Mi Re Exam Flash

Front 1

1 acre (sq.ft.)

Back 1

43,560 sq. ft.

Front 2

1 section (acres)

Back 2

640

Front 3

1 square mile (sections)

Back 3

1 section (miles)

Front 4

1 square mile (sq.ft.)

Back 4

5280 sq. ft.

Front 5

1 township (square miles)

Back 5

36 square miles

Front 6

3 main types of depreciation

Back 6

physical deterioration, functional obsolescence, external obsolescence

Front 7

Abstract of Title

Back 7

A brief, chronological summary of the recorded documents affecting title to a particular parcel of real property.; "full history of all real estate transactions; -a summary of all recorded documents affecting title to a given parcel ofland usually organized by an abstracter-abstract is sent to an attorney who renders an ""opinion of title"" statingwho the appropriate fee owner is, and this opinion is known as a""certificate of title"""

Front 8

acceleration clause

Back 8

A provision iin a mortgage or deed of trust that permits the lender to declare the entire principal balance of the debt immediately due and payable if the burrower is in default

Front 9

Acceptance

Back 9

Agreeing to the terms of an offer to enter into a contract, thereby creating a binding contract.

Front 10

accidental agency

Back 10

An individual's being led to believe by a broker/salesperson's actions and representations that the broker/salesperson is representing (is an agent for) the individual

Front 11

accord and satisfaction

Back 11

...A new agreement by contracting parties that is satisfied by full performance there by terminating the prior contract as well

Front 12

Accounting

Back 12

The agent must account for all money or possessions of the principal

Front 13

Accredited Residential Manager (ARM)

Back 13

Those specializing in managing residential properties who complete an Institute of Real Estate Management (IREM) course, meet experience standards, manage a sizable portfolio, and are endorsed by the local IREM chapter.; -awarded upon successful completion ofIREM's educational programs forresident managers of apartmentbuildings

Front 14

accretion

Back 14

the increase in land resulting from the deposit of soil by natural action of water (gain)

Front 15

Accrued Depreciation

Back 15

Loss in value of a property due to time. Difference of replacement cost and the presently appraised value.

Front 16

accrued expenses

Back 16

Expenses seller owes on the day of closing but for which the buyer will take responsibility (such as property taxes)

Front 17

Acknowledgment

Back 17

A formal declaration by a party before a notary public in the presence of two witness by the person who signs an instrument to the effect that it is his own free and voluntary act done for the purposes therein expressed.

Front 18

Acre

Back 18

43,560 Sq Ft

Front 19

Actual agency

Back 19

Any agency where the agent has literally, and in fact, been employed by a principal, whether by express or implied authority

Front 20

Actual Fraud

Back 20

Intentional misrepresentation or concealment of a material fact; when a person actively conceals material information or makes statements known to be false or misleading. ALSO CALLED: Deceit.

Front 21

Actual Notice

Back 21

Notifying person of an existing property by showing documents or other physical evidence.

Front 22

Ad Valorem

Back 22

According to value. (Latin)

Front 23

Adjustable Rate Mortgage (ARM)

Back 23

(ARM) A mortgage that permits the lender to periodically adjust the interest rate to reflect fluctuations in the cost of money.

Front 24

adjustable rate mortgage (ARM)

Back 24

One in which the interest rate changes according to changes in a predetermined index.

Front 25

adjustable rate mortgages (ARM)

Back 25

a mortgage where the rate fluctuates up or down during the loan term

Front 26

Administrator

Back 26

A Personal representative. A person appointed by court to settle the estate of a person who died without a will.

Front 27

administrator's deed

Back 27

issued by "Personal Representative" of the estate who is appointed by the probate court because the deceased died "intestate"(did not leave a will)

Front 28

Adverse Easement (Easement by prescription)

Back 28

An easement acquired by means of a notorious and continous use of property.

Front 29

Adverse Possession

Back 29

Gaining interest in real estate through actual, notorious, and notorious possession for the statutory period of time.

Front 30

aesthetic zoning

Back 30

sets requirements for new buildings to conform to certain architectural styles

Front 31

Affiliated business arrangement

Back 31

When one person, who is in a position to refer settlement services, has an affiliated relationship or direct ownerhip interest (of more than 1%) in the business to whom the person refers business.

Front 32

Agency by estoppel

Back 32

An agency created by operation of law rather than agreement or conduct. i.e; A principal allowing an agent to exercise more authority than has been granted may be "estopped" (prevented) from denying that the agency exists due to his carelessness

Front 33

agency disclosure

Back 33

...The fiduciary relationship between a principal and an agent (in the form of a piece of paper that says who's acting on behalf of whom. e. g. buyer's agent, seller's agent, dual agent, etc.)

Front 34

Agency Disclosure Statement

Back 34

Form that states whether an agent is representing the seller, buyer, or both in a transaction.

Front 35

Agent

Back 35

A person licensed to represent another (the principal) in a real estate transaction; a person authorized to represent the principal in dealings with third parties (clients or customers)

Front 36

Agent's Responsibility to Third Persons

Back 36

No: misrepresentation of fact; negligent misrepresentation; innocent misrepresentaton. MI law says seller's broker is not liable for statments made to buyer/customer regarding condition of property.

Front 37

Agent's Responsibilty to principals

Back 37

OLD CAR Obedience, Loyalty, Disclosure of info, Confidentiality, Accounting, Reasonable xxx?, care, and diligence

Front 38

Air Rights

Back 38

The right of the real estate owner to the space above the land.

Front 39

Air Space

Back 39

Space that is solely owned by condo owners (they only own the condo, not the land below or air above.

Front 40

alienation clause

Back 40

A statement in a mortgage or deed of trust entitling the lender to declare the entire principal balance of the debt iimmediatley due and payable if the borrower sells the property during the mortgage term. Also known as due on-sale-clause.

Front 41

allodial system

Back 41

Individual, private ownership of land

Front 42

amendment

Back 42

a contract used to amend (change) the terms of a purchase agreement

Front 43

Amendment to MI Constitution

Back 43

When privater property is taken for public use, the individual must be paid at least 125% of the fair market price.

Front 44

American Recovery and Reinvestment Act of 2009

Back 44

Congress authorized a tax credit of up to $8,000 for qualified first-time home buyers purchasing homes on or after January 1, 2009 and before December 1, 2009.

Front 45

Americans with Disabilities Act (ADA)

Back 45

Passed by Congress in 1991, this act banned discrimination against the disabled in employment and mandated easy access to all public and commercial buildings.

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Amortized Loan

Back 46

A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan.

Front 47

amortizing loan

Back 47

One in which uniform installment payments include payment of both principle and interest.

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Annexation

Back 48

Legal term for attaching or affixing personal property to real property.

Front 49

Annual Escrow Loan Statement

Back 49

The statement summarizes all escrow account deposits and payments made suring the second year. It also places the borrower on notice of there are any surpluses or shortages and how they can be refunded or paid.

Front 50

Annual Percentage Rate (APR)

Back 50

(APR) Relationship between the cost of borrowing and the total amount financed, represented as a percentage; The actual effective rate of interest charged on a loan expressed on a yearly basis; not the same as simple interest rate

Front 51

anti trust laws

Back 51

laws prohibiting conspiracies and monopolies to restrain commerce and trade between real estate companies

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Application to FSBOs (for sale by owners) and expired listings

Back 52

Do not call list may not be called in an attempt to obtain a listing. A real estate licensee may, however, call such seller on behalf of a buyer who is specifically interested in the property.

Front 53

appraisal

Back 53

An estimate of value of a particular property, at a particular time for a specified purpose.

Front 54

Appreciation

Back 54

The increase of property value resulting from economic conditions

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Appurtenance

Back 55

A right that goes with ownership of real property; usually transferred with the property, but may be sold separately.

Front 56

Arms length transaction

Back 56

Negotiated between 2 independent and unrelated parties, each working to protect his own best interest, without one being under the infuence or control of the other; affects market value.

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arrears

Back 57

Delinquency in maeeting an obligation; or, paid at the end of a period (e. g., at the end of the month) for the previous period; payments in arrears include interest for using the money during the previous period.

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As Is Clause

Back 58

Provision in a purchase agreement stating the buyer accepts the property in present condition.

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Assemblage

Back 59

The merging of adjacent properties into one common ownership or use

Front 60

assessed valuation

Back 60

value placed on property for tax purpose

Front 61

assessment rate

Back 61

ratio between the assessed value of property and its appraised value

Front 62

Assessor

Back 62

A person employed by the local govt to evaluate property for tac purposes

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assignee

Back 63

...One to whom contractual rights are transferred

Front 64

Assignment

Back 64

Transfer of legal rights and obligations by one party to another 1. When a person transfers his interests under a contract to another. 2. When a tenant transfers his right of possession, or other interest, in leased property to another person for the remainder of the lease term.

Front 65

assignment of lease clause

Back 65

prohibits assignment without lessor's consent (lease takover)

Front 66

assignor

Back 66

...The person transferring contractual rights to another

Front 67

Association of Real Estate License Law Officials (ARELLO)

Back 67

Organization established in 1929 by license law officials on the state commissions to assist one another in creating, administering, and enforcing license laws.

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Attestation

Back 68

The act of witnessing a person's signing of an instrument by a notary public.

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Attorney in fact

Back 69

A person authorized under a power of attorney to act on behalf of a principal in conducing business or persona activity

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Auctioneer

Back 70

A person with an auctioneer's license as well as a real estate license who can sell real estate through an auction.

Front 71

Authority

Back 71

The granting of permission to an agent by a seller pursuant to a listing agreement to represent them

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balloon mortgage

Back 72

One in which the scheduled payment will not fully amortize the loan over the morgage term; therefore, to fully satisfy the debt, it requires a final payment called a balloon payment, larger than the uniform payments.

Front 73

bargain and sale deed

Back 73

conveys title only and contains no other warranty of title unless expressly stated

Front 74

Base Line

Back 74

Imaginary line that runs in an east-west direction and interescet s with the meridian

Front 75

Basic agency concepts

Back 75

An agency relationship exists between two persons when one of them (the agent) acts on behalf of or represents the other (the principal)

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basis

Back 76

amount of investment owner has in property

Front 77

Benchmark

Back 77

A fixed monument of a known location and elevation

Front 78

beneficiary

Back 78

(a) Recipient of a gift of personal property by will. (b) Lender in a deed of trust.

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bequest

Back 79

A gift of personal property by will.

Front 80

bilateral contract

Back 80

...An agreement based on mutual promises that provide the consideration. (A "done deal" both parties have fulfilled promises)

Front 81

bill of sale

Back 81

transfers title to Chattel (personal property)

Front 82

blanket mortgage

Back 82

One in which two more parcels of real property are pledged to secure payment of the note

Front 83

Blockbusting

Back 83

Illegal practice of inducing homeowners to sell their properties by telling them that a certain people of a certain race, national origin or religion are moving into the area.

Front 84

Blue sky laws

Back 84

laws that reulate the licensing and registration of securities and security dealers

Front 85

Board of Directors

Back 85

An elected group of owners in a sub or condo associaition whose job is to meet to enforce the associations bylaws and to overlook the maintenance of the common elements

Front 86

Board of Real Estate Brokers and Salespersons

Back 86

The governing board for real estate licenses in MI

Front 87

bona fide purchaser

Back 87

A buyer of property who relies on the records and is unaware of an unrecorded prior document

Front 88

BPO

Back 88

Broker Price Opinion

Front 89

breach of contract

Back 89

...Failure, wthout legal excuse, to perform any proise that forms the whole or part of a contract.

