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88 Cards in this Set
- Front
- Back
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What exactly is a contract?
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(notes)
A contract is a legally enforceable agreement between two or more people to do or not to do something. |
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What are the FIVE necessitys for a legal contract to exist?
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1) Offer
2) Acceptance of the offer of the terms 3) Consideration 4) Capisity 5) Legality |
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Bob agrees to mow Mr. Jones lawn for 10.00. Mr. Jones will pay him after he mows the lawn.
What type of Contract Exists? |
UNILATERAL
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In the lawn mowing contract with Bob and Mr. Jones, Bob never mows the lawn.Does Mr. Jones owe him for the contract? Why?
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NO
Because the PERFORMANCE was never completed therefore he is not required to pay the cost. |
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Real Estate Agreements are usually what type of contracts?
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BI-LATERAL
PROMISE FOR A PROMISE SELL YOUR HOME----PAY ME COMMISSION |
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I have a contract that is in writing, all the terms are clear, and there are dates of expiration..
What type of contract do I have? |
EXPRESS CONTRACT
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Mary brings her Realtor friend to an open house, though they have no agreement in writing, she introduces her friend to the owner as her "agent" why could a contract be assumed in the future?
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BECAUSE OF IMPLIED AGENCY OR IMPLIED CONTRACT..
HER ACTIONS LED BOTH PARTIES TO ASSUME AN AGENCY EXISTED. |
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What are the general rules for a contract to be in writing?
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1) Real Estate
2) Contracts over 750.00 3) Contract that will exist for over one year. ( lease, mortgage etc.) |
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98% of contracts are what type of contract?
Formal or Informal |
Informal
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My purchase of my home is finished. All funds are transfered, the title is recored. All releases are signed.
1) Can I cancel this contract? Why? |
NO
It is an EXECUTED Contract |
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When an owner uses a property as security for a loan, but does not give up possession this is called ________.
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HYPOTHECATION
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A netural third party is part of what?(filing the..)
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TRUST DEED (TITLE)
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In a trust deed, who is the trustor?
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THE BORROWER
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Who owns bare legal title to a property encumbered by a trust deed?( who usually is this party)
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THE TRUSTEE(the trustee is usually the title company who has a duty to the bank or loan agency)
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The purpose of a reconveyance deed is what?
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TO DEED THE PROPERTY TO THE BORROWER AFTER A NOTE SECURED BY THE DEED HAS BEEN PAID IN FULL.
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An "or more" clause allows what in a loan?
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TO PAY OFF LOAN EARLY WITH NO PENALTY/
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Someone who buys an existing negotiable note is known as:
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THE HOLDER IN DUE COURSE( taken usually for consideration in good faith that loan is current and in good standing)
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What is the remedy for default of payment on a "note"
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FORECLOSURE
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Who must sign the reconveyance deed?
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THE TRUSTEE
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The promissory note is the ______ of the debt and the trust deed is the ______ for the debt.
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1) EVIDENCE2) SECURITY
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When a person uses the lender's money to purchase a home, this is known as _____
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LEVERAGE
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What are the requirements of a Promissory Note? (6)
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1) Writting2) Legal Capisity to Contract3) Signed by Borrower4) Payable on demand at a given time5) Paid to bearer6) Voluntarity delivered by borrower
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An interest only note is referred to as an _______ note.
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STRAIGHT
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A payment that includes periodic payments that are FIXED and include both principal and interest are ______________ Notes.
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FULLY AMORTIZED INSTALLMENT NOTES
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A Note where the interest can change up or down on the term of the loan.
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ADJUSTABLE NOTE( Known as a ARM Adjustable Rate Mortgage)
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The parties of a trust deed include:
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1) Trustor: BORROWER2) Trustee: Neutral Party holds the title32) BENEFICIARY: Lender: Holds note
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The fact that the "owner" has the rights to all increase of equity in the property is known as:
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EQUITABLE TITLE
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A ____________ is a judgement against a borrower for the unpaid amount and interest of a loan when a borrower defaults on a loan.
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DEFICIENCY JUDGEMENT
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If the borrower can get their loan payment up to date within FIVE days of the trusee sale, this causes ___________ of the loan to occur.
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REINSTATEMENT( loan continues as if there were no laspes, though credit may be damaged for showing 60 or 90 day late payments)
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In California, most loans pass through a _______ deed.
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TRUST DEED*Easier forclosure process. Trusee holds title which makes things faster and easier in case of default.
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When a party is behind in loan payments, what NOTICE must be filed to begin the forclosue process?
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NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED OF TRUST
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What is the time frame for forclosure from start to finish ( minimum)
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THREE MONTHS AND 21 DAYS( three months for Notice to satisfy the loan..20 days after the notice is served)
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When an owner uses a property as security for a loan, but does not give up possession this is called ________.
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HYPOTHECATION
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A netural third party is part of what?(filing the..)
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TRUST DEED (TITLE)
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In a trust deed, who is the trustor?
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THE BORROWER
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Who owns bare legal title to a property encumbered by a trust deed?( who usually is this party)
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THE TRUSTEE(the trustee is usually the title company who has a duty to the bank or loan agency)
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The purpose of a reconveyance deed is what?
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TO DEED THE PROPERTY TO THE BORROWER AFTER A NOTE SECURED BY THE DEED HAS BEEN PAID IN FULL.
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An "or more" clause allows what in a loan?
