CE SHOP California Real Estate Principles
CONTRIBUTION, PRINCIPLE OF
An appraisal principle which holds that the value of real property is at its best when the improvements produce the highest return proportionate with their cost - the investment.
Easement by Prescription
An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law.
Estate at will
An occupation of space, for an indefinite period, which can be terminated by either the lessor or lessee at any time. Also referred to as tenancy at will.
Appraisal Report
An opinion of a property's market value given to a lender or client with detailed market information.
rectangular (government) survey system
Based on two sets of intersecting lines: principal meridians (north and sounth) and base lines (east and west).
competition, principle of
Business profits encourage competition, which ultimately may reduce profits for any one business
Warranty Deed
Offers the greatest protection that a deed can give.
Percentage Lease
One that bases the amount of rent on a percentage of the sales generated in the space.
How many feet in an acre?
43,560 feet
Trade Fixtures
Personal property used in a business and can be removed by the lessee when the lease terminates.
Acceleration Clause
a statement in a credit contract that requires you to repay the entire loan immediately if you miss a payment
living trust
a trust that takes effect while the grantor is still alive
Depreciable Base
acquisition cost of an investment property plus any improvements or renovations
Defeasance Clause
A clause used in leases and mortgages that cancels a specified right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment of the mortgage loan.
due on sale clause
A clause, included in many mortgages, permitting the lender to require the borrower to repay the outstanding balance when the property is sold. Prevents loan assumption.
Alienation Clause
A contract clause that gives the lender certain stated rights when there's a transfer of ownership in property. (Often called a due-on-sale clause.)
Express Contract
A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.
Executed Contract
A contract that has been completely performed by both parties.
executory contract
A contract that has not yet been fully performed.
Voidable Contract
A contract that may be legally avoided at the option of one or both of the parties.
Trustee's Deed
A deed executed by a trustee conveying land held in a trust.
Executor's Deed
A deed executed by an executor to convey title to real property owned by a decedent who left a valid will.
Deed in Lieu of Foreclosure
A deed given by the mortgagor to the mortgagee when the mortgagor is in default under the terms of the mortgage. This is a way for the mortgagor to avoid foreclosure.
Quitclaim Deed
A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest.
Redlining
A discriminatory real estate practice where minority groups are prevented from obtaining money to purchase homes or property in white neighborhoods. The practice derived its name from the red lines depicted on cadastral maps used by real estate agents and developers. Today, redlining is officially illegal.
Joint Tenancy
A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition.
Radon
A gas that arises from the earth where radioactive materials are present. Causes lung cancer
VA-guaranteed loan
A government-guaranteed loan designed to help veterans obtain home mortgage loans for which they might not otherwise qualify.
Condemnation Clause
A lease provision which specifies that proceeds be paid to the landlord in the event the leased premises are acquired by the government through condemnation.
Net Lease
A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs.
Strict Foreclosure
A legal procedure which enables the lender to take title from a defaulting borrower without a foreclosure sale. The court grants the borrower a specified amount of time to pay off the loan. If the debt is not paid, title is awarded to the lender.
mortgage lien
A lien or charge on the property of a mortgagor that secures the underlying debt obligations.
Conventional Loan
A loan that requires no insurance or guarantee.
Predial Servitude
A predial servitude is a charge on a servient estate for the benefit of a dominant estate. Estate is a distinct corporeal movable
Blockbusting
A process by which real estate agents convince white property owners to sell their houses at low prices because of fear that persons of color will soon move into the neighborhood
If buyer signs agency agreement. but natural disaster destroys property? what happens
Agreement is terminated by force of law
Steering
Channeling prospective buyers or tenants to particular neighborhoods based upon their race, religion, national origin, or ancestry.
Personal servitude
Charge on a thing for the benefit of a person. There are three: usufruct, right of use, and habitation.
Tenancy in Common
Co-ownership of property in which each party owns an undivided interest that passes to his or her heirs at death.
CMA
Comparative Market Analysis
CERCLA
Comprehensive Environmental Response, Compensation, and Liability Act
Extended title insurance policy
Covers defects of an incorrect survey and boundary encroachments - Buyer will post likely pay for this policy -typically purchased for lender
Cap Rate
Divide the income by the property value.
contractor licensing requirements
Homeowners are exempt if they are working without the intention to sell. Work that costs $500+ requires a license
Income Tax Lien
Lien for non payment of income tax to the IRS
Level of government where building codes are enforced
Local
M.A.R.I.A
Method Adaptability Relationship Intention Agreement.
Valuable Consideration
Money or something that can be converted to money
Implied Contract
Not specifically defined in words. Actions are expected based on social standards/customs. A contract formed in whole or in part from the conduct of the parties.
