CE Shop Exam Review

120 days

A DC apartment complex is being converted to condominiums. Advance notice of _____ must be provided to existing tenants and subtenants.

Corporation

A business organization owned by stockholders that exists as a legal entity

Walk-through

A buyer's final inspection of a property to determine if all of the conditions to the purchase agreement have been satisfied and that the home is in the same condition it was in when it went under contract

general warranty deed

A deed that grants the most protection to the buyer because it carries all the possible covenants of the grantor. Also known as a full covenant and warranty deed.

Federal Trade Commission Act

A federal law passed to prevent unfair methods of competition and deceptive advertising; created the Federal Trade Commission

Asbestos

A fibrous mineral found in rocks and soil, previously used in construction materials for its insulating and fire-retardant strength- in many homes built before 1973.

Triple Net Lease

A lease in which the tenant is required to pay rent plus taxes, insurance, and maintenance costs - Charlene entered into a triple net lease with her landlord, so she'd pay the rent and any associated taxes, insurance, and maintenance costs for renting out the space for her nail salon.

General Lien

A lien against a person and all the property owned by that person, whether real or personal (e.g., judgments, estate and inheritance tax liens, income tax liens)

Voluntary Lien

A lien that is agreed to, such as a mortgage

Fixed Rate Mortgage

A loan where the principal and interest payment remains the same over the life of the loan

Clear Title

A marketable title (free and clear of liens or question of ownership).

Budget Mortgage

A mortgage in which taxes and insurance are added to the payment for principal and interest.

Balloon Mortgage

A mortgage that has lower initial payments that do not amortize and provide for a "catch up" lump sum to be paid at a specific time

collateralized mortgage obligation (CMO)

A security that uses mortgage-backed securities as collateral

Closing Disclosure

A statement of final loan terms and closing costs, provided to the borrower three days prior to closing; part of TRID lender disclosure requirements

Bridge Loan

A temporary loan used to cover the interval between two transactions.

full covenant and warranty deed

Aka general warranty deed; a deed that grants the most protection to the buyer because it carries all the possible covenants of the grantor

convertible ARM

An adjustable rate mortgage that allows the borrower to convert the loan into a fixed-rate loan within a specified period of time. -Calli wasn't sure what her finance situation would be. She preferred a fixed-rate mortgage, but liked the lower interest rate of an adjustable rate mortgage. She opted for a convertible ARM to give her the flexibility to convert to a fixed rate mortgage at a later date.

Certified Residential Real Estate Appraiser

An appraiser certified to perform appraisals for one- to four-unit dwellings for federally related real estate transactions.

Sales Comparison Approach

An approach to determining value using similar recent sales data

Base line

An imaginary line that runs east and west and crosses the principal meridian at a specified point; it is used by surveyors as a reference point to locate and describe land under the rectangular survey system.

Historic Districts Coalition

An informal alliance of individuals and organizations that represent the DC historical districts, as well as others who are interested in historic preservation

Wetlands

Areas of standing water, wet all or most of the year, that support aquatic plants, including bogs, marshes, swamps, and sloughs, with very high diversity of species

value x assessment ratio

Calculate assessment value

Loan amount= LTVRx value

Calculate loan amount

Value= Loan amount/LTVR

Calculate value

5

Commissioners must have _____ years of experience to serve on the Real Estate Commission.

3

Commissioners serve ________ year terms without compensation on DC's commission of human rights.

Deed restriction

Contingency placed on ownership

Contigency Clause

Contract clause that, if the property doesn't appraise at or above the sales price, the buyer is allowed to terminate

Bracketing

Determines a probable range of property values by comparing a group of comparable sales to the subject

Mortgage banker

Does the lending. In-house loan processors and underwriters & tend to limit offerings.

Chain of Title

Establishes the title history or the path and proof of property ownership through a public records search for successive conveyances of title and encumbrances; each owner is considered to be a "link" in the chain

$10,000 and up to a year in jail

Fine for criminal convictions

$105,194

For a third violation of the Fair Housing Act in seven years, the civil penalty may be as much as

Cooperative

Form of real property ownership in which the owner is a member of an association that owns the building and shares stock in that association

(Loan amount/value) x 100

How to calculate Loan to value ratio:

his licensed sales assisant

If a licensee wants to share his commission with people who helped get it sold he can share it with ___________

90 Days

If a listing agreement doesn't have a definite termination date all agency agreements terminate after _______ after commencement.

appreciation

Increase in property value

Construction Loan/ Mortgage

Interim financing for developing land. The contract allows for disbursements of funds at specific stages of construction.

