Real Estate
Growth vectors
directions and patterns of growth as revealed on the map of a market area.
Escrow
disinterested third party holds all money and documents relating to a transaction until all of the terms and conditions of the escrow instructions have been satisfied.
Truss height
distance from the floor to the bottom edge of a truss support the ceiling or roof; clear height is lower than truss height if there are hanging objects, beams or joists below the truss.
Clear height
distance from the floor to the lowest object hanging from the ceiling over a substantial portion of the industrial work area; defines the minimum height of usable space within the structure; determines; clearance for pallet stacking, racking, fork truck traffic, etc.
To derive the load factor of an office property, one would ________.
divide rentable area by the difference between rentable and usable area.
Torrens System
legal registration system used to verify ownership of real estate.
Capital reserve budget
A plan to finance long-term outlays, such as for fixed assets like facilities and equipment. It includes variable expenses, for such things as remodeling and capital expenses, such as new equipment.
When opening a new brokerage, what should the managing broker write to minimize risk?
A policy manual and a procedures manual.
Cash-on-cash rate:
A return measure that is calculated as cash flow before taxes divided by the initial equity investment.
Klout
A service which provides a measure of online social influence. The score range may be up to 100. The higher the score, the more social media influence in the digital world.
Algorithm
A set of formulas developed for a computer to perform certain functions. Social media sites like Facebook use algorithms in order to develop content-sharing strategies.
Special Agency "limited or specific agent"
A shorter term agency relationship which usually involves the listing of just one property for a relatively short period of time such as for 90-days. - Real Estate Brokerage is Based on Special Agency
Scanner Apps
A smartphone's camera can take scanner- quality photos that convert to PDF files, which can then be emailed from your smartphone.
Errors and Omissions.
A standard E&O policy provides coverage for "damages resulting from any negligent act, error or omission arising out of Professional Services." A standard policy does NOT cover:
Free and Clear Cash Sale
Although not very common, this type of property sale is the simplest. The parties get attorney representation, the seller provides the deed and the buyer pays in cash.
Salient functional features most important to the office user include which of the following?
Amenable floor plans and flexible designs
Adjustment Period
An ARM loan specifies a specific time at which the interest rate may change. The adjustment period may be for any period of time but one year, three years and five years are the most common
Are affiliation fee's permitted?
An affiliation fee may not be charged to a licensee at any time.
Intentional Misrepresentation (Fraud)
An agent may intentionally defraud a buyer by misrepresenting or concealing facts. While it is acceptable to promote the features of a property to a buyer or the virtues of a buyer to a seller, it is a fine line that divides promotion from misrepresentation.
Give an example of a compensation agreement that is not a listing agreement.
An agreement that a broker signs with an unrepresented seller (a FSBO) in which that seller agrees that if he or she enters into a purchase contract with the buyer named in the agreement within a specified time period, the seller will pay a specified commission to the broker's firm at closing.
Forebearance
An agreement to reduce or suspend payments for a short period of time
What is a mail-merge function?
An application allowing for a tailored email to be sent to multiple selected contacts
A market gap is which of the following?
An imbalance between office demand and office supply
What is the primary benefit for the buyer with an installment sales contract?
An installment sales contract offers a means for a marginally-qualified buyer to acquire property (by avoiding standard down payment and income requirements).
Which of the following statements regarding the structure of the Code of Ethics is correct?
Articles are broad statements of ethical principles, and Standards of Practice interpret, support, and revise the Articles.
Irrigated
Artificially watered; suitable for agriculture
Separate Property
Generally is real and personal property acquired by either spouse during marriage.
Promotional items are also known as
Giveaways
Marketable Title
Good or clear title, reasonably free from the risk of litigation over possible defects.
Ginnie Mae (GNMA)
Government National Mortgage Association (GNMA) was established in order to buy special assistance mortgages carrying below market interest rates. GNMA is a government agency under HUD and deals only in VA and FHA mortgages. (See Pass Through Securities.)
Income and Capital gains taxation
Government requires citizens to contribute to the cost of government services by way of taxation. Gov taxes income and capital gains and both affect real property value.
Ownership system
Grants individuals the benefits of property ownership that translate into real property value
To complete the sales comparison approach the appraiser
Weights the comparables
Liabilities
everything a person owes, including credit card debt, charge accounts, student loans, car loans, other installment loans, medical bills, and outstanding taxes.
Puffing
exaggeration of property benefits
Megan's Law (1996)
federal law that requires persons convicted of sexual offences against children to notify local authorities when they move or change employment after they have been released from prison or a mental facility.
LBP
five percent of homes built before 1978 contain some lead-based paint. Although when it is properly maintained and managed this paint poses little risk, there are still an estimated 1.7 million children with blood-lead levels above safe limits, mostly due to exposure to lead-based paint hazards.
The basis for classifying industrial buildings as Type I or Class A is primarily
flammability.
Strip commercial—
free-standing or connected structures arranged in a line along a commercial street; stores generally owned and operated separately, with no central management or leasing program.
Infill coverage
gaps in goods and services being provided in a trade area, vacancies.
The three architectural types of office property are
garden,low/mid rise, and high rise.
Emergency Home Finance Act of 1970
gave Fannie Mae the authority to deal in conventional mortgages. However, several eligibility restrictions and/or risk-sharing requirements were imposed on the mortgages Fannie Mae could buy in order to ease any credit concerns raised by the acquisition of conventional mortgages. This new law also required the HUD Secretary to provide prior approval of Fannie Mae's purchase of conventional mortgages.
Brokerage services
generally involve either the sale or the leasing of real estate. A broker can become involved in a transaction in: Sales & Leasing
option contract
gives the optionee the right to lease or buy a property or a right within a certain period of time. This type of transaction is often used when a development or a change of use is planned, and when a developer needs to assemble a single property from a number of separately owned parcels.
Business cycles
growth, stagnation, decline, indicated by retail sales, stock prices, exports, trade balances, the consumer price index, interest and inflation rates, permits, construction starts.
As of the present, the National Association of Realtors ______.
has convened a PAG to investigate electronic methods of sharing MLS information.
One attribute of file storage in the cloud is that it is possible to ______.
have all your devices access your files simultaneously.
Biotech (Wet Lab)
highly specialized flex buildings that support different kinds of laboratory work where chemicals, drugs or biological matter are tested. This type requires extensive plumbing and water distribution systems, good ventilation, and specialized utilities. Some include special climate controls, dust control, and heavy power.
Telecom/Data Hosting
highly specialized, with reinforced floors to support the weight of heavy electrical equipment, including backup generators and specialized HVAC. They may also include raised flooring to handle cooling and extensive cabling; located close to major communications trunk lines with access to a power supply capable of reliably powering large arrays of computer servers and telecom switching equipment.
independent contractor
responsible for their own income, security taxes and receive nothing from an employer that could be constructed as employee benefit.
Easement
right to use land of another for a particular purpose
Standard forms.
save time and protect against the unauthorized practice of law. Since they are most often prepared by lawyers familiar with the market area, they can address contingencies that are common in the area in a manner that reflects the real estate laws of the state.
Minimum property standards MPS
set of HUD regulations that establish minimum standards for buildings constructed under HUD programs.
A preliminary title report:
shows those items that the title company would exclude from coverage if a policy is issued at a later time.
Showroom--
similar to office buildings in basic construction and layout; combine retail display space with onsite storage and distribution. Typically up to 50% of the space is dedicated to sales.
Research & development-
similar to office/service, combining manufacturing and office uses. This type is designed to house relatively people-intensive activities and usually must provide special tenant improvements, such as "clean rooms" for electronic component manufacturing, product testing areas, cafeterias, lounges, etc.
Brokerage
simply the business if bringing parties together
Nonagent
simply to help both the buyer and seller with the necessary paperwork.
