Real Estate Flash Cards

  1. Abstract
    Written history of property
  2. Acceleration Clause
    (Due on default clause) A mortgage clause where a lender calls a loan balance due and payable upon the happening of certain event, e.g., non-payment of mortgage
  3. Accounting
    A client level duty relating to account of earnest money, actions, etc.
  4. Accretion
    Gradual build up of soil; person gains title to added land built up on property
  5. Accurate
    A customer level duty relating to disclosure of all material defects (including latent or hidden defects) to any customer; e.g., leaky roofs, leaky basements, etc.
  6. Acknowledge
    Occurs when a document, such as a deed, is signed by the seller in the presence of a notary public, acknowledging that this is a voluntary act
  7. Actual Notice
    A situation where a person has actual or personal knowledge of a transaction, etc.
  8. Ad Valorem
    Based on value
  9. Addendum
    A change made to an original contract; e.g., extending closing date on contract; also referred to as an amendment
  10. Adjustable Rate Mortgage
    (ARM) A note where the interest changes periodically, thereby possibly changing all terms of the loan
  11. Administrator
    Court appointed person to oversee estate distribution of deceased; only applies when one dies intestate (without a valid will)
  12. Adverse Possession
    Squatter's Rights; can gain title by using someone else's property continuously, openly and notoriously (without permission) for a certain period of time
  13. Agent
    One who is hired to represent another
  14. Alienation
    In a real estate context, this relates to the word transfer; e.g., in a mortgage, an alienation clause allows the lender to call the loan due and payable if a property is sold or transferred, in other words, making the loan non-assumable
  15. Alienation Clause
    (Due on Sale Clause) A mortgage clause where a lender calls a loan balance due and payable upon selling the property; makes loan non-assumable
  16. Amendment
    A change made to an original contract; e.g., extending closing date on contract; also referred to as an addendum
  17. Annual Percentage Rate
    (APR) Takes all costs of borrowing and expresses as a percentage
  18. Anticipation
    Looks to the future for value
  19. Appraisal
    A document that gives an estimate of fair market value; for lenders, owners, etc.
  20. Appurtenance
    A right, privilege or improvement that is permanently attached to the land
  21. Appurtenant Easement
    A type of easement that runs with the land tied to a particular property given for the benefit of the particular land, e.g., shared driveway
  22. Arms-length Agreement
    Refers to an agreement arrived at under no undue pressure
  23. Arrears
    At the end, e.g., May 1st house payment applies to April's interest
  24. Assemblage
    The total value of combined properties exceeds total value of individual properties; also referred to as a plottage increment
  25. Assignment
    A total transfer of rights in a lease where the original tenant and new tenant are both liable to the landlord for the lease payments
  26. Assignment
    A transfer of rights in contract to another party
  27. Assumption
    An assignment of a loan from the seller to the buyer where the buyer becomes primarily liable for debt and the seller remains secondarily liable
  28. Attorney-in-fact
    The title given to someone who has the power of attorney; can sign on others' behalf
  29. Avulsion
    Sudden transfer; e.g., stream changing channel. With an avulsion, the boundary lines for a property remain the same as they were before the sudden change.
  30. Bargain and Sale Deed
    A type of deed transferring title from a seller to a buyer where the only promise made by the seller is the covenant of seizing (seller promises ownership of the property and the right to sell)
  31. Beneficiary
    Legal holder of the note (lender)
  32. Bequest
    Transfer of personal property through a will
  33. Bi-Lateral
    A contract containing a promise for a promise; e.g., buyer and seller in selling and buying a house
  34. Blanket Mortgage
    Covers more than one property; used by developers, etc. Usually contains a partial release clause to release each property from the blanket mortgage as sold
  35. Blockbusting
    The illegal act of making a profit by inducing owners to sell by telling them that persons of a protected class are moving into their neighborhood
  36. Bond
    Creates the debt; a promise to pay back money that was borrowed; also referred to as a promissory note
  37. Bounds
    Markers in a Metes and Bounds description; e.g., stake, well, etc.
  38. Breach
    Where a party to a contract does not perform according to the terms of the agreement
  39. Buffer Zone
    An area separating two incompatible areas
  40. Buydown
    Similar to discount points; a buydown is where one pays extra money to a lender up front in order to lower the interest rate for the first several years of the loan term; helps buyer qualify for loan
  41. Buyer's Guide to Settlement Costs
    (HUD booklet) A booklet that explains all about closing costs; must be given to buyer within 3 days of loan application
  42. Capital Gain
    Profit made on an investment item, such as real estate
  43. Capitalization Approach
    An approach to value best used on income producing properties such as shopping centers, apartment complexes, etc. This approach uses the net operating income and a capitalization rate to estimate the value. Also referred to as the income approach.
  44. Care
    A client level duty exercising knowledge and skill
  45. Chain of Title
    List of recorded documents
  46. Chattel
    Another word for personal property; comes from the word "cattle"
  47. Chronological Age
    Actual Age
  48. Civil Rights Act of 1866
    Banned all racial discrimination
  49. Civil Rights Act of 1968
    Banned discrimination in residential real estate on the basis of race, color, religion, national origin, sex, handicap, or familial status
  50. Cloud on the Title
    Any claim that impairs title; e.g. forged signatures or no signatures on deed, heirs of prior owner claiming title, etc.
  51. Color of Title
    Refers to a squatter's rights to ownership once time period has been met
  52. Commercial Banks
    A type of lender that historically specialized in making business loans
  53. Commingling
    Mixing escrow money with personal or business funds; illegal
  54. Community Property
    Property acquired during marriage; spouses have equal interest in property
  55. Competent Parties
    An essential element of a contract; one must be of legal age and of sound mind
  56. Competition
    High profits attract competition
  57. Competitive Market Analysis
    (CMA) What an agent uses in trying to find a value for a piece of property; a residential agent analyzes sold properties, currently for sale properties, and expired listing properties in an effort to determine a range of value for a particular piece of property
  58. Concurrent Estates
    Where two or more own property together at the same time
  59. Condemnation
    The PROCESS used to take the property when the government exercises the right of Eminent Domain.
  60. Conditional Fee
    Property deeded with conditions; e.g., must be used as a school. Also referred to as a defeasible fee
  61. Condominium
    A multi-unit building where the occupants each own their individual units and receive a deed granting ownership of the property
  62. Confidentiality
    A client level duty relating to maintaining confidential information of the client
  63. Conformity
    Properties should conform to the neighborhood to maintain the greatest value
  64. Consideration
    An item of value; one must have consideration to have a valid deed or contract
  65. Constant Mortgage Payment Plan
    A payment plan where the total principal and interest payment remains the same each month; amount toward principal and interest changes monthly
  66. Construction Loan
    Typically, a short term loan; money is released as needed; usually riskiest type of loan
  67. Constructive Eviction
    In leasing, a situation where the landlord constructively evicts the tenant by not maintaining the premises; e.g., no heat in the wintertime; lessee or tenant must actually leave the premises and is released from lease obligations
  68. Constructive Notice
    Occurs when a document is recorded on the public record at the county courthouse; a person is responsible for knowing facts because of recording on the public record
  69. Contract for Deed
    Owner financing where the seller keeps the warranty deed for the entire duration of the contract for deed; thus the seller retains legal title. The buyer gets possession and receives an equitable title upon the signing of the contract for deed, allowing for the buyer to obtain the deed after the entire contract is paid off. Also referred to as an installment contract or land contract.
