
the starting point of the survey situated in one corner of the parcel
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Monuments
fixed objects used to identify the POB, all corners of the parcel or ends of boundary segments, or the location of interesting bountaries
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rectangular survey system
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established in 1785 by fed gov for surveying and descriging land by reference to principal meridians and base lines
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air lots
a designated airspace over a of land (may be transfored)
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base line
the main imaginary line running east and west and crossing a principal meridian at a definite point, used by surveyors to reference in locating and describing land under the rectangular survey system of legal description
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benchmarks
a permanent reference mark or pint established for use by surveyors in measuring differences in elevation
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correction lines
provisions in the the rectangular survey system made to compensate for curvature of earths surface
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datum
a horizontal plane from which heights and depths are measured
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fractional section
a parcel of land less than 160 acres, usually found at the edge of a rectangular survey
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government check
the 24-mile-square parcels composed of 16 townships in the rectangular survey system of legal description
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government lots
fractional sections in the rectangular survey system that are less than one quarter-section in area
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lot-and-block (recorded plat) system
a method of describing real property that identifies a parcel of land by reference to lot and block numbers within a subdivision, as specified on a recorded subdivision plat
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plat map
a map of a town, section, or subdivision indicating the location and boundries of individual properties
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principal meridian
the main imaginary line running north and south and crossing a base line at a dfinite point, used by surveyors for reference in locating and describing land under the rectangular survey system of legal description.
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range
a strip of land six miles wide, extending north and south and numbered east and west according to its distance from the principal meridian in the rectangular survey system of legal description
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section
a portion of township under the rectangular system (a square with mile long sids and an area of one square mile, or 640 acres)
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township
the principal unit of the rectangular survey system (a square with six mile sides and an area of 36 square miles
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township lines
all the lines in a rectangular survey system that run east and west, pararllel to the base line six miles apart
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township tiers
township lines that form strips of land and are designated by consecutive numbers north and south of the base line
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ad valorem tax
a tax levied ccording to value, generally used to refer to real estate tax.
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assessment
the imposition of a tax, charge, or levy, usualy according to established rates
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attachment
the act of taking a persons property into legal custody by writ or other judicial order to hold it available for application to that persons debt to a creditor
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encumbrance
anything that may diminish the value or use and enjoyment of a property
ex. mortgage, tax, or land, or an outstanding dower right
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equalization factor
a factor (number) by which the assessed value of a property is multiplied to arrive at a value for the property that is in the line with statewide tax assessments.
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equitable lien
a lien enposed on property value
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lien
charge or claim against a persons property made to enforce the payment of money
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mechanics lien
an effort to recover payment for work performed
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voluntary lien
a lien placed on property with the knowledge and consent of the property owner
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statutory lien
a lien which arises out of common law
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estate taxes
federl taxes on a decentents real and personal property
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general liens
the right of a creditor to have all of a debtors propety, both real and personal, sold to satisfy a debt
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general real estate tax
a tax that is made up of the taxes levied on th real estate by government agencies and municipalities
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inheritance tax
state-imposed taxes on a decentents real and personal property
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involuntary lien
a lien placed on property without the consent of the property owner
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judgement
the formal decision of a court upon the respective rights and claims of the parties to an action or suit
(after a judgment has been entered and recorded with the county recorder, it usually becomes a general lien on the property of the defendant)
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lis pendens
a recorded legal document giving constructive notice that an action affecting a particular property has been filed in either a state or federal court
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Local Improvement District (LID)
An assessment on a local improvement district for a public improvement project the district has approved
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mill
1/10th of one cent (used to compute real estate taxes).
ex. a rate of 52 mills would be $0.052 tax for each dollar of assessed valuation of a property
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mortgage lien
a lien or charge on the property of a mortgagor that secures the underlying debt obligation
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redemption
the right of a default property owner to recover his or her property by curing the default
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special assessment
a tax or levy customarily imposed against only those specific parcels of real estate that will benefit from a proposed public improvement like a stree or sewer
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specific lien
a lien affecting or attaching only to a certain, specific parcel of land or piece of property
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subordination agreement
a written agreement between holders of liens on a property that changes the priority of morgage, judgment and other liens under certain circumstances
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tax lien
a charge against property, created by operation of law. tax liens and assessments take priority over all other liens.
