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262 Cards in this Set
- Front
- Back
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Special Warranty Deed |
Guarantees tittle only against defects arising under grantors period of ownership -Defects existing before that time are not covered. |
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Deeds contain covenants and warranties. Five most common are..... |
Covenant of seizing Covenant of quiet enjoyment Covenant of further assurance Covenant against encumbrances |
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Covenant of seizin |
The grantor claims to be the owner with the right to sell the property. |
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Covenant of quiet enjoyment |
Grantor promises the new owner will not be disturbed with claims against the property.
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Covenant of further assurance
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Grantor is responsible for any documentation needed to transfer tittle. |
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Covenant against encumbrances |
Grantor promises all encumbrances have been disclosed.
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Covenant of warranty forever
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grantor promises no expiring date
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Hazard and Insurance
(FEMA) |
Federal Emergency management Agency. Oversees the national flood insurance program in the united states. Flood prone areas have been identify and mapped out by the army corps of engineers -Properties in this area will be required to have flood insurance. |
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Errors and Omissions E&O |
Insurances protects both broker and sales licenses from a legal claim when a mistake causes financial harm to another in any transaction.
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Homeowners Policy |
Will protect the property from damage due to a variety of reasons including but to limited to fire, smoke, vandalism, storms and other perils. -In a condominium complex, each unit owner will have his or hers own policy to cover the unit. |
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General Liabiality |
Liability risk may include bodily injury or property damage caused by direct or indirect actions of the insured. -Genreal liability insurance protects a company assets if someone is injured on company property |
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EPA ( The environment protection Agency ) Lead based paint. |
Use the lead paint disclosure for all properties before 1978 is required by the residential lead based paint hazard reduction act of 1992. Buyer has has the right to have property inspected for lead within 10 days. May terminate contract 14 days of effective date due to the presence of lead.
There is no duty to remediate lead Seller must keep a record copy of the disclose for at least three years from sale date. |
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Right of first refusal |
The tenant has the right to match or better offer before the property is sold.
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Subletting |
Is the transfer of some or all of the rights and or leased space under a lease to another Liability remains to original tenant |
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Assignement |
Is the transfer of all rights and liabilities to a new tenant under and existing lease |
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Ground Lease
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Tenant usually making a long- term commitment up to 99 years.
-More often for industrial or commercial use |
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Lease purchase agreement
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Also called a lease with an option to buy -Gives tenant the right to purchase at a future date. -Price is set when the agreement is negotiated. |
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Graduated Lease |
A lease with scheduled rent in increase often based on expected business growth. |
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Percentage Lease
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Lease in which all or parts of the amount is based on the receipts of the tenants business.
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Net lease |
Tenant pays rent plus some expensive of the property.
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Gross Lease
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The landlord pays all expenses of the property the tenant pays only rent. |
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Tenancy At Sufferance
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Occurs when a lease expires and the tenant refuses to move out. - Landlord not receiving rent -If tenant pay rents and landlord receives it a landlord tenancy is created. |
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Estate At Will
( Tenancy at will ) |
Is a lease that can be determine by the either party at will without notice. |
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Periodic Tenancy
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Is a lease with a fixed period that is automatically renewed unless the tenant or the landlord acts to terminate it.
-Month to month lease is one of these -Required 30 days to terminate |
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Estate for years |
Is a lease with a specific starting and ending date.
-This lease survives death and to sale of property -No notice is required to terminate. |
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Leashold Estate
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Lease agreements create the leasehold estate. The lease is personal property, but the right to possession that the lease gives is real property.
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Fair Housing Laws
(Civil Rights Act of 1866) |
Prohibits discrimination based on race or color
-There is no exemption |
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Fair Housing Laws
( Federal Fair Housing Act Tittle VIII ) |
Of the civil rights act of 1968, forbids discrimination on the basis of race, color, national origin and religion. - 1974 amendment added sex as protected category sexual orientation is not protected category. - Act was amended in 1988 to include family composition and the handicapped this was enforceable in 1989. Family composition is a minor living with a parent or guardian. |
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Fair Housing Laws
( Senior Housing ) |
Age is not covered, this allows for senior housing.
-100% of the units must be occupied by someone 62 or older. -80% of the units must occupied by someone 55 or older. -Senior housing communities can refuse to sell or rent to those who do not meet age requirements or to families with children. |
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Marketable Title
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Is tittle that a reasonable buyer would accept as clear.
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Equitable Title
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An interest created by a legal document.