  70. Contribution
    Value of improvement is equal to what it adds to total value
  71. Conventional Loan
    A type of loan where the borrower typically pays a down payment of 20%, thus receiving an 80% loan from the lender; there is no government involvement in this type of loan
  72. Cooperative
    A multi-unit building where the people who occupy the units own stock in a corporation, thereby receiving a right to lease the unit from the cooperative itself
  73. Corporation
    A type of syndication where owners can limit their liability; a corporation who purchases real estate takes title in severalty
  74. Cost Approach
    An approach to value best used on special purpose properties, such as churches and hospitals; the approach values a property by determining the current replacement cost, less depreciation, plus the current land value
  75. Counter-Offer
    A rejected offer and a new offer made back to the other party
  76. Cubic Foot Method
    A way to determine current replacement cost by taking the cubic footage (length times width times height) of a property times a cost per cubic foot
  77. Curtesy
    A life estate interest a husband receives in property upon wife's death, regardless of debts owed on the property
  78. Debt Service
    Principal and interest payments required to retire debt
  79. Declare Contract Forfeited
    Buyer backs out of a contract, is release from the contract but the seller keeps the earnest money is liquidated or pre-arranged damages
  80. Decreasing Returns
    Money spent on improvement does not add at least that much or more to the total value
  81. Dedication
    Voluntarily giving land to government; typically done by a developer
  82. Deed In Lieu of Foreclosure
    An agreement whereby the lender receives the deed to a property from the defaulting borrower rather than foreclosing; this is still referred to as an involuntary alienation; this does help save the borrowers credit
  83. Deed of Reconveyance
    A document verifying that a trust deed loan has been paid in full; should be recorded on the public record, thus releasing the property from the trust deed
  84. Defeasance Clause
    (Null and Void Clause) A mortgage clause that voids the security upon the loan being paid off
  85. Defeasible Fee
    Property deeded with conditions; e.g., must be used as a school. Also referred to as a conditional fee
  86. Deficiency Judgment
    A personal judgment against the defaulting borrower for any other debts owed and not satisfied by a foreclosure sale
  87. Delivery and Acceptance
    Title is transferred from seller to buyer when the deed is delivered and accepted
  88. Demand
    An element of value; must be wanted
  89. Demise
    A transfer of rights in real property through a lease
  90. Department of Veteran's Affairs
    DVA or VA or GI; established by the government in the 1940's, the VA guarantees loans made by lenders in case of default by the buyers
  91. Descent
    Occurs when one dies intestate; probate judge then determines who receives the property of the deceased, such as children, parents, other family members, etc. In essence, judge determines who property descends or goes to
  92. Description
    An essential element of a contract; must have an adequate description of the real estate; generally a legal description
  93. Developer
    Improves the lots
  94. Devise
    Transfer of real property through a will
  95. Devisee
    Receiver of real property through a will
  96. Disclosure
    A client level duty relating to disclosing to a client all material facts regarding the transaction
  97. Discount Points
    Extra money paid up front in cash to a lender in order for the buyer to receive a lower interest rate; in essence, pre-paid interest; 1 point = 1 percent; discount points are always based on the loan amount
  98. Discount Rate
    Interest rate banks pay to borrow money
  99. Discounting
    Selling a note for less than face value
  100. Dominant Tenement
    Land benefited or in favor of the easement
  101. Dower
    A life estate interest a wife receives in property upon husband's death, regardless of debts owed on the property
  102. Downzoning
    Going from a more active use to a less active use; e.g., multi-family to single family
  103. Dual Agency
    A situation where a broker represents both buyer and seller at the same time; must have written prior permission from both parties and informed consent
  104. Earnest Money
    Good faith money
  105. Easement
    Gives someone else the right to use a part of your property while you still retain the ownership rights
  106. Easement by Prescription
    Using someone else's property continuously, openly and notoriously for a certain period of time the adverse user then gains an easement to use that land
  107. Easement in Gross
    A type of easement not tied to any land but instead that is owned by a person or company, e.g., utilities, railroads
  108. Economic Life
    Number of years item is profitable; economic life is shorter than the physical life
  109. Economic Obsolescence
    A form of depreciation due to problems outside the property lines; e.g., owning a house next to a factory or sewage treatment plant; also referred to as external obsolescence
  110. Effective Age
    Apparent age based on condition; generally less than chronological age
  111. Effective Gross Income
    The annual gross income for a property less a vacancy rate; used with the income approach
  112. Emblements
    Growing crops in the field; allows the seller to come back and harvest after the sale
  113. Eminent Domain
    The RIGHT of the government to take private property for public good. The property owner is paid compensation for the property.
  114. Encroachment
    Trespassing; an improvement or appurtenance that extends across the property line; e.g., fences, tree limbs, etc.
  115. Encumbrance
    Something that burdens or limits your title to a property, such as a lien or deed restriction (or) rights held by someone else in your property, such as through an easement
  116. Equal Credit Opportunity Act
    Bans credit discrimination based on: Race, Color, Religion, National origin, Sex, Age & Marital status
  117. Equitable Redemption
    The right to redeem property before the foreclosure sale
  118. Equitable Title
    What a buyer receives upon buyer and seller signing a contract to purchase a property; allows buyer to receive deed (or legal title) at a later date, usually at closing
  119. Erosion
    Gradual wearing away of soil; owner loses title to land eroded away
  120. Escalation Clause
    A lease clause allowing a landlord to pass increased costs along to tenant; i.e., can raise rent to tenant if landlord's costs go up
  121. Escalator Clause
    A mortgage clause allowing a lender to increase the interest rate in the event of a late payment or default
  122. Escheat
    The right of the government to take private property when an owner dies intestate (no will) and has no heirs; also applies if owner abandons the property
  123. Escrow Account
    A separate account for holding other peoples' money; e.g., a broker holding earnest money in escrow or a lender holding pre-paid taxes and insurance in escrow
  124. Estate
    The degree, quantity, nature and extent of ownership interest in real property.
  125. Estate for Years
    A lease with a definite beginning and ending date
  126. Estate in Remainder
    A life estate whereby the property goes to a third party (named by the grantor) when the grantee (life tenant) dies
  127. Estate in Reversion
    A life estate whereby the property reverts back to the grantor when the grantee (life tenant) dies
  128. Estoppel Certificate
    States the current loan balance on a note; used especially when notes are sold to others
  129. Exceptions and Reservations Clause
    A clause in a deed that lists any encumbrances the buyer is subject to; many times, referred to simply as the reservations clause
  130. Exclusion on Homes
    Only for owner-occupied properties; a person can write off up to $250,000 of capital gains if single, $500,000 if married; must have been your personal residence for 2 of the past 5 years; can use exclusion repeatedly, not just once in a lifetime
  131. Exclusive Agency Listing
    A type of listing where the owner and one broker are authorized to sell and receive a commission
  132. Exclusive Right to Sell Listing
    A type of listing where only one broker is authorized to sell and receive a commission
  133. Executed
    The phase in a contract where the promises have been completed; e.g. contract closing
  134. Executor
    One named in will to carry out will
  135. Executor's Deed
    Type of deed used by the executor to transfer property to those named in will
  136. Executory
    The phase in a contract where the promises have been made but not completed; e.g. contract pending
  137. Expressed
    Refers to a contractual obligation where all parties have clearly stated their intentions
  138. Extended Policy
    A title insurance policy that may cover more things than a standard policy, such as unrecorded liens, etc.
  139. External Obsolescence
    A form of depreciation due to problems outside the property lines; e.g., owning a house next to a factory or sewage treatment plant; also referred to as economic obsolescence
  140. Fair
    A customer level duty relating to treating all customers fairly
  141. Familial Status
    A person with a child under 18; a protected class under the 1988 Amendments to the Fair Housing Act
  142. Federal Deposit Insurance Corporation
    Government agency that insures deposits in banks and savings & loans
  143. Federal Home Loan Mortgage Corporation
    FHLMC, Freddie Mac: An organization in the secondary mortgage market that primarily buys conventional loans from savings & loans
  144. Federal Housing Administration
    FHA; Established by the government in the early 1930's, FHA insures loans made by lenders in case of default by the buyers
  145. Federal National Mortgage Association
    FNMA, Fannie Mae: The largest organization in the secondary mortgage market that buys notes from lenders, thus providing liquidity for lenders; even though a private organization, FNMA raises money by selling government guaranteed bonds; buys all types of loans
  146. Fee Simple
    The maximum rights one can have in owning real estate; also called fee simple absolute.
  147. Fiduciary
    Loyalty and trust; what an agent owes to a principal (client)
  148. First Mortgage
    First lender to record a mortgage is first in rights
  149. Fixture
    Going from personal to real property; item that was once personal property but is now attached
  150. Freehold Estates
    What we usually think of as OWNERSHIP. There is no definite ending date and it is for at least a lifetime.
