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362 Cards in this Set

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  • Back
PROPERTY
Rights or interest in the thing you own
Real Property
1. Immovable
2. Bearing Wall
3. Not a lease-hold estate
Fixtures
1. Incorporated into land
2. Not cost
3. Not time of attachment
Trade Fixtures
Business Office
Run with the Land
1. Appurtenant
2. Easements, water co. stocks, covenant, minerals
3. No seperate conveyance
Personal Property
1. Hypothocated
2. Alienated
3. May become real property
Fee Simple Estates
(Fee Estate)
(Estate in Fee)
1. Indefinate duration
2. Free Hold
3. Most Interest
4. Not free of encumbrances
5. Estate of inheritance
Fee Simple Defeasible
No alcohol
Life Estate, Property is leased
Owner dies, lease terminates
Less-Than-Freehold Estates
(Leases)
1. Lessee
2. Not necessarly to sign
3. 6 months, Estate for Years
4. Personal Property(Chattel Real)
Sublease
1. Transfers Possession
2. Can sublease or assign if not prohibited.
Quiet Enjoyment
Paramount, no intrusions
Abandonment
Tenant leaves voluntarily
Percentage lease
Based on gross receipts
Security deposit
Furnished or not
Estate for Years
Fixed period
License
Personal revocable
TITLE VESTINGS
Tenancy = method
Severalty
Individual
Joint tenancy
TTIP: time, title, interest, possession
1. Cannot Will
2. Free of unsecured debts
Tenancy in Common
1. Can convey seperately
2. Unity of possession
Community Property
Husband and Wife
Agreement to Sell
Unenforceable
Cloud on Title
Single woman married
Quiet Title Action
1. Remove a cloud
2. Court action to remove a cloud.
Alienation
1. Convey
2. Opposite of acquisition
Eminent Domain
1. Compensation paid
2. For Public Use
3. Taken by the Government
4. Individuals don't have
Police Power
Zoning
Escheat
Individuals don't have
Accretion
Natural causes
Avulsion
Dam brakes
Probate Sale - Commission
Set by court, court order
Intestate Succession
No Will
DEEDS - Purpose
Transfer interest
Grant Deed
1. Executed when signed
2. Not necessary to be recorded.
Quitclaim Deed
1. Conveys rights of Grantor
2. No covenants
Deed Essentials
1. Granting clause
2. Legal competence of Grantor
3. Not acknowledged
4. Delivered and Accepted
RECORDING:

Contructive Notice
1. Given by recording
2. First to possess or record, gets property
Acknowledgement
Employee without interest
ENCUMBRANCES
Limits Title
EASEMENTS
Encumbered
Prescriptive Easements
1. No confrontation with owner.
2. can easily be terminated for "non-use"
Termination of Easements
Dominent Tenament records "Quitclaim Deed"
Appurtenant Easements
Buyer has same rights
Confirmed by
"Quiet Title" suit
Private Restrictions
1. 4 Lots
2. Grantor or developer
Condition
Penalties are more severe
Public Restrictions
1. Public Health, Safety, Morals, Welfare.
2. 1 Lot = Variance
Changes can be initiated by
Owner, subdivider, government
Commercial to residential
Down-Zoning
ENCROACHMENTS
Sue neighbor
Liens
1. By month; a charge imposing.
2. Trust Deed or Mortgage
Specific Lien
Trust Deed
General Lien
All Property
PROMISSORY NOTES
Evidence of debt
Amortization
Liquidation
Level Payment
Payment applied to principle increases.
Negative Amortization
Payments don't cover interest
GPAM Loan
Differs some principle payments.
Interest Rates Affected by
Not unemployment
Simple Interest
Home loans
Variable Interest
Rate can increase or decrease
Effective Interest Rate
Rate paid
Nominal Interest Rate
Rate specified in Note.
Negotiable Instrument
Not a mortgage
Straight Note
No principle payments made
Balloon Loan
1. Partially amortized
2. Entire balance due
Holder in Due Course
No knowledge of defects
Discounting
Selling for less
Default
Foreclose for full amount
More Than One Borrower
Jointly and Severally
Trustor
Signs the Deed
Beneficiary
Loans money
Right to Sell
Trustor to Trustee
Terminated
Reconveyance Deed
Court Sale
1. 1 year redemption period.