Front 90

Breach of fiduciary duty

Back 90

The failure to observe an agent's fiduciary duties makes him liable to the principal for any resulting harm

Front 91

broker

Back 91

Person or a nonperson (partnership, association, corporation, common law trust, or combination) acting as agent for others in negotiating the purchase and sale of real property or other commodities for a fee

Front 92

brokerage

Back 92

...The business of bringing buyers and sellers together and assisting in negotiations for the terms of sale of real estate

Front 93

Brownfields

Back 93

Are environmentally contaminated properties typically located in core urban areas.

Front 94

budget mortgage

Back 94

The lender requires one-twelfth of the estimated cost of the annual property taxes and hazards insurance on the mortgaged property in addition to paying monthly priincipal and interest

Front 95

Buffer zone

Back 95

A district or area that separates two districts with different zones. The intent is to make them them blend more easily. Ex, A park is built between a residential and commertial zone.

Front 96

Building codes

Back 96

A form of land use control that establishes minimum standards for new construction

Front 97

Building permit required

Back 97

Befor building or remodeling, an owner of his builder must apply for a permit with the local building department. A number of different insoections are generally required to make certain that the builder is following the uniform stade construction code.

Front 98

Building regulations

Back 98

Before an owner engages in new construction or substantial remodeling, one or more permits will likely be required by the local building department.

Front 99

bulk zoning

Back 99

used to avoid overcrowding by controlling the ratio between sizes of land in relation to improvements

Front 100

bundle of rights

Back 100

The rights of an owner of a freehold estate to possession, enjoyment, control, and disposition of real property.

Front 101

Business Cycles

Back 101

General swings in business activity, resulting in expanding or contracting activity during different phases of the cycle.

Front 102

buy down mortgage

Back 102

borrower pays points to the lender in exchange for receiving lower loan interest rates

Front 103

Buyer Agency Agreement

Back 103

employment contract between the agent (broker) and the buyer

Front 104

Buyer Agency Agreement

Back 104

The document setting forth the terms and conditions of the brokerage relationship with the purchaser. (expectation to act in the client's best interest, follow legitimate instructions, advocate their price and terms; keep all pertinent info confidential.) employment contract between the agent (broker) and the buyer

Front 105

buyer's contract

Back 105

A contract in which a buyer hires a broker to obtain property that he or she may purchase; the broker is the agent of the buyer, who is his or her principal

Front 106

Buyer's Market

Back 106

A situation in the housing market where buyers have a large selection of properties to choose from.

Front 107

Bylaws

Back 107

Rules enforced by subdivision and cond associations regulationg the use of properties and common elements. For example limiting the numer of pets a co owner may keep in a condo

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Calculating-Just compensation

Back 108

The owner of the property is entitled to the fair market value of the property at the time of taking

Front 109

Cap

Back 109

A threshold after which a realtor keeps all commissions and the broker keeps none

Front 110

capital gains

Back 110

result from the sale of a capital asset such as real estate

Front 111

Capital improvement

Back 111

Improvements to property that add to its value extending the useful ilfe

Front 112

Capitalization

Back 112

Determining the value of property by calculating its net operating income and divididng it by a capitalization rate

Front 113

Capitalization (CAP) rate

Back 113

the rate of return an investor would receive on investment

Front 114

carryover provision

Back 114

...A statement in a listing contract protecting the broker's commission entitlement for a specified period of time after the contract expires; also called extender clause.

Front 115

Cash Flow

Back 115

The income from an ivestment

Front 116

Caveat emptor

Back 116

Latin for let the buyer beware

Front 117

caveat emptor

Back 117

...Latin meaning "let the buyer bewar"; applies to "sales talk" and not to statements of material facts.

Front 118

Cehck

Back 118

An area of land, equal to 24 x 24 miles

Front 119

certificate of reasonable value (CRV)

Back 119

A document setting forth the value of a property as the basis for the loan guarantee by the Veterans Administration to the lender.

Front 120

certificate of title opinion

Back 120

A report, based on a title examination, setting forth the examiner's opinion of the quality of a title to real property.

Front 121

Certificate of use and occupancy -C of O (Dream)

Back 121

Upon final insoection and prior to the owner taking possession, a certificate of use and occupancy must be issued.

Front 122

Certified Property Manager

Back 122

Awarded by the IREM to those who meet certain requirements.

Front 123

Chain of Title

Back 123

A history of the ownership affecting title to a parcel of land.

Front 124

chattel

Back 124

personal property; movable goods on real property

Front 125

chattel mortgage

Back 125

creates a lien on personal property; aka security agreement

Front 126

Civil Rights Act of 1968

Back 126

A federal prohibition on discrimination in the sle, rental, or financing of housing on the basis of race, color, religion, sex, or national origin

Front 127

Clamdestine "meth" labs and the environment

Back 127

Methamphetamine (Meth, crystal, speed, and ice) is a highly addictive, illegal drug that is classified as a powerful stimulant. Its a controlled substance Manufacturing produces toxic waste. Meth becdomes a real estate-related problem when the volatile manufacturing process produces toxic waste that pollutes dwellings, soil and surrounding water supplies.

Front 128

client

Back 128

...The principal in a real estate transaction

Front 129

closed mortgage

Back 129

One that imposes a prepayment penalty.

Front 130

Closing

Back 130

In a real estate transaction, this is the final exchange in which the deed is delivered to the buyer, the title is transferred, and the agreed-on costs are paid.

Front 131

Closing Statement

Back 131

A written analysis or itemization of the amounts owed by or due to both buyer and seller. The final responsibility for the completion of the closing statement on the listing broker.

Front 132

Clouds on the Title

Back 132

Encumbrances or outstanding claims that could affect the owner's title; problems or uncertainties with a title to real property.

Front 133

Cluster zoning

Back 133

The size of lots and required frontage can be reduced if the overall sensity of the develpoment does not exceed the master plan. The homes are clustered instead of uniformly spread out, leaving more area available for recreational areas, parks, and schools.

Front 134

CMA

Back 134

Comparative market analysis-An informal estimate of value created by a broker, salesperson, or associate broker. Brokers can charge a fee. It compares: 1) currently listed properties 2) recently sold properties 3) properties where the listing expired

Front 135

co-ownership

Back 135

Title to real property held by two or more persons at the same time; also called concurrent ownership

Front 136

Commercial Properties

Back 136

Include offices, stores, hotels, and other buildings.

Front 137

Commission Paid to Cooperating Brokers

Back 137

Usually 50%/50%

Front 138

Commission Paid to Sales Associates

Back 138

The amount of the brokerage's commission that goes to the realtor

Front 139

Common Elements

Back 139

Portions of condominium complex owned jointly by tenants

Front 140

common elements

Back 140

shared ownership; portions of the structure owned by unit owners together; everything except air space

Front 141

community property

Back 141

A form of co-ownership lmited to husband and wife; does not include the right of survivorship

Front 142

compensatory damages

Back 142

...The amount of money actually lost, which will be awarded by a court in case of a breached contract

Front 143

Concurrent estate

Back 143

Ownership of a property by two or more persons at the same time

Front 144

concurrent ownership

Back 144

Simultaneous ownership of real property by two or more people

Front 145

Condemnation

Back 145

The legal process by which the government takes private land for public use, paying the owners a fair price. See EMINENT DOMAIN. Also called APPROPRIATION.

Front 146

condition

Back 146

...Any act or event that, if it occurs or fails to occur, automatically creates or extinguishes a legal obligation.

Front 147

condition concurrent

Back 147

...When the parties are to exchange performances at the same time.

Front 148

condition precedent

Back 148

...An act or event that must exist or occur before a duty of immediate performance of a promise arises. (relative to contracts)

Front 149

condition subsequent

Back 149

...Any fact, the existence or occurrence of which, by agreement of the parties, operates to discharge a duty of performance after it has become absolute. (making mortgage payments)

Front 150

conditional sales contract

Back 150

.. A contract of sale and a financing instrument wherein the seller agrees to convey title when the buyer completes the purchase price installment payments; also called nstallment land contract contract for deed, and conditional sales contract.

Front 151

condominium

Back 151

A form of ownership of real property, recognized in all states, consisting of individual ownership of some aspects and co-ownership in other aspects of that property.

Front 152

Condominium Fee (Association Fee)

Back 152

an expense assessed in proportion to the cost necessary to operate the Condominium Association; NOT tax deductible IF unit is used as principal residence

Front 153

condominium ownership

Back 153

owning one unit in a multi-unit structure; can be residential or commercial

Front 154

conforming loans

Back 154

Those processed on uniform loan forms and according to FNMA/FHLMC guidlines

Front 155

Consideration

Back 155

Anything of value, as recognized by law, (e.g., money, services, goods, promise) given to induce another person to enter into a contract. ALSO CALLED: Valuable Consideration

Front 156

construction mortgage

Back 156

A temporary mortgage used to borrow money to contruct an improvement on land

Front 157

constructive condition

Back 157

...A condition in a contract imposed by a court. (e. g. court orders payback on agreed upon amount because of incomplete fulfillment of contract...38 acres instead of 40 sold)

Front 158

Constructive Fraud

Back 158

A negligent misrepresentation or concealment of a material fact; when a person carelessly fails to disclose material information, or makes false or misleading statements. ALSO CALLED: Negligent Misrepresentation

Front 159

Constructive Notice

Back 159

Notice given to the public when legal documents are recorded at the register of deeds office.

Front 160

Consumer protection and real estate marketing

Back 160

Licensees must be aware of these acts due to their potential impact on real estate marketing efforts

Front 161

Contaminated Well (Dream)

Back 161

Is a material fact that needs to be disclosed.

Front 162

contract buyer's policy

Back 162

Title insurance that protects contract buyer against defects in contract seller's title.

Front 163

contract for deed

Back 163

...A contract of sale and a financing insturment wherein the seller agrees to convey title when the buyer completes the purchase price installment payments; also called installment land contract, contract for deed, and conditional sales contract.

Front 164

contract remedies

Back 164

1. Specific performance, 2. Rescission, 3. Compensatory Damages 4. Liquidated Damages

Front 165

Contribution

Back 165

Value added by one component of property in comparison to the whole.

Front 166

conventional (private) mortgage

Back 166

a mortgage not insured or guaranteed by the government

Front 167

convey

Back 167

To pass to another (as in title)

Front 168

cooling-off period

Back 168

A three-day right of rescission for certain loan transactions

Front 169

cooperative

Back 169

A form of ownershp iin which stockholders in a corporation occupy property owned by the corporation under a lease.

Front 170

Cooperatives

Back 170

Businesses owned and controlled by the people who use it - producers, consumers, or workers with similar needs who pool their resources for mutual gain.

Front 171

Cooperatives

Back 171

A system of ownership reflected in leasing a unit by a stock holder of a corporation that owns the entire multi unit structure

Front 172

Cost Approach

Back 172

Appraiser calculates the rebuilding of the subject property using present day costs and expenses. The market value of the land is added back to the adjusted replacement cost.

Front 173

Cost of Money

Back 173

The interest rate that people or businesses must pay to use another's money for their own purposes

Front 174

Counteroffer

Back 174

A response to an offer to enter into a contract, changing some terms of the original offer. It is a rejection of the original offer (not a form of acceptance) and does not create a binding contract unless the new counteroffer is accepted by the original offeror (the counterofferee).

Front 175

Covenant

Back 175

A provision entered into an instrument promising certain action or inaction possibly limiting or allowing the use of property

Front 176

covenant against encumbrances

Back 176

grantor guarantees that the title is free of all encumbrances except those stated in the deed

Front 177

covenant of further assurance

Back 177

grantor agrees that s/he will execute any instruments necessary to eliminate a cloud surfaced after conveyence

Front 178

covenant of quiet enjoyment

Back 178

grantor covenants that the property is free from claims of others claiming title to it

Front 179

covenant of seisin

Back 179

grantor guarantees that s/he has the right to convey possession

Front 180

covenant of warranty of title

Back 180

grantor forever warrants title to the premises and promises to defend the grantee's title against all claims and will compensate the grantee with money if the title became defective

Front 181

credit

Back 181

In a closing statement, money to be recieved or credit given for money or an obligation given.