  151. Front Footage
    Linear (straight) feet along the street line; in essence, the width of your property along the street
  152. Fully Amortized Note
    A loan where the payments apply to principal and interest; the entire principal loan balance is totally paid off over the term
  153. Functional Obsolescence
    A form of depreciation due to problems inside the property lines; does not function the way modern properties do; e.g., outhouses, pumps for water, etc.
  154. Further Assurance
    A promise made by the seller in a general warranty deed assuring the buyer that the seller will provide or sign documents in the future if necessary to help prove buyer's title
  155. General Agent
    A person who represents someone else in several areas on an ongoing basis; e.g., property manager to owner; also salesperson to broker
  156. General Assessment
    Tax on land plus improvements; pays for school, police and fire protection, etc.
  157. General Lien
    A lien that applies to all of one's property, real and personal
  158. General Warranty Deed
    The instrument used to transfer title from a seller to a buyer whereby seller gives buyer greatest protection; seller promises the covenant of seizin, quiet enjoyment, against encumbrances, further assurance and warranty forever
  159. Geodetic Survey System
    A form of legal description that uses benchmarks to identify land
  160. Good Faith Estimate of Settlement Costs
    A preliminary estimate of expected closing costs given to buyer within 3 days of loan application
  161. Government National Mortgage Association
    GNMA, Ginnie Mae: An organization in the secondary mortgage market that buys notes from local lenders; government corporation under HUD; buys notes in depressed areas of country; primarily buys FHA & VA loans
  162. Government Survey System
    A form of legal description that describes land in America using meridians (north and south) and base (east and west) lines; every six miles range and tier lines are drawn to form townships; also referred to as the rectangular survey system
  163. Graduated Lease
    A lease where the payments can go up or down, but are pre-determined
  164. Graduated Payment Note
    A note where payments start out lower than normal, then go up yearly typically for 5 years, then leveling off for the remaining term; the FHA245 is a type of graduated payment note; sometimes can result in negative amortization
  165. Grantee
    The person receiving title to real property; typically the buyer
  166. Grantee
    Receiver of real property (buyer)
  167. Granting Clause
    Words of conveyance in a deed; using property wording and verbiage in a deed
  168. Grantor
    The person transferring title to real property; the seller
  169. Grantor
    Giver of real property (seller)
  170. Gross Income
    The possible annual gross income for a property; used with the income approach
  171. Gross Lease
    A lease where the landlord pays taxes, assessments, insurance, etc.
  172. Gross Rent Multiplier
    (GRM); This is a form of the income approach used to estimate the value of a rental property. The gross rent multiplier is computed by taking a rental property's sale price and dividing by the rent charged.
  173. Ground Lease
    A lease for ground; usually long-term; e.g., farmers, gas stations, etc.
  174. Growing Equity Mortgage
    A type of mortgage where predetermined amounts, in addition to regular principal and interest payments, apply to principal each month, thus growing equity faster than normal
  175. Habendum
    In a deed, contains just these words: "To have and to hold"
  176. Handicap
    A physical or mental impairment; a protected class under the 1988 Amendments to the Fair Housing Act
  177. Highest and Best Use
    The use of a property that provides greatest net return on land
  178. Homestead
    A law that protects a family's home from creditors; does not apply to real estate taxes or home mortgage
  179. Honest
    A customer level duty relating to being honest with customers
  180. Hypothecate
    The borrower retains item used as security for loan; e.g., house or car loan
  181. Implied
    Refers to a contractual obligation that is created by one's actions
  182. Income Approach
    An approach to value best used on income producing properties such as shopping centers, apartment complexes, etc. This approach uses the net operating income and a capitalization rate to estimate the value. Also referred to as the capitalization approach.
  183. Income Tax Lien
    A lien for non-payment of income tax to the IRS (Internal Revenue Service)
  184. Increasing Returns
    Money spent on improvement adds at least that much or more to the total value
  185. Index Lease
    A lease where the payments can go up or down but are based on some type of index, such as the consumer price index
  186. Installment Contract
    Owner financing where the seller keeps the warranty deed for the entire duration of the contract for deed; thus the seller retains legal title. The buyer gets possession and receives an equitable title upon the signing of the contract for deed, allowing for the buyer to obtain the deed after the entire contract is paid off. Also referred to as a contract for deed or land contract.
  187. Insurance Companies
    Primarily make large loans
  188. Interest
    Rental charge for using someone else's money
  189. Intestate
    Dying without a valid will
  190. Joint Tenancy
    A form of ownership where two or more parties own property together; carries the right of survivorship (when an owner dies, the ownership interest goes to the surviving owners, not the heirs of the deceased)
  191. Jones VS Mayer
    In 1968, the United States Supreme Court rules that one cannot discriminate racially under any circumstances
  192. Judgment Lien
    A lien for personal debts; covers all real and personal property
  193. Judicial Foreclosure
    Where a mortgagee/lender has to go to court to foreclose upon breach of contract
  194. Junior Mortgage
    Any mortgage other than a first; also called a second mortgage
  195. Land
    A spot on the earth that goes down to the center of the earth and up to infinity
  196. Land Contract
    Owner financing where the seller keeps the warranty deed for the entire duration of the contract for deed; thus the seller retains legal title. The buyer gets possession and receives an equitable title upon the signing of the contract for deed, allowing for the buyer to obtain the deed after the entire contract is paid off. Also referred to as a contract for deed or installment contract.
  197. Leasehold Estates
    What we usually think of as RENTING or LEASING. It is for a definite period of time, i.e., a limited duration.
  198. Legal Object
    An essential element of a contract; must be for a lawful purpose
  199. Legal Title
    Refers to party who actually is in possession of warranty deed
  200. Lessee
    Receiver of lease (tenant)
  201. Lessor
    Giver of lease (landlord)
  202. Leverage
    Using borrowed money to make money
  203. License
    Personal permission to use someone else's property; does not encumber title as an easement does
  204. Lien Theory
    States that honor this recognize that a homeowner has title; the lender has mortgage lien against property
  205. Liens
    A money encumbrance against a property
  206. Life Estates
    A property that is deeded to someone for their life or the life of another
  207. Limited Partnership
    An arrangement where one can invest money with a general partnership; the limited partner is normally only liable for their investment; basically a financial backer; not involved in day to day running of business
  208. Liquidated Damages
    A clause in a contract allowing for the earnest money to be forfeited to the seller if a buyer backs out of a contract; also called pre-arranged damages
  209. Lis Pendens
    Latin for "pending litigation or action"
  210. Littoral
    Property bordering a lake or ocean
  211. Loan Origination Fee
    A fee charged by a lender for originating and processing a loan
  212. Loan to Value Ratio
    The percent the loan is to the total value; e.g., a loan of $80,000 on a property valued at $100,000 would result in an 80% loan to value ratio
  213. Lock-In Commitment
    A lender guarantees a borrower a fixed interest rate and a fixed amount of discount points for a certain time period
  214. Lot and Block System
    A form of legal description which lists a lot #, block#, subdivision, county and state; recorded on a plat map; used primarily for new subdivisions
  215. Loyalty
    (Fiduciary) A client level duty relating to doing what is in your client's best interest
  216. Margin
    Basically, a lenders' profit; the margin is added to an index in an adjustable rate mortgage to come up with the actual interest rate charged to the borrower; the margin remains the same for the life the loan
  217. Market Data Approach
    An approach to value best used on residential property and vacant land; uses comparable properties to estimate values
  218. Master Land Plan
    Plan for a cities future growth
  219. Mechanic's Lien
    A lien designed for people who make improvements on property and are wrongfully not paid; e.g., contractors, sub-contractors and material vendors who are not paid for work performed or materials supplied
  220. Metes
    Length measurements in a Metes and Bounds description; e.g., feet and inches
  221. Metes and Bounds
    A form of legal description that gives a physical description of the property
  222. Misrepresentation
    False statement of a material fact
  223. Mortgage
    A document where property is used as security for the debt
  224. Mortgage Banker
    Acts as a middleman between lender and borrower; mortgage bankers actually make the loans to the borrowers; earns money by servicing loans
  225. Mortgage Broker
    Earns money by bringing lenders and borrowers together; normally does not actually make loans
  226. Mortgage Contingency Clause
    A clause in a contract where the buyer is obligated to buy only if loan approval is obtained; usually buyer gets earnest money back if mortgage is denied
  227. Mortgage Lien
    A voluntary lien where one uses property as security for a loan
  228. Mortgage Release
    A document verifying that a mortgage loan has been paid in full; should be recorded on the public record, thus releasing the property from the mortgage
  229. Mortgagee
    The receiver of a mortgage (lender)
  230. Mortgagee's Policy
    (lender) A title insurance policy covering a lender for the outstanding loan balance
  231. Mortgagor
    The giver of a mortgage (borrower)
  232. Negotiable
    An instrument that can be bought and sold
  233. Net Lease
    A lease where the tenant pays all or part of taxes, assessments, insurance, etc. Taxes paid by tenant would be tax deductible for the tenant.