Free-standing and single store--
single structures designed for one or a few tenants, often located on a "pad" or outparcel in the parking area of a shopping center; generally less than 20,000 square feet; often the result of "infilling" to meet unmet specific retail demand near major shopping centers or major corridors.
Light manufacturing—
smaller, less specialized, with fewer heavy-duty features; used for light manufacturing and assembly operations that do not have extensive physical plant and space requirements.
Multi-tenant-
smallest of the industrial buildings (1,000-5,000 SF); often located in a complex which includes support services in or near the complex; often used for warehouse and distribution activities, as well as "incubator space" for small or start-up tenants renting on a short term basis.
Oral contracts are __________.
sometimes valid, but possibly unenforceable.
Class B
space is fairly new and has a good location. Construction is satisfactory. It has very little functional obsolescence or deterioration.
Refrigeration/Cold Storage
specialized with large capacity cold storage and/or freezer space; often used as special distribution centers for products requiring refrigeration.
Retail space supply is defined in terms of ______.
square footage of occupied space by type of user in a trade area
Rectangular Survey System
standardize the description of land acquired by the newly formed federal government.
Certificate of Title
statement of opinion of the titles status on the date the certificate is issued
TYPE II
steel or concrete walls, floors and structural framework similar to Type I
One new way to keep website news information current is _____
subscribable syndicated RSS feeds.
Consumer protection laws
such as equal credit opportunity act and real estate settlement procedures act, affect how the real estate business is transacted and might affect in unforeseeable ways.
Assets
such as stocks or bonds; they can be tangible or intangible - an intangible asset would be the cash value of a life insurance policy; or they can be physical, such as jewelry, real estate, cars or furniture.
According to The REALTORS Standard of Practice 12-10 regarding website advertising, REALTORS may not ______.
use devices to direct, drive, or divert Internet traffic.
Margin
usually between two percent and three percent, at the time of a loan's origination. The margin is added to the current index to set the interest rate, providing the lender the desired yield on the loan.
individual building manager
usually manages a single large property. This manager may be employed by a property manager or directly by an owner and may or may not have a real estate license.
Standard coverage policy
usually the less expensive title insurance option primarily since it offers fewer insurance coverage benefits.
Supply and Demand
Greater supply means producers need to attract more buyers, so they lower prices. When demand is greater means produces higher prices because buyers compete for product.
HUD/FHA
HUD and FHA directly impact entire regions partly by deciding whether or not an urban, suburban, or rural region is fundable with government-backed residential or commercial loans.
Estate for years
Has a definite beginning and ending date. Not necessary to give notice to the landlord to terminate. NO automatic renewal. When this type of lease is over, it's over. Commonly used with commercial leases and some apartment leases.
voluntary tax lien
If property owners initiate the assessment by requesting the local government to provide the improvement, the assessment creates a voluntary tax lien.
Sale "Subject To" a Mortgage
If a grantee takes title to a property "subject to" a mortgage, that person is not personally liable to the lender for payment of the mortgage. The seller is still responsible for making the mortgage payments.
Involuntary tax lien
If a taxing entity initiates an assessment, the assessment creates an involuntary tax lien.
If an order from the Commission denies a license application, what will the order state?
If and when the applicant will be eligible to submit a subsequent license application.
One of the strengths of the sales comparison approach is that it:
Takes into account the competitive value of specific amenities of the subject property
What happens if a payment is made against a licensee from the recovery fund?
The licensee's license will be immediately suspended or permanently revoked.
Deed of Trust
The means by which a trustor conveys real estate to a trustee for the benefit of a beneficiary
Recording the deed is done through which of these?
Constructive notice
Article 9
"Realtors®, for the protection of all parties, shall assure whenever possible that all agreements related to real estate transactions including, but not limited to, listing and representation agreements, purchase contracts, and leases are in writing in clear and understandable language expressing the specific terms, conditions, obligations and commitments of the parties.
Tie-in Arrangements
Arrangements that requires a buyer to purchase additional or unrelated products or services when making a product purchase.
National Electric Code NEC
united states standard for the safe installation of electrical wiring and equipment.
Ownership, Title and Authority
Warrants that the owners are the only title holders of the property and therefore have authorization to sell it.
Partition
a legal way to dissolve the relationship between co-owners of real estate when the parties do not voluntarily agree to its termination
Which of the following statements is (are) TRUE about Article 16?
Article 16 does not prohibit aggressive or innovative business practices which are otherwise ethical.
_____ states that Realtors® agree to arbitration in the case of a violation of the Code of Ethics and agree to be bound by any resulting agreement or award.
Article 17
Which of the following may be cited in an ethics violation complaint?
Articles
Cross
a loading dock situated along two walls at the corner of same building to facilitate transfers from vehicle to vehicle.
lot and block method
a map of a town, section or subdivision where the land is located
Unmet demand for a type of industrial space in a market area is _______.
a market gap presenting possible investment or development opportunities.
Index
a measure of economic conditions.
Easement in gross
an individual or company interest in or right to use someone elses land
What is the minimum E&O insurance limit of liability for one claim?
$100,000
Trademark
A legally protected symbol or logo
Spur
A railroad track belonging to the building owner, connecting to a main line or siding.
Straight amortizied loan
DIFFERENT payment amount every month
What kind of ad usually combines both institutional and product advertising?
Display Ad
Which loans usually require private mortgage insurance (PMI) at certain higher loan-to-value amounts?
FHA Loans
Tenant
Lessee in a residential real property transaction
What is another name for the Lot and block survey method?
Recorded plat method
Fully amortizied loan
SAME payment amount every month
Care
Skill and Diligence
What is the east-west area between two parallels named?
Tier
Grievance committee
as two areas of responsibility - ethics proceedings and arbitration proceedings.
Distressed Property
"real property that is undergoing a reduction in market price due to the pressures of a threatened foreclosure, divorce, estate settlement, drastic economic changes, and/or deteriorating physical condition."
The Charter Act of 1954
"rechartered" Fannie Mae by removing government backing for money borrowed to fund Fannie Mae's secondary market operations and allowing Fannie Mae to finance through private capital. Fannie Mae could now sell its mortgages in addition to purchasing new loans.
Estate for Period to Period
"month to month lease" -Requires proper notice to terminate - 30 days, 60 days or whatever is agreed to in the lease. -No definite ending date. This type of lease renews itself for whatever period of time that was called for in the original lease or whatever is agreed upon in the actual lease.
Article 14
"If charged with unethical practice or asked to present evidence or to cooperate in any other way, in any professional standards proceeding or investigation, Realtors® shall place all pertinent facts before the proper tribunals of the Member Board or affiliated institute, society, or council in which membership is held and shall take no action to disrupt or obstruct such processes. (Amended 1/99)"
Article 7
"In a transaction, Realtors® shall not accept compensation from more than one party, even if permitted by law, without disclosure to all parties and the informed consent of the Realtor®'s client or clients. (Amended 1/93
Article 17
"In the event of contractual disputes or specific non-contractual disputes as defined in Standard of Practice 174 between Realtors® (principals) associated with different firms, arising out of their relationship as Realtors®, the Realtors® shall mediate the dispute if the Board requires its members to mediate.
Article 12
"Realtors® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.
Article 3
"Realtors® shall cooperate with other brokers except when cooperation is not in the client's best interest.
Article 8
"Realtors® shall keep in a special account in an appropriate financial institution, separated from their own funds, monies coming into their possession in trust for other persons, such as escrows, trust funds, clients' monies, and other like items."
Article 6
"Realtors® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client's knowledge and consent.
Article 4
"Realtors® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner's agent or broker.
Article 10
"Realtors® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity.
Article 13
"Realtors® shall not engage in activities that constitute the unauthorized practice of law and shall recommend that legal counsel be obtained when the interest of any party to the transaction requires it."
