National Real Estate Exam Prep

Front 1

ECOA - Equal Credit Opportunity Act

Back 1

Law designed to prevent discrimination due to age in lending. Remember, MapCorners

M - Marital Status

A - Age

P - Public Assistance (Social Security Disability)

C - Color

O - Opportunity (Equal Opportunity)

R - Race

N - National Origin

E - Equal (Equal Opportunity)

R - Religion

S - Sex

Hint 1

Law designed to prevent discrimination due to age in lending.Remember: MapCorners

Front 2

Capitalization

Back 2

mathematical process for estimating the value of a property using a proper rate of return on the investment and the annual Net Operating Income expected to be produced by the property.

Hint 2

Net Operating Income (NOI)

Income / by rate = value (IRV) - circle formula.

Front 3

Administrative Law

Back 3

Rules and regulations created by real estate commissions and departments, as authorized by the legislature.

Front 4

Common Law

Back 4

The rules established by tradition and court decisions.

Front 5

Purchase Money Mortgage

Back 5

When a seller extends credit to a buyer to finance the purchase of the property, accepting a mortgage in stead of cash.

Hint 5

Conveys title

Front 6

Gross Lease

Back 6

A lease of property according to which a landlord pays all property charges regularly incurred through ownership, such as repairs, taxes, insurance, and operating expenses. Most residential leases are gross leases.

Hint 6

1) It's stable

2) Most residential leases are this type of lease.

Front 7

Title Unities

Back 7

P - possession

I - Interest

T - Time

T - Title

Hint 7

Hint: there are four of theseThink Brad Pitt

Front 8

Capitalization Rate

Back 8

Determined by comparing the relationship of net operating income with the sales prices of similar property that have sold in the current market.

Hint 8

Hint: It expresses the return an income property will produce

Front 9

A Specific Lien. Secured by specific property and affect only that particular property

Back 9

A Specific Lien. Secured by specific property and affect only that particular property

Front 10

A General Lien covers all of debtors property

Hint: A lien that attaches to all real and personal property until full payment is made.

Back 10

A General Lien covers all of debtors property

Hint: A lien that attaches to all real and personal property until full payment is made.

Front 11

Market Value is the value which reflects what buyers and sellers feel is a fair price.

Back 11

Market Value is the value which reflects what buyers and sellers feel is a fair price.

Front 12

Revocable right of use is a license that is a revocable right of use and is not an encumbrance

Back 12

Revocable right of use is a license that is a revocable right of use and is not an encumbrance

Front 13

An encumbrance is anything - such as a mortgage, tax, or judgment lien; an easement; a restriction on the use of the land; or an outstanding dower right - that may diminish the value or use and enjoyment of a property is an encumbrance

Back 13

An encumbrance is anything - such as a mortgage, tax, or judgment lien; an easement; a restriction on the use of the land; or an outstanding dower right - that may diminish the value or use and enjoyment of a property is an encumbrance

Front 14

Term (straight) Loan

Hint: Interest Only Loan

Back 14

A term (straight) loan are where periodic payments are made on interest only.

The entire original principal will come due at the end of the term of the loan.

Front 15

Estate for years is a rental tenancy that will expire on a fixed date

Back 15

Estate for years is a rental tenancy that will expire on a fixed date

Front 16

if the increase in value of the real estate is more than the cost to renovate, the sellers would financially benefit by doing the renovation. This is an example of the appraisal principal of contribution.

Back 16

if the increase in value of the real estate is more than the cost to renovate, the sellers would financially benefit by doing the renovation. This is an example of the appraisal principal of contribution.

Front 17

A standard title search would reveal all of the parties in possession.

Back 17

Title searches use public records to find all items that have been recorded. Items that are typically recorded are tax liens, deed restrictions, easements, and mortgages. The parties in possession of the property would be found through a physical inspection of the property.

Front 18

Variance is permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances

Back 18

Variance is permission obtained from zoning authorities to build a structure or conduct a use that is expressly prohibited by the current zoning laws; an exception from the zoning ordinances

Front 19

Fair Housing Act.

The federal law that prohibits discrimination in housing based on race, color, religion, sex, disability, familial status and national origin.

Back 19

Fair Housing Act.The federal law that prohibits discrimination in housing based on race, color, religion, sex, disability, familial status and national origin.

Front 20

An act that prohibits racial discrimination in the sale and rental of housing

Back 20

Civil Rights Act of 1866

Front 21

Regulation to a lesser position, usually in respect to a right or security

Back 21

Subordination

Hint 21

This agreement can change the priority of mortgage liens.