  234. Net Listing
    Normally illegal; this is where the real estate commission is the sale price less the seller's required proceeds
  235. Net Operating Income
    NOI; the annual gross income for a property less a vacancy rate and operating expenses; used with the income approach
  236. Non-Conforming Use
    Before zoning; similar to a grandfather clause; allows continued use of a property that is technically in violation of the current zoning law because the owner was using the property a certain way before the zoning change. Property can be sold as non-conforming use if buyer uses it the same as the seller had; however, if property burns down, generally property then must conform to the new, current zoning use.
  237. Non-Disturbance Clause
    A clause in a lease and lending document allowing for continuation of a lease even if the property is foreclosed on
  238. Non-Judicial Foreclosure
    In a trust deed state, the trustee sells the property and pays off the beneficiary (lender) without having to go to court
  239. Notorious
    Without permission (hostile); this is a requirement for a person claiming rights to a property either through adverse possession or an easement by prescription
  240. Novation
    New contract takes place of old contract; e.g., an assumption of a loan with a release of liability given by the lender to the seller
  241. Obedience
    (Performance) A client level duty following instructions of a client
  242. Offer
    In a real estate transaction, the buyer makes the first offer
  243. Offer and Acceptance
    An essential element of a contract; the parties must agree on the exact same terms
  244. Open End Mortgage
    Line of Credit; can borrow again and again on the same loan; e.g., home equity loan; works like a credit card
  245. Open Listing
    A type of listing where everyone is authorized to sell and receive commission, including the owner; the only one who gets paid is the one who is the procuring cause (found the buyer)
  246. Open Market Operations
    Federal Reserve transactions in buying and selling securities
  247. Operating Costs
    Costs incurred in a property management situation, such as utilities and repairs; does not include vacancies
  248. Operating Expenses
    Used with the income approach, the operating expenses include all operating costs, such as utilities, maintenance, salaries, etc. The one expense NOT considered is the debt service (mortgage payments).
  249. Option
    A possibility contract where one party is bound to perform but the other party is not
  250. Optionee
    Receiver of option (possible buyer)
  251. Optionor
    Giver of option (seller)
  252. Ostensible
    Refers to a contractual obligation that is created by what appears to be; similar to implied
  253. Package Mortgage
    Uses both real and personal property as security
  254. Partial Release Clause
    A clause in a blanket mortgage allowing each property to be released from the blanket mortgage as sold; however, loan balance must be reduced
  255. Partially Amortized Note
    A loan where the payments apply to principal and interest; however, the principal loan balance is only partially paid down, thus usually requiring a balloon payment at the end of the loan term
  256. Partnership
    A type of syndication where the partners have unlimited liability and generally share in profits, losses, taxes, etc.
  257. Party Wall
    A situation where two structures share the same wall; e.g., a duplex
  258. Percentage Lease
    A lease where the rent is based on a percentage of sales; normally used in retail leases
  259. Periodic Tenancy
    A lease that runs from period to period; e.g., a month-to-month lease
  260. Personal Property
    Anything that is easily movable; e.g., camera, grill, etc.
  261. Personal Services Contract
    A non-assignable contract; e.g., listing contracts
  262. Physical Deterioration
    A form of depreciation due to peeling paint, sagging floors, etc.
  263. Physical Life
    Number of years item is physically sound
  264. Planned Unit Development
    (PUD) Diverse uses of land in one area; requires special zoning (referred to as overlay, cluster or density zoning)
  265. Plat Map
    Used with the Lot and Block System, this map is a diagram of a subdivision
  266. Pledge
    The lender retains item used as security for loan; e.g., stocks, bonds, etc.
  267. Plottage increment
    The total value of combined properties exceeds total value of individual properties; also referred to as assemblage
  268. Police Power
    Keeping things in order; e.g., zoning and building codes fall under police power
  269. Power of Attorney
    A written document authorizing one to sign legal documents on behalf of another
  270. Pre-arranged Damages
    A clause in a contract allowing for the earnest money to be forfeited to the seller if a buyer backs out of a contract; also called liquidated damages
  271. Pre-payment Penalty Clause
    A mortgage clause where a lender charges a penalty if the loan is paid off early
  272. Principal / Client
    One who hires an agent for representation
  273. Probate Court
    A special court for handling estates upon one's death. Court determines who gets what property and in what amounts if the deceased died intestate (without a valid will)
  274. Promissory Note
    Creates the debt; a promise to pay back money that was borrowed; also referred to as a bond
  275. Property Management Agreement
    An agreement between an owner and property manager that shows basic duties of the property manager; generally this agreement does not contain a vacancy rate
  276. Property Tax Lien
    A lien for non-payment of real estate taxes; this always takes priority getting paid off at a foreclosure sale
  277. Protective Period Clause
    Protects broker in case negotiations extend past the expiration date of listing; this clause is normally standard in an agency agreement
  278. Puffing
    Subjective opinion; e.g., this home has a beautiful view; not a law violation
  279. Pur autre vie
    (for another's life) A life estate where the grantee owns a property based on someone else's life
  280. Purchase Money Mortgage
    Owner financing; typically where a seller carries a second mortgage on behalf of the buyer
  281. Quantity Survey Method
    A way to determine current replacement cost by pricing the rebuilding item by item; every brick, board, etc.
  282. Quiet Enjoyment
    A promise assuring no third party claims; e.g., in a lease, a tenant receives the right of quiet enjoyment from a landlord, thus relieving tenant from having to worry about another party claiming rights to that same space
  283. Quiet Title Suit
    Court action to clear a cloudy title; e.g., ownership disputes, adverse possession claims, encroachments, etc.
  284. Quitclaim Deed
    A type of deed transferring title from a seller to a buyer where NO promises are made by the seller. The seller says IF I own it, but I'm not saying I do, I give you whatever rights I MAY have. This deed is typically used to quiet cloudy titles.
  285. Real Estate Investment Trust
    (REIT) A type of syndication that is basically a giant mutual fund for real estate investments
  286. Real Estate Settlement Procedures Act
    (RESPA) A federal law whose purpose is to inform borrowers ahead of time total closing costs so borrowers can shop around to get the best deal
  287. Recapture
    Allows owners of investment property to deduct a percentage of the cost of the property each year from their taxable income; also referred to as tax depreciation
  288. Reconciliation
    (Correlation) The final step in the appraisal process; this reconciles differences from among three different approaches to value to arrive at a final dollar amount for the appraisal
  289. Rectangular Survey System
    A form of legal description that describes land in America using meridians (north and south) and base (east and west) lines; every six miles range and tier lines are drawn to form townships; also referred to as the government survey system
  290. Redemption
    Redeem = buy back; defaulting borrower has a certain time period to buy property back at foreclosure sale price plus any other costs owed
  291. Redlining
    Lenders refusing to loan in certain areas based upon protected classes
  292. Regulation Z
    A federal law pertaining to lenders having to disclose all loan costs to borrowers; also referred to as Truth-In-Lending Laws
  293. Regulations
    Government regulations relating to subdivisions; e.g., most cities require streets, sewers, easements, etc.
  294. Remainderman
    Third party who receives fee simple title upon death of the grantee (life tenant)
  295. Replacement Cost
    Using the cost of similar materials
  296. Reproduction Cost
    Using the exact replica cost
  297. Rescind
    In a contract, this returns the parties to status quo; way they were before contract signed
  298. Reservation
    A form of life estate where the seller sells the property but retains (reserves) a life estate interest in that same property for the seller's lifetime
  299. Reserve Controls
    Percent of funds banks must keep on hand
  300. Restrictions
    A private agreement contained in a deed that restricts the use of a property; e.g., certain types of fences or roofs required. Also referred to as restrictive covenants or deed restrictions.