2. Trustor possesses the property.
Trustee's Sale
1. 3 months before publishing
2. Right of Reinstatement
3. Most expedient
Deed in Lieu of Foreclosure
Lender assumes Junior Liens
Request for Notice Protects
Beneficiary of Second Loan
Lender's Basic Protection
Borrower's equity
Priority
Recorded first
Blanket Mortgages
More than one property
Release Clause
Releases portions of the property.
"Assume"
Relieves Seller
"Subject To"
Seller's liable
Subordination Clause
Future loans have priority
Acceleration Clause
Unpaid sum due
Open-End
Borrow additional money
Beneficiary Statement
Gives current balance
Prepayment Penalty
Trustor making advance payments.
Mechanics Liens
Verified and recorded
Mechanics Lien: Priority
Earlier than recording
Mechanics Lien: Notices
Completion sessation non-responsibility.
Lis Pendens
May affect title
Lis Pendens is effective until:
Judgement rendered or lawsuit dismissed.
Execution
Court order to sell
Injunction
Court order to stop
Chain of Title
Important when deciding to issue title policy.
Abstract of Title
Written summary of documents
Preliminary Report
1. Seller is Trustor
2. Remove "Mechanics Liens"
Standard Policy of Title Insurance
1. Most Buyers obtain
2. No survey or on-site inspection.
Protect Against
Forgery, improper delivery
Extended Policy
Covers improvements on adjoining land.
ALTA Policy
Includes a survey
Exclusions
1. Zoning
2. No policy covers everything
Search
County Clerk, County Recorder, Federal Land
REAL ESTATE LAW
Commissioner makes Rules & Regulations.
ILLEGAL ACTS
District Attorney prosecutes
Misrepresentation
1. Obvious knowledge caused
2. No expenses on income property
Commission to Buyer
Must inform Seller
Blind Ad
No Brokers name
Misleading Advertising
1. Misleading map
2. Move right in, major repairs
Secret Profit by Non-Licensee
No cause for action
Referral Fees
Both Broker and Sales Person
Gifts
1. Microwaves are okay, reveal to all.
2. $50 is okay
Commingling
Funds from Brokers own Property
Not a Member
Not a Realtor (N.A.R.) Nat'l. Assoc. of Realtors
Saleserson as independent contractor
Broker still liable for conduct
Unlicensed assistant
1. Broker must read advertising.
2. Must be supervised on internet.
3. Both guilty if solicits Buyers or Sellers.
MANAGE PROPERTY
Broker
LOAN BROKER LAWS
Disclosure given to Borrower when signed.
Advertisement
800-FOR-A LOAN
DESK COST
Total expenses divided by no. of salespersons
COMPANY DOLLAR
Income minus commission
TRUST FUND ACCOUNT
1. Separate Trust Funds
2. Any employee of a Broker
ETHICAL PRACTICES
Honesty and fairness
RECOVERY ACCOUNT
Only pay recovery acct. plus interest.
SELLING TRUST DEEDS
Advertising must include interest rate and discount.
MOBILE HOMES: Can sell
Only if registered
MOBILE HOMES: Must remove signs
Within 48 hours
MOBILE HOMES: Notice of Transfer
Within 10 calendar days
Expired License
Can be renewed within 2 years after expiration.
Temporary (150 day) License
Delinquent child support
ADVANCE FEE CONTRACT
No guarantee of sale or lease
FAIR HOUSING
1. 1968
2. Provide fair housing
3. Steering
4. Unenforceable, no effect
5. Refuse to show when our out town.
6. Blockbusting, Panic Peddling
7. No descrimination against singles
8. Dept. of Fair Employment & Housing
9. Different prices, money damages
10. Show same homes
11. No gender or ethnic quotas
ECONOMIC THEORY
Lost interest on equity is a cost of home ownership.
Leverage
Borrow the maximum
Appreciation
Trustor
Prices Decrease
Value of money increases
Seller's Market
Prices rise
Impact Real Estate
Consumerism land use controls
GNP and Employment Rise
Income rises, home sales increase.
LENDERS
1. Portfolio Risk Management: "D"
2. Individual savings accounts
3. Pay any rate of interest
Insurance Companies
1. Large loans
2. Work thru Mortgage Companies
Savings & Loan Assoc.