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Subrogation Clause
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This clause allows the tittle company to assume the rights of a buyer with respect to any claim
-Title Insurance is for past not future. |
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Abstract of Title
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An abstract is a complete history of title, included in the abstract is a chain of title a list of all owners from the first until today. |
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Essentials Of Title |
A title company attorney views the abstract and renders an opinion of title. - A title report (Snapshot of title at the present time) is prepared. -The state board of insurance sets premiums in many states. Including Texas. -Any claim that may injure the title to a property. Is called a cloud on title. -A quitclaim deed can sometimes be used to fix problems if not then a quit title suit. |
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Market Value
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Market value is defined as the price a willing seller will sell for the price a willing buyer will pay.
- Market value is most commonly associated with the price a party pays for a property. |
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Four Characteristics of Value
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D.U.S.T Demand- There must e a demand for the item and the purchasing power to acquire it. Utility- The item must be needed or wanted Scarcity- There must be a limited supply. Transferability- The item must be able to be sold- Ownership rights must be transferable. |
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Appraisal
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Is an opinion. it is an estimate of value.
- Accuracy of the appraisal depends on the integrity and competency of the appraiser. - Appraisers use principals of value to help them arrive at their final opinion. |
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Highest and best value
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The legal use that gives the greatest return in money an or amenities.
Considered the most important detail by an appraiser. |
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Principle of substitution
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Sets an upper limit on price. Max value of property set by cost of acquiring similar substitute property.
-Used to demonstrate the need to prove correctly and overpriced property will not sell. |
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Principle of conformity
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States that maximum value is found when there is a reasonable degree of similarity or sameness .
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Principle of increasing and decreasing returns |
Invest in property when each dollar invested returns a dollar or more and stops when each dollar invested returns less than a dollar. -Do not over-improve a property. |
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Life Estate |
Is ownership for the duration of someones life -Owner is called life tenant; all the rights except the right to choose who property goes to upon death. -The person who gets the property after life estate is ended is the remainderman. -If life estate is based upon someone else life this is called a life estate per after vie. |
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Eminent Domain |
Is the right of the government to take private property for public use through the action of condemnation. -Only time government must compensate property owners When individual forces the government to buy its property to is called inverse condemnation. |
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Police power |
Is the power given to a municipality to regulate and control the character and use of property for the health, safety and general welfare of the public. |
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Zoning
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The most common example of police power
-Zoning regulations are local laws to control and use. |
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Estate in severalty or
( Sole ownership ) |
Ownership by one person is called estate in severalty
-Corporations or partnerships hold title this way. -one signature is required. One owner. |
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Conditional Use
( Special Use ) |
Can be granted for zoning by a zoning committee or deed restriction ( HOA ) - Planned Unit Development (PUD) |
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Buffer Zone
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Is an area of lan separating one land use from another such as residential from commercial
- Located between incompatible uses -Transitional Use |
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Tenancy In common
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Ownership byt two or more without rights of survivorship.
-Most common type of joint ownership -Its an estate of inheritance Most Common Will able estate of inherintance unequal interest allowed title passes at probate |
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Joint Tenancy
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Ownership by two or more with right of survivorship.
-Upon your death your change goes to surviving co-owner, immediately. -to prevent joint tenancy. time title, interest and possession. Partition is a procedure to divide interest. Poor mans will, rights of survivorship, last man standing. Avoids probate at death. |
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Tenancy by the entirety
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Specific type of joint tenancy where co-owners are husband and wife. One advantage, it avoids probate. |
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Trust
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A property is held by one party for the benefit of another then that property is held in a trust.
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Syndicate
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When two or more parties join together to create and operate a real estate investment is called a syndicate.
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Encumbrances
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Is a limitation on your rights. May also be a cloud on a title. The legal method of removing an encumbrance is to realize it. - Examples of cloud on title; Liens, encroachments easements, lis pendens. |
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Lien |
A change against property as security for debt. - Voluntary lien; Created by the lines or borrowers actions, like out a mortgage or home improvement loan. Involuntary lien; Created by law and can be statutory or equitable (Common law) |
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Severance
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The process of real property becoming personal |
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Fixture
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Personal property that has been attached in such a way to make it real property. - A fixture is never freestanding. - The process may also be called annexation. |
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Personal Property
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Is a right or interest in something of a temporary or movable nature and includes anything not classed as real property. Also called chattel or personalty. Ownership is transferred by a bill of sale.