  301. Restrictive Covenants
    A private agreement contained in a deed that restricts the use of a property; e.g., certain types of fences or roofs required. Also referred to as deed restrictions
  302. Reverse Annuity Mortgage
    RAM; A type of mortgage where the mortgagee (lender) pays the mortgagor (borrower) a fixed amount every month; usually for retired people with home completely paid off
  303. Reversion
    Upon expiration of a lease, the property goes back to original lessor (landlord); also, a life estate in reversion is where once a grantee (life tenant) dies, the property goes back to original grantor
  304. Right of First Refusal
    A contract where one is given the first opportunity to buy if a property is put up for sale
  305. Right of Rescission
    Allows for a party to rescind or back out of a contract. On many loans, a borrower has a 3-day right to rescind (back out). However, there is no right of rescission with a real estate sales contract.
  306. Right Of Survivorship
    Found in joint tenancy, when one owner dies, the ownership interest passes to the surviving owners
  307. Riparian
    Property bordering a flowing waterway; e.g., river or stream
  308. Sale / Leaseback
    This is used when owner needs capital (money); owner sells property to a buyer and then leases the same property back from the purchaser
  309. Savings & Loans
    A type of lender with their largest investment in residential home loans
  310. Scarcity
    An element of value; must be a limited supply
  311. Schedule of Exceptions
    A title insurance clause stating that certain items are excluded from coverage; e.g., government regulations such as zoning
  312. Second Mortgage
    Any mortgage other than a first; also called a junior mortgage
  313. Secondary Mortgage Market
    A place where loans already made by local lenders are bought and sold; the purpose is to provide liquidity for lenders
  314. Section
    A portion of ground measuring one mile square; also one square mile; contains 640 acres; every acre contains 43,560 square feet
  315. Securities License
    Required if one sells investments to the general public, such as REIT's (Real Estate Investment Trust)
  316. Seizin
    Seized of title; A term where seller promises ownership of property and has the right to sell
  317. Separate Property
    Property acquired before marriage; individual spouses retain sole ownership interest
  318. Servient Tenement
    Land burdened by the easement
  319. Setback Lines
    Amount of space between lot line and building line
  320. Severalty
    A situation where one person only owns the property; also, how corporations take title
  321. Severance
    Going from real to personal property; e.g., cutting down a tree
  322. Shared Appreciation Mortgage
    SAM; A type of mortgage where the lender shares in appreciation plus interest; a form of a participation loan
  323. Sheriff's Deed
    Transfers property to buyer at foreclosure sale; e.g. for non-payment of mortgage
  324. Sherman Anti-Trust Laws
    A federal law that prohibits groups of brokers setting a fixed price for services
  325. Signed
    An essential element of a contract; must have signatures of all parties to contract
  326. Special Agent
    A person who represents someone else one time in one area; e.g., broker to seller
  327. Special Assessment
    Property tax for improvements that benefit certain properties; e.g., sewers and sidewalks
  328. Special Warranty Deed
    A type of deed transferring title from a seller to a buyer. However, the seller only makes promises regarding ownership, encumbrances, etc. during the time period in which the seller owned the property, no promises before that.
  329. Specific Lien
    A lien that applies only to one specific property
  330. Specific Performance Suit
    Court action to force completion of a contract
  331. Spot Zoning
    Changing the zoning of one particular spot; normally for public good
  332. Square Foot Method
    A way to determine current replacement cost by taking the square footage (length times width) of a property times a cost per square foot; appraisers use outside dimensions in determining square footage
  333. Square Footage
    Length times width
  334. Standard Policy
    A title insurance policy that covers forged documents, undisclosed heirs, etc.
  335. State the Problem
    The first step in the appraisal process; this defines the purpose of the appraisal
  336. Statute of Frauds
    A law that requires certain documents to be in writing to be enforceable; e.g., real estate sales contracts, deeds, leases over 1 year
  337. Statutory Redemption
    The right to redeem property after the foreclosure sale
  338. Steering
    Directing people toward areas based upon their protected class
  339. Straight Line Method Depreciation
    A method of depreciation where one depreciates equal amounts each year; what appraisers use
  340. Straight Note
    (Term Loan) A loan where the payments apply to interest only; usually short-term; e.g., used on construction loans
  341. Sub-Agency
    An agency situation where one agent is authorized to use another agent to represent the client; historically, this is where two brokers, the listing and selling broker, both represent the seller; buyer is a customer and is unrepresented
  342. Subdivider
    Divides land into lots for sale
  343. Subject To
    An assignment of a loan from the seller to the buyer where the seller remains solely liable for debt
  344. Subleasing
    A partial transfer of rights in a lease where just the original tenant remains liable for the lease payments; the new tenant is a lessee of the original tenant
  345. Subordination Clause
    A mortgage clause where lenders change the lien priority that is different than recording date; lender waives their right in favor of another
  346. Subrogation
    Signing over rights in a claim to a title insurance company in return for getting paid off
  347. Substitution
    A property is only worth what one can get another one for just like it
  348. Suit to Partition
    A lawsuit where one of the owners institutes court action to force sale of property by all parties
  349. Syndication
    Two or more people investing together
  350. Tax Assessor
    A public official who appraises property for tax purposes to determine only the assessed value.
  351. Tax Base
    Total of all assessed values
  352. Tax Deed
    Transfers property to buyer at foreclosure sale for non-payment of taxes
  353. Tax Depreciation
    Allows owners of investment property to deduct a percentage of the cost of the property each year from their taxable income; also referred to as recapture
  354. Tax-free Exchange
    Exchanging like-kind property for like-kind property, resulting in a deferral of capital gains tax; also called a 1031 exchange
  355. Tenancy at Sufferance
    A lease where the tenant stays over without permission; landlord suffers
  356. Tenancy at Will
    A lease where the tenant does have permission to occupy but nothing is in writing; e.g., a landlord continuing to accept rent from a tenant even after expiration of the original lease
  357. Tenancy by the Entireties
    Very similar to joint tenancy, with the difference being that the owners must be husband and wife
  358. Tenancy In Common
    An individual interest in group ownership; the ownership interest can be unequal, the parties all share possession, and the heirs of the deceased receive the property upon the death of one of the owners (ownership does NOT transfer to the other co-owners)
  359. Testate
    Dying with a valid will
  360. Testator
    Deceased person who had made a will
  361. Time is of the Essence Clause
    States that all terms of the contract must be completed in a timely manner
  362. Time Sharing
    Fee simple ownership to a unit for a set period of time each year; interval ownership
  363. Title Insurance
    Insures the title to a particular piece of property
  364. Title Theory
    States that honor this recognize that generally, the lender has title until debt is paid off
  365. Township
    A portion of ground measuring 6 miles square; also 36 square miles
  366. Trade Fixtures
    Item installed by a commercial tenant for business use; e.g. display cases
  367. Transferability
    An element of value; seller must be able to give to buyer
  368. Trust Account
    Separate account for holding other people's money; usually held by broker; also referred to as escrow account
  369. Trust Deed
    A document where property is used as security for the debt
  370. Trustee
    The receiver of a trust deed; a neutral third party whose primary job is to foreclose if payments are not made to the lender or beneficiary
  371. Trustor
    The giver of the trust deed (borrower)
  372. Truth-In-Lending Laws
    A federal law pertaining to lenders having to disclose all loan costs to borrowers; also referred to as Regulation Z
  373. Unenforceable
    A contract that may not be enforceable in court; e.g., an oral contract
  374. Uni-Lateral
    A contract containing a promise for an action; e.g., a lease with an option to buy
  375. Uniform Settlement Statement
    (HUD 1 Form) Lists actual final closing costs for seller and buyer
  376. Unit-In-Place Method
    A way to determine current replacement cost by pricing the rebuilding by units; concrete, roof, etc.
  377. Usury Laws
    Set the maximum interest rate that can be charged by law; states have their own unique usury laws
  378. Utility
    An element of value; must be useful
  379. Valid and Enforceable
    A contract containing all the essential elements, including being in writing
  380. Value Depreciation
    An item goes down in value due to age, wear and tear, etc.
