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20 Cards in this Set
- Front
- Back
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First step in an appraisal process
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Appraisers can legitimately come up with different values for the same property depending on the purpose of the appraisal. For example, an appraisal for a second mortgage generally would be more conservative than one for a competitive market analysis for the purpose of selling the home. Additionally, an appraisal for insurance purposes focuses more on the costs of replacing the structure rather than what the house, land and intangibles, such as curb appeal, would be worth on the open market.
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recorded subdivision plat is used in the:
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Lot and block is the "final" survey of property being readied for development and identifies each individual parcel in a subdivision.
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principal meridian
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Crossing a base line, the PM is the primary reference point for locating and describing land falling within its boundaries.
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Economic Life of a property
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Just like cars, buildings and their systems deteriorate over time and require repairs. Additionally, code changes can trigger expensive upgrades. At some point, those repairs begin to exceed the income generated and the building has reached the end of its economic life.
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Principle of substitution
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An appraisal principle, "substitution" holds that the maximum value of a property is that price for which a comparable, equally desirable property can be purchased in a timely manner. For example,if two 4-bedroom homes with equal features, age, condition, lot size and desirability are on the market at the same time, buyers would not pay $250,000 for one when the other is available for $240,000. However, if the $240,000 is on the market now, but the owner wants to delay closing for six months while the other is available for immediate occupancy, there may well be buyers willing to pay the premium.
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Economic obsolescence
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Implicit in the term "economic obsolescence" is the conclusion that repairs and upgrades have already been considered and would not present a cost-effective option. At this point, next to abandonment, demolition for re-use of the land is the only viable alternative.
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"effective age,"
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Effective age is a combination of many factors, including location, quality of construction and maintenance, architectural style, actual age, climate and so forth. A well-built building in a desirable location will have a much longer effective life than a cheaply constructed space in a poorly maintained office park setting.
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Regression
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The regression principle is the reason people are cautioned against owning the most expensive house in the neighborhood. It's an observation of the fact that lower priced homes (and commercial buildings) have a much greater downward pull on the value of higher end properties than the other way around.
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gross rent multiplier
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This is used as a quick, short-hand "guesstimate" for a property's approximate value. Sometimes this calculation produces a positive cash flow; other times a negative one--and one is not necessarily better than the other. Far more detailed calculations are necessary to determine a property's real market value and attractiveness as an investment.
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Nonconforming use
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This is an example of "grandfathering" that's common when new zoning rules are put into place. Basically it means that businesses and buildings that were in compliance before the new code was established may continue to operate or exist under their present owners. However, if the Ls want to sell their business, it must be to an enterprise that meets the new requirement.
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Restrictive covenants
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Restrictive covenants are private matters established and enforced by residents on a voluntary basis. (That is, a person who wants to live in a particular neighborhood voluntarily agrees to abide by the covenants. If he or she feels they are overly burdensome, the person is free not to move in.) Police powers, on the other hand, are imposed by governments and impact all affected persons. "Affected persons" can range from everyone in the case of law enforcement to just people constructing a home or building in the case of permits.
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External obsolescence
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External obsolescence is caused by events outside of the owner's control, such as a zoning change that makes the building's current use non-conforming.
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Witnesses to a will
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Two witnesses are required to sign in the presence of the person writing the will.
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Holographic will
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A handwritten will, referred to as holographic, is acceptable as long as the writer's identity can be confirmed by two witnesses.
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partial release
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A partial release clause provides that as payments are made on an accelerated or greater than pro rata rate, specific lots in the subdivision will be partially released from the mortgage.
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An $84,000 loan at 10% annual interest had principal and interest payments of $737.16 per month. How much of the second month's payment would be applied to the principal?
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You must reduce this loan twice in order to discover the answer to the problem. Step 1 - $84,000.00 X 10% = $8,400.00 a year divided by 12 months = $700.00 a month interest. Step 2 - $737.16 principal and interest payment minus $700.00 =$37.16 principal paid the first month. Step 3 - $84,000.00 minus $37.16 = $83,962.84 principal balance at the end of the first month. Step 4 – Repeat the same process using the new loan amount. $83,962.84 X 10% = $8,396.28 interest a year divided by $699.69 interest a month. Step 5 - $737.16 principal and interest minus $699.69 = $37.47 principal paid the second month. Be very careful when completing a question like this that you don’t make the mistake of using the interest amount monthly for the answer.
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A naturally occurring gas that is suspected of causing lung cancer is known as:
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Radon
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an encumbrance
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A claim or liability attached to a property is called:
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Which of the following events does NOT usually terminate a listing?
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The old joke, "death is no excuse," has some validity in real estate transactions. In this particular case, however, the matter is straightforward. Listing agreements are with firms and so survive the death of an individual, and the death of one buyer has no direct bearing on the listing agreement at all.
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ready, willing and able buyer
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By definition, "ready, willing and able" means having the funds in place to complete the transaction. Since that wasn't the case, no commission is due.
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