Article 16
"Realtors® shall not engage in any practice or take any action inconsistent with exclusive representation or exclusive brokerage relationship agreements that other Realtors® have with clients. (Amended 1/04)"
Article 15
"Realtors® shall not knowingly or recklessly make false or misleading statements about other real estate professionals, their businesses, or their business practices. (Amended 1/12)"
Article 5
"Realtors® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties."
Article 11
"The services which Realtors® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.
Fee Simple Defeasible Estate
"a fee estate that is qualified by some condition that, if violated, may "defeat" the estate and lead to its loss and reversion to the grantor."
E-Forms
"drafted" and put into PDF format, which are then emailed to the client. The forms can be discussed and changed via a telephone conference between the broker and client.
The Clean Water Act (CWA) - 33 U.S.C. § 1251 et seq. (1972):
"establishes the basic structure for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters. The basis of the CWA was enacted in 1948 and was called the Federal Water Pollution Control Act, but the Act was significantly reorganized and expanded in 1972. "Clean Water Act"
What is the minimum balance the recovery fund must be kept at?
$400,000.
What is the maximum conforming loan amount limit for a 4-unit property?
$871,450
Disability or Handicap
(including hearing, mobility and visual impairments, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex and mental retardation) that substantially limits one or more major life activities
Institutional advertising
(sometimes called corporate advertising) attempts to establish a positive image of the company, its services and its reputation in the minds of the public.
Disbursing escrow funds/ Commission and or fees
-No earlier than the day the transaction is consummated or terminated and -Not later than the next business day after the transaction is consummated or terminated, unless the broker has received other written direction from all principals to the transaction or their duly authorized agents.
Consequences for violating a duty to a client
-Rescission of the listing agreement (causing a loss of a potential commission) -Forfeiture of any compensation that may have already been earned -Disciplinary action by the state license law authorities, including license suspension or revocation -Suit for damages in court
A license suspended or revoked following payment from the recovery fund will only be reinstated if:
-The licensee reimburses the recovery fund in full for all amounts paid from the fund. -The licensee pays interest on the amounts paid from the fund at the rate of 10% per annum.
Buyer representation
-a buyer who contracts with a broker to locate property and represent the buyer's interests in a transaction is the principal- the broker's client
3 Accepted methods for describing parcels of real estate
-metes and bounds - rectangular survey system -recorded plat method
TITLE to real property
1) the right to ownership of the property including the owners bundle of legal rights 2) evidence that ownership by deed.
Special Warranty Deed
A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of his or her tenure and ownership of the property and not against defects existing before that time, generally using the language, "by, through, or under the grantor but not otherwise."
What form notifies the borrower of the total amount of interest and property taxes paid in the previous year?
1098
How many Articles are included in the Code of Ethics?
17
Sherman Antitrust Act
1890 law banning any trust that restrained interstate trade or commerce
Clayton Antitrust Act
1914 made both substantive and procedural modifications to federal antitrust law. The Clayton Act was designed to cover restraints on interstate trade or commerce that are not covered under the Sherman Act. This included preventing individuals from serving as directors at competing companies.
What year the National Association of REALTORS® become the official name of the organization?
1974
FIRPTA Certificate
1985, Congress passed the Foreign Investment in Real Property Tax Act (FIRPTA) to eliminate the problem of collecting delinquent taxes from foreigners who owned and sold property in the US and left the country without paying the taxes due on the sale.
no one can serve the commission more than
2 consecutive terms
Within what time period must a person file a complaint with the Commission against a licensee?
2 years
Deed
A deed is the most important document at closing, since it transfers the property to the purchaser.
What was the minimum down payment required for a conventional mortgage as of 2018?
3%
Low-/ mid-rise:
3-10 stories in many markets; steel, masonry and concrete construction is the norm; all locations and grades.
What was the minimum down payment for an FHA loan as of 2018?
3.5%
How many acres are there in ½ of a township?
320
What is the maximum conforming mortgage limit for condominiums and townhomes in Kentucky as of 2018?
422,500
If an identification record shows a felony conviction, how soon must the applicant submit the record to the Commission?
5 days
When a license has been revoked how long till another licenses can be issued
5 years from the date of revocation
For how long must a broker keep records of transactions?
5 years.
What was the maximum allowable debt-to-income ratios for conforming loans as of 2018?
50%
The average size of "bulk" space is ________.
50,000 square feet.
How many hours of academic credit must an applicant for a sales associate's license have completed?
6 hours
Reflective
A metallic foil material (usually aluminum) designed to block radiant heat transfer across open spaces.
All actively licensees must successfully complete how many classroom hours of mandatory continuing education each year?
6 hours Continuing Education You must complete 12 hours every renewal period. 6 hours must be in law. You must complete a minimum of 6 hours by December 31st of the first year of the renewal period. However, if you take more than 6 during that first year, you can "rollover" hours to the second year in the renewal period.
What percentage of all funded residential loans nationwide are held by Fannie Mae and Freddie Mac?
60%
Agenda 21
700-page document backed by the vast majority of Western World Nations and the United Nations back in 1992.
At what loan-to-value does PMI insurance begin?
80%
Which answer below is the best example of a Special Agency relationship?
90 day listing
Once a license is suspended following a hearing, how long does the licensee have to reinstate his or her license before it will be cancelled?
90 days
An applicant for a broker's license must first attend what
A 3-hour academic credit brokerage management skills course.
Exchange
A Section 1031 exchange allows a principal to defer tax obligations resulting from the sale. A "like-kind" property is traded in lieu of other consideration, and liability for taxable gain is transferred from one property to another.
What must a licensee provide to an owner selling a property without a listing agreement?
A blank disclosure of conditions form.
What is a piggyback loan?
A concurrent 1st and 2nd loan that allows the 1st mortgage to stay at or below 80% LTV
If a licensee has his or her license permanently revoked, how long will it be before he or she may be issued with another license?
A minimum of 5 years.
Deed in Lieu of Foreclosure
A defaulting borrower who faces foreclosure may avoid court actions and costs by voluntarily deeding the property to the mortgagee. This is accomplished with a deed in lieu of foreclosure, which transfers legal title to the lender. The transfer, however, does not terminate any existing liens on the property.
What must a broker maintain within Kentucky?
A definite place of business.
What does a demand feature mean in a mortgage loan?
A demand feature would allow the lender to require early repayment.
Buffer
A designated area of land controlled by local zoning regulations partly as a "buffer" region to protect adjacent areas from the impacts of development on the local environment.
Legal Description
A detailed way of describing a parcel of land for documents such as deeds and mortgages that will be accepted in a court of law.
Base (in lease terminology):
A face, quoted, dollar amount representing the rate or rent in dollars per square foot per year and typically referred to as the base rate.
Loan origination fee
A fee charged to the borrower by the lender for making a mortgage loan. The fee is usually computed as a 1 percentage of the loan amount.
An agent is not typically defined by which answer below?
A fiduciary to another agent in the transaction.
What is the fine for failing to renew a license on time?
A fine of up to $200.
Stabilized budget
A forecast of income and expenses that can be projected over a short period of time, usually five years.
Limited Liability Company (LLC)
A hybrid form of business enterprise that offers the limited liability of the corporation but the tax advantages of a partnership.
Build-to-suit
A landlord agrees to develop or finish a property to the tenant's specifications, usually with the building cost partly offset by the tenant in the form of increased rent.
Turnkey
A landlord agrees to turn the premises over to the tenant in a ready-to-use condition. This is in contrast to a lease which requires landlord or tenant to make certain improvements before occupancy can occur.
Land lease
A landowner leases land to a tenant, who typically builds and owns the improvements. The landowner retains ownership and receives income. The tenant deducts lease expenses, depreciates the improvements, and can sell the improvements at the end of the lease term.
Americans with Disabilities Act of 1990
A law passed in 1990 that requires employers and public facilities to make "reasonable accommodations" for people with disabilities and prohibits discrimination against these individuals in employment.
If a third party acquires an interest in property being sold, how is a licensee representing a party in the sale obligated to disclose information to the third party?