  381. Variance
    After zoning; this is a small deviation in the current zoning law that still conforms to the over all general plan for the area. Variances are generally granted for things like setback requirements, front footage requirements, etc.
  382. Vendee
    Buyer of property; in a contract for deed, buyer is one who gets possession of property and pays "installments" to the seller until the contract is paid off
  383. Vendor
    Seller of property; in a contract for deed, seller is one who retains legal title
  384. View Easement
    A type of easement for viewing across another's property
  385. Void
    A contract with no legal effect; e.g., one of the parties not of sound mind
  386. Voidable
    A contract that can be voided by one of the parties; e.g., contract signed by a minor, under duress, or due to misrepresentation
  387. Warranty Forever
    A promise made by the seller in a general warranty deed that says if the seller provides faulty title, the seller will return the purchase price money back to the buyer; in essence, a money back guaranty
  388. Water Table
    Difference between earth's surface and percolating water
  389. Wraparound Mortgage
    A financing arrangement where typically a 2nd lender assumes the note of a 1st lender on behalf the buyer, advances the buyer additional funds to purchase the property with the buyer then making payments on the entire new mortgage made to 2nd lender
  390. Writ of Execution
    A procedure where a sheriff seizes property and sells to satisfy a judgment
  391. Writing
    An essential element of a contract; contract doesn't have to be in writing, but generally does to be enforceable (an oral contract generally cannot be enforced in court)
  392. Zoning
    The regulation of structures and uses of property within designated areas
  393. As Real Estate Agents we sell?
    Land & Appurtenances
  394. Appurtenances are:
    The right, privilege, or improvements permanently attached (run with the land)
  395. Examples of Appurtenances are:
    Natural (creek, trees) Man made (garage or house) Mineral Rights (Oil) Air Rights & Water Rights.
  396. Do Mineral Rights transfer with the land?
    Always unless specified otherwise.
  397. What is used to transfer personal property?
    Bill of Sale
  398. What is it called when real property gets converted to personal property?
    Severance
  399. What is it called when personal property gets converted to real property?
    Fixture
  400. What is personal Property?
    Not Real Property
  401. What are trade fixtures?
    Personal Property that a tenant can take with them at the end of the lease.
  402. What are emblements?
    Crops cultivated by previous tenant or owner, it belongs to the past owner. (does not run with the land)
  403. What is the difference between government and private rights?
    Government rights are for the good of the entire community.
  404. What rights does the government have?
    Taxation, Police Power, Eminent Domain, Escheat
  405. What is Eminent Domain?
    The right of the government to seize a persons property through the process of condemnation, for the greater good.
  406. What is Escheat?
    Right of the government to seize abandoned property.
  407. 2 Kinds of Freehold Estates are:
    Fee Estates & Life Estates
  408. Which type of estate is fully inheritable to the occupant?
    Fee Simple Estate
  409. Which type of estate is non inheritable?
    Life Estates
  410. Freehold estate means what?
    You own it with no definite ending date - all conditions transfer with it.
  411. Leasehold estate means:
    You rent or lease for a definite period
  412. If someone dies & the property is a life estate  it becomes an:
    estate in reversion
  413. What are the 4 unities of Joint Tenancy?
    • T - Time: Take ownership at the same time
    • T - Title: Must all be on title
    • I - Interest: Equal Interest
    • P - Possession: Undivided, take possession at the same time.
  414. An estate in remainder means:
    As long as the life tenant is breathing, the grantor can lease, sell, mortgage, but when the life tenant dies it will go back to the original grantor (3rd party involved)
  415. Mortgage "discount" points only apply if:
    The interest rate on the mortgage loan has been lowered by 1% for each point charged
  416. Standing trees would be considered:
    Real Property
  417. What tenancies does Kansas allow?
    Joint Tenancy
  418. Which is not necessary for a valid contract?
    •  
    • Due date
  419. Who is responsible for maintaining a habitable property and for complying with local housing and building codes?
    Lessor
  420. Does Kansas allow Holographic wills?
    •  
    • NO
  421. How soon can a broker receive a commission check after a closing in Kansas?
    After the transaction is completed and funded.
  422. Which of the following is required for an applicant to receive a Real Estate License?
    Must sit and pass the required exam
  423. Which of the following would not put a sales person in jeopardy of losing their license in Kansas?
     Being authorized to accept and excessive commission.
  424. What term means "going to the state?"
    Escheat
  425. Does Kansas have dower laws?
    Yes
  426. Does Kansas have reciprocity with other states?
    No
  427. Is Kansas a community property state?
    No
  428. Which of the following isn't part of a deed?

    Novation, Acknowledgement, Habendum, Premises
    Novation
  429. A license expires every 3 years. True or False
    False. Every 2 years.
  430. After getting a license, how often must you take Continuing Education classes?
    Every 2 years
  431. What is homestead protection?
    •  
    • The status provided to a home owner's principal residence that protects the home against judgement up to a specified amount.
  432. Which of the following is a landlord's option for a tenant not paying rent?
    unlawful detainer action in court
  433. A Salesperson license fee costs how much?
    $125
  434. The license law is administered by:
    Kansas Real Estate Commission
  435. In what circumstances, if any, can a broker in Kansas who is serving as an intermediary representing both parties collect compensation from both the buyer and the seller?
    Only when both buyer and seller give informed consent to this arrangement
  436. Does Kansas have homestead laws?
    •  
    • Yes
  437. What is the effect on mineral rights when the land is sold?
    They pass to the grantee unless specifically noted.
  438. When is an item considered to be real estate?
    When it is permanently attached to the land.
  439. Which of the following would not be appurtenance? (Right, Privilege, Improvement, Reversion)
    Reversion
  440. A buyer made an offer on a house and the seller accepted the offer as written. The buyer wanted some of the seller's personal property to remain with the house. The personal property would transfer to the buyer under what conditions?
    If it was included in the contract.
  441. A commercial tenants lease for a seafood store was about to expire. The tenant began dismantling the display cases that the tenant had originally installed. The owner of the property informed the tenant that the tenant could not dismantle the display cases. Whats is correct concerning this situation?
    The tenant would be able to take the cases and would not have to pay the owner for the fair market value of the cases.
  442. A seller sold a property to a buyer. The property contained built-in bookshelves. What would be true about the built-in bookshelves?
    They stay with the property as they are permanently attached.
  443. Which of the following is not a fixture? (bathtub, extra and attache door locks, built-in dishwasher, above ground pool)
    Above ground pool
  444. When a property is taken for public improvements from an unwilling owner, this is:
    eminent domain
  445. When a property is taken through condemnation, it was a result of:
    the government exercising the right of eminent domain.
  446. the state government can take property that has been abandoned by the owner through what right?
    Escheat
  447. the zoning commission has the authority to zone under which government right?
    Police Power
  448. Fee simple title would BEST be described as receiving:
    The maximum rights in a property.
  449. T deeds a property to L, giving L a life estate in the property. T also selects R to receive the property after L dies, this would become an:
    estate in remainder
  450. a Child owns a life estate and sells the property to a friend. What is true regarding the friend's estate?
    It ends when the child dies
  451. Property owned solely and separately is:
    severalty
  452. A person owned a condominium and leased it to K for one year. What did this create?
    a Leasehold Estate
  453. G has a lease for one year. At the end of the year, G stays over without consent. This would be called an:
    estate at sufferance
  454. What is a voluntary lien against a persons property?
    Mortgage Lien
  455. One year ago, a seller had work performed on their property. Currently, the seller sold the property to a buyer. Just before closing, it was discovered that there existed a judgement against the seller from the work that was done one year ago. Who would be responsible for this judgement lien?