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Air rights
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Consist of the right to use open space above your land
- Can be sold or leased. - Can be transferred by easement as in elevated highways. -Can be taxed separately from the land. |
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Navigable water
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State owns all navigable water, all waters in rivers, creeks or streams.
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Non navigable water
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Regarding waterfront property landowners may own to the middle of a body of water.
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Riparian rights
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Right to use water from a river or stream that borders your property.
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Littoral rights
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the right to use water from a lake or ocean
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Water Rights
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Water can be used for domestics purposes, flow cannot be interrupted and the water cannot be contaminated.
-State has the right to refuse to grant water right because of shortage of water. |
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Land three physical characterictics
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Non-homogeneity-No two pieces are exactly like. each piece of land is unique Immobility- Land cannot be moved- a person must go to the land Indestructibility- Durability- it will always be there. |
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Statutory Liens
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Statutory law always takes precedence over common law.
Examples of statutory liens include; Federal tax, liens, ad valorem (according to value) and mechanics and materialmens (m&m) lien. An m&m lien can be placed on a property when materials have been delivered or work has begun. |
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Equitable liens
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common law and include seller (vendor) or buyer (vendee) liens. |
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Specific Lien
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***Liens can be specific or general
Specific lien attaches to one or more specific or named properties. ( Example; mortgage ) |
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General Lien
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Attaches to all property of the debtor, not exempt from forced sale. ( A judgment or IRS lien ) Recording is required for a judgment to become a lien. |
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Writ of execution |
If a party wins a judgment and is unable to collect that party can secure a writ of execution from the courts to enforce payment of the lien.
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Encroachment
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When a structure or improvement overlaps or trespasses onto another property.
-Must be disclosed. -Determination requires a survey -Buyers agent recommends a survey -Injured party has the right to request removal of encroachment. |
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Easement
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Allows limited use or enjoyment of another land. it is a right in land and should be created in writing and recorded.
-It is without possesion -created by express (written or verbal) or implied (by actions or evidence) -Terminated by merger, release or abandonment. |
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Dominant Estate
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If you have two parcels of land with road across one park the owner who crosses over the others land is dominant. Would be landlocked with out easement.
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Servient Estate
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The property with the road is servant to the dominant estate.
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Easement Appurtenant
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The most common reason for this type of easement is entry and exit from the property.
-It goes with the land, and the landowner owns the easement. |
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Easement in gross
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Belongs to a person or corporation an example is a utility easement. No matter who owns the land. Still belongs to the utility.
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Party Wall
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A dividing wall in a condominium complex or the common wall between two town homes is a party wall.
-Can also be considered a type of easement. -It is shared owners on both sides. |
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Time shares
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Gives an individual part ownership of a property coupled with the right to exclusive use of it for a specified number of days per year.
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Cooperative ( Co-ops ) |
Are on investment for residents. the lan and buildings are own by a corporation. Corporations pays for the mortgage, property taxes and maintenance of the buildings. |
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Assessed Value
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Value of your property for tax purposes
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Escheat
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Property reverts to the state when someone dies leaving no will and no heirs or kindred
- Also used if property is abandoned. |
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Deed Restrictions
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Most common private controls of land use are deed restrictions.
-Also referred to as CC&Rs -HOA,POA, regulations are like deed restriction but usually apply to condominiums complexes and subdivisions. -Deed restrictions are imposed to control land use development and methods and materials for construction. |
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Alienation
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A change of ownership of real property.
- Voluntary alienation; Occurs when an owner transfer title to another, requires written document called conveyance. -Involuntary Alienation- Happens in a court. Foreclosure, bankruptcy, condemnation, escheat. |
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Requirements of a valid deed
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Grantor
Consideration words of conveyance execution delivery legal description of property |
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Defeasible Fee
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Ownership with conditions or terms which if violated reverts back to original grantor or grantor heirs. Also called; -Qualified Fee -Qualified Defeasible fee - Determination Fee |
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Fee simple
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Ownership with the greatest bundle of right. The best type of ownership. -Ownership has all the available rights to the property and can always pass it to his or her heirs. |
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Bundle of rights
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All the legal right that attach to the ownership of real property are called bundle of rights.
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Freehold Estate
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Is ownership
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Lis Pendens
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Is a recorded noticed filed against a specific property. Meaning a lawsuit has been filed and no yet resolved. A lis pendens may become the responsibility of now owner if not resolve before closing.