A licensee representing a party in the sale of real property has no obligation to disclose to a party who acquires an interest in that real property, any information not required by Kentucky license law or applicable federal law.
A "seller agent" is defined by the state law as ______
A licensee who enters into an agency relationship with a seller/landlord
What is the purpose of the Pathways to Professionalism document?
A list of professional courtesies to use on a voluntary basis.
Asbestos
A long, thin, fibrous silicate mineral with insulating properties, which can cause cancer when inhaled.
Open Meetings Law
A state statute which requires local legislature to open up most or all of their meetings to members of the general public.
What is the fee for the licensing examination?
A sum not to exceed $100.
What is the maximum the Commission will pay from the recovery fund per claimant?
A sum not to exceed $20,000.
What is the fee a licensee must pay to real estate education, research and recovery fund when renewing a license?
A sum not to exceed $30.
What is the fee for renewing a broker's or sales associate's license?
A sum not to exceed $30.
Credit History
A summary of a person's borrowing and repayment history
What must an applicant for a broker's license provide as proof of experience in real estate?
A sworn notarized statement signed by the principal broker or other documentation satisfactory to the Commission.
Sublease
A tenant leases some portion of the premises to another tenant, while remaining liable to the landlord for the rent.
What must a property manager maintain for each tenant renting property that is being managed?
A tenant ledger, in electronic or written form.
Assignment
A tenant transfers all interest in the leased property to another party. Assignments and subleases generally preserve the terms of the original lease: gross, net, or percentage.
The letter of intent is characterized as which of the following?
A tenant's non binding statement of interest in leasing the property
Express Actual Authority
A type of actual authority granted by a principal to an agent by written or spoken words
encumbrance
A type of interest in real estate that does not rise to the level of ownership or possession, yet still gives an individual, business, or other entity some degree of use or control of the property.
As-of-Right
A use of land that is already permitted as a principal use within a specific zoning district with no variance request needed.
Market Allocation
Agreements between or among members of a trade to avoid doing business in specific market areas.
How is Gross Leasable Area measured in the BOMA standard?
All enclosed areas designed for exclusive tenant use are measured and totaled, including basements and mezzanines.
Absorption and vacancy
Absorption is a measure of how much space becomes occupied (is removed from the market) over a time period. Vacancy is a measure of how much space is empty at a particular time.
Americans with Disabilities Act (ADA)
Act addresses rights of individuals with disabilities in employment and public accommodations.
A licensee representing a purchaser must submit what to the owner of the property?
All written offers to lease or purchase real estate from the licensee's prospective purchaser-client.
In making dollar adjustments in the sales comparison approach, the appraiser:
Adds value to a comparable that is inferior to the subject
The fact that an exclusive agreement has been entered into with a Realtor® shall not preclude or inhibit any other Realtor® from entering into a similar agreement _____ .
After the expiration of the prior agreement
Which party below is the most likely to be the description for this definition: "A person guided or instigated by another in some action"?
Agents
Group Boycotts
Agreements between or among members of a particular trade that would prevent other members from fair participation in the trade's activities.
What is a contract?
An intangible agreement between parties to perform or refrain from performing some act
A blog is an outlet to post which of the following?
An occasional new listing
Permalink
An online address or URL of a specific post within a website or blog.
Tag Cloud
An online visual representation of user-generated tags for text data or keyword metadata (tags). Tags are usually just single words, and may be shown with different font styles or colors in order to better define their perceived importance.
What kind of retail space is a "pad?"
An outparcel in the parking area of a shopping center
Sale-leaseback
An owner-user sells a property to an investor, developer, or builder and then leases it back, either for continued use as it is or after being developed for the original owner's use.
Build-to-suit
An owner/builder leases land-and-improvements to a user and uses the lease as security to finance and construct the improvements to the user's specifications. The lease is structured to return the capital investment, with interest, to the builder.
Sale/leaseback
An owner/user sells undeveloped land to a landlord/developer who develops it and leases it back to the user. The user gains the tax advantage of being able to expense the lease payments.
Dwelling
Any building or part of a building designed for occupancy as a residence by one or more families.
TRID mortgage loan rules apply to what type of real estate transactions?
Any closed end-loan secured by real property, including unimproved property
Must report discrimination within:
Any person who believes he or she has been discriminated against may file a complaint with HUD within one (1) year of the alleged act. HUD can also initiate a complaint on its own. In Kentucky it is within 2 years
Which answer below is the most likely to be a type of Implied Agency?
Apparent Authority
What must a licensee do before engaging in promotional activities within Kentucky for property located outside of Kentucky?
Apply to the Commission for its approval; comply with the statutes and administrative regulations; comply with any restrictions and conditions the Commission may impose.
Since inception in 1913, the Code of Ethics has required that members deal with monetary disputes in what manner?
Arbitrate monetary disputes rather than litigate.
After the relevant data has been assimilated, the appraiser must then:
Assess highest and best use
When must an agency disclosure agreement be given to a consumer and signed?
At the time a buyer is making an offer and at the time a seller is reviewing that offer.
Flood Insurance
Average flood premium is about 600$ annually but can go up to 6000$ for the highest risk properties
What are the four strategies for managing risk?
Avoidance, reduction, transference, and retention.
The Competitive Market Analysis (CMA) Notice (GCAAR Form - GMA) is usually provided to a client when a licensee has offered a ______.
BPO
Implied Agency
Based on the actions of the parties that imply that they have mutually consented to an agency relationship, an implied agency relationship is formed.
Appraisal Fee
Because the main collateral for the lender's loan is the property itself, the current valuation at the time of closing is very important to the lender. This is especially true if the loan being provided represents upwards of 96.5% (FHA), 97% (conventional) or 100% (VA) of the loan-to-value as compared to the purchase price.
A licensee must deliver a completed Consumer Guide to Agency Relationships before what?
Before receiving confidential information from a prospective party; or before entering a representation agreement; or at the conclusion of the second contact between the licensee and a prospective party.
IRS Common Law Rules
Behavioral Financial Type of relationship
A party's failure to perform a required specified action in a written contract has engaged in ______.
Breach of contract
If Broker A offers to cooperate with Broker B, ______.
Broker B may not assume the cooperation includes compensation.
Improvements
Building an improvement on one parcel of land can affect the land's value and use, as well as that of neighboring tracts and whole communities. For example, constructing a new shopping center or selecting a nuclear power site or toxic waste dump can dramatically shift land values in a large area.
Commercial Zoning Designations:
C1 (Neighborhood Commercial District - small strip malls or individual, detached single-story business offices) C2 (Retail Business and Service District - retail shopping centers) C3 (General Commercial District), CR (Commercial Rural District), MP (Industrial Park District - warehouses may be located here), M1 (Limited Urban Industrial District - clothing design business offices) M2 (Heavy Industrial -larger manufacturing companies).
Prior to the founding of the organization now known as NAR, what statement could it be said about governed transactions?
Caveat Emptor
Steering
Channeling homebuyers toward or away from homes in certain neighborhoods in order to preserve or alter the makeup of that neighborhood. Some examples of steering would be showing a white couple properties in areas that are occupied only by other whites or showing African-American buyers homes that are in integrated areas or areas occupied only by African Americans.
Any person who engages in real estate brokerage without a license is guilty of:
Class A misdemeanor for a first offense. Class D felony for all subsequent offenses. Issuing a fine of between $100 and $1,000. Issuing a jail sentence of up to 6 months. Issuing a fine of between $100 and $1,000 and a jail sentence of up to 6 months.
Which office property would probably generate the lowest rents per square foot?
Class C garden
Tax Districts
Collect funds for providing specific services. Major tax districts in most areas are school districts.
Price Fixing
Collusion between or among members of a particular trade to maintain prices at a set level.
Imperfect market:
Commercial real estate is bought and sold- market in which product differentiation exists, there is a lack of important product information, and certain buyers or sellers may influence the market.