1. Most funds in Real Estate
2. Primary source
Mortgage Companies
Sell in secondary market
Private Lenders
Junior loans
Secondary Mortgage Market
Resale market place
Federal Home Loan Mortgage Corporation
Maintains secondary market
Increase Reserves
Decreases loan activity
Tight Money
1. More Second Trust Deeds (TD's)
2. Sellers carry back a Second
Federal National Mortgage Assoc.
Not a demand source for money
Loan-to-Value
Lower ratio - higher equity
A Loan Commitment
Result of income borrower & property
Construction Loan
Interim
Take-Out Loan
Long term
Debt-Income Ratio
Loan qualifying tool
Mortgage Loan
Collateralized by real property
Mortgage Yield
Investor's interest return
Lenders Minimize
1. Sub-standard loans
2. Degree of risk most important
Late Payment
More than 10 days
100% Loan
Protected by appreciation
Amortization Tables
Monthly payment
Warehousing
Collecting loans
FICO score
Credit history of borrower
Security Interest
Creditors interest in debtors property
Discount Points
Percentage of loan amount
Document Reparation Charges
Loan Origination Fee
TRUTH-IN-LENDING
Not agricultural
Purpose
Meaningful disclosure by lender
Annual Percentage Rate
Cost of credit
Advertising - Only APR is used:
Other disclosures not required
Right to Cancel
Residence
CONDITIONAL INSTALLMENT SALES CONTRACTS:
Seller: Vendor-Legal Title
Buyer: Vendee-Equitable Title
(Land Contract Security device)
Default, Quitclaim Deed
Signed by Buyer only
Loan Insured By:
FHA or private insurer
FHA
Protects lender against default
VA
1. No down-payment
2. No Rental property
Cal-Vet
Land Contract
INSURANCE
Promise of reimbursement for damages
Fire Insurance
Neither gain nor lose
ESCROW
Financial Code
Instructions Executed By
Buyer, Seller, Third Parties
Purpose
Terms are met
Closing Statement:
Buyer Debit
Purchase price
Closing Statement:
Credit Seller
Prepaid Taxes
Prorations
Not unsecured loans
Impounds
Recurring costs
Two Termite Reports
Get instructions from Buyer & Seller
Escrow can
Call for funding of loan
Report to IRS
Escrow
Move in Early
Sellers written permission
Release disputed funds
Instructions from all parties or court order.
1-to-4 Family Residental Dwellings
Required
Uniform Settlement Statement
No charge
Buyer can require
Specific lender
Good Faith Estimate
Must be furnished
Real Property Transfer Disclosure Statement:
Given by
Transferor, even if sold "as is"
Real Property Transfer Disclosure Statement:
Must Reveal
1. All known defects
2. Not repairs
Real Property Transfer Disclosure Statement:
Amended statement
Buyer can rescind
Real Property Transfer Disclosure Statement:
Licensee can never
Fill out Sellers portion
Real Property Transfer Disclosure Statement:
Defective statement
Buyer can sue within 2 years
Alquist-Priolo Act:
Requires disclosure
Nearby earthquake faults
Alquist-Priolo Act:
Zone extends
1 qtr. mile wide along fault lines.
Contracts: Bilateral
Diligence
Contracts: Executed
Completely performed
Contracts: Voidable
1. Binding until rescinded
2. Duress
3. Menace or threats
4. Not illegable purpose
LEGAL ESSENTIALS OF A VALID CONTRACT:
Not money, performance or writing
Offer and Acceptance
Must have for Real Estate Contracts
Capable Parties
Minors can acquire
Capable Parties
Minors can acquire
Consideration
Valuable, good, sufficient, adequate
STATUTE OF FRAUDS
If not to be performed within 1 year, must be written.
Breach of Contract: Specific Performance
Not by Broker
LISTINGS
Bilateral Employment Contract
(Seller is Employer - Broker is Employee)
Agency Creation
1. Reveal as soon as possible
2. For any period of time
3. Find purchaser - accept deposit
4. Payment of consideration is not required
5. Not voluntary offer
6. Terminated by completion
Oral Agreements
1. Commission permissable
2. Broker would sue Broker
Lease on Duplex
Broker is Agent
Subagent of Listing Broker
Duty to Seller only
Fiduciary Obligations
1. Licensee
2. Integrity, loyalty, honesty, confidentiality.
Present All Written Offers
At same time, unless frivolous.