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Adverse Possesion
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(Squaters rights) Occurs when property is acquired from the rightful owner though the statue of limitations. -Occupancy must be; hostile, visible or open actual. -required time 3 years to 25 years in texas is 25 years. |
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Rectangular Survey System
(Government Survey System) |
Takes into consideration base line, meridians township and sections. -Townships and sections are locate in ranges -One township contains 36 sections -Each section contains 640 acres which is one square mile. -Each acre contains 43,560 square feet. |
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Metes and bounds |
Descriptions that use terminal points and angles and always have P.O.B (point of beginning) also called termination point.
-Might use street names -Oldest method of land description also most common. -Monuments, permanent surveyor makers are often POB |
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Lot, Block and Subdivision description
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Derived from a record map called a plat this is the most common description used in residential listing agreements.
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Trade Fixture |
fixtures installed by a tenant in order to carry out a business. May be removed prior to lease expirations. if not removed they become real property.
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Prior Appropriation
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Theory of water law based on the idea that first in time is first in right.
First landowner to claim rights has to exclusive rights. |
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Assumption Clause
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Allows a new borrower to take over the payments on an existing lain under specified terms and conditions.
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Subordinate Clause
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Allows a lender to move to or take a lower lien position.
This clause would be found in a second mortgage, a house improvement loan or a home home equity loan. |
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Prepayment Clause
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Statement in a mortgage that the mortgagee can pay the entire amount or the stated amount prior to the due date in the note.
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Escalation Clause
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Allows a lender to raise the existing rate an escalation clause is usually found in ARM
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Defeasance Clause |
States that the lien is defeated when the debt is repaid. |
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The principle of regression |
Presence of lowered-valved properties in the neighborhood leads to a declined in the value of your property. Conversely, the presence of higher valved properties will increase the value of your property. |
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The principle of competition |
An increase in competition will result in decreased profits for current providers. -Competitions lowers prices, success leads to competition. |
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The principle of change |
Change is constant and is reflected in values. Appraisers must make adjustments. |
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The principle of anticipation |
Purchase price is affected by exception of future appeal and benefits. |
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The principle of Balance |
Mixed Land used the third result in a maximum value for all properties involved |
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Three basic approaches to appraisal |
-Market date approach -Income approach -Cost Approach |
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Market data approach
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Used primary in residential. It involves comparisons with known sales in the same area. |
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Income approach |
Used for income producing properties Net annual income --------------------------------- rate/ | Market Value rate of | return
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Cost Approach |
Is used for unique properties such as church or government buildings Land value + building reproduction cost - depreciation= value OR Land value + Replacement cost - depreciation= Value |
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Functional Obsolescence
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is brought about by factors in the property. it is often or mostly curable. Ex.... inferior material, curb appeal, not enough baths. |
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Physical Deterioration |
Is ordinary wear and tear. It is curable has the least impact on appraisal because al building have it. Example.... Chipped paint, worn flooring. |
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Economic Obsolescence |
Is a loss of value due to outside factors. Also called external obsolescence and it is incurable - Example.....zoning, air pollution. |
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Assemblage or Plottage |
Combining several parcels of land into one. Result usually increased usability and value of land |
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Comparative Market analysis (CMA) |
Is a tool used by a licensees to help sellers determine a realistic price for their property. |
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Boot |
Additional capital or property included in a transaction to even out the exchange |
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USPAP |
Uniform Standards Of Professional Appraisal Practice. A code appraisers must follow. |
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Gross Rent Multiplier ( GRM ) |
The GRM is a factor based on location and rent a price rent. GRMxRent=Price GRM Is calculated by property value and diving it by monthly rent. |
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COLIC |
Requirements of valid lease and enforceable real estate contract. -Competent parties -Offer and acceptance -Legal purposes -In writing -Consideration |
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Void Contract |
No contract at all- One of the key elements is missing- Invalid contract. |
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Voidable Contract |
one party has the the right to withdraw Example, Minor, signed under duress or under the influence. |
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Unenforceable Contract |
Will not be enforced by the courts -Oral, violates the statue of frauds |
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Express Contract |
Written or spoken |
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Implied Contract |
By actions or evidence but not written or spoken. |
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Time is of the essence |
A clause in a contract that allows each party to hold the other to strict performance on the date specified. - In a contract with this clause, if one party does not perform the contract becomes voidable at the option of the other party. |
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Unilateral Contract |
Binds only one party. An if... then... contract is unilateral. |
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Option contract |
A unilateral contract where one party has the option to buy property at a preset price within a negotiated time period. |