Depositing trust account funds with business account funds is known as?
Commingling funds
Riparian Rights
Common law rights granted to owners of land along the course of a river, stream, or similar flowing body of water.
As questioned in the technology audit, an assessment of social media should include which of the following?
Company policies and procedures for proper use of these channels
Monetary policies
Concerns efforts to control the Supply of money for the purpose of assisting stability and growth in the economy. Through the control of interest rates and the buying and selling of securities.
Property Management
Conducted by a property manager, a person or company hired to maintain and manage property on behalf of the property owner
What is required to be included on an advertisement for properties listed for sale by agents?
Confidentiality
Which industry has the lowest ratio of square feet per industrial employee?
Construction
Bargain and Sale Deed
Contains no express warranties against encumbrances, but it does imply that the grantor holds title and possession of the property.
Apparent Authority
another person believes that an agent is representing a principal solely based upon their observations and actions.
Since the inception of the Code of Ethics, REALTORS have been required to _______.
arbitrate rather than litigate.
Blockbusting
The act of encouraging people to sell or rent their homes by claiming that the entry of a protected class of people into the neighborhood will have some sort of negative impact on property values.
The Code of Ethics requires that REALTORS _______.
arbitrate.
Non-bearing walls
are apart of the interior framework and do not support the building itself
Fannie Mae MBS
Fannie Mae pools loans that generally conform to their standards and converts them into single-class mortgage-backed securities known as Fannie Mae MBS, which they then guarantee as to timely payment of principal and interest.
Safe Harbor Test- IRS Code Section 3508
Is to establish if a real estate agent is in fact an independent contractor.
3 Types of Conventional government backed loans
FHA,DVA, RHS
Fair Housing and Civil rights legislation
Fair housing laws and civil rights legislation aimed at ensuring that all citizens have the same rights to purchase and enjoy real property
Fixed expenses
Costs that do not change from month to month
Variable expenses
Costs that vary in amount and type, depending on the choices you make.
Easement by necessity
Created when an owner sells a parcel of land that has no legal access to a street or public way except over the seller's remaining land.
The National Association of REALTORS® (NAR) is responsible for which of the following activities:
Creating and amending the Code of Ethics.
Why do retail agents need to keep track of business cycles?
Cycles can suggest whether users and investors will be moving forward with real estate plans or postponing them.
In addition to supply and demand, retail market rent is primarily driven by which of the following factors?
Demographics and trade area income
When calculating a Property/project/transaction analysis, a broker MUST
Determine the potential use of the facility in the marketplace
Development costs
Development costs frequently determine not only what kind of use will be highest and best for a property, but also how that use will be achieved—whether by conversion, rehabilitation, or new construction. The major cost items are: permitting, impact fees, materials, labor, debt service, and marketing.
Who is not a major player in the secondary mortgage market?
Fannie Mac
Which of the following types of newspaper ad is the most expensive?
Display Ad
Which of the following best describes the population and expenditure approach to defining and evaluating a retail trade area?
Draw the area around a site that contains enough people and per capita spending to generate required sales at the site.
3 Sections of the Preamble
Duties to Clients Duties to the Public Duties to Realtors
Which of the following are sections of the Code of Ethics?
Duties to the Public
______________ is a shareholder-owned company that works to make sure mortgage money is available for people across the country.
Fannie Mae
Master Escrow Account Log
Each sponsoring broker must keep a master escrow account log identifying all escrow bank account numbers and the name and address of the bank where the escrow accounts are located.
Which direction does the parallel line go when used to identify a township?
East to west
What two pieces of information are needed to estimate the demand for industrial space in a market?
Employee head count changes and the number of square feet per employee type.
1968 Charter Act
Fannie Mae became a fully private company operating with private capital on a self-sustaining basis. As a separate, privately-owned corporation, Fannie Mae became subject to federal corporate income tax, but it was exempt from state income taxes.
Cahners Study
Energy upgrades are the first things that consumers would paye extra for - upto 1000
Who is responsible for ordering the preliminary title report?
Escrow Officer
Who is responsible for ordering the preliminary title report?
Escrow officer
What are ethics? How do they differ from morals, principles, and legal issues?
Ethics are rules of conduct or accepted behavior based on moral principles. They are subjective rules that depend on specific circumstances. Ethics are typically defined as standards of conduct applied to a group or society.
Which of the following are enforced by the local association/board of REALTORS?
Ethics complaints and arbitration requests
Valid but unenforceable contract
Ex: an oral contract that is not in writing.
Puffing
Exaggerated or superlative comments about a property's benefits
Baloon-frame construction
Exterior wall studs continue through the first and second stories.First floor joists and exterior wall studs both bear on the anchored sill. This type of construction is not widely used today.
Flood Insurance
Federal flood insurance affect development in coastal and wetland areas.
Loan Assistance programs
Federal loan assistance programs such as FHA and the Department of Veteran Affairs enable buyers to undertake larger mortgage loans than would have otherwise been possible.
If a licensee decides not to participate in the group E&O insurance program administered by the Commission, what must he or she do?
File a certificate of coverage with the Commission.
what option is available to a homeowner who receives a tax bill that she feels is outrageous?
File a complaint with the local board of assessment review
Monuments
Fixed objects used to identify the POB, all corners of the parcel or ends of boundary segments, and the location of intersecting boundaries.
A rapidly growing company would most likely be concerned with which of the following office user needs?
Flexibility on lease renewals and options
Certificate of Eligibility
Form that allows them to qualify to buy a home with no cash down is one of the best home buying candidates out there.
NAR's Code of Ethics
Founded in 1908 in Chicago under the name of National Association of Real Estate Exchanges. "to unite the real estate men of America for the purpose of effectively exerting a combined influence upon matters affecting real estate interests."
Realtors should strive for
Honesty, Integrity, Fairness, Moral Conduct
HUD Programs
Housing Subsides from agencies such as HUD affect supply and type of housing construction.
fiscal policy
How the government collects revenue and makes expenditures on various services.
Waiver of Right to Receive Completed Property Disclosure Statement -
If the buyers sign here, they are giving up their right to receive the seller disclosures.
Waiver of Right to Revoke Offer
If the buyers sign this waiver, they are saying they have read the disclosure statement, approve it, and are giving up their right to revoke the purchase offer.
Easement by Prescription
If the claimant has made use of anothers land for a certain period of time
Claim Advance
If the loan is insured the property owner may qualify for an interest free loan from the guarantor to bring the account current
Under what circumstances can an out-of-state principal broker engage in commercial real estate brokerage in Kentucky?
If the out-of-state principal broker has a valid cooperation agreement with a Kentucky-licensed cooperating broker.
Deficiency Judgment
If the sale does not yield sufficient funds to cover the amounts owed, the mortgagee may ask the court for a deficiency judgment. This enables the lender to attach and foreclose a judgment lien on other real or personal property the borrower owns.
Straight sale
If the transaction is primarily motivated by investment concerns, the most likely transaction is a straight cash or cash-to-loan sale of the fee simple interest.
Fannie Mae
In 1938, the Federal government established Fannie Mae to increase the flow of mortgage money by creating a secondary market to purchase Federal Housing Administration (FHA)-insured mortgages.
Validity of A Conveyance Contract
In addition to satisfying the foregoing requirements, a contract that conveys an interest in real estate must: -must me in writing -contain a legal description of property -be signed by one or more
Installment sale
In return for incremental payments, the fee interest is transferred incrementally across several tax years. This type is used when the seller wants to spread taxable gain over several years, and the buyer wants to reduce the amount of capital investment per year
Installment sale
In return for incremental payments, the fee interest is transferred incrementally across several tax years. This type is used when the seller wants to spread taxable gain over several years, and the buyer wants to reduce the amount of capital investment per year.
Title company fees
In the state of Texas, buyers generally will buy title insurance as a way to protect both their mortgage lender and the buyers themselves against title defects.
