Real Estate Test 2

Front 1

If a seller is selling his house and he doesn’t want to sell it anymore he can…

Back 1

seller doesn't show up to the signing of the deed

Front 2

When a broker sets up a deal between a buyer and seller, who pays commission?

Back 2

The seller

Front 3

Which of these is "as is"?

Back 3

No warranty on physical condition

Front 4

Purchase contracts

Back 4

aka: deposit receipt, offer and acceptance, purchase offer or purchase and sales agreement
-4 key parts:
1-provision for the buyer’s earnest money deposit
2-buyers offer to purchase
3-acceptance of the offer by the seller
4-provisions for the payment of a brokerage commission

Front 5

Installment contracts

Back 5

AKA land contract

Front 6

Q: How many days does someone have due to the right of recession to go back on a deal?

Back 6

3 days not including saturday

Front 7

Equitable title

Back 7

-seller has naked title (title in name only without full ownership rights)
-title that lacks the rights and privileges usually associated with ownership

Front 8

option contract

Back 8

-a unilateral, executed contract
-buyer has right to purchase the property but with no obligation to do so
-buyer has right to buy and seller has obligation to sell
-buyer must pay consideration to the seller usually in the form of a cash payment
-buyer also does not have to give the seller any reason for termination of this contract
-some option agreements simply have an option period and will terminate if the option is not exercised

Front 9

Lease with Option to Buy

Back 9

-aka lease option, allows the tenant to buy the property at a preset price and terms for a given period of time
-for residential, lease is for a year with option to buy within that year
-only the landlord must sign the purchase contract and option agreement
-optionor: party giving the option (owner)
-optionee: party receiving the option (tenant)
-option to buy is referred to as a call

Front 10

Promissory note

Back 10

Written promise to repay a debt. A primary proof/ evidence of a loan.

Front 11

Prepayment privilege

Back 11

allows borrower to pay more than what is required every month without penalty

Front 12

prepayment privilege

Back 12

if you have loan and can pay off faster?

Front 13

Acceleration clause

Back 13

allows the lender to demand immediate payment of the entire loan if the borrower defaults

Front 14

(A: mortgagee and mortgagor)

Back 14

What are the names of the 2 parties in a mortgage deal?

Front 15

(A: …alienation clause…)

Back 15

: Due on sale clause states what?

Front 16

estoppel

Back 16

-borrower is asked to verify the amount still owed and the rate of interest

-certificate of reduction: prepared by the lender to show how much of the loan remains to be paid

Front 17

What is after a senior mortgage?

Back 17

Junior mortgage

Front 18

equitable mortgage

Back 18

-written agreement that is considered by the courts to be a regular mortgage just in different form

Front 19

When trustee is brought in and he gets the title, what type of title?

Back 19

naked title

Front 20

In a deed of trust who holds property in ttust for another

Back 20

trustee

Front 21

When you pay a loan in interest payments then pay the full amount due?

Back 21

Term loan

Front 22

Amortized loan

Back 22

a loan requiring periodic payments that include both interest and partial repayment of principle

Front 23

balloon loan

Back 23

any loan in which the final payment is larger than the preceding payments (last payment is called the balloon payment)

Front 24

loan to value ratio

Back 24

a percentage reflecting what a lender will lend divided by the sale price or market value of the property, whichever is less

Front 25

origination fee

Back 25

expenses a lender incurs in processing a mortgage loan

Front 26

department of veterans affairs

Back 26

No down payments on loans by veterans

Front 27

truth in lending act benefits which party?

Back 27

consumers

Front 28

financial institutions have to disclose what info?

Back 28

APR

Front 29

life insurance companies like taking which type of investments?

Back 29

Commercial building/ office building

Front 30

Federal National Mortgage Association (FNMA) (fannie mae)

Back 30

-organized in 1938 to buy FHA mortgage loans from lenders, making it possible for lenders to grant more loans to customers, successful
-in 1968, divided into two organizations GNMA and FNMA

Front 31

Government National Mortgage Association (GNMA) (ginnie mae)

Back 31

-best known for its mortgage backed securities program

Front 32

Federal Home Loan Mortgage Corporation (FHLMC) (freddie mac)

Back 32

-deals primarily with conventional mortgages
-participation certificates: a certificate representing an undivided interest in a Freddie Mac pool

Front 33

Adjustable Rate Mortgages (ARM)

Back 33

-interest rate on an ARM is tied to an index rate

Front 34

Equity Sharing

Back 34

-an arrangement whereby a party providing financing gets a portion of the ownership

Front 35

Reverse Mortgage

Back 35

-monthly payments to the homeowner as an annuity for the reverse term of the loan
-elderly homeowners,

Front 36

mill rate

Back 36

(property tax rate expressed in tenths of a cent per dollar)

Front 37

mill rate

Back 37

1 mill = .001 (4 cents = 40 mills) (1/10 of a cent)

Front 38

: if theres a closed neighborhood and they want to get their sidewalks re-done, what would pay for it?

Back 38

Speciak assessment

Front 39

an elderly couple that lives in an expensive house but they don’t have a lot of cash, what mortgage would they take out?

Back 39

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