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146 Cards in this Set
- Front
- Back
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Freedom to own land
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Allodial System
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No two parcels are identical
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Nonhomogeneity
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Improvements on land
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Structures
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Economic Characteristics
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Scarcity (Limited Supply)
Situs (Location/Site) Durability (Permanence of Improvements) |
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3 Hereditaments
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Land, Tenemants & Incorporeal Rights
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Rights of Government
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You own the land, but the government determines how you use it
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Eminent Domain
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Government can condemn property and offer fair value to owners and using for public purposes
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Escheat
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If someone dies, and there are no heirs or wills left behind - then the property reverts back to the state
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Police Powers
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Regulation of use of land (NOT the taking of it)
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Personal Property
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Chattel: Property that is movable in nature, such as a chair or table. Is not Real Property
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Fixtures
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Items of personal property that become real once they're affixed to real estate. Ex: Cabinets, Light Fixtures, bookcases, etc.
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Codicil
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A written amendment to an existing will
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Voluntary Alienation
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When an owner voluntarily sells.
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Devise
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Will states who is to inherit the real property
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Descent
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When someone dies inestate (without a will), the home passes through probate and to the next heir.
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Adverse Possession
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NOT squatter's rights. Rightful owner loses land to occupant who has taken possession in hostile, distinct, and actual way for the statutory period.
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Foreclosure
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Bank takes home as collateral for defaulted loan
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Meridians
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North & South (36 in all)
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Parallels
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East & West (32 in all) 66 miles, or 1 degree apart.
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Correction Lines
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Every 24 miles on the meridians to correct curvature of earth
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Check
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24 square miles = 16 townships
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Townships
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Contains 36 sections. Every section is 6 square miles or 640 acres.
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Freehold
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Indefinite duration of ownership. (Fee Simple Absolute)
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Fee Simple Absolute
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A freehold estate. Allowed to sell, will or giveaway property. Subject to gov't. regulation/restriction & OWNER has MOST power.
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Fee Simple Defeasible
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(Conditional) Limits estate holder to terms set by grantor. If conditions aren't met, land reverts to grantor, heirs or reversioner.
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Fee Simple to a Condition Subsequent
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Gives same rights as Fee Simple Defeasible, but grantor must step in if conditions are broken or estate holder can proceed with plans.
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Life Estate
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Granted through will or deed by the law w/o owner's consent.
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Nonfreehold Estates
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"Leasehold Interests" Give possessory rights for some specific amount of time. No ownership - LEASING
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Title
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Evidence of ownership (intangible)
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Deed
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Document that conveys grantor's interest in property to the grantee (transfers ownership).
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Remainderman
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Named by original grantor for provisions upon life tenant's death.
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Reversionary
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Estate reverts back to grantor or grantor's heirs at some point.
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Acknowledged
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Sworn under oath.
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Consideration
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Price paid for property (can be, "for love & affection," etc)
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Livery of Siezin
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Act of transferring deed
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Notarized signatures on deed
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Validity of signatures, NOT contract
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Constructive Notice
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Newspaper/Recorder's office give, "Notice to the world." "Any claimaints against John Doe, notify..." then one can place a lien.
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What is on a deed?
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Consideration, Words of conveyance, Description, Restrictions, Quality & Quantity and Signatures
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Restrictions to the deed
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"Subject to assessments, taxes or easements." Ex: If a property has restricted building laws, etc.
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Specialty Warranty Deed
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Only warrants the deed/title was clear during grantor's ownership
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Quitclaim Deed
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Grantor may not have clear title. Biggest risk is taken by buyer, grantor takes no liability. Ex: Liens, judgements, etc may still be owed.
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Sheriff's Deed
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Repossessed homes
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In Joint Tenancy, ALL tenants must have the same:
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Timeframe, title, interest & possession.
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Unilateral Contract
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"If I sell your house, you pay me commission." Does not bind agent to perform. ONE PARTY COMPLETES ACT.
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Implied Contract
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Not enforceable
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Expressed Contract
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Written or oral
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Bilateral Contract
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Lease: Promises of both parties
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Executory Contract
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Also a lease contract, has not yet been completed. Will be completed after a promise is completed.
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5 Elements of a Contract
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Offer & Acceptance, Consideration, Capacity of Parties, Legality of Object, and Written/Signed
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Statute of Frauds
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Requires ALL real estate transfers be in writing.
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Parole Evidence Rule
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Prohibits PRIOR verbal or written evidence (prior to purchase agreement) to altar purchase agreement.