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Bilateral Contract |
An exchange of promises binding both parties. |
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Bilateral Contract |
An exchange of promises binding both parties. |
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Requirements of a valid listing |
Signatures of all owners and the listing licensee property description List Price- this must be set by the seller Definite starting and termination date |
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Exclusive right to sell
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The broker is the exclusive agent and receives the commission eve if the seller sells the property himself. This is the type of listing a broker want. |
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Exclusive agency listing |
The broker is the exclusive agent and receives the commission unless the seller sells it himself. -Usually the seller competes with broker |
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Acceleration Clause |
A provision in a written mortgage or note stating that in the event of default the whole of the principal become due and payable. |
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Sub prime loans |
Loans with risks based pricing- the rates are not published. Borrowers involved are rated A-F. |
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Reverse Annuity Mortgage |
Allows homeowner 62 years of age or older for all borrowed involved, to borrower against their equity without making any payments on the amount borrowed. |
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Construction Loan |
Start term loan with funds advance periodically during the stages of construction. Term loan. -Interest only -Interest rate on this is higher than the rate on a permanent loan. |
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ARM (Adjustable rate mortgage) |
An arm is a loan with an interest rate subject to change as conditions in the market change. |
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Open-end Mortgage |
Permits additional borrowing on the note this is sometimes called a credit card mortgage or a home equity line of credit- HELOC |
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Participation Loan |
Two or more lenders invest in one loan. Allows lender to share the risks. |
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Balloon Loan |
Partially amortized loan with a final payment larger than the other. -Benefits of this type of loan is lower interest rate -The main disadvantage is the high cost of refinancing. |
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Budget Loan |
includes principal, interest, taxes and insurance in the monthly payment known as PITI. -Many loans include FHA, VA and most amortized fixed rate loans are budget mortgages. |
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package loan |
Includes real property plus personal property;
For example a furnished condominium. |
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Blanket loan
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Covers more than one piece of property
-May contain a release clause allowing borrower to obtain partial release by making require lump sum payments |
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Term Loan
( Straight Loan ) |
interest only into the end of the time when the entire principle is repaid. -Zero-amortization loan |
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Fixed rate amortized loan
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Equal regular payments of principal and interest to the loan is repaid. Interest is paid in arrears. |
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Conventional loans
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These loans are neither federally insured not guaranteed.
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Va Loan |
The loan is assumable release of liability does does not result in the loan restoration or entitlement.
-veterans must obtain a certificate of eligibility from VA based on ability to pay ( Cert x 4= Approved max loan amount VA loan interest rates are set by market conditions. The VA must be notified prior to foreclosure by loan servicer on a VA loan. |
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VA |
The Department of Veterans Affairs Guarantees repayment of loan. The guarantee is for the top 25% of the loan. Lenders call it a 75/25 ratio. Guarantee is free to the veteran and protects the lender. Required funding fee may be paid by buyer or seller at closing or included in the loan. Veterans loans need 0% down payment may be prepaid without penalty. |
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FHA
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The Federal housing administration. Primary purpose is to aid in home financing by ensuring the loan. The insurance protects the lender it ensures the whole loan amount.
-the loan requires and approved appraisal and may be prepaid without penalty. The insurance on the FHA is referred to as MIP(mortgage insurance premium) The FHA procurements overseen by HUD. |
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Government loan programs
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Require owner occupancy and assumable.
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Leverage
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The use of borrowed money to make money
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Predatory lending
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When an unscrupulous lender takes advantage of the consumers lack of knowledge regarding lending practices. This is called predatory lending. |
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USURY |
Charging an interest rate higher than the legal limit. Usury law protects consumers.
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Equity
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The difference between the market value of property and the outstanding debt.
-buyers equity is the amount of the down payment -sellers equity is the sale price minus that that on the property |
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Lenders requirements
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Appraisal of property, complete credit report, job history of the borrower and evidence of down payment funds.
28 to 36% would be typical debt ratio for conventional loans. |
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Mortgage Insurance ( PMI ) |
PMI is private mortgage insurance. May be required by lenders if a borrower has less than 20% down payment. PMI allows for the purchase of a home loan with a small down payment. |
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Point
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1% of the loan amount.
- discount points are prepaid interest and tax-deductible. They raised to return or yield to the lender. -Points are paid at closing |
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LTV Ratios |
The loan to value ratio is the loan amount as percent of either the price or the appraised value, which ever is lower.
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Secondary market
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Is where lenders go for money.
-the secondary market warehousing agencies are Fannie Mae, Freddie Mac, Ginnie Mae. The secondary market is funded by investors |
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Non-conforming loans
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A loan unable to be sold to Fannie Mae or Freddie Mac.
