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174 Cards in this Set
- Front
- Back
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Licensee/sales associate |
Sales person working under a broker |
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Broker |
Licensed person who is the point of contact in negotiating a real estate deal |
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Appraisal/appraiser |
Process/person of developing an opinion of a property's market value - works for buyer |
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Brokerage |
The business of bringing people together in a real estate transaction. |
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Comps or comparisons |
Sale price of local comparative properties |
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Property manager |
Person or company hired to maintain and manage property |
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Financing |
Business of providing funds that make real estate transactions possible |
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Subdivision |
The dividing of a single property into smaller parcels. |
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Development |
The construction of improvements that benefit the land (especially subdivisions) |
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Home inspection |
People combine knowledge of real estate with construction trades; conducts visual survey and report - works for buyer |
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NAR |
National association of Realtors |
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Ethics |
System of moral principles |
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Code of Ethics |
Written system of standards for ethical conduct |
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Name 6 types of property |
Residential commercial mixed use, special purpose, industrial, agricultural |
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Name three types of housing |
Single family, condo, apartment, PUD, MUD |
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Market |
Place where things are bought and sold |
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Supply and demand |
Quantity vs buyers |
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Affect of supply and demand |
Supply low, demand high, prices up. Supply high, demand low, prices down. |
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Factors affecting supply |
Cost of building, govt control and financial policies, local govt |
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Factors affecting demand |
Population, demographics, employment and wages |
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Factor that most affects supply |
Government monetary policy |
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Factor most likely to affect demand |
Wage levels and employment opportunities |
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Realtor |
A real estate licensee and member of NARS |
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Real Estate is made up of |
small businesses |
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Laws for real estate are made by this jurisdiction. |
the state or province |
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the purpose of real estate laws are |
to protect the public by making standards |
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real estate laws govern |
the activities of us, the licensees |
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"Brokerage" is simply the |
business of bringing parties together |
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A real estate broker is licensed to |
buy, sell, exchange, or lease real property for others and charge a fee for that service |
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A broker also has to |
handle the demands of running a small business |
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The sales associate, or licensee performs real estate activities on behalf of |
the licensed real estate broker |
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a broker who employs sales associates, or licensees is called an |
employing broker |
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the sales associate receives compensation only from |
that broker |
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A managing or supervising broker |
manages the sales associates or licensees in that brokerage. |
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Sales associates can work as |
independent contractors or employees see page 135 for more details |
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A real estate assistant works for |
the sales associate. Different laws apply to different states as to licensing and tasks permitted to be performed p136 |
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broker's compensation |
is determined by contract with the client. It may be a commission, a flat fee, or an hourly rate. p136 |
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MLS stands for |
multiple listing service |
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the purpose of the mls |
is to provide many professionals the ability to view the houses on the market last paragraph on page 136 is confusing |
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the commission is earned when |
the transaction is complete |
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to receive compensation from a real estate sales transaction, an individual must meet these criteria. |
be a licensed broker, be employed by a party under a contract, be the procuring cause of the sale |
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a procuring cause of the sale is the person who |
is responsible for a series of events that lead to the sale. |
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A ready, willing, and able buyer is one who |
is prepared to buy and taking positive steps toward the completion of the transaction |
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Sales associate, or licensee compensation is determined |
by mutual agreement between the broker and the sales associate. There are many ways the compensation can be determined - see page 138 |
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the formula for determining the amount of a flat rate commission is |
the amount of the sale, multiplied by the percentage of the commission. There are many ways this can be split, such as multiple levels p 138 |
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Bundling and un-bundling services allow the real estate professional to |
meet the needs of all clients. p139 |
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the Minimum Level of Service is determined by |
state law. p139 |
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FSBO stands for |