Seller Fires Broker
Liable for damages
Broker Owes Buyer
Fair and honest deal
Broker as Agent of Buyer (Offeror)
1. Can present offer to Seller and Sellers Agent.
2. Accepting unauthorized deposits.
3. Owes fiduciary duty to Buyer only.
Material Facts
1. Must reveal
2. Leaky roof
3. Septic tank rescind
Puffing
Exaggerated claims
Broker promises Seller to find house
Civil suit for damages
Agent promises to Advertise and does not
Actual fraud
Protect confidential information
After listing expires
Deposits
May be anything
Seller
Deposit belongs to Seller
Hold deposit check or accept promissory note
Must inform Seller
Conflict between Buyer and Seller
Interpleader action
Commissions
1. Communicate acceptance
2. If not shared - civil suit
3. Cancels - owes both
Commission after term of listing
Protection Period Clause (Safety Clause)
Liability
Damages if acts in excess of authority
Fraudulent Misrepresentation
Discipline, Civil, Criminal
Exclusive Listing
Must contain termination date
Exclusive Agency
Owner sells - no commission
Exclusive Right to Sell
1. Pay commission
2. No procuring cause
OFFERS: Terminated By
1. Withdrawal gets refund
2. Debt of Buyer
3. Rejection by Offeree
OFFERS: Counteroffer
Offeree becomes offeror
DEPOSIT RECEIPTS: Buyer defaults, deposit is
Divided between Seller and Agent
DEPOSIT RECEIPTS: Time is of the Essence
Deposit receipts
OPTIONS: Agreement
Not to revoke an offer
OPTIONS: Contract
To keep offer open
OPTIONS: Optionee
Not obligated to perform
OPTIONS: Option and Listing
Disclose offers written consent
FEDERAL INCOME TAXES:
Marginal Tax Rate
Next dollar earned
FEDERAL INCOME TAXES:
Unadjusted Basis
Cost
FEDERAL INCOME TAXES:
Adjusted Basis
Not mortgage payments
FEDERAL INCOME TAXES:
Tax Shelters
Income taxes
FEDERAL INCOME TAXES:
Gain
$8,000 basis $40,000 Sale =
$32,000 (Profit)
Personal Residence: Deductions
1. Property taxes and interest.
2. Interest on common area mortgage.
Personal Residence:
Adjusted Basis
Concrete Patio
Income Property:
Deductions
Not for vacancy
Income Property:
Depreciation
1. Cost of building not land
2. Must be improved
Income Property:
Operational Loss
Might offset capital gain
Income Property:
Capital Expenditures
Added to cost basis and depreciated
Income Property:
Loss Upon Sale
Could deduct if rental property
Exchanges
Like-Kind
Boot
Debt relief or cash
Receiver
May have recognized gain
Basis of New Property
Basis of Old
Sale-Leaseback
1. Deduct all future rent paid.
2. Not Sellers book value.
Installment Sale
Mortgage relief is part of the downpayment.
PROPERTY TAXES
Not entangible Personal Property
Property Tax Bills
No legal description
Ad Valorem
According to value
Property Reassessed
When sold
PROPERTY TAXES: Over-Assessed
Assessment Appeals Board
PROPERTY TAXES: Dates
Feb. 1st.
PROPERTY TAXES: Delinquent Tax Sale
Owner remains in possession and can redeem for 5 years.
ASSESSMENT LIENS
1. For local improvements
2. Cannot purchase land
Mello-Roos
Seller must disclose
TRANSFER TAX
$ 22.00
$138.00
SUBDIVISION MAP ACT
City or County governing body
Master Plan
Districts, streets, sysmic
Planning Commission
Zoning
SUBDIVIDED LANDS ACT:
Condominiums
5 or more units
CONDOMINIUMS: Sidewalks
Common area
CONDOMINIUMS: Type of Property
Residential, Industrial, Commercial
CONDOMINIUMS: Estate in Real Property
Condo and apartment
CONDOMINIUMS: Seller Provides Buyer
Bylaws CC&R's
Land Project
14 days
Real Estate Commissioner
Desist and Refrain Order
Public Report: Given
Anyone, anytime
Public Report: Receipts
Keep 3 years
Public Report: Excessive Price
Not included
Building Code
Higher standard
Building Code: Purpose
Minimum standards
Building Permit
Local Building Dept.