Front 182

Curable Obsolescence

Back 182

Outdated feature in property tht may be feasibly corrected to bring the property to current standards

Front 183

Curtesy

Back 183

A lifetime granted to the husband in his wife's real estate granted to him upon her death.

Front 184

Curtesy rights

Back 184

husband's life estate in his wife's property conveyed to him upon her death; NOT in Michigan

Front 185

debits

Back 185

In a closing statement, an expense or money received against a credit

Front 186

Debt servce

Back 186

Loan payments including principle of interest

Front 187

Decisor

Back 187

The person transfering the title of real estate through will

Front 188

declaration

Back 188

Master deed containing legal description of the condoinium facility, a plat of the property, plans and specifications for the building and units, a description of the common areas, and the degree of ownership in the common areas available to each owner.

Front 189

Dedication

Back 189

The donation of privately owned property to the public use.

Front 190

deed

Back 190

A written instrument transferring an interest in real property when delivered to the grantee.

Front 191

deed contents (9)

Back 191

names and addresses; clause of conveyance; to have and to hold clause; deed restrictions; valuable consideration; legal description; execution; delivery and acceptance

Front 192

deed covenants (5)

Back 192

covenant of seisin; covenant against encumbrances; covenant of quiet enjoyment; covenant of warranty of title; covenant of further assurance

Front 193

deed in lieu of foreclosure

Back 193

upon default, lender agrees not to go through foreclosure and accepts a deed from mortgagor surrendering property to lender to satisfy debt

Front 194

deed of trust

Back 194

A form of mortgage wherein there is a third party, who is called a trustee

Front 195

deed restriction (restrictive covenant)

Back 195

a provision in the deed aimed at controlling the present and future use of land

Front 196

defeasable fee estates

Back 196

title may be divested upon occurrence or non-occurrence of a specified event that is stated as a condition in the deed

Front 197

Defeasance Clause

Back 197

A contract clause used to defeat or cancel a certain right upon the occurrence of specific event, A clause within a mortgage that legally binds the lender to release the lien from the title once the mortgage has been satisfied.; clause allowing termination of the mortgage upon full payment of the debt

Front 198

Defeasible Fee

Back 198

Also called a qualifieid fee. Interest in real estate that may be canceled upon happening of a certain event

Front 199

Deferred Maintenance

Back 199

Existing maintenance and repair requirements that are put off.

Front 200

deficiency judgement

Back 200

the amount owed by the mortagor to the mortgagee is bid but the highest bid does not satisfy the loan; holds mortgagor personally liable for the difference

Front 201

delivery and acceptance

Back 201

The transfer of a title by deed requires the grantor to deliver and the grantee to accept a given deed.

Front 202

Density zoning

Back 202

Consists of population restrictions; for ex, a city passes a residential use zone with three subcategories 1) detached, single family dwellings, 2) one-to-four-unit residential structures, and 3) apartment dwellings

Front 203

Depreciation

Back 203

Loss of property value

Front 204

descent

Back 204

The distribution of property to legally qualified heirs of one who has died intestate

Front 205

description by reference

Back 205

Property description that may refer to a map and lot number that has been recorded or ato a prevous deed conveying the saome property

Front 206

designated agency

Back 206

a broker may designate individual salespersons as exclusive agents of their clients

Front 207

Desireability

Back 207

Economic charactersitic of a property affecting value which represents whether or not their are possible buyers

Front 208

Deterioration

Back 208

The physical wear and tear that leads to depreciation

Front 209

devise

Back 209

A gift of real property by will

Front 210

Difference between an appraisal and a CMA (Dream)

Back 210

An appraisal is done by an appraiser and a CMA (certified market analysis) is done by a broker , sales agent or an associate broker.

Front 211

discharge of contracts

Back 211

Agreement of the parties; full performance; iimpossibility of performance; operation of law (judge's ruling)

Front 212

Disclosure of known material facts

Back 212

Under Michigan law, a third-party's right to sue a listing agent for failing to disclose defects is probably limited to situations where the agent actually knew of the defect and helped to conceal it

Front 213

Disclosure required at the time of loan application

Back 213

1) Information booket prepared by HUD titled Settlement Costs and You 2) Good Faith Estimate of settlement costs 3) Mortgage Servicing Disclosure Statement that informs the borrower whether the lender intends to keep the loan or transfer it to another lender for servicing.

Front 214

disclosure statement

Back 214

An accounting of all financial aspects of a mortgage loan required of lenders to borrowers in residential mortgage loans by Regulation Z of the Federal Reserve Board.

Front 215

discount points

Back 215

A percentage of the loan amount the lender requires for making a mortgage loan

Front 216

discriminatory advertising

Back 216

Any advertising that states or indicates a preference, limitation, or discrimination on the basis of race, color, religion, sex, national origin, handicap, or familial status in offering housing for sale or rent.

Front 217

disintermediation

Back 217

The loss of funds available to lending institutions for making mortgage loans, caused by depositors' withdrawal of funds for making investments that provide greater yields.

Front 218

Disparate Impact

Back 218

A law that is not discriminatory at face value, but has a greater impact on a minority group than on other groups.

Front 219

Doctrine of Equitable Conversion

Back 219

...The vendor cannot do anything to jeopardize the interest of the vendee.

Front 220

Documents relared to transfer od ownership

Back 220

Deed, land contract, Bill of sale

Front 221

Documents related to financing

Back 221

Mortgage, note (promise to pay), deed of trust, Private mortgage insurance (PMI), Transfer of tax, insurance escrows, Estoppel certificate (says that there are no leins)

Front 222

Dominant Estate (Tenament)

Back 222

The property that benefits from an appurtenent easement

Front 223

Dominant Tenant

Back 223

The owner of the dominant estate that benefits from the appurtenant easement

Front 224

Dower Rights

Back 224

wife's life estate in her husband's real property conveyed to her upon his death (if not in will); the interest acquired is at least one-third in Michigan

Front 225

Dred Scott Decision

Back 225

A Missouri slave sued for his freedom, claiming that his four year stay in the northern portion of the Louisiana Territory made free land by the Missouri Compromise had made him a free man. The U.S, Supreme Court decided he couldn't sue in federal court because he was property, not a citizen.

Front 226

Dual agency

Back 226

Authorized to represent both a buyer/client and a seller/client who are negotiating a common transaction. Michigan permits a dual agency with proper disclosures and written consent. A broker also becomes a dual agent when two salespersons licensed under him represent the seller and buyer in the same transaction.

Front 227

due on sales clause

Back 227

A statment in amortgage or deed of trust entitling the lender to declare the entire principal balance of the debt immediately due and payable if the borrower sells the property during the mortgage term. Also known as due on sale clause.

Front 228

Duties an agent owes to the third party

Back 228

Caveat emptor; honesty; disclosure of known material facts

Front 229

duties of real estate board

Back 229

interpretation of licensing requirements; aiding in investigations and assessing penalties; reccommending issuance or renewal of license; recommending approval for educational courses; making rules known and adjusting standards of practice

Front 230

Duties that arise from an agency relationship

Back 230

Fiduciary Duties of the Agent - Loyalty- fidelity, confidentiality, profit outside of agency; Disclosure - notice of material facts; reasonable care; obedience; accounting

Front 231

Duty a principal owes to the agent

Back 231

Compensation, cooperation

Front 232

Duty to present all offers

Back 232

A listing agent must present all offers made on a property.

Front 233

earnest money

Back 233

...A deposit a buyer makes at the time of submitting an offer, to demonstrate the true inten to purchase; also called binder, good faith deposit, escrow deposit.

Front 234

Easement

Back 234

A right that goes with ownership of real property; usually transferred with the property, but may be sold separately. (A nonpossessory right to use another's property in a manner established by either express or implied agreement.)

Front 235

Easement Appurtenant

Back 235

A "right of way" given to a neighboring property which may be used usually for ingress and egress. It is said to "run with the land"

Front 236

easement be prescription (adverse easement)

Back 236

easement obtained as a result of trespass situation by one party on another's land; continues for statutory period of 15 years, must be open, continuous, and notorious

Front 237

Easement By Govt Condemnation

Back 237

An easement that is obtained bu the govt on provate property for public use

Front 238

easement by necessity

Back 238

court-ordered easement for the benefit of a landlocked parcel over an adjacent property providing access

Front 239

Easement by Reservation

Back 239

Created by a person who transfers ownership of property but withholds the right to use a portion of the property

Front 240

easement in gross

Back 240

an easement belonging to a person or entity, NOT a neighbor; no dominant estate

Front 241

Economic Base

Back 241

The main business or industry in and area that a community uses to support and sustain itself.

Front 242

economic characteristics of real estate (4)

Back 242

DUST: Desirability, Utility, Scarcity, Transferability

Front 243

Economic Life

Back 243

The length of time during which a property can be profitably utilized.

Front 244

Economic Obsolescence

Back 244

...

Front 245

Education and Research Fund

Back 245

A fund designed to offer scholarships and loans to students who are taking real estate-specific classes.

Front 246

Electronic communication privacy act

Back 246

Set forth provisions for access, use disclosure, interception and privacy protections of electronic communications.

Front 247

Elliot Larson (Michigan Civil Rights Act)

Back 247

1977; prohibits against discrimination because of age and marital status; Replaced the 1968 Michigan Fair Housing Act in prohibiting discrimination in the sale, rental, or lease of housing accommodation.

Front 248

emblements

Back 248

Personal property growing in the soil, requiring planting and cultivation; annual crops.

Front 249

Eminent domain

Back 249

The power that a state, municipality, or other authorized rntity has to take provate property for public use. When private property is taken for public use, the owner must be paid a fair and just compensation.

Front 250

encumbrances

Back 250

liens, mortgages, taxes, leases, easements, etc. attached to a property that may be come a burden and which may diminish its value; run with the land

Front 251

Environmental and land use regulations

Back 251

Real estate development is subject to several other state and federal acts designed to regulate the development of land. Environmental laws not only plat a critical role in the development proecess, but also have the potential to affect the purchase or sale of lands upon which exisitng dwellings exist

Front 252

Environmental hazards

Back 252

There are a number of hazaeds that may be found in a property such as urea formaldehyde, asbestos, radon, leaking underground storage tanks, groundwater contamination and hazardous waste dumping and spills

Front 253

Environmental site assessment

Back 253

An invetigation for the existence of any number of environemental hazzards. It is typically handled in the following three phases: 1) a property history 2) soil boring and groundwater sampling, and 3) cleanup if necessary

Front 254

Equal Credit Opportunity Act (ECOA)

Back 254

A federal law prohibiting discrimination in consumer loans

Front 255

equitable lien

Back 255

lien usually placed as a result of a civil dispute (private party)

Front 256

equitable redemption

Back 256

The borrower's right to redeem the title pledged or conveyed in a mortgage or deed of trust after default and prior to a foreclosure sale by paying the debt in full, accrued interest, and lender's costs.

Front 257

Equitable Right of Redemption

Back 257

The right of a debtor to save (redeem) property from foreclosure proceedings prior to confirmation of sale.

Front 258

Equitable Title

Back 258

An interest created in property upon the execution of a valid sales contract, whereby actual title is transferred by deed at a closing. The buyer's interest in property under a land contract. Also called an equitable interest.

