What is the best way to determine the value of a property?
do and appraisal
What is market value described as?
most probable price
What is market price?
The actual price paid in the transaction
What are the essential elements or characteristics of value?
DUST
demand
utility- usefullness
scarcity
transferability
What is not included in a CMA?
HABU
highest and best use
Explain substitution?
Lowest priced property has the best demand
What are the two principals of conformity?
Regression- value of over improved declines
Pregression- value under improved increases
Explain the sales comparision approch to value?
Subject is the property being evaluated, use comparables within the last year
GRM = value / rents
TEST answer 150,000
What is the final step in valuation process
reconciliation
Explain title theroy vs lien?
Title - mortgage
Lien- judgment
What is a promissory note?
promise to repay and terms, evidence of the debt
What is an acceleration clause?
speeds up the note when the borrower is in default
What is the difference between E and OR
E- recives
OR- gives
Who records satisfaction or defeasance clause
Mortgagor
What is a deficiency judgment?
Insufficient proceeds from a forclosure
A foreclosure removes all liens from a property T or F
T
What does a deed in lieu of foreclosure not take care of?
secondary liens
What happens to a lender if they accept a deed in lieu of foreclosure?
take title jubject o any junior liens
When does a short sale take place?
prior to foreclosure
What is a term/strait/interest-only(negative amortized loan?
Interest only payment with balloon due at the end
what is partially amortized?
principal and interest with a ballon at the end
what is a ARM?
adjustable rate index+ margin
What is negative about subprime laons?
leads to preditory lending
Explain seller financing?
Contract for deed land contract or installment contract
What is LTV?
loan to value ratio sales price or appraisel whichever is less
What is market value today?
total debt today =equity
What is a loan origination fee
charged by the lender to process and issue the loan, its a percentage of the loan amount
what is leverage?
can control a large asset with very little cash
disadvantage higher risk with less equity
What is Usury?
charging of interest in excess of what is permitted by law(set at the state local level)
what is conventional insured loans?
loans over 80% LTV require PMI private mortgage insurrance
FHA?
federal housing administration fully insurred, has to be an approved lender CREDIT UNIONS ARE NOT!
What is the LTV that requires MIP
Above 96.5
Explain FNMA?
Federal national mortgage association fanne mae
Explain FHLMC?
Federal home loan mortgage corporation freddie mac
What is regulation Z?
truth in lending Z-loan
According to RESPA when is the good-faith estimate due?
at time of application or no later than 3 days after
Borrower has the right to inspect Unifor settlement statment A(hud-1) how many days befor closing?
1 day
What is the difference between truth in lending and RESPA?
TIL- true cost of credit and lender cost
RESPA- disclosure of all closing cost within 3 days
What is the note rate?
nominal rate
When is there a three day right of recission?
only applies to REFI
WHY is there RESPA?
to prohibit kickbacks on refferal and inspections
typically who pays the commisions?
seller
In contracts what is the difference between Express and implied?
Express- can be oral or written
Implied- created by actions not in writing
What is the difference between unilateral and bylateral contracts?
unilateral- one side (option)
bylateral- promise for a promise excutory contract
what is the satute of limitations for a contrant
4 years
When will you not be covered by E and O
for fraud
what kind of title do you have with a Executory contract.
equitable title
What is novation?
a new contract replaces the old one
What are the four parts of a valid contract?
MCCL
M- mutual accent
C- consideration
C- competence
L- legal purpose
What is an addenda?
additional materal attaced to the initial aggrement offer
What is a counter offer?
A full rejection of initial offer
Is ernist money consideration?
NO
according to statute of limitation or frauds do contracts need to be in writing?
YES
What is the diff between gross net and percentage lease?
Gross- rent no expences
Net- rent plus expences
percentage- percentage of income as rent
Actual eviction is what kind of eviction?
Judicial
What are the two remidies for default?
specific performance
Liquidated damages
If personal property appears to match it could be what?
Fixture
Land can be a fixture T or F
F! never
How is personal property and dirt conveyed?
Dirt= deed
Personal property= bill of sale
What are the three pysical characteristics of land?
immoble
indestructible
unique
Economic characteristics of land
SIPL
s- scarce
I- improvements
P- permanance of investment
L- location
Explain the metes and bounds description?
Uses compass degrees has a POB mesure clockwise and oldest system in use
Explain rectangular survey/ government
uses meridians townships ranges tiers
township- 36 sections 36 square miles
perimiter- 24 miles
section= 640 aceres
section 16= school taxes
How do you find a township within a section?