Plottage
Occurs when two or more sites are combined, with the result that the value of the assembled site is worth more than the value of the sum of each of the individual sites.
Fair Housing Act of 1968
Prohibited discrimination concerning the sale, rental, and financing of housing based on race. Eliminate discrimination caused by blockbusting, steering, and redlining.
Asset held In a land trust
Real Estate
Which category of appraiser can appraise one -4 unit residential property valued under 1 million and that are not complex in nature, and non-residential properties valued below 250000
Residential license
CERCLA amendment says that "innocent landowners" aren't responsible for clean-up of hazardous contamination?
Superfunds amendments and reauthorization act
Gross Lease
Tenant pays rents, landlord pays all expenses of property; most common form of residential lease
Estate at Sufferance
Tenant remains on the property, without the landlord's permission, after the lease has expired
Holdover Tenant
Tenant who remains in possession of leased property after the expiration of the lease term.
Fiduciary Duty
That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.
In what way did Brown vs. Board of Education affect the way fair housing laws are implemented today?
The decision overturned the doctrine of "separate but equal"
Tenancy by the Entirety
The joint ownership, recognized in some states, of property acquired by husband and wife during marriage. Upon the death of one spouse, the survivor becomes the owner of the property.
CONFORMITY, PRINCIPLE OF
The maximum of value is realized when a reasonable degree of homogeneity of improvements is present. Use conformity is desirable, creating and maintaining higher values.
After a general plan is developed, what is the next step in the adoption process
The plan is reviewed at a public hearing by the planning commission
Probate
The process of proving in court that the will of someone who has died is valid, and of administering the estate of a dead person.
Inverse Condemnation
The taking of private property by the government without payment of just compensation as required by the U.S. Constitution. The owner must sue the government to recover just compensation.
Sublease
The transfer of part of the term of a lease, but not the remainder of it, to someone else.
prepayment penalty
a fee charged if you repay a loan before the agreed-upon time
FHA loan
a government-sponsored loan that carries mortgage insurance
Judgement Lien
a lien that is a decree issued by court
Judicial Foreclosure
allows the property to be sold by court order after the mortgagee has given sufficient public notice
Void Contract
an agreement of no legal effect
Easement Appurtenant
an easement benefits the use and enjoyment of a specific parcel of land, it is classified as an easement appurtenant. The burdened property is the servient estate, and the benefited estate is the dominant estate. An easement appurtenant runs with the land, meaning the use of the easement transfers to the next owner of the land automatically.
what must be true for a partnership tp conduct real estate activities?
at least one partner must hold a broker license
advantages for trust
avoid probate. cuz it takes years
two types pf physical deterioration
curable and incurable
The sub agency relationship
ex. Kayla is a licensee w ABC realty and lists a property for seller Devon. Maurice is a salesperson w XYZ realty group and he has a buyer customer who wants to see property.
Non-Judicial Foreclosure
foreclosure that does not require court proceedings or a judgment of foreclosure - the result of the power of sale clause in a deed of trust
When a land trust expires, the trustee must either extend the trust term or sell the real estate and ------
give the proceeds to the beneficiary
former landfillls ?
golf courses/ parks
Net Income Equation
income - operating expenses
how to improve debt- income ratio without reducing debt
increase income
Testamentary Trust
is a trust created by a will. It only comes into use when the person making the will dies.
Fixtures
items of personal property that are attached or annexed to real property
what could be a consequence if there were no secondary mortgage market
lenders might not have funds available to make new loans public
what type of agent is an escrow officer
limited agent
Good Consideration
love, affection or a promise
which legal description method uses compass headings and directions
metes and bounds
reserve fund
money that can be made available for the future expansion of a business. ALSO CALLED ESCROW ACCOUNT
Which occupancy type is eligible for a VA loan
owner occupied
what comprises sum total of buyers mortgage?
principle, interest, taxes, and insurance
Unilateral Contract
promise in exchange for an act
restricted appraisal report
provides a minimal discussion of the appraisal with large numbers of references to internal file documentation. simply a matter of filling out a form
partition
specific divided portion of property that's created as part of a. coronership termination
Single Agency
the agent represents only one party to a transaction.
describe a buydown
the borrower pays a lump sum to the lender to buy down the interest rate, lowering their monthly payment
California land title association
title insurance. shows legal description of the property and the standard its,s it covers such as encumbrances of record.
Why might a license want to make 2 visits to the property as a part of a listing presentation
use info from a tour to prepare the CMA
VOCs
volatile organic compounds. can make air quality toxic at high levels. found in some air fresheners, cleansers, paint, and building materials
When is an ease by necessity created
when a property doesn't have direct access to a road, this type of easement is created across any intervening properties.
how is priority determined when more thank one judgment lien is filed against a property?
whoever filed their claim first receives priority.