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Conforming Loan |
This is standardized loan written on uniformed documents that meets the purchase requirements of Fannie Mae and Freddie Mac.
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Primary market
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Where consumers go to borrow money
Banks, mortgage company..etc |
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Principle of contribution
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The value of a part is determined by its contribution to the total value of the property rather than by it cost.
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License
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Is a permission to do a particular act upon the land or property of another.
License is similar to an easement. Not a right in the land. |
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Taxation
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Property taxes are the highest priority lien on real property.
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Land four economic characteristics
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Scarcity- in short supply where demand is great. Usually based on Geographic consideration Modification- modification is land used and value Is greatly influenced by improvements made by man to the land into surrounding parcels of land. Fixity- land and buildings and other improvements to land I considered fixed or permanent investments Situs- location preference or location from an economic rather than a Geo graphic standpoint. |
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Condominiums |
Established under law referred to as horizontal property act. Each unit is separate legal ownership each owner arranges his or her own financing.
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Redemption
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At any time up to the moment of foreclosure, the borrower has the right to step in and pave what is owed and reclaim property.
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Will |
Testate
Executor Title by devise Beneficiary |
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No will |
Intestate Administrator laws of descent and distribution. Title by descent |
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Foreclosure
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is the legal process instituted by a trustee, lien holder or creditor after eight debtors default on his or her payments. And alternative to foreclosure is deed in live of foreclosure. |
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Short sale
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A sale of secured real property that produces less money than is owed the lender.
It's better than a foreclosure |
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Real estate owned
(Reo) |
Is a class of property owned by a blender
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Recording title
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-Recording is not a requirement of a valid deed
-Recording gives constructive notice of ownership -Recording is always done in the county where the property is located -Document must be acknowledge and in English. |
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Title
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Is both the ownership of something in the legal evidence of that ownership a deed.
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General warranty deed
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Guarantees and protects against defects
Offers buyer the best protection a buyer who wishes to ensure that the seller is conveying good title should request a general warranty deed |
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TREC consumer information notice 1-2
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Notifies the public of the recovery trust account. Applies to both a real estate license holders and inspectors. Must be displayed in the broker's office.
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Intestate
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One without a will is intestate
-Court will point an administrator to settle the estate of an intestate person. - The heirs will inherit Real property according to the laws of descent and will have title by descent. |
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Devise
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Inheritance by will gives title by devise
The property is the devise and the heir is the devisee. |
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Executor |
The person named in the will to settle the estate is called the executor.
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Testate
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One who has a valid will. |
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Testor
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Party who makes a will
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Dedication
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When a developer returns over the streets in a subdivision to the local government, this is called dedication.
-accomplish my recording the plat plan. |
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Patent
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When the government transfers title to an individual uses a patent.
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Bargain and sale deed
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A deed with only one covenant.
Does not provide any warranties about title but promises to grantor the right to convey title. |
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Quit claim deed
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Gives no warranties or guarantees and offers the least protection.
Used to clear a cloud on the title or to hear a defect in title. |
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Open listing
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The owner reserves the right to list with as many brokers as he chooses.
-can sell himself and avoid paying commission. |
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Net listing
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All money over the amount the owner wants for the sale of the property is treated as broker commission.
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Four types of listing agreements
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-exclusive right to sell -exclusive agency -opened listing -net listing |
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Offer
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A properly completed form with price less than, equal to, for more than sellers asking price.
-the offer may be called a purchase agreement -offers must be presented to seller -an offer be withdrawn at any time prior to assistance -an offer can be a accepted, rejected or counter |
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Counteroffer
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A Counteroffer it's actually a rejection of the offer and the presentation of a new offer.
- A counter offer usually a set of some of the terms of the original offer and changes others |
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Earnest money
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A buyers evidence of good faith, submitted with an offer to purchase.
Not necessary in a sales contract It is not consideration Determine by parties in agreements. |
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Novation |
Is the substitution of a new contract for an existing one.
For example when a contract falls |
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Assignment
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Occurs when there is a substitution of a party in an existing contract.
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contingency |
A condition in a contract which has not yet been met
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Default
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Is nonperformance of a duty under a contract
When one of the parties in a contract defaults, that agreement has been breach. |
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Ratification
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occurs when a principal accepts actions that he did not authorize.
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fiduciary relationship |
The relationship based on trust. The relationship governed by the law of agency between broker principal.