Developer
Streets, etc.
Time Share Gifts
Must reveal required attendance
BUSINESS OPPORTUNITIES:
Franchise
Marketing Plan
BUSINESS OPPORTUNITIES:
Advance Fee for Advertising
Deposit in Trust Acct. and use for advertising.
BUSINESS OPPORTUNITIES:
Bill of Sale
Not Real Property
Appraiser
1. Disclose Interest
2. Date contract was signed
3. Building of no value, deduct demolition.
4. Unacceptable methods - felony.
5. Marketability and Acceptability
6. Not assessed value
7. Strip mall - Certified General License.
Narrative Report
Not Buyers finances
Type of value
Statement of purpose
Fee Appraiser
Self employed
Appraisal
Analysis of facts
Stability of Value
Conformity
Market Value
1. Present worth ability of one commodity.
2. Not Cost
3. D.U.S.T.= Demand, Utility, Scarsity, Transferability.
Principle of Contribution
1. Swimming Pool
2. Effect on net income
Highest and Best Use
1. First Step for vacant land
2. Net return
3. Site analysis
4. If temporary - interim use
Principle of Substitution
1. No prudent person
2. Use design income
3. Lowest price perferred
Principle of Regression
Nearby substandard property
Unearned Increment
Population
Plottage
Common ownership of 2 or more units.
Highest Value
Maximum resources
Appreciation
Increase in value over time
MARKET DATA (COMPARISON) APPROACH
1. Entire property
2. Substitution
3. Subtract features from comparables.
4. Vacant lot
5. Rent schedules
6. Real Estate Licesee's
Difficulty of Market Data
1. Adjusting for differences
2. Rarely similar concerning everything.
Least Reliable
Rapid economic change or inactive market
Warehouse
Square foot
COST (REPLACEMENT) APPROACH
Special purpose properties
Upper Limits of Value
Established by Cost Approach
Replacement
Same utility
New Property
New not Old
Cost of Construction
Quatity survey unit in place, square foot
1910 House
Reproduction
CAPITALIZATION APPROACH
Converts income into value
Effective Gross Income
Deduct for vacancy
Net Income
Do not deduct interest
Present Worth
of future benefits
Capitalization Rate
1. Most difficult part
2. Summation comparison bands of investment
3. Post Office lower rate
Capitalization (Income) Approach
Restaurant
GROSS MULTIPLIERS
Price divided by rent
DEPRECIATION
Loss in value from any cause
DEPRECIATION: Effective Age
15 year old, 6 years
DEPRECIATION: Economic Life
Sufficient income
DEPRECIATION: Obsolescence
Not wear and tear
DEPRECIATION: Functional Obsolescence
1. Not nearby nusance
2. 1-Car garage
Same Building Costs - Different Values
Functional Obsolescence
Economic Obsolescence
1. Economic changes
2. Ectraneous
3. Difficult to ure
4. Not heating system
5. Airplanes
6. Over supply
7. Zoning changes
8. Expensive house amount cheaper ones.
9. Abandon the gas station, toxic waste report.
10. Are tenants prospering?
Obsolescence
Cause Not Method
Bearing Wall
Remodeling, stronger, any angle
Joist
Parallel beam that supports ceiling or floor
Ridge Board
Highest
Footing
Spreading at foundation base
Structural Pest Control Report
1. Anyone from Pest Control Board
2. Must give to Buyer asap
No infestation or damage
Buyer pays
Best time to get report
Before marketing
Deciduous
Not soil
Roof Sloping on Four Sides
Hip Roof
Higher EER
Unit is more efficient
Sheet Metal
Flashing
Insulation
Interior adequate
R-Value
Resistance to heat
Turn Key Project
Ready for occupancy
Elevation Sheet
Exterior views of building
Information Booth
KIOSK
Backfill
Excavation
Cracked Foundation
Soils Report
Plot Plan
Placement of improvements
Foundation Plan
Footings, piers, subflooring
Substandard Building
Not wiring
Repairs to Buildings Equipment
Corrective maintenance
Commercial Acre
Gross area minus streets, sidewalks, etc.
Orientation
Position on site
HVAC
Heating, venting, air conditioning