For Sale By Owner |
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The Real Estate industry is also governed by these federal laws |
The Sherman Antitrust Act |
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Price-Fixing |
practice where competitors agree to set prices p140 |
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Group boycott occurs when |
two or more businesses conspire against another business. Also illegal under anti trust laws p141 |
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When brokers conspire to divide their markets and avoid competing, they are breaking these laws |
Anti-trust |
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Allocation of markets breaks these laws. |
Anti-trust |
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Tie in or tying agreements are |
illegal agreements to force the client to buy two things tied together, such as both managing the purchase AND the sale of a home. p141 |
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Penalties of violating anti-trust are as much as |
$1 million fine and ten years in jail p 141 |
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An individual who has suffered an anti-trust violation may be entitled to |
three times the actual damage sustained. |
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Internet listing services will have ________ on their pages stating that the information is not guaranteed. |
Disclaimers |
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technology has _________________ the real estate business. |
revolutionized. p 143 |
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E-signing is |
when you can sign a document over the internet without scanning. |
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e-signing is controlled by |
federal law p 145 |
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Consumers are protected from receiving unwanted phone calls by |
the do-not-call law, managed by the federal trade commission p 145 |
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COPPA is a law |
protecting children from having their information gathered online. p 145 |
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We can find consolidated information from each chapter in the section called |
Key Point Review, otherwise known as the Cliff Notes. |
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An Exclusive Right-to-Sell Listing is when |
One authorized broker receives a commission no matter who sells the property. P. 176 |
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The most usual type of listing is |
an exclusive right-to-sell listing p 176 |
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In an Exclusive AGENCY listing, the buyer retains the right to |
sell the property themselves without paying the broker. |
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in an Open Listing, the seller retains the right to use . .. |
many brokers as listing agents. p 177 |
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In a Net Listing, the seller receives a set amount from the sale, with the broker retaining the remaining amount. this is _______ in Maryland and many other states. |
illegal. p 17 |
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The MLS is |
the Multiple Listing Service, which gives members of the MLS the right to make their listings available as well as access other broker's listings. |
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Termination of Seller Representation is when |
a seller decides that the broker is not doing a good job for them. p 178 |
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Expiration of a Listing Period is when |
the defined period as specified in the contract for selling the house has expired and the relationship between client and broker is dissolved. p 179 |
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A CMA is |
a Comparitive Market Analysis. Having this at an initial meeting with a new selling client is a great marketing move, showing your preparation. p 179 |
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Disclosures to the client let the client know |
with whom they are making the contract and whose interests they legally represent. p 181 |
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The listing contract allows |
the broker (or sales associate) to list the property. P 181 |
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The listing contract must be |
explained to the client in order to have full disclosure. p 181 |
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Listing agreements must include |
21 individual provisions as described on pages 186-187. These are similar in all states. |
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to determine a commission, the formula is |
sales price times percent of commission equals commission. p 187 |
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to determine a sales price given the commission percent and amount, the formula is |
Commission amount divided by commission percent to determine sales price p187 |
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to calculate a commission rate given the commission amount and the sales price, the formula is |
commission amount divided by sales price to determine commission rate p187 |
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To calculate the net to the seller given the sales price and commission rate, the formula is |
multiply the sales price by the difference between 100% and the commission rate to get the net to the seller amount. p 187 |
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In general, the formula for determining commission, sales price and commission rate is |
commission amount divided by sales price times commission rate. p 187 |
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Real property is defined as anything that is |
connected to the house or property, such as a shed or a lighting fixture. |
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personal property is defined as anything that is |
not connected to the property, such as books, non-built in furniture, and your dog. p 187 |
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A closing is |
the meeting for ratifying the contract, with all details of the sale come together. p 187 |
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Encumberances are |
any liens that may be in place against the property. These have to be paid by the seller or assumed by the buyer. p 188 |
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A buyer representation agreement is |
a contract employing the broker or sales associate to work for the buyer in the acquisition of a property. |
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A broker acting as the agent of the buyer must |
protect the buyer's interests at all times during the transaction |