Starts with a "C"

Front 22

A provision in the mortgage stating that the entire balance of the note is immediately due and payable if the mortgagor transfers (sells) the property.

Requires full payment on transfer of title.

Back 22

Due-On-Sale-Clause

Hint 22

Requires full payment on transfer of title.

Front 23

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

Back 23

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

Hint 23

Transferable to a third party

Front 24

Charging interest in excess of the maximum rate allowed by law.

Back 24

Usury

Hint 24

This law is set at the state level

Front 25

CFPB

Back 25

Consumer Financial Protection Bureau

Front 26

Debt service is the cash that is required for a particular time period to cover the repayment of interest and principal on a debt. Debt service is often calculated on a yearly basis.

Back 26

Debt Service

Hint 26

Debt service is the cash that is required for a particular time period to cover the repayment of interest and principal on a debt. Debt service is often calculated on a yearly basis.

Front 27

Covers both personal and real property

Back 27

Package Mortgage

Hint 27

Covers both personal and real property

Front 28

Seller holds the deed until the last payment has been made

Back 28

Contract for deed

Hint 28

Seller holds the deed until the last payment has been made

Front 29

A mortgage that has no government insurance or guarantee

Back 29

Conventional mortgage

Hint 29

A mortgage that has no government insurance or guarantee

Front 30

Most likely found in a blanket mortgage.

This clause permits the borrower to obtain the release of any one lot or parcel from the blanket lien by repaying a certain amount of the loan.

Back 30

Partial Release Clause

Hint 30

A partial release clause is an agreement between the commercial lender and the borrower whereby a mortgage that blankets two or more parcels will be released from a particular parcel upon the payment to the commercial lender of a previously-agreed amount of money.

Front 31

A construction loan is an example of "_______" financing

Back 31

Interim financing

Hint 31

Also known as take-out

Front 32

For a seller's agent who must treat the buyers as customers, which form would the seller's agent use to create a customer relationship?

Back 32

Brokerage Disclosure to Buyer

Hint 32

The answer is brokerage disclosure to buyer. To create a customer relationship in Colorado, the Brokerage Disclosure to Buyer or Seller form must be signed. Because the agent represents the seller in this question, the Disclosure to Buyer form would be used. The other forms would not be appropriate for this function.

Front 33

To be in compliance with Conway-Bogue, a Colorado broker must do all of the following EXCEPT

Back 33

Give a written disclosure before accepting any confidential information.

Hint 33

The answer is give a written disclosure before accepting any confidential information. Conway-Bogue requires brokers to have a connection to the transaction, not charge a separate fee for completing legal documents, and use only standard or approved documents unless an attorney prepares them for a party to the transaction. The broker is required to give a written disclosure prior to accepting any confidential information under Rule E-35, not Conway-Bogue.

Front 34

The Closing Instructions form

Back 34

is an agreement between the seller, the buyer, and the title company.

Hint 34

The Closing Instructions form is an agreement between the seller, the buyer, and the title company. It should be delivered with the earnest money if possible and must be delivered with the earnest money if a title company is holding the funds.

Front 35

Straight line depreciation is the Improvement Value divided by the number of years the improvement is expected to last. This will give you the annual straight line depreciation.

Back 35

Straight line depreciation is the Improvement Value divided by the number of years the improvement is expected to last. This will give you the annual straight line depreciation.

Front 36

The Real Property Transfer Declaration - TD 1000 provides essential information to the county assessor to help ensurefair and uniform assessments for all property for property tax purposes.

Back 36

The Real Property Transfer Declaration - TD 1000 provides essential information to the county assessor to help ensure fair and uniform assessments for all property for property tax purposes.

Front 37

Substitution is the most important principal in appraisal. It is the basis of the sales comparison approach and is used in all three approaches (Sales comparison / market data approach, Cost approach, Income approach)

- In real estate the (like any commodity) the lowest price with the highest value will sell first.

- The buyer considers the cost of acquiring an equally desirable substitute that meets the same criteria of time, function and utility.

- To be accurate, all approaches to value must consider what the market will pay.

Back 37

Substitution is the most important principal in appraisal. It is the basis of the sales comparison approach and is used in all three approaches (Sales comparison / market data approach, Cost approach, Income approach)- In real estate the (like any commodity) the lowest price with the highest value will sell first. - The buyer considers the cost of acquiring an equally desirable substitute that meets the same criteria of time, function and utility.- To be accurate, all approaches to value must consider what the market will pay.