    Seller
  456. A trespass of an improvement is what?
    Encroachment
  457. A devoloper has a 50 acre development with 500ft of lake frontage. A purchaser of a non-lake frontage would want what included in the purchase?
    an appurtenant easement to the lake
  458. What would transfer legal use, but not ownership of a property?
    Easement
  459. Easements, rights of ingress, rights, privileges and improvements that transfer with the delivery of the deed are called:
    appurtenances
  460. A building with a roof that extends over the boundary line would be considered?
    an encroachment
  461. An encroachment on a property would be discovered though a:
    survey
  462. Who would determine the amount for maintenance fees in a condominium?
    the board of directors
  463. The right of a party to the use and occupancy of a property for a stipulated recurring period is known as:
    timeshare
  464. An owner of a condominium unit failed to pay the property taxes. What is most likely to occur:
    Ownership of the condominium unit will be jeopardized.
  465. What interest does a condominium owner have in common with the other condominium owners?
    Undivided interest in the common areas
  466. When ownership is conveyed through the transfer of shares of stock, this is:
    cooperative
  467. Ownership of a unit in a condominium is transferred through:
    a deed
  468. As a condition of owning space in a condominium, the owners were assessed a monthly fee for the use of the clubhouse and swimming pool. An owner did not use either. The owner:
    Would still have to pay the full monthly assessment.
  469. A condominium development with a long standing established home association would be governed by the:
    Association of unit owners.
  470. A relocation company purchased a property. The relocation company in trying to sell the property only wanted to guarantee the property since they have owned it. The type of deed necessary to accomplish this would be a:
    special warranty deed
  471. A grantee is going to sue a grantor based on a cloudy title. The grantor would most likely prevail in this lawsuit under which circumstance?
    The grantor conveyed the property with a quitclaim deed.
  472. The purpose on the encumbrance clause in a general warranty deed is to protect against:
    unrecorded liens that may affect the value of the property.
  473. Unless specified otherwise, when a property is sold, when would possession of the property normally be given?
    Upon the deed being delivered and accepted by the buyer.
  474. When does title to real estate transfer from the seller to the buyer?
    When the deed is delivered and accepted.
  475. The purpose of recording the deed is to protect the:
    Grantee
  476. Documents are recorded to provide:
    Constructive knowledge
  477. A person occupies a property in a hostile, visible, actual and direct manner. This is BEST described as:
    Adverse possession
  478. What is a quitclaim deed generally used for?
    To quiet a cloud on the title.
  479. An insurance policy designed to insure against title defect is paid:
    Once when the policy is issued.
  480. What would not place a limitation on your rights in property?
    Title insurance
  481. A tax assessment for the addition of a sidewalk in a neighborhood would be referred to as:
    Special Tax Assessment
  482. A property with a total value of $40,000 was appraised for tax purposes at 25% of market value. If the tax rate was $3 per $100 of the appraised tax value, how much tax was owed?
    $300
  483. A property was assessed at $150,000 with a rate of $27.50 per $1,000. The next year the tax rate was reduced to $25 per $1,000 and the assessed value went up by 10% the tax rates would:
    stay the same
  484. An established family grocery store is in an area that has recently been zoned residential. If the grocery store was to be sold, what document would be needed to allow continued use of the grocery store.
    Pre-existing non-conforming use
  485. Property used for something other than the current zoning is referred to as:
    non-conforming use
  486. Why would an appraiser, in doing an appraisal on a particular property, check out the zoning on that property?
    To see what the legal uses are for the property.
  487. An owner wanted to extend the current garage, but found out that the modification would extend the garage over the side set-back line. What would the owner need to obtain in order to extend the garage past the set back line?
    Variance
  488. What is the purpose of a mortgagor giving a mortgage to the mortgagee?
    To pledge property as security for the loan
  489. What liens would take priority over all other liens?
    Real Estate Tax Lien
  490. The primary purpose of a mortgagor giving a mortgage to the mortgagee is to:
    Secure the debt
  491. A mortgage is recorded to protect:
    Mortgagee
  492. A property appraised for $42,000. If the buyer borrowed $28,000, what is the difference between the two amounts called?
    Equity
  493. How does a buyer become a client of a broker?
    By signing an agency agreement with a broker
  494. Dual agency is allowed in a real estate transaction as long as:
    Both parties give written informed consent right up front.
  495. Sellers who hire agents to represent them and sell their properties are:
    Principals
  496. What does a person have who can sign legal papers for another person?
    POA - Power of Attorney
  497. What are the Legal Principals of a contract?
    • Competent Parties
    • Offer & Acceptance
    • Consideration
    • Legal Object
    • Writing
    • Signed
    • Description
  498. Do you have to have earnest money for a contract?
    NO, but it does have to have something of consideration (something of value)
  499. What is lawful purpose?
    Contract cannot be for anything illegal, only for a purpose that is legal.
  500. Parol Evidence allowed in regards to real estate contracts in court?
    (Oral agreement) Not allowed if it differs from the written agreement
  501. When is a purchase said to have "equitable title"
    At the signing of the sale contract by both the buyer and the seller
  502. If a counter offer is made by a seller, what happens to the previous offer?
    It becomes void.
  503. H had a property for sale for $129,000. B made an offer for $123,000. H made a counter offer for $127,000. Would the counter offer be binding on B?
    No, because it's not signed and accepted by all parties.
  504. In the process of preparing to present and offer to the seller, a broker receives another offer. The broker is required to:
    Present both offers at the same time.
  505. How are contracts created?
    • Expressed
    • Implied
  506. An agreement has been signed by all parties but the terms have NOT been fully performed. What kind of contract would this be?
    Executory Contract
  507. What are the 4 ways to legally classify contracts?
    • Valid and Enforcable
    • Void
    • Voidable
    • Unenforcable
  508. 3 examples of a voidable contract:
    • Contract signed by a Minor
    • Contract signed under Duress
    • Contract signed due to Misrepresentation
  509. Is puffing a voidable contract?
    No, it's in the eye of the beholder
  510. A contract where one party is bound to perform but the other party is not would be referred to as:
    Uni-lateral
  511. Knowlingly misrepresenting a material fact in a deliberate way so that someone else suffers a loss in an attempt to make money is:
    Fraud
  512. What are the choices a Buyer has if a seller defaults on a contract?
    • Specific Performance Suit
    • Rescind
    • Sue for Damages
  513. What are the 4 choices a Seller has if a buyer defaults on a contract?
    • Declare contract forfeited
    • Specific Performance Suit
    • Rescind
    • Sue for Damages
  514. What type of contract cannot be assigned?
    Personal Services Contracts
  515. Nova means:
    New
  516. What is the difference between an option contract and a right of first refusal?
    An Option - Seller gives the buyer the option to buy or not to buy

    Right of First Refusal - A person has the first opportunity to buy if offered for sale or lease
  517. What is a Possibility Contract(Option Contract)?
    • Definite Time Period
    • Definite Sales Price
    • Unexercised Option Contracts (Uni-Lateral)
    • Exercised Option Contracts (Bi-Lateral)
  518. Is an address a legal description?
    No
  519. What are the methods of giving legal description?
    • Metes & Bounds
    • Geodetic Survey System
    • Rectangular Survey System
    • Lot & Block System (Plat Map)
  520. How many acres are in one Section (1sq mile)
    640 acres
  521. How much sq ft is in 1 acre?
    43,560 sq ft
  522. What is the distance between the street and a house called?
    A setback
  523. What is a plat map?
    Lot & Block Numbers
  524. What are examples of Syndication?
    • Corporation
    • Partnership
  525. What is REIT?
    Real Estate Investment Trust - A group of managers used to buy houses
  526. A sale of Interstate Real Estate Securities would be governed by which organization?
    SEC - Securities & Exchange Commission
  527. A corporation who purchased a piece of real estate as a co-owner with and individual would usually take title in which of the following manners?
    Tenancy in Common
  528. What are the 3 main Fair Housing Laws that pertain to Real Estate?
    • 1: Civil Rights Act of 1866 (Racial Discrimination)
    • 2: Civil Rights Act of 1968 aka Title 8 (7 Protective Classes: Race, Color, Religion, National Origin, Sex, Handicap, Familial Status)
    • 3: Illegal Acts
  529. What are Illegal Acts in the Fair Housing Laws?
    • Refuse to sell, rent or negotiate
    • Change terms or conditions
    • State property is restricted
    • Tell persons property is not for sale when it is
    • Telling owners to sell because a particular type of people are moving in
    • Different terms for loan
    • Deny membership in the MLS
  530. Which two Fair Housing Laws were added in 1988 to the Civil Rights Act of 1968?
    Handicap & Familial Status
  531. Who is exempt from Fair Housing Laws?
    • FSBO
    • Owner Occupied 1-4 Plex
    • Religious Organizations
    • Private Clubs
  532. Can a Landlord deny a rental if the family size is too large for the unit?
    Yes
  533. What is considered a Handicap?
    Physical or mental impairment that limits activity
  534. What is Jones VS. Mayer (1968)
    Mayer owned a 4-Plex and rented out the other 3 and refused to rent to an African-American family. They went all the way to the Supreme Court and they found it is ALWAYS illegal to discriminate Racially.