Loose Fill
Includes loose fibers or fiber pellets that are poured or blown into building cavities using special equipment.
Bundle of rights
Includes the rights of possession, control and enjoyment,exclusion and disposition
When an underwriter is looking at an applicant's income, he or she wants to see:
Income that is stable and enough
penalties for antitrust violations can be severe
Individual violators of the Sherman Act can be fined up to $350,000 and sentenced to up to 3 years in federal prison for each offense; corporations can be fined up to $10 million for each offense.
Broker Jim always has a parade float in the annual Fall Holiday Parade. What form of advertisement is broker Jim's float?
Institutional
Which kind of advertising aims at increasing sales by informing the public of a company's capabilities?
Institutional
Active Fraud
Intentional misrepresentation of a material fact for the purpose of gaining an unfair or dishonest advantage over another person. This results in an injury to the person who is relying on the information.
If an escrow account is interest bearing, who receives the interest?
Interest earned on an interest-bearing account will accrue to the party agreed to in writing by all the parties in the transaction.
Rights leases
Interests and rights, such as water rights, air rights, mineral rights, and farming rights, are unbundled from the fee simple interest in the land and leased separately. The buyer typically pays less than the market value of the fee interest and can pay in the form of fees, royalties, or lease payments. Options
Where must contract deposits and money belonging to others be deposited?
Into an escrow account
Where must a property manager deposit a tenant's rent money?
Into an escrow account or management account without unreasonable delay.
What will the Commission do if it receives a record check revealing a felony conviction?
Investigate the charges and order a hearing.
Real estate investor requirements
Investors and lenders take risks and require rewards. Yield requirements change, as do the economics of different types of land use. These changes can make a project feasible or unfeasible.
How does the Code of Ethics benefit the client?
It benefits consumers by imploring licensees to be truthful and honest in all communications and to always place the interests of the client above the licensee's own interests.
If a principal broker has his or her license revoked, what happens to the sales associates affiliated to the broker?
It causes the licenses of all licensees affiliated to the principal broker to be automatically rendered inactive.
Which of the following is true regarding instant messaging?
It is not recommended for transmittal of confidential information.
Right of First Refusal
It is the right of a person to have the first opportunity to purchase or lease a property.
What happens to a license that is not renewed at the end of the renewal period?
It will automatically expire.
Hardship
Job loss / unexpected unemployment Sudden illness or medical emergency Death in the family Divorce Loss of second income Excessive debt obligations Job demotion Inability to pay an adjustable rate mortgage Unanticipated major expenses
Common laws are based upon what?
Judges decisions in civil court and the Jurys decisions on criminal cases
Purchase and Sale Agreement
Known as contract of sale which the buyers agree to purchase a property for a certain price and the sellers agree to convey title to the buyers using a deed or an assignment of lease.
What answer below is NOT a "soft cost" for a builder?
LUMBER
Factors affecting supply
Labor force government controls Monetary policy
Labor Laws
Labor laws and regulations affect the activities of employers, workers and labor unions, with impacts on the cost of goods and services.
Dryland
Lacks groundwater; soil is often alkaline and unsuitable for agricultue
Barren and waste
Lacks water, has poor soil and bad terrain not suitable for most uses
Nonconforming Use
Land use not typically permitted by zoning law, but which already existed at the time the zoning law or amendment was created. Many nonconforming uses may continue to be used by property owners, but this usage may not be modified even further by the property owners.
Which of the following is true regarding rentable area and rentable square feet?
Landlords use this denomination in quoting rent.
Freehold Estate
Lasts for an indeterminable length of time, such as for a lifetime or forever.
Environmental laws
Laws protecting the environment and endangered species directly affect the use of real estate.
Prepayment Penalty
Lenders typically do not want loans that are bringing in high interest to be paid off early. Consequently, a lender will try to control prepayments by including a prepayment penalty clause that allows the lender to assess a penalty to the borrower for paying early
Tiers
Lines running east and west, parallel to the base line and six miles apart, are called township lines
Loan-to-Value Ratio (LTV)
Loan Amount ÷ Sales Price or Appraised Value (Whichever is less)
Advisory services
Loan workouts, Lease Buyouts, Financial analysis,BOP
Special tax District
Local Gov may establish to pay for cost of a specific improvement or service that benefits that area.
The list of professional courtesies in Pathways to Professionalism may be supplemented by which of the following?
Local custom and practice
The list of professional courtesies in Pathways to Professionalism may be supplemented by?
Local custom and practice
Batts and Blankets
Made of mineral fiber -- either processed fiberglass or rock wool -- and used to insulate below floors, above ceilings, and within walls.
Rigid Board
Madefrom fiberglass, polystyrene, or polyurethane and used for work on flat roofs, on basement walls and as perimeter insulation at concrete slab edges, and in cathedral ceilings.
Expense trends
Major operating expense items such as utilities, taxes, marketing, maintenance, and repairs can make properties profitable or unprofitable, regardless of occupancy levels and market rents.
Which of the following statements best describes the central concept of the sales comparison approach?
Make dollar adjustments to the sale prices of comparable properties to account for competitive differences with the subject
Blockbusting
Making a profit by inducing owners to sell by telling them that persons of a protected class are moving into the neighborhood which will have detrimental results, such as the lowering of the property values, an increase in criminal behavior or a decline in the quality of the schools in the area. Blockbusting - also called panic peddling or panic selling -includes subtle as well as obvious actions or inducements.
It is important for the lender to determine the ___________ of a particular piece of property at any given point in time.
Market Value
What is the difference between market value and market price if any?
Market value is an estimate; Market price is the price at which a property is sold
A _____________ is some piece of information that is so important that the parties to the negotiations might change their mind about completing the transaction if they had that information.
Material Fact
The principal objective of the office property owner or landlord is which of the following?
Maximum income
Ad Valorem
Means "Assessed Value" which is detemined according to state law.
A central concern of an office user contemplating expansion or contraction is which of the following?
Minimizing business disruptions
What type of disputes fall under arbitration?
Monetary disputes among broker members of the Association.
Right to Rescind
Most cases the borrower has a right to cancel the transaction by notifying the lender within three days. This does not apply to residential first mortgage loans, but does apply to refinancing and home equity loans.
Fixed Rate Mortgages
Most conventional loans have traditionally been designed as fixed-rate loans. With this common type of mortgage program, the monthly payments for interest and principal never change.
conventional mortgage loan
Most conventional loans require the borrower to make a down payment of 20% or more, making the loan 80% or less of the property's sale price.
Mortgager must protect property from loss due to fire/flood by insurance
Most lenders require that the property be insured for at least 80 percent of its value.
Why have net listings been outlawed in most states?
Net listings are illegal because they violate the requirement that a valid listing agreement must specify a selling price and the agent's compensation. Net listings generally do not benefit the seller.
Under what conditions might a broker hold an authorized disbursement of escrow moneys claim?
Never
The origins of the PLSS systen
New England and then the continental congress passed the land ordinance in 1785
Which form of advertisement works well for an agent that deals with specialized properties?
Newsletters
Which form of advertising is considered the most cost-effective method for selling a home?
Newspaper
Uniqueness
No matter how identical they may appear, no two parcels are ever exactly alike.
Can a principal broker designate him or herself as a designated agent?
No, a principal broker must not designate him or herself as a designated agent.
In which direction do Meridians go as it relates to surveys?
North to south
If a licensee places his or her license in inactive, what must the licensee do?
Not engage in any real estate activity and pay the renewal fees.
Press Releases
Not really an "ad" per se, a press release is free advertising. Many of the stories in the real estate section of the paper are adapted from press releases.
Describe the duty of obedience.
Obedience means to act on the principal's requests regarding the transaction as long as they are legal.
Garden:
One or two stories; sometimes a basement level; often small suite-oriented; typically suburban locations; image-conscious; landscaping important.
