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165 Cards in this Set
- Front
- Back
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Ad Valorem
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According to value - sales tax
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Progressive tax
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Rates increase with income - Federal Income Tax
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Tax Shelter
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To shelter or defer taxes on income
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Fiscal Tax Year
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No Darn Foolin Around - NDFA
Nov 1st, Dec. 10th, Feb 1st, Apr. 10th |
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Boot
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Money or property of unlike kind given in exchange
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Proposition 90
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Allows elderly to transfer cost basis to another property
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Veteran's property tax exemption
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$100,000
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Homeowner's tax exemption
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$7000
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Capital Gain
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Taxable profit from the sale of capital asset.
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Special assessments
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Assessed to each property owner based on benefits derived.
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Installment sale
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Payment of capital gains over the entire contract period
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Street Improvements Act of 1911
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Off street improvements including sewers. Owner must pay bill 30 days after receipt of funds
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Unadjusted basis
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Original cost
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Adjusted basis
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Cost plus capital improvements
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Late payment penalty
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Lenders cannot impose until more than 10 days late
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Promissory Note vs. Trust Deed
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The terms of the Promissory Note will control if there is a conflict between the terms of the not and the Trust Deed
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Incident of the debt
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The trust deed is a mere incident of the debt.
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Pledge
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Transfer of property to be held as security for repayment of a debt
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Mortgage vs. Trust Deed
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Differ in:
1. Number of parties 2. Statute of limitations 3. Transfer of title |
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Notice of Default
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Minimum time between the Notice of Default and the trustee's sale is three months plus 20 days.
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right of Reinstatement
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Trustor (borrower) has the right of reinstatement (bring the loan current) up until five days before the trustee's sale
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Deficiency Judgments
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Only possible with a judicial forclosure on a non purchase money loan.
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Reconveyance deed
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The instrument used upon payment of the loan to reconvey title from the trustee to the trustor
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APR
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The relative cost of credit expressed in percentage terms
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RESPA
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Lender cannot charge borrower for preparing the Uniform Settlement Statement.
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RESPA
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Uniform Settlement Statement must be given to the borrower at or before closing
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RESPA
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Referral fees (kickbacks) are prohibited
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Truth in Lending
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Borrower has the right to rescind until midnight of the third business day after the promissory note is signed, except on purchase money loans
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Blind Ad
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An ad in which the name of the person placing the ad is not included.
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Reservation in a deed
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Retention of interest by the grantor
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Exception in a deed
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Grantor withdraws or holds back part of the deed
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Gift deed
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A deed in which the consideration is "Love and affection." May be voided by creditors is the grantor was insolvent at the time.
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Quitclaim Deed
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Releases whatever interest the grantor has in the property. Does not convey after-acquired title.
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Transfer of Mobile home
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Certificate of Ownership (Title)
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Testate
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Dying with a will
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Intestate
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Dying without a will. Property usually distributed to the deceased's heirs. If no heirs claim the deceased's property, it reverts to the State by escheat.
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Escheat
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Intestate non claimed property reverts to the State
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Holographic Will
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A will that is written, dated and signed in the testator's handwriting. There is no such thing as a typed holographic will. May not be signed with an X
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Nuncupative Will
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An oral will. No longer valid in California
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Legacy
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A gift of money or personal property by will, as in a bequest
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Devise
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A transfer of real property by will. The donor is the devisor and the recipient is the devisee.
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Ambulatory
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Not fixed; alterable. A will is considered ambulatory because it can be changed.
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Requirements of a formal will
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Signature and witness
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One Township
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36 square miles
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One section
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640 acres
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One Mile
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5280 feet
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One acre
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43560 sq. ft.
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One square acre
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approx 208.7 sq. ft.
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One rod
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16.5 linear feet
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One chain
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66 linear feet
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One board foot
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144 cubic inches of wood
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One cubic yard
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27 cubic feet
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One square yard
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9 square feet
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Each township contains
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36 sections
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Townships contain
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36 square miles
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Townships are ______ miles square
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6 miles square
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Numbering starts in the...
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upper right-hand (NE) corner
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Listing price is most likely...