Front 259

erosion

Back 259

the gradual wearing away of land due to the natural movement of water (loss)

Front 260

Errors and Omissions Insurance

Back 260

Insurance which financially protects an architect against claims for damages resulting from professional negligence. Also called professional liability insurance.

Front 261

escalation clause

Back 261

specifies increases in rent/loan terms

Front 262

escheat

Back 262

The reversion of property to the state or county, as provide by state law, in cases where a decedent dies intestate without heirs capable of inheriting , or when the property is abandoned

Front 263

Escrow

Back 263

A legal document or money delivered by a person to a neutral 3rd party to be held until the occurance of some event or contingency.

Front 264

Escrow Account

Back 264

The trust account established by the broker under the provisions of the license law for the purpose of holding funds on behalf of the broker's principal or some other person until consummation or termination of a transaction.

Front 265

Escrow Closing

Back 265

A closing by a disinterested 3rd party- often an escrow agent.

Front 266

Essential Elements of a contract

Back 266

1. offer, 2. acceptance, 3. consideration, 4. legal capacity of the parties, 5. reality of consent, 6. legality of object, 7. possibility to complete

Front 267

Estate (Tenancy) at Sufferance

Back 267

the tenant occupies the premises with the landlord's consent but later consent is withdrawn (ex. eviction)

Front 268

Estate (Tenancy) at Will

Back 268

(month to month) estate for an undetermined duration; either party can terminate with notice

Front 269

Estate (Tenancy) for Years

Back 269

a lease created with a certain predetermined duration of time

Front 270

Estate (Tenancy) from Period to Period

Back 270

when the lease expires, involves automatic equal renewals or extensions in the lease

Front 271

estate in real property

Back 271

An interest sufficient to provide the right to use, possession, and control of land; establishes the degree and duration of ownership

Front 272

Estate in Remainder

Back 272

the deed or will that creates the life estate names a third party/entity to whom the title will pass upon the death of the life tenant

Front 273

Estate in Reversion

Back 273

property reverts back to the grantor after the death of the life tenant

Front 274

estoppel

Back 274

...Preventing a person from making a statement contrary to a previous statement.

Front 275

evidence of title

Back 275

shown by collecting group of facts resulting from the recording of instruments (documents)

Front 276

Exclusionary zoning

Back 276

A zoning restriction that makes it difficult for certain social or low-income groups to locate within the community,

Front 277

Exclusive Agency Listing

Back 277

broker has sole right to sell property, however, owner reserves right to sell by him/herself without paying commission

Front 278

Exclusive Right to Sell

Back 278

the broker is the sole agent of the principal and is promised a fee regardless of who procures a buyer

Front 279

executor's deed

Back 279

issued by the "Personal Representative" of the estate named by a person who died "testate" (leaving a will)

Front 280

executory contract

Back 280

contract that has been signed by all parties but not performed in full yet

Front 281

Exemptions to Fair Housing

Back 281

religious organizations (non-commercial); private club operating dwellings (non-commercial); senior citizens housing; DOES NOT APPLY to racial discrimination

Front 282

express agency

Back 282

...An agency relationship created by oral or written agreement between principal and agent

Front 283

Express Contract

Back 283

Contract where all terms are in writing and understood by both parties.

Front 284

expressed agreement

Back 284

written listing or buyer agency contract; verbally stating "I am your agent"

Front 285

external obsolescence

Back 285

aka economic/environmental obsolescence; loss due to changes in society and the surrounding area; hardest to cure… The only category of depreciation that results from external factors to the property such as the house being located in a deteriorating neighborhood or close to a nuisance such as a landfill, highway or airport.

Front 286

Fair Housing Act of 1968

Back 286

A federal prohibition of discrimination in sale, rental, financing, or appraisal of housing on the basis of race, color, religion, sex, national origin, handicap, or familial status.

Front 287

Fair Housing Amendments Act of 1988

Back 287

A law adding to the Fair Housing Act provisions to prevent discrimination based on mental or physical handicap or familial status

Front 288

familial status

Back 288

An adult with children under 18, a person who s pregnant, one who has legal custody of a child or who is in the process of obtaining such custody.

Front 289

Fannie Mae (FNMA)

Back 289

The shortened name for the Federal National Mortgage Association (FNMA), a privately owned corporation that purchases FHA, VA, and conventional mortgages

Front 290

Farming an Area

Back 290

A term for a marketing technique, which is used to create an image of working on a specific area over a period of time for prospects.

Front 291

Federal Housing Administration

Back 291

(FHA) An agency of the federal government that insures private mortgage loans for financing of new and existing homes and home repairs.

Front 292

fee simple absolute

Back 292

An inheritable estate in land providing the greatest interest of any form of title

Front 293

fee simple conditional

Back 293

defeasable fee estate; terminates upon violation of a certain activity that the owner MUST NOT perform

Front 294

fee simple determinable

Back 294

defeasable fee estate; given for a special purpose; limitation or condition that the owner MUST do

Front 295

fee simple estates

Back 295

highest type of interest in real estate recognized by law; upon death of owner, passes to heirs

Front 296

FHA-insured loans

Back 296

...A mortgage loan in which payments are insured by the Federal Housing Administration

Front 297

fiduciary

Back 297

...A person, such as an agent, placed in a position of trusted in relation to the person for whose benefit the relationship is created; essentially the same as a trustee

Front 298

Fiduciary Duties

Back 298

A deed executed by a trustee, executor, or other fiduciary, conveying property that the fiduciary does not own but is authorized to manage.... OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable Care. This mnemonic device has a slight variation (e.g. care vs. reasonable care), but both are helpful in recalling the fiduciary duties an agent owes his clients and broker.

Front 299

Financial institutions Reform, Recovery and Enforcement Act (FIRREA)

Back 299

An appraisal license law that states that there are only 4 Appraiser license categories.

Front 300

fixed rate mortgage

Back 300

mortgage that carries the same interest rate over the term of the loan

Front 301

Fixture

Back 301

An item of personal property that may or may not be attached to real property, but is closely associated with real property in such a way that it has legally, and is intended to become part of real property.

Front 302

fixtures clause

Back 302

addresses whether fixtures installed by the tenant can or cannot be removed after expiration of tenancy

Front 303

Flat Fee

Back 303

A commission not based on a percentage of the selling price.

Front 304

foreclosure

Back 304

The legal procedure of enforcing payment of a debt secured by a mortgage or any other lien.

Front 305

foreclosure by advertisement

Back 305

mortgage is foreclosed upon utilizing a "power of sale by advertisement" clause

Front 306

Foreign Investment in Real Property Act

Back 306

The sale of a U.S. real property interest by a foreign seller is subject to special IRS withholding requirements. The purchaser must withhold 10% of the amount due to the seller and transmit it to the IRS to make assure collection of capital gains taxes from foreign sellers.

Front 307

forfeiture clause

Back 307

a condition written in a contract that allows a "legally injured" party to declare a sum of money "forfeited" to compensate for a for a breach of contract by another party

Front 308

formal assumption

Back 308

Permission to assume the mortgage at an interest rate prevailing at the time of assumption

Front 309

Freddie Mac (FHLMC)

Back 309

Federal Home Loan Mortgage Corporation; secondary market for conventional mortgage loansa corporation wholly owned by the Federal Home Loan Bank System that purchases FHA, VA, and conventional mortgages.

Front 310

free market

Back 310

provides ample time for buyer and seller to effect a mutually beneficial purchase and sale without undue pressure or urgency

Front 311

Freehold Estate

Back 311

A possessory and ownership estate in real property; either a fee simple or a life estate. The holder of a freehold estate has title.

Front 312

fully amortized mortgage

Back 312

a mortgage loan that has been fully paid off by making regular monthly payments

Front 313

functional obsolescence

Back 313

outdated design and layout inadequacy

Front 314

General Agent

Back 314

One who is authorized to act (with broad negotiation power) for his principal in all matters concerning a particular business venture. i.e; a property manager

Front 315

general lien (blanket lien)

Back 315

lien thatapplies to a group of properties that an individual owns

Front 316

General Warranty Deed

Back 316

Deed that offers the most protection in which grantor fully warrants good clear title to the premises.

Front 317

general warranty deed

Back 317

A deed denoting an unlimited guarantee of title

Front 318

Ginnie Mae GNMA

Back 318

Government National Mortgage Association;government agency that purchaes FHA and VA mortgages…. under HUD; high-risk, low-yield loans

Front 319

Government Survey System

Back 319

A method of land description in which meridians (lines of longitude) & base lines (lines of latitude) are used to divide land into townships & sections.

Front 320

graduate lease (step up lease)

Back 320

pre-planned rent increases scheduled at certain intervals as described in an escalation clause

Front 321

graduated payment mortgage (GPM)

Back 321

...One in which the payments are lower in the early years but increase on a scheduled bass until they reach an amortizing level....A combination of the graduated payment mortgage and the variable rate mortgage

Front 322

grandfather clause

Back 322

a provision that allows the continuation of a non-conforming use when such use had preceded a zoning change

Front 323

grant deed

Back 323

...A statutory form of deed in which the warranties are mplied from the statute rather than being spelled out in the deed.

Front 324

grantee

Back 324

...One who receives title to real property by deed

Front 325

granting clause

Back 325

...The statement in a deed containing words of conveyance

Front 326

grantor

Back 326

...One who conveys title to real property by deed

Front 327

Greenfields

Back 327

An underdeveloped area, generally located within suburban lands, where there are less perceived obstacles to development.

Front 328

gross lease

Back 328

the tenant pays a fixed rent and landlord pays operating expenses; common in residential housing

Front 329

Gross Living Area (GLA)

Back 329

the area of a structure measured using external dimensions

Front 330

gross rent

Back 330

potential (projected) gross income - vacancy/rent loss + additional income

Front 331

ground lease (land lease)

Back 331

lease of land that allows for erection of building; tenant pays all expenses on land

Front 332

growing equity mortgage (GEM)

Back 332

...Mortgage loan for which the monthly payments increase annually, with the increased amount applied directly to the loan's principal, thus shortening the term of the loan

Front 333

Guaranteed Loan Program

Back 333

...Should an individual borrower default on a loan, the Rural Housing Service will pay the private financier for the loan

Front 334

habendum clause

Back 334

...The statement in a deed beginning with the words "to have and to hold" and describing the estate granted

Front 335

Handling expesnses

Back 335

Real estate agents are expected to review the expenses for which the purchaser and the seller will be responsible at the closing.

Front 336

Holder in Due Course

Back 336

One who acquires a negotiable instrument in good faith and for consideration, and thus has certain rights above the original payee.

Front 337

Home Mortgage Disclosure

Back 337

act that requires lenders whose loans are federally related to disclose the number of loans made in various areas in an effort to eliminate redlining

Front 338

Homestead rights

Back 338

rights protecting the holder's principal residence from being sold by creditors to satisfy outstanding debts

Front 339

Housing bubble

Back 339

Unstable increase in housing prices, to the extent of which, a sudden drop or "bursting" of the bubble could result in a widespread loss of equity.

Front 340

Housing Cycles

Back 340

General swings in real estate activity, resulting in increasing or decreasing activity and property values during different phases of the cycle.

Front 341

HUD

Back 341

Department of Housing and Urban Development

Front 342

hypothecating

Back 342

Pledging property as security for the payment of a debt without giving up possession.

Front 343

Implied agency/implied authority

Back 343

An agency that arises from the words, actions, or conduct of a party (the implied agent)

Front 344

implied contract

Back 344

formed when a person makes it known by his/her actions that s/he will act to fulfill a certain obligation...One crated by deduction from the conduct of the parties rather than from the direct words of the parties; opposite of an express contract.