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TO PAY OFF LOAN EARLY WITH NO PENALTY/
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Someone who buys an existing negotiable note is known as:
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THE HOLDER IN DUE COURSE( taken usually for consideration in good faith that loan is current and in good standing)
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What is the remedy for default of payment on a "note"
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FORECLOSURE
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Who must sign the reconveyance deed?
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THE TRUSTEE
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The promissory note is the ______ of the debt and the trust deed is the ______ for the debt.
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1) EVIDENCE2) SECURITY
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When a person uses the lender's money to purchase a home, this is known as _____
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LEVERAGE
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What are the requirements of a Promissory Note? (6)
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1) Writting2) Legal Capisity to Contract3) Signed by Borrower4) Payable on demand at a given time5) Paid to bearer6) Voluntarity delivered by borrower
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An interest only note is referred to as an _______ note.
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STRAIGHT
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A payment that includes periodic payments that are FIXED and include both principal and interest are ______________ Notes.
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FULLY AMORTIZED INSTALLMENT NOTES
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A Note where the interest can change up or down on the term of the loan.
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ADJUSTABLE NOTE( Known as a ARM Adjustable Rate Mortgage)
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The parties of a trust deed include:
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1) Trustor: BORROWER2) Trustee: Neutral Party holds the title32) BENEFICIARY: Lender: Holds note
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The fact that the "owner" has the rights to all increase of equity in the property is known as:
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EQUITABLE TITLE
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A ____________ is a judgement against a borrower for the unpaid amount and interest of a loan when a borrower defaults on a loan.
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DEFICIENCY JUDGEMENT
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If the borrower can get their loan payment up to date within FIVE days of the trusee sale, this causes ___________ of the loan to occur.
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REINSTATEMENT( loan continues as if there were no laspes, though credit may be damaged for showing 60 or 90 day late payments)
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In California, most loans pass through a _______ deed.
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TRUST DEED*Easier forclosure process. Trusee holds title which makes things faster and easier in case of default.
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When a party is behind in loan payments, what NOTICE must be filed to begin the forclosue process?
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NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED OF TRUST
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What is the time frame for forclosure from start to finish ( minimum)
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THREE MONTHS AND 21 DAYS( three months for Notice to satisfy the loan..20 days after the notice is served)
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Interest Rate Formula |
I=PRT Principal, rate, time |
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PITI |
Mortgage Payment =Principal, interest, tax, and insurance |
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Appurtenant |
Pertaining to something that attaches. Any right or restriction which goes on property. I.E. easement to gain access to, across neighbors |
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Disintermediation |
To remove the middle man such as banks, to invest directly |
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Installment Contract |
Where seller keeps title but buyer takes possesion while making payments |
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Back End Ratio |
Portion of income that goes towards paying off debts (debts made by PITI and other dues) Total monthly debt/gross monthly income * 100 = Back end % |
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Deed Restriction |
Private agreement that government uses land |
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Novation |
Subsatition of a new contract for an old one |
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Freehold Estates |
An estate in which ownership is for an udefined length of time - Less than freehold is estate by one who rents or leases |
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Chattels |
Article of Personal Property |
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Statutory Estates |
Includes Dower, Gives right to wife in husbands property. Dower and community property give spouse 1/2 interest in property |
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Life Estates |
Conveys an estate for duration of someones life. Someone must receive estate upon term |
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Easement |
Right to use land of someone's for a specific purpose, such as a right of way or utilites |
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Covenant |
Written agreement where one party pledges to do or not to do regards to property Agreement |
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Conveyance |
A written instrument such as a deed or lease that transfers legal title of property from seller to buyer written contract w/ purchase $, date of actual transfer, obligations and responsibility of buyer |
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Tenants in Common |
2+ people own undivided interest in property. Each has right to possession of entire property. None can be excluded nor has specific portion |
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Quitclaim Deed |
Legal instument used to convey interest in property. No covenants, warranties of implication of ownership |
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No right of survivership |
Tenanats in common and one dies, his share passes to his heirs, then his heirs become tenant in common |
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1 mile |
640 acres |
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one acre |
43,560 feet |
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Qiet Title Action |
Court ordered hearings to determine land ownership |
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Front End Ratio |
what portion of income is used to make mortgage monthly housing expense divided by monthly income |
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Estopple Certificate |
Used to establish facts and finacial obligations required by a lender of a 3rd party transaction |
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4V or LTV Ratio |
Loan value ratio. The % reflecting what lender will lend % sale price or market value, whatever is less |
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Deed in Lieu of Forclosure |
Vlountary act of debt cancellation (If property is worth more than the balance due lender must pay the difference in cash) |
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Acceleration Clause |
Allows lender to demand immedite payment of entire loan if borrower defaults |
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Hypthecation |
borrower retains the right to possess and use the property while it serves as collateral |
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Pledging |
give up possession while it serves as collateral, like pawn shop |
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Interpleader Action |
Escrow can removethemselves by filing an action until all parties resolve their differences |
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Unilateral Contract |
Promise for performance Like cat missing sign with reward |
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Bilateral Contract |
Promise for Promise , i.e. real estate contract |
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Income Rate Approch |
Income/Rate=Value i.e Apartment is supposed to bring in $18,000 say rate is 9%=value of apartment |
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Value of Property where you know cap rate, like an apartment |
NOI (net operating income) NOI/cap rate=max purchase price |
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Cap Rate |
Net operating income (NOI) / sales price = cap rate |