What kind of industrial operation is most likely to find a high, hangar-like metal building suitable?
One where heating and cooling aren't important
Circles
Online clusters of friends, family and business associates. when a user wants to share information online they use "circle of contacts"
Forums
Online message boards
How can a licensee whose license was revoked obtain another license?
Only by the discretion of the Commission after 5 years from the revocation.
High-rise:
Over 10 stories in many markets; steel and concrete construction with varying types of skin, e.g., marble, glass, special plastics.
Surface rights
Ownership rights in a parcel of real estate that are limited to the surface of the earth
Reinstatement
Paying the total amount owed by a specific date in exchange for the lender agreeing not to foreclose
What must a sales associate do once his or her license is returned to the Commission following a termination of affiliation with a broker?
Re-affiliate with another broker or place his or her license in inactive.
Listing can Terminate when the following occurs:
Performance: The license has helped the seller find a willing, ready and able buyer Expiration of agreement term- the date arrives that was stated in writing on the listing agreement Termination- The parties either mutually agree to end the relationship or one party decides to end it
What forms can an earnest money deposit take?
Personal checks, cashier's checks, money orders, cash, valuable goods, or any other forms of legal tender
Internet Data Exchange (IDX) policy
Policy that allows all multiple listing service (MLS) members to restrict internet access to MLS property listings.
PITT
Possession Interest Time Title
Net operating income is equal to:
Potential gross income minus vacancy and credit loss minus expenses.
The Golden Rule is part of the _______.
Preamble
Which of these is a free form of advertising?
Press Release
Four P's of Marketing
Price, Product,Promotion, Place
Client
Principal
PITI
Principle, interest, tax, insurance
When can a Realtor® modify the offered compensation with respect to cooperative compensation?
Prior to the time a Realtor® submits an offer to purchase/lease the property.
Fair Housing administration FHA
Prohibits discrimination in housing based on -race -color -national origin -religion -sex -familial status -disability
Stigmatized Properties
Properties are considered stigmatized if a violent crime or death occurred on the property, if there has been illegal drug manufacturing, if gang-related activities have taken place on the property, or if a suicide occurred there. Some properties are even considered stigmatized if there is a rumor that the property is haunted.
Immobility
Property cannot be relocated to satisfy demand where supply is low
Capital expenditures:
Property improvements that cannot be expensed as a current operating expense for tax purposes. Examples include a new roof, tenant improvements, or a parking lot—such items are added to the basis of the property and then can be depreciated over the holding period.
General Warranty Deed
Provides the greatest protection to the buyer because the grantor is legally bound by certain covenants or warranties.
Residential
R1 (Low Density: single-family homes, condominiums, townhomes, or other single units), R2 (Medium Density: two or more units such as a duplex), R3 (High Density: three, four, or more units).
What is the north-south area between consecutive meridians called?
Range
Debt-coverage ratio (DCR):
Ratio of net operating income to annual debt service. Expressed as net operating income divided by annual debt service
What must real estate advertising not be?
Real estate advertising must not be intentionally false, misleading, or deceptive.
Land Trusts
Real estate is the only asset of land trust.
E-key Apps
Real estate professionals who work with modern electronic key-accessed lock boxes can now utilize their smartphones to unlock, read data from, and release the shackle of their lock boxes.
Article 1
Realtors® pledge themselves to protect and promote the interests of their client.
Article 2
Realtors® shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.
The appraisal step in which the appraiser evaluates the value estimates derived by the various appraisal approaches and arrives at a final estimate of value is called:
Reconciliation
What is another name for the Government Survey Method?
Rectangular Survey System
The cost of constructing a functional equivalent of a subject property is known as ______________.
Replacement Cost
Disclosed Dual Agency
Representing both the buyer and the seller required full knowledge and informed consent
The best comparable property for use in the sales comparison approach is the one that:
Requires the fewest and smallest adjustments
What does Coinsurance clause do?
Requires the homeowner to have property insurance equal to 80% of the home's replacement value.
Cooling-Period Rescission
Rescission is the act of nullifying a contract. In many states, parties to certain contracts are allowed a statutory amount of time after entering into a contract, or "cooling period", to rescind the contract without cause.
What is a disclosure of conditions form is not required for?
Residential purchases of new homes if a warranty is offered; the sale of real estate at an auction; a court supervised foreclosure.
at least 4 members on the commison must have been
Residents of Kentucky for 10 years and had an active license for 10 years
Redlining
Restricting the number of loans in certain areas of a community because of its racial or ethnic makeup. The usual justification for redlining is that the lender wants to limit the risks in a deteriorating area. The lender then discriminates against the whole class of risks rather than distinguishing among the individual risks.
Statute of Limitations
Restricts the time period for which an injured party in a contract has the right to bring a lawsuit against another party
Matching future listings that come on the market with a contact's specifications is facilitated by ______.
Salesforce.com
If a real estate transaction involves agents from the same real estate brokerage company, which section of the agency disclosure statement must be completed and what must be designated?
Section II must be completed and it must designate whether the transaction involves designated agency or dual agency by checking the appropriate box
What is a broker who advertises real property at absolute auction obligated to do?
Sell the property to the highest bidder on the day of the auction.
How should a principal broker maintain a property management account?
Separately from all other accounts, or specifically indicate in all escrow records if funds are property management funds.
When the loan amount is greater than the current market value for a listed property, this is called a:
Short Sale
Alluvial
Silty land deposited by a body of water usually good for agriculture
Types of Housing
Single Family Detached Single Family Attached Condominium Cooperative Planned unit developments PUD Converted use properties Factory Built Housing Apartment Building Special use properties
Office properties can be classified by configuration. Which of the following is a form of configuration?
Single-tenant
Which of the following is characteristic of the super-regional type of shopping center?
Site area of 100 acres
Another word or a synonym for "care" in the COALD acronym and description for agency duties can be ........
Skill
tilable/ untillable
Soil, terrain, topography, climate, and existing vegetation are either suitable for ag or unsuitable for agriculture.
Survey
Some lenders may require a survey (or some type of third party engineering report) to verify the validity of the property lines, especially for larger acreage sites.
Which type of inspection covers a home's major mechanical systems?
Standard Home Inspection
John D. Rockefeller's
Standard Oil in 1882 that big business became an issue that the public needed to confront. Standard Oil merged with its competition by forming the Standard Oil Trust. This was basically the establishment of what is known now as a board of trustees.
Transfer Tax
State or local tax payable when title passes from one owner to another.
"A licensee, not in the employ of the listing broker, who acts or cooperates with the listing broker in selling property as a seller's/landlord's agent and is deemed to have an agency relationship with the seller" defines which party?
Sub Agent
The brokers affiliated licenses are acting as a
Subagent to the seller on behalf of the the managing broker when preforming their real estate activities
To derive taxable income, one must do which of the following?
Subtract depreciation and interest from net operating income.
Public Land Survey System (PLSS)
Survey and classify land parcels before naming an owner, particularly in rural and undeveloped land.
Special Assessment Tax
Tax levied against only the owner's who will benefit from the improvements
Tax trends
Taxes usually increase on a property as surrounding land use intensifies. To meet the increasing tax burden, a change in land use is often necessary. With agricultural land, a fall in crop prices along with the increasing tax burden can create tremendous pressure to replace the agricultural use with a higher one.
"Buying" a listing
Technically a property can be listed at any price, however deliberately misleading a client as to the market value of the property to guarantee a listing is an ethical violation. This practice is commonly referred to as:
Within an exclusive right-to-sell agreement, what needs to be listed in boldface type?
That the broker earns a commission on the sale of the property during the listing period regardless of who made the sale, including the owner
What does the Clayton Act do?
The Clayton Act prohibits mergers and acquisitions that are going to lessen competition and hurt the consumer. Private parties can sue violators in federal court for three times their actual damages, plus court costs and attorneys' fees.