1-6 right to left down left to right so and and so forth
When does the plat need to be recorded?
befor the isuance of a building permit
what is the diff between dedication and patemt?
didication= land to government
patent= land to people
what is a freehold estate?
indefinate duration of ownership
what is a fee simple estate?
ownership as long as deed condition is met
what is Pur autre vie?
life estate on the life of someone other than the holder of the life estate
What is a non-freehold estate?
lease
If a non freehold estate is sold what happens to the tennant?
retains possession until the end of the lease term
what is periodic estate/tenancy?
month to month
what is an encumbrance?
a nonpossessory interest in the lands of another
what is an easement?
right to use anothers land
runs with the land
not revocable once givin
What two things does a Appurtenant easement have?
Dominant and servient
What is an encroachment?
unauthorized use of anothers land
What is the first recorded lien?
mortgage
What lien is firs in line?
property tax
How does a license differ from an easement?
License is revocable
What is lis pendens?
recorded document that hives constructive notice of a pending lawsuit regarding title
When property is owned by one person/entity it is called?
estate in severalty
Can an LLC entity own property?
yes
What is the diff between general and limited partnership?
General- shares liability
limited- unequil liability
limited partnership is prespnsible for what liability?
only the amount invested
What is tennants in common?
co-ownership with no right of survivorship
what is jount tenants?
with right of survivorship passes without probate and overides a will
What are the four unities of title?
PITT
P- possession
I- interest
T- time
T- title
What is tenancy by the entirety?
applies exclusively to married couples in some states
A deed does not what?
prove ownership
What are the five covenants of a waranty deed?
Sezin- right to convey
quiet enjoyment- no disturbances
against encumbrances-
furthur assurance-
waranty forever
what is limited warranty deed?
only the grantors period of ownership
who signs a deed?
grantor and must be 18
If a person dies without a will that is stated as what?
without a will
does a will have to be signed prior to death?
yes
What is adverse possession?
ownership granted for use of for 10 years
who governs the spesifics for recordings of deeds?
state law
do signatures have to be notorized?
in most states
what is an abstract of title and how long does it go back?
historical summary of conveyances encumbrances and forever
standard title insurance protects what?
defects discoverd after closing
for national what is escrow?
closing process
A new loan is a what?
credit to the buyer
when would capitol gains tax be pertenant?
$250,000 single $500,000 married for principal residence
how long must you have lived in a property to be exempt from capitol gains tax?
2 out of the past 5
what is the form for investment property and what is it used for?
1031 defer payment of capitol gains tax
What items are tax deductable for propertys?
POIT
points
origination
interest
taxes
What is the depreciation tax deduction for investment property
residential- 27 1/2 years straight line
commercial-39 years straight line
what is the indentify and closing period to deffer in like and kind property?
indentify-45 days
close- 180 days
what are points?
prepaid interest
what method would you use for property bought before 1987?
accelerated cost recovery method
What would you use after 1987?
straight line
What are the government right in land?
PETE
P- police power
E- eminint domain
T- taxes
E- escheat
What is eminint domain and condemnation?
Eminint domain- right
condemnation- process
What is and example of police power?
building codes
what is ad valorem?
at assessed value not current market value
Can u appeal assessed value of your property and if so with who?
yes assessors apeals board
What is escheat?
die with no hiers governments gets property
Where are zoning controls set at ?
local level
what are building code and standards?
material plumbing electrical etc
Environmental impact issues may effect what?
value must disclose even if its not finalized
What are 3 important facts about water rights?
Riparian- river
Littoral- lake
Doctrin of prior appropriation
Deed restrictions or coventants are?
privately created controls on land use and must not violate fair housing laws
indapendant contractors must?
set their own work hours
agent ows pricinciapal who employes him what?
fiduciary duties
listing are the property of whom?
the brokerage
What is a sub-agent?
agent of the agent
what do we as agents owe a third party?
honesty and fair dealing
as a listing agent you can not disclose what?
the sale price
What are the fiduciary responsiblities?
OLD CAR
O-obedience
L-loyalty
D-disclosure
C- confidentiality
A-accounting
R-reasonable care skill
What is reasonable care?
activley applying skill/ expertise
What is special agency?
perfom acts without the ability to bind principal(limited)
What is general agency?
EX property manager employed by property owner
What is universal agency?
bigest kind has Power of attourney
What must all agreements for commision be?
in writing not implied
What is express agency?
what is Implied agency?
Express- writing
Implied- not
Who is not liable for the actions of the QB?