Front 345

impound account

Back 345

...Another term for escrow account

Front 346

Imputed knowledge (Dual agents)

Back 346

Dual agents must take care to keep the confidential information received. Other licensees affiliated with the firm are, in essence, legally charged with the information as if they actually knew it.

Front 347

incentive zoning

Back 347

provides for the combination of different zoning uses (ex. street level retail shops with upstairs apartments)

Front 348

Income Approach (Capitalization Method)

Back 348

VALUE = Net Operating Income/ Capitalization rate

Front 349

Independent Appraiser

Back 349

The appraiser should not have any interest in either the property being appraised or the outcome of the appraisal, and must avoid any temptation to improperly adjust his appraisal figures.

Front 350

index lease

Back 350

rent adjustments based on a predetermined index

Front 351

Industrial Real Estate

Back 351

Land and structures involved in the production, distribution, and storage of tangible economic goods.

Front 352

Information qualifying as material

Back 352

True market value; the financial condition of the buyer; the status of an offer; the brokers policies on cooperation with all agents and coordinators; the status of an earnest money deposit; and property taxes, zoning, building codes, land use restrictions and environmental hazards.

Front 353

Initial Escrow Statement

Back 353

This form itemizes all escrow account deposits and payments made during the past year. It must be given to the borrower at or within 45 days of the closing.

Front 354

innocent misrepresentation

Back 354

...The seller's broker makes a false statement to the buyer about the property, and the broker does not know whether the statement is true or false

Front 355

Innocent purchaser defense

Back 355

A purchaser of a contaminated site can attempt to escape some liability provided that, prior to purchase, all appropriate inquiries were made into the previous ownership and uses of the property.

Front 356

installment land contract

Back 356

....A contract of sale and a financing insturment wherein the seller agrees to convey title when the buyer completes the purchase price installment payments; also called installment land contract, contract for deed, and conditional sales contract.

Front 357

insured conventional loan

Back 357

insurance obtained privately; reimburses lender in case of foreclosure sale

Front 358

inter vivos

Back 358

during one's life

Front 359

interest

Back 359

(a) Money paid for the use of money. (b) An ownership or right.

Front 360

interest deductions

Back 360

IRS allows itemized interest deduction on interest paid to finance a principal residence

Front 361

intestate

Back 361

...The condition of death without leaving a valid will.

Front 362

Inverse condemnation

Back 362

When a land use negatively impacts a property's use or value, the owner may claim that the regulation amounts to a taking thereby entitling him to compensation.

Front 363

involuntary alienation

Back 363

(e. g. Bankruptcy, foreclosure, eminent domain, condemnaton)

Front 364

Joint Tenancy

Back 364

A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition. unity of interest; right of survivorship; unity of possession, unity of time, unity of title

Front 365

Jones v. Mayer

Back 365

Supreme Court decision upholding Civil Right Act of 1866; under no circumstances is anyone exempted from the law prohibiting racial discrimination

Front 366

judicial deed

Back 366

deed ordered by the court

Front 367

judicial foreclosure

Back 367

mortgage foreclosed by filing a civil law suit in circuit court; expensive so not widely used

Front 368

junior mortgage

Back 368

...one that is subordinate to a subsequent mortgage (e. g., a second mortgage)

Front 369

Kickbacks, fee-splitting, and unearned fees

Back 369

service providers are not allowed to give any of these for referrals.

Front 370

Land Contract

Back 370

A real estate installment agreement where a buyer makes payment to a seller in exchange for the right to occupy and use property, but no deed or title transfers until all, or a specified portion of, payments have been made.

Front 371

land use controls

Back 371

Governmental restrictions on land use

Front 372

latent (hidden) vs patent (obvious) defects

Back 372

A patent defect is obvious and one which a reasonable buyer would be expected to discover. Hidden or latent defect are those of which only a seller would be aware (must disclose even if it is not listed on the form)

Front 373

latent defect

Back 373

a defect that is hidden, but known to the seller; can not be revealed by an ordinary inspection

Front 374

Lead-paint disclosre requirement (Dream)

Back 374

Federal law requires sellers or landlords of residential housing contructed before 1978-the year lead-based paint was banned in residential dwellings-to disclose the presence of known lead-based paint in their properties

Front 375

lease

Back 375

an agreement for possession of the land for a certain period of time in consideration of a payment of rent or other income

Front 376

lease with option

Back 376

allows tenant to purchase or obtain additional lease term for a specified price and terms; seller must offer, tenant does not have to buy

Front 377

leased fee

Back 377

landlord's interest in the leased premises

Front 378

leasehold estate

Back 378

An estate that gives the holder (Tenant) a temporary right to possession, without title… Nonfreehold estate; of limited duration, providing the right of possession and control but not title.

Front 379

leasehold mortgage

Back 379

...One in which a leasehold (nonfreehold) estate is pledged to secure payment of the note.

Front 380

legal description

Back 380

a description of real property that gives the exact location and boundary

Front 381

lender's (mortgagee's) policy

Back 381

provided by the borrower; issued in the amount of the mortgage loan

Front 382

leverage

Back 382

The use of someone else's money to enhance your own

Front 383

Liable parties

Back 383

A land owner can be held liable for some or all of the costs incurred by the government in cleaning up a contaminated site. Potential purchasers must determine whether the land contains any hidden problems prior to purchasing

Front 384

License Incentive

Back 384

The license status of any salesperson who returns his license to the Division of Real Estate, or whose broker does not want to maintain sponsorship of the licensee.

Front 385

License on Deposit

Back 385

1. A special license status that is only available only to brokers who wish to return their broker's license to the Division of real estate in order to reactivate their license as a salesperson. A brokers license may remain on deposit indefinitely if timely renewed and continuing education requirements are met. 2. A special license status available to any licensee who enters the military or whose reserve military status is activated. the license remains inactive until the next renewal date following honorable discharge from the military.

Front 386

license renewal period

Back 386

3 years; 10/31

Front 387

License Revocation

Back 387

1. When the Real Estate Commission permanently withdraws a real estate agent's license. /// 2. The automatic event that occurs when a licensee allows their license to remain in a state of suspension for more than 12 months.

Front 388

License Suspension

Back 388

1. The temporary withdrawal of a real estate agent's license for a certain and specified period of time.

Front 389

license violations

Back 389

dual agency; failure to account for money; changing broker w/out notice; paying commission to not licensed person; commingling funds;gross negligence; failure to provide agency disclosure

Front 390

Licensees must obtain consent

Back 390

As a result of the FCC's rule licensees must not send unsolicited faxes

Front 391

Lien

Back 391

A nonpossessory interest in a property, giving a lienholder the right to foreclose if the owner does not pay a debt owed the lienholder; a financial encumbrance on the owner's title.

Front 392

lien foreclosure sale

Back 392

...Selling property without consent of the owner who incurred the debt, resulting in a lien, as ordered by a court or authorized by state law, and title conveyed to purchaser by judicial deed.

Front 393

lien theory state

Back 393

state in which the lender receives a lien on the mortgaged property and must foreclose upon default of the borrower

Front 394

life estate

Back 394

A freehold estate created for the duration of the life or lives of certain named persons; a non-inheritable estate; granted to a person (life tenant) for a lifetime; cannot devise in will

Front 395

Limited Warranty Deed

Back 395

Deed in which the grantor warrants title only against defects arising during the time he owned the property and not against defects arising before that time of ownership. Special Warranty Deed.

Front 396

Liquidated Damages

Back 396

A sum on money specified in a contract as compensation to fully satisfy or "liquidate" any damages suffered to be paid to one of the parties if the other defaults.

Front 397

Lis Pendens

Back 397

A recorded notice stating that a lawsuit is pending that may affect title to the defendant's real estate.

Front 398

Listing Agreement

Back 398

employment contract between the agent (broker) and the seller

Front 399

littoral rights

Back 399

rights of an owner whose land borders large navigable rivers, lakes, or oceans

Front 400

loan origination fee

Back 400

...Financinig charge required by the lender

Front 401

loan point

Back 401

1% of loan

Front 402

loan-to-value ratio

Back 402

...The relatonship between the amont of a mortgage loan and the lender's opinion of the value of the property pledged to secure payment of the loan.

Front 403

Location Survey

Back 403

A survey that determines if a property's buildings encroach on adjoining property, or if any adjoining property's buildings encroach on the subject property.

Front 404

Lot and Block Description

Back 404

A legal description used for platted property. The description states only the property's lot number and block number in a particular subdivision.

Front 405

Market data approach

Back 405

The subject property is compared to similiar properties that have recently been sold. Since there are physical differences between the subject property and the comparable properties, the appraiser makes adjustments to the sale price of each comparable.

Front 406

Market Price

Back 406

actual selling price of property

Front 407

Market Value

Back 407

What a willing and able buyer would be willing to pay.

Front 408

Marketable Record Title

Back 408

Every link in the chain of title is recorded going back at least 40 years.

Front 409

Marketable Title

Back 409

Title free and clear of objectionable liens or encumbrances; title which is free from reasonable doubt or defects, which can be readily sold or mortgaged.

Front 410

Marketable Title Act

Back 410

Is intended to improve the marketability of title and simplify the ittle search process by extinguishing certain old, dormant clauses against a title.

Front 411

master deed

Back 411

The instrument that legally establishes a condominium; also called condominium declaration

Front 412

Master plan (Dream)

Back 412

A comprehensive plan incorporating the goals and recommendations of the planning commission. Once completed, devises such as zoning are used to put the master plan into effect and enforce it.

Front 413

Material Breach

Back 413

An unexcused failure to perform according to the terms of a contract, important enough that the non-breaching party is not required to perform his contractual obligations.

Front 414

material facts

Back 414

facts that have a direct effect on value and MUST be disclosed

Front 415

merger

Back 415

...When a subsequent contract covering the same subject matter is drafted (with changes)

Front 416

Metes and Bounds Description

Back 416

A legal description of a parcel of land that begins at a well-marked point and follows the boundaries, using directions and distances around the tract, back to the point of beginning.

Front 417

MI assessment rate

Back 417

50% of the true cash value

Front 418

Michigan Civil Rights Commission

Back 418

Investigates alleged discrimination and secures the equal protection of civil rights.

Front 419

Michigan Condominium Act

Back 419

Details rights of condominium purchasers in Michigan

Front 420

Michigan Consumer Protection Act

Back 420

...Prohibits certain practices in trade or commece and provides for certain remedies.

Front 421

Michigan Due on Sale Clause Act

Back 421

Provides that if the lender amends the loan contract and blends the rate for the buyers assuming the loan, the seller still retains liability on the note and the mortgage. It applies to Michigan state-chartered lenders only

Front 422

Michigan Mortgage Brokers, Lenders, Servicers and Licensing Act

Back 422

Regulates the licensing and registration of persons who make, broker, or service one- to four-family residential first mortgage loans secured by Michigan property.

Front 423

Michigan Person's with Disabilities CiveI Rights Act

Back 423

Requires that an owner or any other person engaging in a real estate transaction, a real estate broker, or a real estate salesperson shall not, on the basis of a disability that is unrelated to the individua's ability to acquire, rent or maintain property or use by an individual of adaptive devices or aids, engage in a number of discriminatory practices.