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tax sale
a court-ordered sale of real property to raise money to cover delinquent taxes
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vendors lien
a lien that belongs to a vendor for the unpaid purchase price of land, where the vendor has nnot taken any other lien or security beyond the personal obligation of the purchaser
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assignment
the transfer in writing of interest in a bond, mortgage, lease or other intruments
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4 ways of creating a lien
- 1. voluntary
- 2. involuntary
- 3. statutory
- 4. equitable
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goverment agencies which use General Tax
- states
- counties
- cities, towns, boroughs and villages
- school districts
- drainage districts
- water districts
- sanitary districts
- parks, forest, and recreation districts
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contract
a voluntary agreement or promise between legally competent parties
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express contract
when parties state the terms and show their intentions in words
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statues of frauds
certain types of contracts must be in writing to be enforceable in a court of law
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implied contract
the agreement of the parties is demonstrated by thier acts and conduct
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bilateral contract
both parties promise to do something; one promise to give in exchange for another
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unilateral contract
one party makes a promise to induce a second party to do something
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executed contract
all parties have fulfilled their promise
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executory contract
one or both parties still have and act to perform
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offer and acceptance
offer-a promise made by one party, rquesting something in exchange for that promise
acceptance-a promise by the offere to be bound by the exact terms proposed by the offror
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5 elements of a contract
- 1. offer and acceptance
- 2. consideration
- 3. legally competent parties
- 4. consent
- 5. legal purpose
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counteroffer
proposal of any deviation from the terms of the offer costitutes a rejection of the original offer and becomes a new offer
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consideration
something of legal value offered by one party and accepted by another as an inducement to perform or to refrain from performing some act
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a contract may be....
- 1. valid
- 2. void
- 3. voidable
- 4. unenforceable
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reality of consent
a contract must be entered ito as a free and voluntry act of each party
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valid
when a contract meets all the essential elements that make it legally sufficient or enforceable
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void
when a contract has no legal force or effect because it lacks some or all of the essential elements of a contract
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voidable
when a contract appears on the surface to be valid but may be rescinded or disaffirmed by one or both parties bases on some legal principle
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unenforceable contract
seems on the surface to be valid; however neither party can sue the other to force performance
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time is of the essence
the contract must be prvormed withing the time limit specified
a party who fails to perform on time is liable for breach of contract
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novation
the substitution of a new contract in place of the original
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breach of contract
a violation of any of the terms or conditions of a contract without legal excuse
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rescission
one party may cancel or terminate the contract as if it had never been made
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earnest money
a purchaser provides a deposit when making an offer to purchase real estate
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equitable title
when both buyer and sellr have executed a sale contract, the buyer acquires an interest in the land
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liquidated damages
the parties agree on a certain amount of money that will compensate the nonbreaching party
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contingencies
a provision in a contract that requires a certain act to be done or a certain event to occure before the contract becomes binding
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disclosure
accurate information about real estate given to buyer
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option
a contract by which the owner gives a purchaser or leasee the right to buy or lease the owners property at a fixed price within a certain period of time
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land contract
the seller retains legal title
also called a contract for deed, bond for title,installment coontract, land sales contract or artiles of agreement for warranty deed
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installment contract
the purchase price is paid in periodic installments by the purchaser, who is in possession of the property even thogh the title is retained by the seller until future date
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lease
any agreement that gives rise to the relationship of landlord and tenant or lessor and lessee
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escrow contract
an agreement between a buyer,seller,and escrow holder setting forth rights and responsibilities of each
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