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A high market value
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Interpleader action
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Filed by a broker when both the buyer and seller make demands on the broker for the buyer's deposit after the sale falls apart.
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Board Aribitration
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Settles disputes between agents
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Puffing
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Exaggerated comments or opinions that paint an overly optimistic picture
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Optionor
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Owner; the person who gives the option
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Optionee
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Buyer; the person who may exercise the option
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Novation
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The substitution of a new obligation for an old one
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The rate of commission for selling a business is determined by...
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agreement between broker and owner (negotiable).
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Agent of the buyer
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When broker accepts a deposit without authorization
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Prorations in escrow are based on a
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360 day year and 30 day month
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Recurring costs
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Pertains to impound account items such as taxes and insurance.
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Escrow companies are under the jurisdiction of the...
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Corporations Commissioner
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Impound accounts belong to the
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trustor
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Who has primary responsibility for reporting sale information to the IRS
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Escrow Agent
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Title plant
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all records of a title company relative to real estate transactions in a country.
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Chain of Title
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The exact history of conveyances and encumbrances
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ALTA (American Land Title Association) Lender Policy
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Protects lenders, usually requires a survey
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Color of Title
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No title at all, just an appearance of ownership
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Cloud on Title
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Any condition discovered by a title search that could affect the title
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Short Rate
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The increased premium charged by an insurance company upon early cancellation of a policy to compensate the insuror for the fact that the original rate charged was calculated on the full period of the policy
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Interim Use
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Uses to which sites and improved properties may be utilized until ready for highest and best
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Realtists
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A national organization of predominately black real estate brokers, known as the National Association of Real Estate Brokers (NAREB), Founded in 1947
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Turn-key project
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Construction of a project from groundbreaking to completion.
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A fictitious-name statement expires...
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Five years from Dec. 31st of the year recorded.
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Real Property classical definition
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Air space above to center of earth
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Real Property is: (4)
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Immovable
Land & Buildings, Attachments (Fixtures) Appurtenances (Easements) Stock in a mutual water company |
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Appurtenant
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"Runs with the land"
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Personal Property (4)
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Movable
Real if not personal Trust Deed or Mortgage Lease |
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Fixtures
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Personal property can be changed into real property by becoming affixed to the land.
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Bundle of Rights
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"PEWS" Possess, Encumber, Will, Sell
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Freehold Estates
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Fee Simple Absolute-greatest
Fee Simple Defeasible-qualified by condition or limitation |
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Less-Than-Freehold
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Lease:
Estate for Years Estate From Period to Period Estate At Will Estate At Sufferance |
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Life Estates
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Owner dies-Lease terminates
Reversionary Interest |
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Joint tenancy
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"T-TIP"
Time Title Interest Possession Right of survivorship cantbe willed |
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Tenancy in Common
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Unity of Possession
Undivided Interests No Survivorship rights |
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Both Tenancy in Common and Joint Tenancy Share...