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A nonexclusive representation |
is when more than one broker is representing a client. |
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When creating a Buyer Representation Agreement, a sales associate must |
explain the terms, types of representation, disclose any necessary information, and define the relationship p 189 |
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In termination of Buyer Representation, the agreement can be terminated by |
either side, and either side could be held liable for breach of contract. p 191 |
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A lien is |
an encumberance, but not all encumberances are liens p 222 |
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An encumberance |
is any charge or claim that attaches to real property and lessens its value. A lien is one example. |
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There are four types of liens that follow the acronym VISE - like putting the property in a vise that holds it and prevents it being used. |
V- voluntary - created intentionally like a mortgage I - involuntary - created by law S - statutory - created by statute - tax lien E - equitable - common law - unpaid charge account chart on page 223 shows liens |
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General liens affect |
all property, both real and personal, of a debtor. A loan is made with the property as collateral, creating a lien. |
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Specific liens affect |
the title of a property, not the property owner, so can be sold with the property, although not many buyers would buy a property so emcumbered. |
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The purpose of a title search is |
to discover any liens against the property that a buyer would want to know about. |
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Liens have levels called subordinations - for example . . . |
a primary lien would have first rights to the sale of the property to satisfy the lien. |
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One type of lien has priority over all others and that is |
local and state taxes will be satisfied before all other liens, no matter what their order is. |
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Ad Valorem means |
according to value, which is how property taxes are taxed. p 225 |
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Property taxes pay for a wide array of services and programs such as |
states, counties, towns, cities, schools, hospitals, water, sanitation, transportation and parks. |
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Some real estate is exempt from taxes such as |
cities, schools, parks, playgrounds, state and federal governments, religious organizations, hospitals, educational institutions. |
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Assessment is the |
valuation of property for tax purposes |
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Tax rates are decided in three ways with equal endings. |
a mill - .032 of a dollar a mills per dollar ratio - 3.2% or $32 of $1,000, all of assessed value p 226 |
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A tax sale is |
where a property is sold for non-payment of back taxes or another lien, such as a water bill. p 227 |
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The statutory right of redemtion is |
the owners right to pay the tax and any fees to reclaim his or her property. p227 |
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A mortgage lien is a |
voluntary lien put on the property so the owner can borrow the money to buy the property. |
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A mechanic's lien is placed on a property for |
nonpayment of work on the house; to a contractor or sub-contractor. |
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A judgement is |
when a decree is issued by a court placing a lien on a property. |
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A writ of execution is |
an order from a judge that all real and personal property will be taken and sold to satisfy the lien. |
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Liz Pendens is the |
condition of a property title when there is a delay in the court proceedings. Basically that there is a court case affecting the property, such as foreclosure proceedings P230 |
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Lien for municipal utilities and local government can be placed on a property for |
non-payment of municipal utility services |
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IRS tax liens can be |
put on property, but have a lower priority as compared to other liens. The order is based on when it was filed. |
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Ownership in severality means |
that the property is owned by one person or other entity. (Severed from others) |
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TIC, or tenancy in common |
where two or more people own shares in ownership. One person dies and their ownership goes to their heirs p 73 for overview chart |
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Joint tenancy |
two or more people own a property. if one dies, the shares go to the other owner. p 73 for overview chart |
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To create a joint tenancy, four elements are needed (PITT) |
P - unity of possession - each jt owns an undivided right to possession I - unity of interest - each jt owns an equal interest T - time - all jt acquire their interest at the same time T - title - all JT acquire their interests by the same document p 73 for overview chart |
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Termination of Co-Ownership by Partition Suit |
to dissolve the relationship between co-owners of real estate when they don't agree.
The court will order the property sold if there is no way to divide the property.
p 73 for overview chart |
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Ownership by married couples, or entirety |
the married couple is considered as one legal person, so the surviving spouse inherits the whole property
p 73 for overview chart |
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Community property rights |
Some states recognize community property, while others recognize separate property between spouses. p 73 for overview chart |
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A trust |
a device where ownership can be transfered to someone else to be held for a third party, for example, holding education money or property for a child. |
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Living trusts |
trust created during the person's lifetime to perserve wealth p 73 |
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Testamentary trusts |
trust created after a person's death from instructions in the will.