Front 424

Michigan Residential Code

Back 424

building code; applies to the construction and remodeling of residential properties statewide

Front 425

Michigan Right to Farm Act

Back 425

defines farm uses, operations, practices, and products; protects farmers from complaints or ordinances; farms within 1 mile of property MUST be disclosed

Front 426

Michigan State Housing Development Authority (MichDA)

Back 426

Make good loans to qualified borrowers ( e. g. Rural Development loans)

Front 427

Michigan Uniform Securities Act

Back 427

Prohibits a real estate licensee from engaging in a transaction that could be viewed as a security

Front 428

Michigan Uniform State Antitrust Act

Back 428

...There are certain types of trade restraints that are so injurious to competition that there can be no justification for them (price fixing; boycotts or concerted refusals to deal; territorial or customer allocation; tying agreements)

Front 429

Michigan usury laws

Back 429

...Provides that in transactons between private parties or unregulated lenders the maximum allowable interst rate is 11 percent

Front 430

Michigan's Seller Disclosure Act

Back 430

...Mandates that the seller complete a disclosure form regarding the condition of the property

Front 431

millage rate

Back 431

one mill=1/10 of a cent per dollar of assessed value

Front 432

misrepresentation

Back 432

...(a) A false statement or omission of a material fact. (b) In real estate, making an unintentionally false statement to induce someone to contract.

Front 433

Mitigation

Back 433

When the non-breaching party takes action to minimize the losses resulting from the beach of a contract.

Front 434

monument

Back 434

physical evidence of a boundary line

Front 435

mortgage assumption

Back 435

The transfer of mortgage obligations to purchaser of the mortgaged property.

Front 436

mortgage bankers

Back 436

A form of organization that makes and services mortgage loans.

Front 437

mortgage broker

Back 437

One who arranges a mortgage loan betwen a lender and a borrower for a fee.

Front 438

mortgage discharge

Back 438

evidence of satisfying the debt that the mortgage secures

Front 439

mortgage foreclosure

Back 439

when the borrower is in default and the lender moves to auction off the property

Front 440

mortgage insurance premium (MIP)

Back 440

...A payment for insurance to protect the lender and/or insurer against loss if default occurs.

Front 441

mortgage principal

Back 441

The amount of money (usually the loan amount) on which interest is either paid or recieved.

Front 442

mortgagee

Back 442

The lender in a mortgage loan, who receives a mortgage from the borrower (mortgagor).

Front 443

mortgagee's policy

Back 443

...A policy that insures a mortgagee against defects in a title pledged by a morgagor to secure payment of a mortgage loan.

Front 444

mortgagor

Back 444

The borrower in a mortgage loan who executes and delivers a mortgage to the lender.

Front 445

Multiple Listing Service (MLS)

Back 445

A listing service whereby local members of the Board of REALTORS agree to share listings and commissions on properties sold jointly. Members of the public may have access to the MLS, but not to all of the features and content.

Front 446

mutual assent

Back 446

The voluntary agreement of all parties to a contract as evidenced by an offer and acceptance.

Front 447

mutual mistake

Back 447

An error of material fact by both parties

Front 448

National Association of Realtors

Back 448

the largest and most prominent trade organization of real estate licensees.

Front 449

National Fair Housing Alliance (NFHA)

Back 449

Coalition of private, nonprofit fair housing groups that has joined with federal and state government fair housing enforcement agencies to substantially improve fair housing enforcement activities.

Front 450

Natural Attachment

Back 450

Plants growing on the land, whether naturally occurring or planted. They are considered real property while growing and personal property when removed.

Front 451

negative amortization

Back 451

...When the loan payment amount is not sufficient to cover interest due, the shortfall added back into principal, causing principal to grow larger after payment is made

Front 452

negligent misrepresentation

Back 452

...Occurs when a seller's broker conceals a defect in the property from the buyer or misrepresents the existence of a defect

Front 453

net lease

Back 453

the tenant pays rent plus some or all of operating expenses; common in commercial leasing

Front 454

net listing

Back 454

Not a type of listing but a method of establishing the listing broker's commission as all money above a specified net amount to the seller. Illegal in MI

Front 455

Net Operating Income (NOI)

Back 455

gross rent - operating expenses

Front 456

Net to Seller

Back 456

An estimate of the money a seller should receive from a real estate transaction, based on a certain selling price after all costs and expenses have been paid.

Front 457

non-material facts

Back 457

facts that have no effect on value; no duty to disclose

Front 458

Nonconforming use

Back 458

Land uses in existence before implementatopn of a zoning change that do not conform to the zone. The pre-existing uses are technically a violation of the new ordinance.

Front 459

Nondisclosure

Back 459

The silent fraud; a form of fraud that occurs when a party knows of a problem and conceals it

Front 460

nonfreehold estate

Back 460

Leaseholds; estates with a length determined by agreement or statute; establishes possession of land as oppposed to ownership in fee. interest in property for less than a lifetime; considered to be personal interest

Front 461

nonjudicial foreclosure

Back 461

A form of foreclosure that does not require court action to conduct a foreclosure sale; also called foreclosure under power of sale.

Front 462

notary public

Back 462

...A person authorized by a state to take oaths and acknowledgments

Front 463

Notice of material facts

Back 463

Disclosure

Front 464

Novation

Back 464

A three-way agreement in which the obligor transfers all rights and duties to a third party. the substitution of a new contract in place of an existing one

Front 465

oil and gas lease

Back 465

executed to a company who searches for oil and gas and receives a royalty

Front 466

open listing

Back 466

broker under contract is not the sole agent; for broker to be paid, s/he must be the one to sell the property

Front 467

open mortgage

Back 467

One that does not impose a prepayment penalty.

Front 468

open-end mortgage

Back 468

similar to "line of credit"; a mortgage has a credit limit based on Fair Market Value of property and borrower can borrow funds and pay them back as needed without formally applying to refinance ...One that may be refinanced without rewriting the mortgage.

Front 469

operating expenses

Back 469

necessary costs to operate the project

Front 470

operation of law

Back 470

The manner in which rights and liabilities of parties may be changed by application of law without the act or cooperation of the parties.

Front 471

option contract

Back 471

a unilateral contract by which an optionor gives an optionee the right to buy/lease the owner's property at a fixed price for a stated period of time

Front 472

ordinary life estate

Back 472

duration of ownership ends upon the death of the life tenant and the property reverts back to the grantor or his/her heirs

Front 473

Ostensible agent

Back 473

One who appears to have actual authority, but, in reality, does not; an apparent agent.

Front 474

owner's policy

Back 474

...A policy insuring an owner of real property against financial loss resulting from a title defect. provided/paid for by the seller; policy issued in the amount of the purchase price

Front 475

Ownership in Severalty

Back 475

Sole ownership that only one person or legal entity holds the title to that property. (as opposed to co-ownership)

Front 476

package mortgage

Back 476

...One in which personal property as well as real property s pledged to secure payment of the note.

Front 477

parol evidence rule

Back 477

A concept allowing that oral explanations can support the wrtten words of contract but cannot contradict them.

Front 478

partial release clause

Back 478

...Allows certain parcels of property to be removed from the mortgage lien if the loan balance is reduced a specified amount

Front 479

participation mortgage

Back 479

...(a) One in which two or more lenders share in making the loan. (b) One in which a lender shares in the profit produced by an income property pledged to secure the loan payment in addition to receiving interest and principal payments.

Front 480

Parties to the agency relationship

Back 480

Principal, agent

Front 481

party driveway

Back 481

two owners of adjoining lots share all/part of the same driveway to get to their houses

Front 482

party wall

Back 482

a single wall located on the lot line separating two parcels

Front 483

patent defect

Back 483

a defect that can be discovered as a result of a reasonable inspection

Front 484

PEGS

Back 484

The factors that incluence the real estate market can be broadly divided into Physical, Economical, Governmental, and Social factors (P-E-G-S).

Front 485

Penalties

Back 485

A lender who violates RESPA provisions may face rather stiff penalties of up to $10,000 and/or one year in prision. Kickback violations may result in treble damages, court costs and reasonable attorney fees.

Front 486

percentage lease

Back 486

normally for retail outlets; rent paid in proportion to gross sales of the leased retail establishment; base rent plus a percentage of gross sails

Front 487

percolation test

Back 487

test measuring how well land absorbs water in order to determine the design of a septic system

Front 488

personal property

Back 488

All property that is not land and is not permanently attached to land; everything that is movable; chattel.

Front 489

physical characteristics of real estate (3)

Back 489

HIT: Hetrogeneity, Immobility, Durability

Front 490

PITI

Back 490

A typical mortgage payment that includes: Principal, Interest, Taxes, and Insurance (PITI)

Front 491

Planned unit development (PUD)

Back 491

A zoning technique consisting of a mixed-use plan of commercial, indistrial, and residential uses; similar to a cluster zone. A devloper can locate shopping areas conveniently near residential areras…. a pre-planned development aimed at satisfying the various and viable needs of a community

Front 492

plat

Back 492

...A property map, recorded on the public record in plat books

Front 493

point of Permanent Reference

Back 493

used to establish the Point of Beginning; a reference which is unlikely to be removed

Front 494

Police Power (Dream)

Back 494

The right that each state has to pass laws designated to promote the health, safety and welfare of its citizens.

Front 495

Possessory Interest

Back 495

An interest in property that entitles the holder to possess and occupy the property, now or in the future; an estate, which may be either a freehold or leasehold.

Front 496

power of attorney

Back 496

legal document that authorizes a person to act on behalf of another as his/her attorney-in-fact

Front 497

Preliminary copy of the HUD-1 statement

Back 497

If the borrower requests it at least 24 hrs before the closing, it must be given to him.

Front 498

premises clause

Back 498

...The introductory information on a deed

Front 499

Premises liability and open houses

Back 499

Businesses often have the added duty of conducting periodic inspections for hazards in addition to warning of or removing them.

Front 500

prepaid expenses

Back 500

...Costs the seller pays in advance that were not fully used up (such as utility payments or property taxes due), shown as a credit to the seller and debit to the buyer

Front 501

prepayment penalty

Back 501

A financial charge imposed on a borrower for paying a mortgage prior to experation of the full mortgage terms.

Front 502

primary lender

Back 502

person you see face-to-face

Front 503

principal

Back 503

...(a) In the law of agency, one who appoints an agent to represent him or her. (b) Amount of money on which interest is paid or received

Front 504

Principal Base Line

Back 504

imaginary line running East-West; coincides with 8 Mile Rd. in Detroit

Front 505

Principal Meridian Line

Back 505

imaginary line running North-South; starts at the Sault Ste. Marie, runs perpendicular to Base Line

Front 506

priorities of liens

Back 506

an instrument that was recorded before another has priority over the latter

Front 507

private mortgage insurance (PMI)

Back 507

...A form of insurance coverage required in high loan-to-value ratio conventional loans to protect the lender in case the borrower defaults in loan payment.

Front 508

probate

Back 508

...The procedure for proving a will

Front 509

procuring cause

Back 509

the effort that an agent contributes that ultimately results in a sale

Front 510

Progression

Back 510

The value of a smaller property naturally increases if it is located near more expensive properties.

Front 511

prohibited acts of discrimination (9)

Back 511

advertising, preventing inspection; blockbusting/panic peddling; redlining; refusing to broker or appraise; accepting a listing knowing discrimination exists by the seller; denying membership; steering; retaliation acts

Front 512

Promissory Note

Back 512

A financing instrument that states the terms of the underlying obligation, is signed by its maker, and is negotiable (transferable to a third party).

Front 513

property description

Back 513

...An accurate legal description of land

Front 514

Property Management Specialist

Back 514

Awarded to those completing training courses designed to prepare licenses for entry into property management.

Front 515

proprietary lease

Back 515

given by the corporation to shareholders in the cooperative; NO individual deeds

Front 516

Proration

Back 516

The division of expenses between buyer and seller in proportion to the actual usage of the item represented by a particular expense. The process used to divide and then allocate part of a financial obligation to the seller and the purchaser. ALSO CALLED: Adjustment.