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Principal
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a party represented by a broker in an agency relationship also called the client.
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General agency |
Gives the agent the power to buy in his principle in a particular trade or business.
The agents signature binds or commits the client to the agreement. |
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special or limited agency |
Gives the agent the power to perform only specific acts and no others.
The agent does not have the power to find his client/principal |
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Universal agency
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Gives the agent the authority to represent his clients in all matters both business and personal
-equivalent to having full unlimited power of attorney. This is very rare in real estate. |
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Dual agency
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The broker represents both parties with their written permission
May appoint a designated agent to represent the buyer and another agent to represent the seller. |
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Intermediary
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A broker in Texas who has the written permission of the buyer and the seller to represent both parties in a single transaction.
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Principals duties to an agent
( CRIP ) |
Compensation-pay the commission
Reimbursement-repay approved expenses indemnification-defend agent when he follows instructions Performance-comply with a written agreement. |
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Agents duty to principal
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OLD CAR Obedience Loyalty Disclosure Confidentiality Accounting Reasonable care *** trust is not a duty |
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Agency coupled with an interest
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When the agent is also the seller or the buyer.
This is dual role must be disclosed. |
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Subagent
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It's an agent for a person who is already acting as an agent for a principal.
Example; agent showing and in-house listing is An agent for his broker and a subagent to the seller. |
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Stigmatized
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a property where there has been a murder or alleged haunting.
Agents not required to disclose this. |
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Blockbusting
( panic peddling) |
Causing panic selling by homeowners
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Steering
(Channeling) |
Directing buyers into or away from certain areas because of their race, color etc.
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Prima Facia |
Evidence of discrimination.
The equal-housing symbol is a house with an equal inside. The penalty for a first violation is 75,000. The penalty for each additional violation is 150,000. Victims have up to two years to file a complaint |
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The Americans With Disabilities Act
(ADA) |
The Americans with disability was passed 1990.
Removal of barriers came into effect in 1992. |
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Sherman anti-trust act
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What's past to preservice business competition by prohibiting monopolies, Monopolistics practices and restraint of trade.
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MLS
(fees) |
MLS fees Is set by the Board of realtors that owns the MLS service |
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TILA |
Implemented by regulation Z
This act is administered by consumer financial protection Bureau |
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RESPA |
Stands for the real estate settlement and procedure act.
Respa what's administered by HUD but under consumer financial protection bureau RESPA regulates closings on 1-4 Family residential property with federally related financing. |
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Redlining
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The refusal to lend in a particular geographic areas prohibited.
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Right of first refusal
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The tenant has a right to match or better any offer before the property will be sold to someone else
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Note
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Is the instrument for the debt
It is your personal promise to pay |
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Mortgage
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Is a pledge of real property as security for a promissory note
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Hypothecation
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The action of pledging real property as security for a debt
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Mortgagor
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Borrower under a mortgage
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Mortgagee
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Lender under a mortgage
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Deed of trust
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In Texas we use a deed of trust instead of a traditional mortgage. The deed contains a power of sale clause that allows for nonjudicial foreclosure.
Power of sale results in a quick foreclosure |
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Management agreement
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An employment contract obligating in broker to act as a fiduciary to a property owner
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Listing agreement
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An employment contract obligating broker to act as a fiduciary to a seller.
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buyer representation agreement |
An employment contract obligating a broker to act as the fiduciary to a buyer
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Customer
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The third-party- one broker is working with but who is not represented by that broker
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Client
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A party represented by a broker and in agency relationship. Also called the principal
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Principal
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A party represented by broker and an agency relationship. Also called the client
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Fiduciary |
A party acting for another any position of trust; a broker an agents |
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Broker
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a properly licensed party who serves a principal in an agency relationship also called an agent
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Contract for deed
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In statements contract Or land contract Or real estate contract. It's also an instrument for financing the state of real property.
It is seller financing the does not transfer immediately Contract for deed benefits the seller |
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Agency
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The fiduciary relationship between a broker an a principal or a broker an a client
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Mineral rights
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Rights to subsurface land and profits.