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Unity of Possession
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Community Property
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Husband and Wife
Both must sign to sell |
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Federal Income Tax
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Progressive
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California State Tax
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Tax on tangible personal property
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Real Property Taxes
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Ad Valorem =According to Value
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Appeal Taxes to
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Assessment appeals board
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Elements of Value
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DUST Demand Utiliity Scarcity Transferability
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Forces influencing value
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Physical, Economic, Political, Social
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Property Life cycle
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Development, Maturity, Old Age, Revitilization
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Principle of change
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Development (Integration)
Old Age (Disintegration) |
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Contribution
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Contribution to net income
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Substitution
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Buyer will not pay more for equal substitute
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Regression
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Worth of better property adversely affected by lesser quality property
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Fee Appraiser
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Indepentent appraiser
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Interim Use
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Current highest and best use expected to change
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Depreciation
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Loss in value from any cause
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Physical Deterioration
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Wear on load bearing members-Incurable
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Economic Obsolescence
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Influence from outside the property Incurable
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Economic Life
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Shorter than physical life
Profitable utilization |
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Functional Obsolescence
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Functional inadequacies
Outmoded style Non Usable |
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Market Data Approach
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Principle of Substitution
Rapidly changing economic conditions |
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Income Approach
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Estimates present worth of future benefits
Most difficult step is selecting cap rate |
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Capiltalization
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Value=Net / Rate
Cap Rate Decreases -Value Increases Interest rates rise- Cap rate increases |
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Cost Approach
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Most appropriate for new property
not used with properties seldom sold Landscaping, fences, walkways- part of land |
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Unit Cost
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Small House costs more than a large house to build
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Secondary Market
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Transferring of loans by lenders (mortgagees)
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Institutional Lenders
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Large Corporations- lend depositor's money
Make most home loans |
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Individual Lenders
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Give loans for shorter terms
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Savings and Loan Associations
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Sell their loans on the secondary market
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Insurance Companies
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Lend greatest amount for longest term
Commercial properties and multi- family buildings |
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Commercial Banks
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Interested in liquidity and marketability
Prefer short term loans |
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FNMA
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Helps set loan standards
Maintains the secondary mortgage market |
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GNMA
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Guarantees FNMA securities
Does not insure loans |
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FHA
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does not lend the money
MMI is mandatory on all FHA loans Low down payment Long term with lower payments. Easy to qualify for FHA Title I: Repair and Improvement loans |
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VA
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no down Payment
Ok for home, farm and business |
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Cal Vet
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government buys-sells to vet-land contract
Vet must purchase term life insurance |
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Promissory Notes
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Deed of trust secures the promissory note
Evidence of the debt |
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Straight Note
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Payments of interest only
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Fully amortized note
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Systematic repayment of a loan
Zero balance |
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Amortized Payment
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Principal increases - Interest decreases
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Partially Amortized Note
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Balloon payment
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Mortgage
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Mortgagor = Owner/borrower
Mortgagee = Lender |
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Deed of trust
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Three party instrument
Trustor (Borrower/buyer) Trustee (neutral third party) Beneficiary (lender or seller) |
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Trustee
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Holds "naked legal title"
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Trustor
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Signs note and deed of trust
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Trust deed vs. Mortgage
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Differ in terms of:
1 Parties 2 Title 3 Statue of Limitations 4 Remedy for default |
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Negotiable Instruments
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A trust deed is NOT- The note is
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Default
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Failure to:
Pay Taxes Maintain Insurance or Make Payments |
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Mortgage
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Most protection to owner against default
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Power of sale
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Given to trustee by trustor
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Foreclosure Time Line
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Closest to four months
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Notice of Default
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Most help to beneficiary of 2nd trust deed
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Judicial Sale
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Superior court
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Proceeds from sale
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Proceeds paid in order of priority
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RESPA
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First mortgages; one to four residential units
10000fine and or jail time Monetary incentive ok with full disclosure |
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Truth in lending
regulation z |
Disclosure of credit terms
disclosure of annual percentage rate part of the federal consumer protection act Credit report and appraisal fee excluded |
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Right of recission
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Not on residential purchase money
First mortgage; hard money loan trust deed loans; hard money loan Refinancing |
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Deregulation
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No longer limit interest paid on savings accounts
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"Fed" Curbs Inflation
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Raising reserve requirements
Raising the discount rate Selling government bonds |
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Acceleration Clause
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unpaid balance due upon default by borrower
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Subordination Clause
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yield priority become secondary
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Release clause
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Partial release from a blanket encumbrance
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Deregulation
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No longer limit interest paid on savings accounts
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"Fed" Curbs Inflation
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Raising reserve requirements
Raising the discount rate Selling government bonds |
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Acceleration Clause
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unpaid balance due upon default by borrower
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Subordination Clause
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yield priority become secondary
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Release clause
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Partial release from a blanket encumbrance
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Warehousing
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Assembling loans to sell on the secondary market
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Seasoned Loan
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Loan with a payment history
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Equity Financing
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Borrowing against equity
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Security Agreement
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Secures loan on personal property
A bill of sale is evidence of ownership of personal property and is not used to secure a loan |
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Interim Loan
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Construction Loan
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Mortgage Yield
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Return on an investment or the amount of profit
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