p 73 |
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Land trusts |
has real estate as its only asset. The trustee takes care of the land for the benefit of the beneficiary. p 74 |
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Partnership |
two or more people in a business association can own land jointly |
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Corporation |
a legal entitiy managed by a board of directors that can buy and sell real estate on behalf of the corporation p75 |
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Limited Liability Company (LLC) |
a different type of organization with many benefits over a corporation or partnership p 75 |
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Condominium |
Owner owns a unit, as well as a share in the common areas such as stairs, roof, etc. p 76 for chart |
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HOA |
Home Owners Association - group of condo owners that create and enforce rules on the condo owners. p 77 |
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Cooperative ownership |
a corporation owns title, then sells shares of stock to people who want to live there, giving the people a proprietary lease to a unit. p 78 |
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Time-share ownership |
Usually used with resort properties, it allows a purchaser the right to occupy the facility for a certain time period p 79 |
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Model Real Estate Time-Share Act |
has been adopted by states to manage and terminate time-share units p 79 |
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Title |
the right to or ownership of the land - it is a concept, the deed is the physical document |
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Transfer of real estate can be |
voluntarily by sale or gift involuntarily by operation of law |
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voluntary alienation |
legal term for the transfer of title |
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deed |
document by which an owner of real estate conveys the right, title or interest owned in the parcel of real estate to someone else deed must be in writing |
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grantor |
person who transfers the property; the previous owner |
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grantee |
person who receives the property |
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word ends with "or" |
the person giving the right |
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word ends with "ee" |
person receiving the right |
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dedication |
is where property is donated tto a goverment organization, often for a park |
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Elements for valid deed page 103 |
grantor has legal competency to execute grantee is named statement of consideration granting clause (words of conveyance habendum clause, defines ownership rights legal description of the property notorization of the signature of the grantor delivery of the deed being clause - reference to previous deed |
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transfer title is complete when |
the delivery and accptance is completed |
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habendum clause |
"to have and to hold", explains what is being conveyed, for example, a time-share clause |
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General warrenty deed includes |
covenant of seisin covenant against encumbrances covenant of further assurances covenant of quiet enjoyment covenant of warrenty forever p106 |
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covenant of seisen |
grantor warrents that he or she owns the property and has the right to convey title to it |
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covenent against encumbrances |
property is free from liens or encumbrances, except for any specifically stated |
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covenant of further assurances |
grantor promist ot obtain and deliver any instrument needed to make the title good |
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covenant of quiet enjoyment |
guarantees that the title will be good against any third party |
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covenant of warrenty forever |
grantor promises to compensate the grantee if the title ever fails |
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Special warrenty deed |
grantor received title and the property was not encumbered during the time the grantor held title |
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bargain and sale deed |
contains no express warranties against encumbrances does imply that the grantor hold title and possession of the property warranty is not specifically stated |
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Quitclaim deed |
provides the grantee with the least protection of any deed carries no covenants or warranties conveys only whatever interest the grantor may have p107 |
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Corrections deed or deed or deed of confirmation |
corrects an error in a previous deed, such as an incorrect property description |
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Deed in trust |
means of conveying title from a trustor to a trustee |
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reconveyance deed |
means of conveying title from trustee back to trustor |
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trustee's deed |
executed by a trustee used to convey title from a trustee to a third party must be in accordance with the powers and authority granted by the trust instrument |
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Deed executed pursuant to a court order |
for sheriff's sale or foreclosure established by state statute lists the actual sale price |
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state transfer tax |
when real estate changes hands, usually payable when the deed is recorded can be paid by seller split 50/50 between seller and buyer |
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involuntary alienation |
transferred without the owner's consent person dies intestate; no heirs found eminent domain foreclosure adverse possession p 110 |
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adverse possession |
ONCHA open - obvious notorious - known by others continuous - uninterrupted hostile - without the true owner's consent adverse - against the true owner's right of possession |
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Testate |
dies with a will |
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intestate |
dies without a will p 111 |
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Devise |
a gift of real property by will |
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devisor |
person who leaves the property |
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devisee |
person who gets the property |
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bequest or legacy |
the gift of personal property |
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legator |
person who leaves the property |
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legatee |
person who receives the property |
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handwritten will |
holographic |
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codicil |
change in a property |
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escheats |
if dies with no will, no heirs, and escheats means the property goes to the government |
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in case of escheats, |
distribution of property is by statutory distribution, according to law. primary heirs are first; other blood relatives p 113 |
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Probate |
probate is the filing of the will with the county in which the decedent (dead person) last resided |
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executor, personal representative, or administrator |
all terms used to describe person in charge of the will |
