Real Estate

Front 1

Real Estate

Real Property

Back 1

Artificially declineate space over time
Legally recognized & transferbale rights

Front 2

Lease

Back 2

owners temp grant tenants the use of space for money

Front 3

Sales Contract

Back 3

seller grants buyer a permanent interest in prop for money

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Stock vs. RE markets

Back 4

similar prods ---- stratified
broad mk dist ---- local mkt
homo product ---- hetero
many participants --- few
public trancs --- proprietary
simultaneous bid -- sequential

Front 5

RE Market Cycle

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Absorption, Expansion, Equilibirium, Decline

Front 6

Appraisals- Determining Value

Back 6

Cost Approach- if u had to build it again
Sales Comparion- prices of similar properties
Income Approach- present value of future cash flows

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Freehold Estates

Leasehold Estates

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Package of rights of ownership possessed by owner
Package of rights ownership possesse by tenant

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Types of Freehold Estates

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Fee Simple Estate
Qualified Fee Simple Estate
Life Estate

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Fee Simple Estate

Back 9

most complete form of ownership recognized by law. no restrictions on owner

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Qualified Fee Simple Estate

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Same as Fee Simple except a qualifcation is placed on the estate. If grantee disobeys qualification the ownership rights are terminated

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Life Estate

Back 11

Ownership that lasts as long as the owner is alive. Remainer is transferred to the person designated at the time of life estate. person had reversion interet.

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Categories of Leasehold Estates

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Tenancy for a stated period
-stated beginning & end period
Estate from period to period
- Defined time period, renewable unless notice is given.
Tenancy at will
-Occupancy of property continues until notice is given by either party gives notice
Tenancy by sufferance
-lease has expired, tenant unable to pay, evicted

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Deed

Back 13

Legal document that transfers ownership & interests in real property from one party to another (conveyance)

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Full/General Warranty Deed

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The grantor must honor the warranties during his or her ownership and all previous ownership periods

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Special or Limited Warrenty Deed

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the grantor must honor the warranties during his or her ownership period

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Secuirty Deed

Back 16

Given to secure an interest in property held as collateral for an obligation.

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Guardian Deed

Back 17

given by a court to administer the personal affairs or property of someone who is incapacitated

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Gift Deed

Back 18

No moneaty compensation; love and affection

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Sheriff's Deed

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Granted by court to faciliatate the sale of property connected with a judgment

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Quitclaim Deed

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No warrenties, often used to correct defects or make changes in title

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Tax

Back 21

Associated with the forced sale of property due to delinquent taxes.

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Title
Tile Insurance

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Proof of ownership
Protects against all prior claims from the time of conveyance backwards.
--Required for mortgage
--Lender's title protects lender
---Owners title protects owner

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Fair Housing Act

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Cannot discriminate against protected classes (race, ethinicity, age, gender, religion)

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Real Estate Settlement Procedures Act

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Informs consumers
Eliminates kickbacks and referral fees for RE agents

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RE Agent Contract

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-No obligation to sow a property unless person is seller's agent or buyer's agent under contract
-No obligation to bring you every offer unless stated

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Mortgage

Back 26

Legal document that creates a security interest in the collateral

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Note or Promissory Note

Back 27

Legal doc that creates the obligation to repay a loan at a specified interest rate, for a specified term or upon demand

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Loan & Security Agreement

Back 28

Document containing additional terms, conditions, covenants, and pledge of collateral

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Mortgage Loan

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Debt capital is often called this as people obtain these loans

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Mortgagor (borrower)

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Creates the debt to borrowing money
-Creates an obligation to repay
-Gives a security instrument to the lender

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Mortgage (lender)

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Accepts the offer and instrument to repay and lends the money

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Defualt Foreclosure

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Borrower has broken his promise and has not made his payments on the loan
-monetary default-failure to pay
-non-monetary defualt-fauilure to comply w/ covenants
-right to cure

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Foreclosure

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Lender takes action to satisfy debt through taking of collateral

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Judicial Foreclosure

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-Lender must go to court
-Benefits defaulted borrowers

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Non-judicial Foreclosure

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Lender does not need to go to court
-Benefits lender

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Foreclosure Auction

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Selling of the property at public auction on the court house steps (includes paying the lender title search and evicting the owner)

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Deficiency Judgment

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Money owed that is not recovered at the foreclosure sale can be obtained by banks/lenders

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Statutory Right of Redemption

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Borrower can pay the costs of the coreclosure sale ad obtain the property again

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Right of Tenancy

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Foreclose borrower gets to remain in the property during redemption period

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Foreclosure Options

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-Loan renewal
-Loan assumption and prop sale
-loan extension/modification
-Deed in Lieu of foreclosure
-Short Sale

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Time Value of Money

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PV-value of amnt recieved today
FV-value of amnt to be recv
Discount Rate-interest rate or rate of return to be earned

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Time Value of Money

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Reciprocal relationship-relationship b/w PV & FV

Compounding- using TVM to calc the FV

Discounting- using TVM to calc PV