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Discharging of a Contract (4)
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Damage to Property, Death, Recession by Mutual Agreement, Partial Performance
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Latent Defects
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Hidden (Plumbing, Electrical, etc)
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Patent Defects
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Obvious Defects (Cracks, etc)
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Principal
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Client
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Customer
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3rd Party (Hasn't yet signed agreement with agent)
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Limited Time Special Agency
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Contracts w/ both buyer & seller are for a limited time.
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Limited Purpose Special Agency
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Representing for a specific purpose (EX: 2 BR, 2 Ba)
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Limited Authority Special Agency
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Agent hired to sell or lease as directed by contract. Power of Attornery to Agent (EX: while client is out of country)
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General Agency
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Can literally "speak" for principal when a principal places preset conditions (Ex: Every time a farm in SW Iowa comes up for sale).
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Seller Agency
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Agent works for seller
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Buyer Agency
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Seller pays all commissions in Nebraska
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Sub-Agency
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Must represent just like agent, keep principal's interest in mind. Must be licensed unless not talking numbers.
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Comparable Market Analysis
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Compares similar properties, square footage, valuations, etc.
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Exclusive Right-to-Sell
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Contract that gives real estate firm the sole right to act as agent for the seller.
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Listing Contract Must have (4)
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Legal Description, Expiration Date, Amount of Commission & when its paid, Signatures
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Exclusive Agency
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When the agent is paid commission if the house sells, but if the owner sells themselves, they DO NOT have to pay agent.
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Flat Fee Listing
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DISCOUNT BROKERS - Always exclusions.
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Discount Broker
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Charges fee at less than prevailing/going rate.
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Agent Compensation
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No set commission rate, fee is negotiable and is set in contract.
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Terminate a Listing
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Until listing expires or sale of house unless BOTH mutually agree to cancel contract.
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Anti-Trust Laws
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Commission payable is negotiable - not mandated or regulated by an agency.
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Net Listing
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A property listed at an agreed upon net price and the broker receives anything over and above the net listing as earned commission.
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Earnest Deposit
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Purchaser gives to the broker at the time of written contract to is offered. It binds contract and demonstrates buyers intent.
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Lease Option
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Leasing with the option to buy within a certain timeframe.
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Mutual Savings Bank
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Primarily in Northeast, all state chartered. Favor long-term, low-risk investments. No stockholders.
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Truth-In-Lending Law
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Federal Reserve used "REGULATION Z" to enforce all 'finance' specifics on loans be disclosed. IE: true APR, date charges commence, pay-off penalties, etc.
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FHA Loan Maximum, Percentage and who its intended for
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Usually first-time home buyers with less-than-perfect credit. Maximum loan is $271K or 97.75% of sale price.
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Truth-in-Lending Act & what enforces it
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States the consumer must know exactly how much it's costing them to borrow... enforced by Regulation Z
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What, exactly, does Regulation Z do?
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Regulates how APR and other loan specifics are advertised. Banks have especially stringent guidelines.
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RESPA (Real Estate Settlement Procedures Act)
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Illegalizes kickbacks and any exchange of "perks" for business. IE: Agent & Loan Officer. ALSO: limits amt of escrow lender can require.
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HUD Statement
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Let's everyone know exactly how much the transaction costs
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VA Loans
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At 2.25% for first-time, doubles with second mortgage
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National Flood Insurance
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Every house must be evaluated to see if it qualifies for a flood plain - if so, must carry flood insurance.
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CRA - Community Reinvestment Act
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Requires lenders INCLUDE all neighbors and not redline based on race, culture, religion, etc.
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FHA-Insured Loan
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Insures the loan in event of foreclosure.
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FHA 203B Loan
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For 1-4 Family Housing, Requires Minimum Down Payment, Excludes any Investor Financing, First or (rarely) 2nd homes, Seller can pay closing if buyer has 3% down, Can accept gift for down payment
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FHA Loan Assumptions (4)
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1) Must pass credit check 2) Can only be assumed by a buyer occupying property 3)No Investors 4) Mortgage payment must not equal more than 29% of their gross monthly income
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FHA ARM (Adjustable Rate Mortgage)
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Typically adjusts once per year.
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VA Loan Assumption
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Don't have to be a vet to assume a VA loan.
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VA/FHA Inspections
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Required on any home that wishes to use a VA/FHA Loan. Not all appraisers are certified and it is additional (typically $100+)
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RECD (Rural Economic Community Development)
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Federal Lender w/ US Dept of Agriculture, Offers Low Interest Rates in areas of <20K people, buyer must have limited income.