Front 517

protection clause

Back 517

in listing agreement; protects the listing broker in the event that a buyer who was found by the broker returns to purchase the property directly from the owner

Front 518

Puffing (Dream)

Back 518

Statements of opinion made during the sale process. As they are not intended to be represented as fact, not a fraud; i.e; most beautiful

Front 519

punitive damages

Back 519

...Court ordered awards for extremely bad behavior by a party; intended to punish and indicate that the behavior will not be tolerated

Front 520

Pur autre Vie estate

Back 520

A life estate based on the life of another, granted for the life of a third party other than the grantor and the present life tenant

Front 521

Purchase Money Mortgage

Back 521

A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing.

Front 522

Qualifying Appraisal

Back 522

Must be performed by a state-licensed or state-certified appraiser for any transaction that involves a federal loan.

Front 523

quarter-section

Back 523

...One-forth of a section, containing 160 acres

Front 524

Question of material defect

Back 524

Michigan law does not recognize stigmatized property situations as being a material defect

Front 525

quiet title action

Back 525

...To perfect the claim and obtain a title to the property, the claimant must satisfy the court that he or she has fulfilled the requirements of the adverse possession statute of Michigan

Front 526

quieting title suit

Back 526

court-ordered hearing held to determine land ownership

Front 527

quitclaim deed

Back 527

A deed of release that contains no warranty of title; used to remove a cloud on a title. A deed to relinquish or release a claim to real property.

Front 528

Range Lines

Back 528

imaginary lines running every 6 miles parallel to the Principal Meridian

Front 529

Real Estate Recovery Fund

Back 529

Used to satisfy unpaid judgments against real estate licensees for activities violating the license law that caused financial loss to the claimant.

Front 530

Real Estate Settlement Procedures Act (RESPA)

Back 530

A federal act designed to safeguard consumers who apply for federaly-related mortgage loans. It allows borrowers to compare lenders and make better-informed decisions about the closing process.

Front 531

real property

Back 531

The aggregate of rights, powers, and priveleges conveyed with ownership of real estate

Front 532

Real Property Administrator

Back 532

Awarded to those completing training courses offered by the Building Owners and Managers International, which is an independent institute affiliated with the Building Owners and Managers Association.

Front 533

reality of consent

Back 533

...Mutual agreement between the parties to a contract; meeting of the minds; to exist and be free of duress, fraud, undue influence, and misrepresentation.

Front 534

Realtist

Back 534

Any real estate licensee who is a member of the National Association of REALTORS. (NAR)

Front 535

Reciprocity

Back 535

The ability of the state department to give a real estate license to an applicant who received a real estate license in another state.

Front 536

recission

Back 536

the termination of a valid contract and returning to the "Status Quo"

Front 537

recordation

Back 537

Written registration of an owner's title in public records to protect against subsequent claimants.

Front 538

rectangular survey system

Back 538

A type of land descripton utilizing townships and sections

Front 539

redemption period

Back 539

time allowed to the mortgagor following sheriff sale to pay back the highest bidder to redeem property; 6 months in MI

Front 540

redlining

Back 540

The refusal of lending institutions to make loans for the purchase, construction, or repair of a dwelling because the area in which the dwelling is located is integrated or populated by minorities

Front 541

Referral Fees

Back 541

A fee paid by a realtor to a brokerage out of the area for a buyer listing

Front 542

Regression

Back 542

The value of a large, expensive property can be negatively affected if it is located in a location with smaller and older homes

Front 543

Regulation Z

Back 543

...Requirements issued by the Federal Reserve Board iin implementing the Truth-in-Lending Law, which is a part of the Federal Consumer Credit Protection Act.

Front 544

REITs

Back 544

Real Estate Investment Trusts (the what mutual funds are to stocks REITs are to mortgages, sort of)

Front 545

remainder

Back 545

A future interest in a life estate

Front 546

Reporting real estate transactions (IRS 1099-S)

Back 546

seller's proceeds from certain real estate transactions must be reportes to the IRS on form IRS on form 1099-S.

Front 547

Resale inspections

Back 547

Are increasingly being required of properties within municipalities prior to their resale. A real estate agent who lists and sales property in cities with resale inspections must not attempt to close a transaction unless the proper permits and clearances have been obtained.

Front 548

Residual Income

Back 548

The income a borrower has remaining after subtracting taxes, housing expenses, and all recurring debts and obligations (used for VA loan qualifying.)

Front 549

Resigned License

Back 549

The license status in which a license has been voluntarily and permanently surrendered to, or is otherwise in the possession of , the Division of Real Estate and Professional Licensing, is not renewed, and is not associated with a real estate broker.

Front 550

RESPA (Real Estate Settlement Procedures Act)

Back 550

regulates and standardizes real estate settlement practices when federally related; prohibits kickbacks; lender must give loan applicants "Settlement Costs and You" booklet within 3 business days

Front 551

RESPA information requirements

Back 551

must be met by lenders at the time a person applies for a loan or when the lender prepares a written application on the borrowers behalf.

Front 552

Restrictive Covenant

Back 552

A promise to do or not do an act relating to real property. especially a promise that runs with the land; usually the owners promise not to use the property in a specific manner.

Front 553

Retainer

Back 553

A fee paid to an agent in advance for representation instead of commission; usually if commission exceeds retainer, a refund would be issued.

Front 554

revenue stamps

Back 554

Tax on the conveyance of title to real property ($8.60 per 1000; $4.30 per half thousand) The $8.60 is split: $1.10 to county, $7.50 to state

Front 555

reverse annuity mortgage (RAM)

Back 555

...Mortgage allowing elderly homeowners to borrow against the equity in their homes to help meet living expenses...lender pays borrower (62+) a lump sum or periodic payments that do not have to be paid back unless the house is sold; insured by FHA

Front 556

reversion

Back 556

Return of title to the holder of a future interest, such as the grantor in a life estate not in remainder

Front 557

right of assignment

Back 557

Allows lender to sell mortgage at any time and obtain money invested rather than wait for completion of loan term.

Front 558

right of first refusal clause

Back 558

A statement in a lease or condominium articles of association that provides for a lessee or an association to have the first opportunity to purchase the property before it is offered to anyone else.

Front 559

right of inheritance

Back 559

The right for property to descend to the heirs of the owner as set out by will or by intestate succession.

Front 560

right of survivorship

Back 560

The right of an owner to recieve the title to an co-owner's share upon death of the co-owner, as in the case of joint tenancy and tenancy by the entirety.

Front 561

riparian rights

Back 561

rights enjoyed by land owners whose land is located next to rivers, streams, or inland lakes

Front 562

Roundtable Closing

Back 562

A closing conducted with all parties present.

Front 563

Rural Housing Service (RHS) Direct Loan Program

Back 563

...Provides financng for rural Americans with incomes below 80 percent of the median income level in the community where they live.

Front 564

Sales Comparison Approach (Market Data Approach)

Back 564

estimating value by using other comparable property (3-4) that has been recently sold in the same general area; best suited for preoccupied houses and vacant land

Front 565

Salesperson

Back 565

A licensed agent who is associated with a broker and may perform most of the acts of a broker on behalf of the broker.

Front 566

Savings Banks (S&L's)

Back 566

A major source of funds for financing residential real estate.

Front 567

secondary lender

Back 567

Sallie Mae, etc

Front 568

Secondary Mortgage Markets

Back 568

Government-sponsored enterprises that buy and sell real estate mortgages.

Front 569

section

Back 569

A one-mile-square area of land described by the rectangular survey system , consisting of 640 acres

Front 570

Security Instrument

Back 570

An instrument that gives a creditor the right to sell collateral to satisfy a debt if the debtor fails to pay according to the terms of the agreement.

Front 571

seller agency

Back 571

...Allows the broker employed to market the seller's property for a given period of time.

Front 572

Seller required title insurance

Back 572

A seller is prohibited from requiring a buyer to use a particular title insurance company. The buyer may sue a seller who violates this provision

Front 573

seller's affadavit

Back 573

statement declaring that the seller is not aware of any clouds that were not revealed during title search

Front 574

seller's disclosure statement

Back 574

...The form the seller completes to reveal any defects in the property (delivered within 72 hours of presentation of purchase agreement or 120 hours over a weekend). Good idea to leave a copy in the house with seller agent business card.

Front 575

Seller's Market

Back 575

Situation in the housing market where there are more buyers than sellers. This allows sellers to choose from a large number of buyers looking for property in a specific area.

Front 576

separate property

Back 576

Any property acquuired by one spouse during marriage by gift or inheritance or purchased with the separate funds of a husband or wife.

Front 577

service provision agreement

Back 577

listing agreement/buyer agency agreement

Front 578

Servicing Transfer Statement

Back 578

This is required if the origional loan servicer transfers the servicing rights to another servicer after the closing.

Front 579

servient estate (tenement)

Back 579

the property that is subject to/encumbered by the easement

Front 580

Setback requirements

Back 580

An ordinance regulating how closely a building can be located, typically to the front or side lot line.

Front 581

Settlement Statement

Back 581

A document that presents detailed accounting for a real estate transaction, listing each party's debits and credits and the amount each will receive or be required to pay at closing. ALSO CALLED: a closing statement or a HUD-1.

Front 582

severalty

Back 582

Ownership by only one person

Front 583

severalty (Estate in Severalty)

Back 583

ownership by one individual or an entity such as a corporation

Front 584

severance

Back 584

the act of detaching a fixture from real estate; becomes chattel again

Front 585

Sewage disposal perrmits

Back 585

Id the lot upon which an owner seeks to construct a residential dwelling is not connected to the municipal sewr system, a septic system is required. A percolation test is also conducted on the building site in connection with the issuance of a permit.

Front 586

shared appreciation mortgage (SAM)

Back 586

...One in which the lender shares in the appreciation in property value in return for making the loan at a fixed rate lower than the rate in effect at the time the loan is made

Front 587

Shelley v. Kraemer

Back 587

A white couple enters a racially restrictive covenant with a neighborhood. A black family, moved into this neighborhood. The white family brought it to court to enforce the contract and kept winning. Shelley appealed up to the Supreme Court. Racially restrictive covenants ruled to violate the 14th Amendment.

Front 588

sherriff's deed

Back 588

a deed issued to the buyer of property that was sold under court order to pay off a debt.

Front 589

silent fraud

Back 589

the act of withholding information regarding concealed property defects by the seller

Front 590

Single Agency

Back 590

An agent who is authorized by one principal to represent his interests on an exclusive basis. The single agent represents and act in the best interest of his principal.

Front 591

site condominium

Back 591

Condominium unit composed of only vacant land with surface improvements or with air space within which a building is to be constructed.

Front 592

Situs

Back 592

The latin term for location

Front 593

soil test

Back 593

...Assures the absence of hazardous materials or problems relating to regulations of the EPA.

Front 594

Special (limited) Warranty Deed

Back 594

The limited warranty deed limits the potential liability of the seller and does not hold him liable for any encumbrances against the property prior to his ownership.

Front 595

special agent

Back 595

An agent who is employed to conduct a single transaction or a series of transactions that, once completed, causes the agency to END; i.e; a real estate broker...principal authorizes agent to represent him/her in a specific matter and has given him/her certain limited authority to that effect

Front 596

Special use permits

Back 596

Most ordinances list certain uses that are exceoted from local zoning requirements such as hospitals, churches, private schools, and clubs. The uses are regulated in advance through a zoning ordinance that uses a case-by-case application.

Front 597

special warranty deed

Back 597

conveys title but guarantees only against claims arising out of the grantor's period of ownership

Front 598

specific lien

Back 598

applies against certain property only

Front 599

specific performance

Back 599

...A court instruction requiring a defaulting party to a contract to buy and sell real property to specifically perform his or her obligations under the contract

Front 600

Sphere of Influence

Back 600

People you know (and whom you can ask for referrals).