  535. On multi-family units (4 or more), how are elevators handled? (After 1991)
    Either all elevators in all units or no elevators and use ground floor only.
  536. What age is the exception for familial status?
    62 and older
  537. A handicapped person made some reasonable modifications to a rented unit after moving in. What should the handicapped person do?
    Return the space to the landlord in the original condition
  538. What is the purpose of an appraisal?
    Estimate value
  539. What has the greatest influence on appraisal value?
    Local economic conditions (supply & demand)
  540. What are the Economic Characteristics of Value?
    • DUST
    • Demand - must be wanted
    • Utility - must be useful
    • Scarcity - must be a limited supply
    • Transferability - Seller must be able to give to buyer
  541. What never depreciates due to passage of time?
    Land
  542. What kind of property can deduct depreciation for rent purposes?
    When it is a rental (income property)
  543. What are the factors affecting real estate supply and demand?
    • Interest Rates
    • Local Economic Conditions
  544. Economic life refers to the period:
    Over which a property may be profitably utilized (# of years of profit)
  545. Physical Life refers to:
    the period of the actual age of the property (# of years structurally sound)
  546. What would lead to an increase in the demand for residential rental property?
    Mortgage rates going up
  547. An appraisal is used to give an:
    Opinion of Value
  548. How do you deduct taxes for investment depreciation?
    Deduct a percentage of the cost of the property each year from their taxable income
  549. What are the types of Depreciation?
    • Tax Depreciation
    • Value Depreciation
  550. Depreciable base is:
    Improvements only due to passage of time (houses or buildings we build on land)
  551. How to compute Straight Line Method Depreciation:
    • 1: Determine value of improvements (As if new)
    • 2: Subtract depreciation
    • 3: Add in current land value
  552. What is it called when a person takes the cost of purchase and then recaptures this amount?
    Depreciation
  553. How do you calculate Appreciation vs. Depreciation?
    • Appreciation is accrued to the value each year.
    • Depreciation is calculated to one price all at once.
  554. 6 Principles Appraisers need to consider:
    • 1: Highest & Best use
    • 2: Substitution
    • 3: Conformity
    • 4: Anticipation
    • 5: Competition
    • 6: Plottage Increment
  555. The direst sales or market approach is based on upon which principal?
    Competition
  556. CMA consists of:
    • 1: Sold
    • 2: For Sale
    • 3: Expired
  557. Always make adjustments to the comps or  subject property?
    Comps
  558. What type of properties do appraisers use a "cost approach" appraisal?
    • 1: New
    • 2: Very few comps
    • 3: Special purpose properties
  559. CPA
    Comparable is poorer you add
  560. CBS
    Comparable is better - subtract
  561. What is the difference between reproduction cost & present value?
    Depreciation
  562. What steps are taken when using the "Cost Approach" method?
    • 1: Estimate replacement cost
    • 2: Subtract for depreciation
    • 3: Add the current land value
  563. An appraiser should lend most validity to the market data approach on which of the following properties?
    Vacant land
  564. How can property depreciate?
    • Physically
    • Functional obsolescence (inside)
    • External (economic) obsolescence (outside)
  565. What way can an appraiser estimate value on a commercial property?
    Capitalization Approach
  566. In the appraisal process, What are the 3 approaches to value?
    • 1: Market data approach
    • 2: Cost approach
    • 3: Income approach
  567. An appraiser must use how many approaches to complete/reconcile the appraisal?
    2 of the 3 approaches
  568. What are the steps involved in the appraisal process?
    • 1) State the problem
    • 2) Gather Data
    • 3) Analyze and Interpret
    • 4) Three Approaches to Value
    • 5) (Final Step) Reconciliation
  569. Kansas License Law was enacted by?
    Kansas Legislature
  570. What activities require a KS Real Estate License?
    • 1: Sell
    • 2: Purchase
    • 3: Lease Commercial Property
    • 4: Auction or Assist
    • 5: List
    • 6: Procure Prospects
  571. Is KS License required to rent residential real estate?
    No
  572. Real Estate includes:
    • 1: Freehold Estates
    • 2: Non-Freehold Estates
  573. People Exempt from License Requirements:
    • 1: FSBO
    • 2: Someone acting under a POA (no compensation)
    • 3: Licensed Attorney performing attorney duties
    • 4: Government offices performing Government duties
    • 5: Gross Easements (railroads, public health)
  574. Which Broker hold all licenses at main office?
    Supervising Broker
  575. Can a salesperson hold licenses?
    No
  576. What is the makeup of the KREC?
    • 1: 5 members appointed by Governor
    • 2: 3 must have been Brokers for 5 years
    • 3: Employs a director to run the office (Public Member)
  577. The KREC director cannot do what?
    Vote
  578. What are the active duties of the KREC?
    • 1: Make Investigations
    • 2: Issue licenses
    • 3: Publish disciplinary action in Newspapers
    • 4: Revoke, suspend, restrict, or censure licenses
    • 5: Fine up to $1000 per violation
    • 6: Fine up to $5000 for an aggravated offense such as: risk of loss to client, fail to disclose clients ability to perform under the agreement (withholding a material fact)
  579. KREC Can not:
    • 1: Give criminal penalties
    • 2: Arbitrate commission disputes
  580. Does Branch Broker hold all licenses?
    Yes
  581. Can Associate Broker hold all licenses?
    No
  582. What are reasons the KREC can refuse a license?
    • 1. earlier revocation or suspension
    • 2. you have already committed an act that could get your license revoked
    • 3. you plead "guilty" or "no contest" or convicted of a ethical crime or felony
    • 4. you have sold real estate without a license (illegally) earlier
    • 5. you lied on your application
    • 6. other matters deemed pertinent by the KREC
  583. Legal Issues:
    • 1: you must recommend to every buyer that an attorney check on the marketability of title and any other legal issues
    • 2: you cannot try to get someone to break a contract of listing, sale or lease
  584. Client
    seller, landlord, buyer or tenant who has an agency agreement
  585. Customer
    seller, landlord, buyer or tenant in which a broker is involved but has not entered into an agency agreement
  586. Does a Transaction Broker have a Customer or a Client?
    Customer
  587. Ministerial acts
    acts a licensee may perform that do not rise to agency status - answering basic questions for peeps
  588. What do you do for a client?
    • promote interests of client with loyalty including:
    • a. disclosing to client all adverse material facts known by licensee
    • b. advising client to obtain expert advice in areas outside expertise of licensee
  589. What do you do for a customer?
    • disclose all adverse material facts known by licensee including:
    • a. environmental hazards
    • b. physical condition of property
    • c. material defects in property or title to property
  590. broker owes no duties to client after termination EXCEPT:
    • 1. account for moneys relating to transaction
    • 2. account for property that changed hands during transaction
    • 3. keep all confidential information confidential
  591. 1. When an option to buy is exercised, the contract becomes:
    • (a) expressed
    • (b) implied
    • (c) unilateral
    • (d) bilateral
    • (a) expressed
  592. 39. A broker who moves his personal residence should do which?
    • (a) Notify the KREC in writing within 10 days
    • (b) Return his license to the KREC
    • (c) Notify the KREC about the new address at the next renewal
    • (d) Nothing, the KREC only needs notification if he moves the office
    • (a) Notify the KREC in writing within 10 days
  593. 44. What duty does a listing agent owe to a prospective buyer?
    • (a) Obedience
    • (b) Fiduciary
    • (c) Honesty and fairness
    • (d) Confidentiality
    • (d) Confidentiality
Author
dvdromm
ID
326853
Card Set
Real Estate Flash Cards
Description
gggg
Updated