AB
Who is responsable for creating propery disclosures?
the seller never the broker
Who must disclose all material facts?
the seller and the broker
What are stigmatized property requirements?
State law (seek legal advice)
If you know about a lie it is?
missrepresentation
What is puffing?
exaggerated opinion
Brokers are liable to take ______ steps to protect others?
Reasonable
Enviornmental issues are regulated by who?
EPA
Which environmental issue is best abated with encaplulation?
asbestos
What are the lead baised paint disclosures?
EPA pamphlet prior to 1978
10 option to test
seller is not required to conduct an inspection
Explain radon?
mitigated with ventilation
cheap to test for
Mold regulations are what?
if found must be remediated per EPA and state regulations
What is an exclusive right to sell listing?
agent gets paid regardless who sells the proptery
commissions are ______ in all cases
negotiable
What is a express agreement?
in writing and signed
How listings terminate?
if listing expires while under contract listing broker will close to get paid
does the death of the selling broker terminate a listing?
no
What is the protection clause?
broker can collect commision fr a certian length after termination of listing
What is the obligation of the listing broker with the property disclosure statment?
buyer must recive prior to making an offer
Brokers must do what even if the seller thinks they know the value of the property?
Complete a CMA
Warranty's terms and length are determined by?
the contract with warranty company
what is the implied habatability warranty?
covers roof colapse on a new home liability would fall on the builder
when was the civil rights act?
1866
Federal fair housing act of _____ covers what?
1968
race
religion
color
national origin
sex
family status
When does the federal fair housing act not apply?
retirement communities 80 perecent are occupied by 55 and older
under federal law what classes are not protected?
age
sexual orientation
marital status
occupation
What are prohibited actions by brokers?
steering- showing only some areas
Blockbusting- panic peddling
redlining-lenders limiting loans based on location
complaints can be filed when?
with HUD within one year
Civil within two years
HUD will not consider what in regards to a complaint?
Brokers intentions or feelings
Equil credit opportunity act (ECOA) prohibits discrimination baised on what?
Age
marital status
recipt of public assistance
Megan's law is what?
state law regards to sex offenders
Real estate professional i required to disclose what?
if they are a principal to the transaction
and enviornmental material or other issue requiring disclosure that might impact the property
is a licensee allowed to give legal advice?
NOOOOO
How long does a broker have to contact a client that is on the do not call list after an inquiry?
3 months
How long to contact a client after sale that is on DNCR
18 months
Who signs the managment agreement?
employing broker
Property managers renting industrial property would be concerned with what?
environmental issues
In condominiums common elements are owned by all tenants as what?
tennants in common
In a cooperative buyers recieve what?
shares of stock
what is the time share right of recission?
7 days
What is TAM
T=A x M
current value- loans =?
answer 2 is correct
a CMA is mot similar to what?
Market data approach
What is market value?
what someone thinks the property will sell for
What is market price?
what the property sold for
When doing a CMA keep the comparables within how long?
6 months
Highest and best use is not a factor im completing what?
CMA
written offer contingent upon eviornment impact statment not showing a decrease in value that infact does would make the contract what?
void
Line 101 would be?
sale/contract price(dibit buyer)
what is an open listing?
only the procuring cause would be compensated
persons reciving section 8 money what are they protected from being descriminated against in regareds to a loan?
ECOA
Before a counter is accepted and a better offer comes in what must the seller do?
withdraw the counter befour accepting the new offer
What should a broker do befour commencing managment duties on a new property?
sign a managment agreement
investor purchasing investment property would most likely use?
1031 exchange
a stigmatized property might also be called what?
psychologically impacted property
If the seller and broker knows there is a leak and said there is not this is?
misrepresentation
If a house has been treated with pestacide and the broker only puts call on the listing and buyer now has issues related to the pestacide is the broker liable?
Yes did not take reasonable steps to notify
A high degree of leverage is what?
high degree of risk due to higher ratio of borrowed money
alienation clause=?
due on sale clause, seller does seller financing and wants to make sure he gets paid.
When would PMI be required?
Conventional loan with %80 or greater LTV
laws that regulate how much interest may be charged are?
USURY laws
Tiltle insurance covers?
events that occur prior to the policy being issued but show up after
What section is directly south of section 14
23
An agrement between brokers to charge a spesific rate is a violation of what?
anti trust laws
a covenant is?
deed restriction or cc&r
What are the four elements of value?
DUST
the type of listing where the seller brings the buyer and the broker is not compensated is?