May or may not be included in the sale of real property Considered part of real property |
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Puffing
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Puffing uses agitation opinions rather than details affects
Example; the most beautiful landscaping in the world. |
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Reasons for suspension or revocation of a broker or sales agents license |
-Guaranteeing future profits
-Sales agents receiving commission directly from selling, leasing, negotiating, appraising, or auctioning real estate. -Failing to specify definite termination date in a buyer's representation agreement. -Selling real estate by lottery -Not advising a purchaser and writing to get an attorney opinion of title on the abstract or to obtain an owners title policy. -Placing a sign offering to sell, rent or lease Real estate without first obtaining the written permission of the owner. |
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Texas real estate license act
(TRELA) |
Passed by legislation in 1939 to protect the public against unscrupulous brokers and sales agent
-TREC rules always favor the consumer and have the full force and effect of the law |
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Inactive status
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-The license holder must still pay renewal fees and meet SAE requirements. Once past SAE requirements, CE is not required for an inactive status. -Time spent as inactive does not apply towards the four year requirement for a broker certification. -To activate an inactive license, Applied through a broker, pay $50 and complete 18 hours of CE if necessary. |
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License act
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Requires a broker to provide a minimum level of service to a client.
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Senate Bill 489
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Allows a broker to act as an intermediary in a transaction where he represents the seller and the buyer.
Requires a license holder to give information about brokerage services. |
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Advertising |
Must include brokers name or company information. |
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Texas department of insurance regulations regarding mold
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Testing mold is not necessary to determine if it
should be removed. Removal is called remediation Testing after remediation is not required Property owners can assess and remedy their own property without a license. On selling a home the law requires you provide the buyer with copies of all certificates of mold remediation you have received for the property within the past five years. If you hire a mold remediation, he must give you a certificate of remediation no later than 10 days have to work is completed. |
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Homestead |
Texas is statutory estate. Homestead protection is automatic and cannot be waived. |
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Intestate succession
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Refers to how property passes when a person dies without a will or with a will that makes only a partial distribution of his or her property.
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New construction warranty
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Cover's defects in materials faulty work men's ship and structural problems. New construction warranty can be anywhere from one to as many as 10 years
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Warranties on existing homes
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Covers items like heating, air conditioning, electrical, plumbing and appliances. Usually deductible, policies typically provide coverage for one year and are renewal.
All records should be for a minimum of four years. |
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Due diligence
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A fair, proper and due degree of care and activity
-A time period in which a buyer is given the opportunity to have experts inspect the property. The due diligence. Usually begins after the contract has been sign and an acceptance communicated. If the buyer finds objectionable conditions here she typically has the right to withdraw from the purchase prior to expiration of the due diligence period. |
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Community property
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All property acquired after marriage, including property acquired with labor, is jointly owned by the husband and wife.
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Management agreement
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Property manager is a general agent with a broad scope of responsibilities and liabilities. And management agreement is used to create this relationship and defined the role and responsibilities of the agents and the owner.
-operating expenses do not include Mortgage payments debt reductions depreciation and capital improvements. Property and casualty insurance will be necessary to compensate any individuals who may be interested on the property. |
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oil and gas lease |
This lease gives the tenant the right to extract oil and gas from specified property.
How front facing royalties from production are usually associated with this type of lease. |
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The deceptive trade practices act
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Allows for the recovery of triple damages. An individual has two years from the discovery of the deception to file a complaint.
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The homestead exemption
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A tax benefit should not be confused with the Homestead protection. Homeowners must apply for the exemption. Must occupy the home on January 1 to qualify you can back file for two years if you have failed to claim this exemption.
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municipal utility District |
The purpose of the municipal utility District the superbright flood control or drainage, water and sewers to residents of the district.
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Forms of business ownership
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Punishers can before with Gen. partners, Limited partners or a combination of both. In general partnership, all part of share responsibility and liability. In limited partnership limited partners have limited liability and usually are not involved in the day day to d operations of the partnership
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trust accounts
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If the broker upsets the money for deposit and an acts as an escrow agent, the money must be deposited in a special trust accounts set up for this purpose.
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Termination
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When the time. On a lease ends or is cut short
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Expiration
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When a lease agreement close at the end of the lease. In terminates
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Mutual recession
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When the lease terminated by agreement of the parties
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Constructive eviction
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Occurs when a landlord is aware of a property condition and allows deterioration to the point that the building is uninhabitable and the tenants of forced two leave.
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Alienation Clause
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"Due on sale" clause States that the balance of the secured debt becomes due is the the property is sold by the mortgagor without the mortgagee approval.
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Person's exam from real estate licensing
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Court-appointed receivers, trustees, guardians and sheriffs.
Anyone engaged in or carrying out foreclosure Sales A person selling his own property In attorney in fact Anyone selling mobile homes On-site apartment managers Texas license attorneys can handle a real estate transaction for a client for a fee as long as they do not participate in broker to broker commission splits. |