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Land Contracts
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No Lender; Seller if financer. Many times for bare land (as there are no mortgages for structureless property), seller has ownership until terms are fulfilled.
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FICA Scores of less tha 680
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Result in difficulty getting conventional loans.
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Discount Point
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1 discount point = 1% of the loan amount. EX: If a lender charges 2 points on a $30,000 loan, the lender will receive 2 percent of $30K, or $600.
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Loan-to-Value (LTV)
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Buyer can only get a loan for the sale price or appraised price - whichever is less.
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Mortgage
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Pledges property for collateral debt.
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Alienation Clause
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Allows lender to call balance due & payable upon sale of property. AKA: Due-on-sale Clause... BASICALLY SAYS a property will be foreclosed on if buyer does not pay mortgage.
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Hypothecation
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Pledging property without giving up possession (having a mortgage)
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Mortgagee
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Creditor
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Mortgager
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Buyer
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Who gives the acknowledgement on a deed?
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Notary
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Which deed carries the least liability for the seller?
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Quitclaim deed
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What term is defined as the government or local government can take land if they think it can be used better in another manner?
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Eminent Domain
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Does the grantor (owner) or grantee (buyer) sign the deed?
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The Grantor MUST sign, the grantee is optional.
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What sets covenance and/or guidelines for how property may be used?
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Restriction
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Title is transferred once______.
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It's been delivered and accepted.
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What is the term when an owner leaves no will or heirs, and as such, the property reverts back to the state?
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Escheat
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Freehold Estate
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NON-LEASEHOLDING, ownership is free & clear.
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What term says the government can control/restrict the use of property?
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Police Power
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This is sold by means of a bill-of-sale and refers to personal property.
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Chattel
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Why is a deed recorded?
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To give notice to the world (and make notice for any potential lienholders)
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Reversion of property to the state...
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Escheat
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What is the initial buyer payment called?
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An earnest deposit
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Most options (w/o consideration) are...
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Unenforceable
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Optioner is also called ______
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Owner
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Listing Contract Must Have (4)
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Consideration, Signatures, Expiration Date & Legal Description
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Optionee is also known as______
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Buyer
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An implied agency, usually unenforceable is a _________ agency
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Estoppel
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An earnest deposit is returned to the buyer if _________
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The offer was never presented to the seller.
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Money is NEVER disbursed ______ closing.
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BEFORE
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When does a title transfer in a leasehold?
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Never
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Reverse Mortgage
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Allows owners to receive payments for equity in property. The balance is settled upon the sale of the deceased's estate.
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2 Loans that are secured by 1 loan
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Blanket Mortgage
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Term Mortgage
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For a certain period of time.
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A Mortgage plan where payments increase every year to reduce the # of years it takes to pay off.
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GEM - Growing Equity Mortgage
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The legal right to delay the meeting of financial obligation.
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Moratorium
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True or False: FHA Loans are assumable.
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FALSE
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Parole Evidence Role
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Does not allow verbal or written changes made before the closing to change the purchase agreement.
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Unilateral Contract
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Example: Option Contract. When one party must fulfil an obligation/promise.
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Broker's Trust Account
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Where agents/brokers can deposit money belonging to others (interest free).
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Net Listing
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When a broker agrees to sell the house for a set commission plus anything over the asking price that the house sells for.
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Listing Contract can be terminated when...
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the seller/agent mutually rescind.
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Fiduciary Responsibilities
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A person entrusted to exercise skill & knowledge in a client's transaction and keeps the best interest of the client at the forefront.
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3 Discount points =
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3% of the loan amount
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VA Eligibility
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Must secure CERTIFICATE OF ELIGIBILITY saying they will occupy home, no prepayment penalty, by 4 tiers of loans.
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What are the 4 tiers of VA Loans?
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Veteran, National Guard, Reservist, 2nd Use of Benefit
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FHA & VA loans both include an ______ clause.
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Escape
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FHA-insured loans insure the ________.
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Mortgagee (creditor)
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True or False: Deeds have to be recorded.
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False.
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Devisee
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A person that inherits property due to a will.
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Life estates can be created by ______ or a __________.
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A deed or will.
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What's the difference between client and principle?
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Nothing, they are interchangeable.
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What are the conditions of a SPECIAL AGENCY?
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Limited time, limited purpose and Limited autority.
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Dual Agency occurs when ______
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The agent represents both parties in the contract. (Buyer & Seller agent)
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Exclusive Agency
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When an agent is hired to sell the property, but the seller also retains the right to sell himself w/o paying commission.
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