Front 601

Split Agent

Back 601

A licensee assigned by a broker to represent a buyer or seller in a transaction, usually in an in-company dual agency situation.

Front 602

Spot zoning

Back 602

A change in zonig of a small area to use that is inconsistent with the master plan for the region.

Front 603

Square Mile

Back 603

A measure of area that is one mile by one mile, an area of 640 acres.

Front 604

state tax

Back 604

paid by the seller to the state upon deed recording; $3.75 per $500

Front 605

State-wise in nature

Back 605

State-wide standards for new construction. It is enforced on a city, township, or county level by local building code offices.

Front 606

Statute of Frauds

Back 606

requires most real estate contracts to be in writing in order to be enforceable

Front 607

statutory lien

Back 607

lien provided by law (government)

Front 608

statutory redempton

Back 608

The borrower is granted the right to pay the debt plus accrued interst and costs in full after the foreclosure sale, and thereby recover the property

Front 609

Statutory Survivorship Tenancy

Back 609

Gives each co-tenant has an equal, undivided interest in real property and right of survivorship. Also called joint tenancy with the right of survivorship.

Front 610

steering

Back 610

The practice of directing prospective purchasers toward or away from certain neighborhoods to avoid altering the racial/ethnic makeup of these areas.

Front 611

Stigmatized property

Back 611

Properties that have had an event that causes a high psychological impact; i.e; murders, suicides, illegal drug activity. Does not have to be disclosed unless something like gunshots were actually fired into the home.

Front 612

stipulation

Back 612

The violations and fines or penalties, which the department and the licensee have agreed upon.

Front 613

Straw Dog

Back 613

An agent working for an unnamed third party buyer (usually a celebrity)

Front 614

strict foreclosure

Back 614

A proceeding in which a court gives a mortgagor in default a specified time period in which to satisfy the debt and thereby prevent transfer to the lender of the title to the mortgaged property.

Front 615

sub-lease clause

Back 615

prohibits tenant from sub-leasing without consent of landlord

Front 616

Subagent

Back 616

An agent of an agent; a person that an agent has delegated authority to, so that the subagent can assist in carrying out the principals orders.

Front 617

Subordination Clause

Back 617

A contract clause that gives a mortgage recorded at a later date the right to make priority over an earlier recorded mortgage.

Front 618

subprime mortgage

Back 618

a type of loan granted to individuals with poor credit histories

Front 619

subrogation clause

Back 619

clause in the title policy that allows the insurance company who pays a claim to seek reimbursement from the party who caused the loss

Front 620

subrogation of rights

Back 620

The substitution of the title insurance company in the place of the insured for filing a legal action.

Front 621

Survey

Back 621

The process of precisely measuring the boundaries and determining the area of a parcel of land.

Front 622

syndication

Back 622

Multiple joint participation in a real estate investment. May be a real estate trust, corporation, or partnership.

Front 623

tacking

Back 623

Occurs when the first adverse possessor transfers possession to another person who continues as an adverse possessor

Front 624

take-out loan

Back 624

...Permanent financing arranged to replace a shor-term construction loan.

Front 625

Telemarketing and :Do-not-call" registers

Back 625

A consumer can request that their name be added to the do not call list to prevent future telemarketers from calling them. You can not call anyone befor 8 am or after 9 pm (local conumers time).

Front 626

Tenancy in Common

Back 626

Ownership by two or more persons who hold undivided interest without right of survivor-ship; interests need not be equal.

Front 627

Tenants in Common

Back 627

may own equal or unequal interests; unity of possession; no right of survivorship

Front 628

term mortgage

Back 628

...One that requires the mortgagor to pay interest only during the mortgage term, with the principal due at the end of the term.

Front 629

term of real estate board

Back 629

4 years, no more than 2 consecutive terms

Front 630

testator/testatrix

Back 630

A man/woman who has died and left a valid will

Front 631

tester

Back 631

A person (or persons) employed by a fair housing organization to pose as a buyer or seller or renter of real estate to determine if the licensee or landlord is acting in compliance with the law.

Front 632

testimonium clause

Back 632

The portion of a deed that contains the grantor's and witnesses' signatures and the acknowledgment (notary).

Front 633

The fiduciary relationship

Back 633

The trust-related responsibilities that an agent owes to his principal

Front 634

The Housing and Community Development Act of 1974

Back 634

prohibits discrimination based on sex; requires use of an equal housing opportunity poster

Front 635

tier

Back 635

a line of townships running East-West

Front 636

time is of the essence

Back 636

...A phrase inserted into a contract declaring that each deadline in a contract must be met as it occurs

Front 637

time-shared ownership

Back 637

multiple owners; each owner is entitled to use the unit for a certain period of time throughout the year

Front 638

title insurance

Back 638

An insurance policy protecting the insured from a financial loss caused by a defect in a title to real property (Buyer buys for mortgage company for amount of mortgage; seller pays for buyer on full price of property).

Front 639

title search

Back 639

inspection of the chain of recorded instruments in order to get information about ownership and encumbrances

Front 640

Title VIII

Back 640

Another name for the Federal Fair Housing Act, which is Title VIII of the Civil Rights Act of 1968.

Front 641

Township

Back 641

A 6-by-6 mile area containing 36 sections each 1 mile square. A division of land in the rectangular survey method of land description.

Front 642

Township Lines

Back 642

imaginary lines running every 6 miles parallel to the Principal Base Line

Front 643

Trade Fixture

Back 643

Fixtures and equipment that may be attached to a building during a tenant's occupancy, with the intention that they be removed when the tenant leaves

Front 644

Transfer on Death Designation of Beneficiary Affidavit

Back 644

One present owner of the real property may designate one or more death beneficiaries and may also name contingent beneficiaries.

Front 645

transfer tax

Back 645

A tax imposed on the conveyance of title to real property by deed

Front 646

Trust Deed

Back 646

An instrument held by a third party as security for the payment of a note. Unlike a mortgage, a trust deed has a power of sale, allowing the trustee to foreclose non-judiciary. ALSO CALLED: Deed of Trust.

Front 647

trustee

Back 647

One who holds title to property for the benefit of another called a beneficiary

Front 648

trustor

Back 648

One who conveys title to trustee

Front 649

Truth in Lending (Regulation Z)

Back 649

requires lender to use the APR that includes all charges; lender must disclose all charges in advance; for residential 1-4 family dwelling; must advertise APR

Front 650

Truth-in-Lending Simplification and Reform Act (TILSRA)

Back 650

...Requirements issued by the Federal Reserve Board iin implementing the Truth-in-Lending Law, which is a part of the Federal Consumer Credit Protection Act

Front 651

Types of Agents (on test)

Back 651

The agent's employer (principal) is the one who decides the extent of the agent's authority (universal, general and special agents)

Front 652

types of deeds (3)

Back 652

warranty, quit claim, and judicial

Front 653

types of title policies

Back 653

owner's and lender's (mortgagee's)

Front 654

unconventional mortgage

Back 654

a mortgage obtained with the help of government insurance or guarantee

Front 655

underwriting

Back 655

...The act of reviewing loan documentation and evaluating borrower's ability and willingness to repay the loan and sufficiency of collateral value of the property.

Front 656

undue influence

Back 656

...Any improper or wrongful influence by one party over another whereby the will of a person is overpowered so that he or she is induced to act or prevented from acting according to free will.

Front 657

unenforceable contract

Back 657

...One that appears to meet the requirements for validity but would not be enforceable in court.

Front 658

Uniform Vendor and Purchaser's Risk Act

Back 658

...MI law stating that if the property is being destroyed, is partially destroyed, or is being taken by eminent domain, the buyer may, at the buyer's option, declare the transaction null and void.

Front 659

unilateral contract

Back 659

...An agreement wherein there is a promise in return for a specific action, which together supply the consideration (A deal entered into by both parties after one party has fulfilled a promise. e. g. an option)

Front 660

unities of ownership

Back 660

Time, title, interest, and possession; concurrent ownerships require at least one unity between co-owners.

Front 661

Universal agent

Back 661

An agent empowered to conduct every lawful transaction that a principal can delegate including the right to represent, negotiate, and sign contracts on behalf of his employer; i.e; a power of attorney. (Not us)

Front 662

Universal Exclusion (Dream)

Back 662

A principal residence for $250,000 or less ($500,000 or less for a married couple filing jointly). The seller must certify that the gain is excludable from gross income.

Front 663

Us of as is clauses

Back 663

Although a seller cannot totally escape liability, an as is clause may be useful in transferring liability among potentially responsible parties.

Front 664

Use zoning

Back 664

Uses are typically divided into one of the following categories: 1. Residential, 2. Commercial, 3. Industrial, 4. Agricultural

Front 665

USPAP (Dream)

Back 665

Uniform standard of professional appraisal practices

Front 666

usury laws

Back 666

laws limiting the legal interest rate a lender can charge the borrower; 25% in MI, 11% non-regulated

Front 667

VA guaranteed financing

Back 667

borrower must be a Veteran (or unmarried surviving spouse) with a certificate of eligibility; no down payment required; requires certificate of reasonable value and funding fee (premium); can be assumed by non-veterans with lender's approval

Front 668

Variance (Dream)

Back 668

A license or permission that an owner seeks to use a property in a way that varies from an existing zone. The variance passes with ownership.

Front 669

vendor's affidavit

Back 669

...Document signed under oath by vendor stating that vendor has not encumbered title to real estate without full disclosure to vendee.

Front 670

Veteran's Administration

Back 670

Administered by the federal government (but not through HUD). The VA guarantees mortgage loans for eligible veterans, even allowing them to buy a home with no down payment in some cases by guaranteeing repayment to lenders (up to a certain amount) in the event of default.

Front 671

Vicarious Liability

Back 671

Liability for one person that arises from the actions of another. A seller may be held liable for certain actions or statements made by his listing broker or subagent.

Front 672

void contract

Back 672

...An agreement that has no legal force or effect.

Front 673

voidable contract

Back 673

...An agreement that may be voided by the parties without legal consequences.

Front 674

voluntary alienation

Back 674

(e. g. Put on market, sell, done)

Front 675

Voluntary Hold on License

Back 675

The license status in which a license is in the possession of the Division of Real Estate and Professional Licensing for a period of not more than 12 months, is not renewed in accordance with the requirements specified, and is not associated with a real estate broker.

Front 676

Warranty Deed

Back 676

A deed in which the grantor makes formal assurance as to quality of title.

Front 677

ways to terminate a contract (8)

Back 677

performance; operation of the law; legal contingency; expiration; revocation (by offeror); rejection (by offeree); impossibility of performance

Front 678

ways to terminate an easement (4)

Back 678

merger, release, necessity no longer exists, lack of use

Front 679

ways to terminate lease (5)

Back 679

performance (expiration); mutual agreement (bilateral surrender); eviction; operation of the law; destruction of premises

Front 680

well and septic report

Back 680

...A report usually provided by a local municipality health department to determine the potability of water and to ascertain that the septic system is running free

Front 681

Women's Council of REALTORS (WCR)

Back 681

An organization devoted to addressing the issues, needs, and concerns of women in the real estate profession. Now affiliated with NAR.

Front 682

Words of Conveyance

Back 682

The type of deed offered by the grantor is communicated through a phrase such as "does hereby grant, bargain, sell and convey unto . . ." This clause is referred to as the "Words of Conveyance."

Front 683

writ of restitution

Back 683

authorizes sheriff to evict occupants because property is not redeemed and sheriff's deed vested title in new purchaser

Front 684

zoning

Back 684

the act of local governments to determine the use of certain properties

Front 685

zoning ordinance

Back 685

the law; the execution of police power of a local government in controlling zoning and use of property

Front 686

zoning variance

Back 686

allows the introduction of a non-conforming use