Conventional Life Estate

Life estate granted by an individual for someone's lifetime, created by will or deed

The Real Estate Commission has the authority to:

Make and enforce rules governing real estate licensees.

Closing Agent

Manages the closing process, presents and explains all of the closing documents to the parties, and obtains signatures; may be an attorney, broker, or a title company representative

Consumer Price Index (CPI)

Measures changes in the price level of consumer goods and services, drawing samples from various marketplaces

Commingling

Mixing trust funds with business or personal funds - Jack, a real estate broker, is in a hurry. He includes his client's earnest money check into a deposit into his general business fund. This is commingling, and is illegal.

FFHA (Federal Housing Finance Agency)

Oversees Fannie Mae and Freddie Mac and regulates the 12 Federal Home Loan Banks -In addition to its oversight and cleanup responsibilities, FHFA sets limits for conforming loans and percentage targets for loans made to low- and moderate-income borrowers.

50,000

Per Licensee maximum that can be collected from the DC Real Estate Guaranty & Education fund

chattel

Personal property, as opposed to real property

DC Real Estate Commission

Regulatory agency that oversees the practices of real estate brokers, real estate salespersons, and property managers

TRID/TILA-RESPA Integrated Disclosures

Replaced the HUD-1, Good Faith Estimate, and Truth in Lending disclosures with the Loan Estimate and Closing Disclosure - Lenders and brokers alike need to play by the rules of TRID, especially concerning the three day window for consumer review of the documents; any changes means that three day timeframe starts over again.

TILA

Requires lenders to provide credit applicants with disclosures that allow credit offer comparisons.

cease and disist order

Requires you to stop running a deceptive ad or engaging in a deceptive practice; effective immediately upon issuance

$10,000 The commission does have the authority to impose civil fines on licensees, at a maximum of $5,000 per violation.

Serena is accused of commingling trust funds from two different clients. She has a hearing before the DC Real Estate Commission next week. If she is found guilty of two separate license law violations, what is the maximum civil penalty that can be imposed on her?

Truth in Lending Act (TILA)

TILA requires disclosure of all financing terms when specific trigger terms are used in advertising.

The DC Inventory of Historic Sites

The DC Historic Landmark and Historic District Protection Act combined the landmark list with the National Register's catalog of DC properties to create what?

FHA (Federal Housing Administration)

The Federal Housing Administration (FHA) is an agency of the U.S. Department of Housing and Urban Development. It sets underwriting standards for loans it insures, but it doesn't make loans. -Rita obtained an FHA loan, allowing her to put just 3.5% down, and she also appreciated that her loan's credit score requirements weren't as strict as for conventional loans.

Commission

The amount of brokerage fee received for a real estate transaction - Janice's commission was 5%. But she had to give 2.5% of that to the buyer's agent, which left her with 2.5%. Then she had to give 50% of that to her broker, which left her with 1.25%.

assessed value

The dollar amount to which the local tax rate is multiplied to determine property tax owed. -Although the appraised value of Myra's bed and breakfast was $600,000, her tax assessed value was only $475,000.

condominium

The fee simple ownership of a unit in a multi-unit building

Civil Rights Act of 1866

The first statute affecting equal housing opportunity largely interpreted to prohibit racial discrimination

1978

The lead-based paint disclosure is also required because the property was built before_____?

Conveyance

The legal transfer of property ownership to another

30 days

The licensee has________ from the date the decision was made to request a rehearing.

Ammortization

The paying off of a debt with regular installments over a fixed repayment schedule

trustee

The person in charge of carrying out the terms of the trust

conditions, covenants, and restrictions (CC&Rs)

The rules of an association, such as a homeowners association or cooperative

Gross Lease

The tenant pays a fixed rent and the landlord pays all operating expenses; most common type of lease used in residential rentals

three years

Transactional documents and related disclosures must be retained in DC for a minimum of

signature of the grantor, habendum clause

Two essential elements of a deed?

credit, collateral, and capacity

Underwriters consider:

Conversion

Using escrow funds for personal or business purposes -Borrowing money from an escrow account for personal/business use

A person performing real estate activities under the judgement or order of a court, such as a trustee in bankruptcy.

When is licensure not required?

Unilateral Rescission

When one party cancels the contract

The real estate commission

Who or which entity administers the DC Real Estate Guaranty and Education Fund?

Three years

You and your client just successfully closed on a home. How long do you have to keep the agency disclosure notice on file that you collected early on in the transaction?

annual property tax = assessed value x tax rate

calculate annual property tax

Conventional Loans

originators usually package and sell the loans on the secondary market (government agencies not involved in creating)