Does the Commission set the rates by which licensees are compensated or receive commission?
The Commission does not establish fees or sets rates by which licensees are compensated. A licensee negotiates his or her commission with the client.
If a licensee has committed an escrow account violation, what action will the Commission take?
The Commission may conduct an emergency hearing.
Under what circumstances may the Commission may investigate the actions of a licensee?
The Commission may investigate the actions of a licensee on its own initiative.
What must the Commission do before denying an application for a license or ordering disciplinary action against a licensee?
The Commission must order a hearing
What is not a common way that mortgage funds are shifted?
The Federal Reserve purchasing mortgages from smaller member banks.
The act that required federally-related appraisals to be conducted by a certified appraiser is known as:
The Financial institutions reform, recovery and enforcement Act FIRREA
What does RESPA stand for and what does the law require?
The Real Estate Settlement and Procedures Act states that a transaction's parties must be given accurate closing cost information.
In regard to the creation of an exclusive relationship to provide the same type of service, and the Realtor® did not directly or indirectly initiate the discussion, what is allowed?
The Realtor® is allowed to discuss the terms upon which they might enter into a future agreement.
Which of the following laws enacted mandatory prohibitions on the manufacture, processing, and distribution in commerce of PCBs in the U.S.?
The Toxic Substances Control Act
Summary of the Toxic Substances Act - 15 U.S.C. §2601 et seq. (1976):
The Toxic Substances Control Act of 1976 provides EPA with authority to require reporting, record-keeping and testing requirements, and restrictions relating to chemical substances and/or mixtures. Certain substances are generally excluded from TSCA, including, among others, food, drugs, cosmetics and pesticides.
Truth in Lending
The Truth in Lending Act, Title I of the Consumer Credit Protection Act, is implemented by Regulation Z. This law requires lenders to disclose to buyers the true cost of obtaining credit, so that borrowers can compare the costs of various lenders.
Accretion, Erosion and Avulsion
The amount of land an individual owns may be affected by the natural action of water
What is the difference between the appraised value of a property and its mortgage value, if any?
The appraised value is an appraisers estimate; mortgage value is the value a lender imputes to the property as collateral
Why is the borrower's net worth significant to the lender?
The borrower's net worth indicates ability to keep up with loan's payments if the borrower loses their job.
Right of Redemption
The borrower's right of redemption, also called equity of redemption, is the right to reclaim a property that has been foreclosed by paying off amounts owed to creditors, including interest and costs.
What will happen if a principal broker fails to return a license to the Commission within 5 business days?
The broker will considered to be engaging in improper, fraudulent, or dishonest dealing and therefore in violation of license law.
Inspections
The buyer and seller, or even the lender if they don't like what was seen in the completed appraisal report, may request or demand that a third party inspection report be completed to check the condition or status of a roof, basement, termites and other types of pests, soils and other potential environmental risk factors, or even whether or not the interior home paint contains toxic levels of lead.
A buyer submits an offer to a seller and then dies in a car accident. Before learning of the buyer's death, the seller accepts the offer. Which of the following is true?
The buyer's death terminated the offer.
Steering
The channeling of homeseekers to particular neighborhoods or discouraging potential buyers from considering some areas.
What must a broker first obtain before offering real estate for sale or lease?
The consent of the owner.
Land
The earth's surface, extending downward to the center of the earth and upward infinitely into space, including things permanently attached by nature, such as trees and water.
How does the buyer know how much money to bring to closing?
The escrow agent will subtract the total of the buyer's credits from the total debits and the result is what the buyer needs to bring.
Rate Caps
The first cap (the periodic cap) sets the amount of increase (or decrease) allowed in each adjustment period. The second cap (overall or aggregate cap) sets a maximum interest-rate increase over the life of the loan.
Shell
The foundation, walls, and roof of a building.
In what type of mortgage-backed security does the security holder receive payment of both principal and interest, whether or not is has been collected?
The fully modified pass-through security
Grace Period
The grace period is an agreed-upon time period after the payment is due in which the borrower can still make the payment and not be considered in default.
The Preamble of the Code emphasizes what type of land use?
The highest and best use of the land.
Civil Rights Act 1866
The law prohibits discrimination based on rice in every property transaction but was largely ignored
Deed in Lieu of Foreclosure
The lender may allow the homeowner to "give back" the property.
Extended coverage policy
The more expensive and extensive type of insurance. you will get the same insurance as the standard policy the only difference is that this title insurance covers past events and histories that arent easy to discover without physical inspections or detailed verbal inquires.
Loan Processing Fees
The mortgage broker or bank offering a loan for the purchase deal may likely collect the bulk of their fees by way of charging one, two, three, four, or five separate types of fees that may be listed as a loan origination fee, loan processing fee, mortgage underwriting fee, credit report fees, documentation preparation fee, and / or a funding or closing fee.
Classified Ads
The most common ad type, these ads are the most effective with buyers. There is usually a fairly large classified ad section in the newspaper which attracts potential buyers of single family homes for resale or lease.
If the dispute is not resolved through mediation or if mediation is not required, how must a Realtor® proceed?
The next step in the process is to submit the dispute to arbitration in accordance with the policies of the Board
"Adjusted basis:
The original cost basis of a property plus capital improvements, less total accumulated cost recovery deductions, and partial sales taken during the holding period.
sale and leaseback
The owner of the real estate sells the property and then leases it back from the buyer. The buyer becomes the owner and the former owner becomes the tenant.
Voluntary, Good Faith Act
The parties must create the contract in good faith as a free and voluntary act. A contract is thus voidable if one party acted under duress, coercion, fraud, or misrepresentation.
Efficiency factor
The percentage of a building's rentable area that is actually available for use is the building's efficiency factor. Usable / rentable area
In addition to the demographic makeup of the population and the median income of families in a particular area, what will the market rents for retail space depend on?
The percentage of income families in the area usually spend on the purchase of goods and services from the retail companies in their area.
infrastructure
The presence or absence of physical systems such as roads, sewers, utilities, postal systems, rail networks and airports may suggest or limit the types of use for a site.
Zoning Map
The previously approved map created by the local legislature after adopting a zoning ordinance for the immediate region.
Who is responsible for returning a sales associate's license to the Commission when a sales associate terminates association with a principal broker?
The principal broker.
Capacity to Contract
The principal parties must be legally able to enter into the agreement; i.e., meet certain age, sanity, and other requirements. If not, the lease can be voided.
Search Engine Optimization (SEO)
The process of improving and increasing both the volume and quality of traffic to a website by way of search engines and keywords which interest the users. An example may be when a real estate agent enters the words "Hotels for Sale in Denver, Colorado."
Survey
The purchaser, purchaser's lender, or title company may require a survey to verify the location and size of the property. The survey also identifies any easements, encroachments, or floodplain hazard.
British thermal unit
The quantity of heat required to raise the temperature of one pound of water one degree Fahrenheit at a specified temperature.
What are the purposes of the recovery fund?
The recovery fund has several purposes, including: - Paying outstanding court orders against licensees who have caused financial harm upon citizens through improper, fraudulent or dishonest conduct. - Investment. - Advancing education and research in the field of real estate.
Economic obsolescence:
The reduction in a property's value due to external circumstances such as legislation or changes in nearby property use.
What is a rent roll?
The rent roll of a property is a list of the number of rental units in a property, the length of each lease (expiration date), and the monthly income for each unit.
What are the two areas of agency risks?
The requirement to inform and disclose; the requirement to carry out an agency duty.
Spot Zoning
The rezoning of a single parcel of land which may benefit one or more property owners as opposed to a modification of the comprehensive plan for the entire local region.
Doctrine of prior appropriation
The right to use any water, with the exception of limited domestic use, is controlled by the state rather than by the landowner adjacent to the water.
Subsurface Rights
The rights to natural resources below the earths surface
What will happen if a sales associate fails to re-affiliate with another broker or place his or her license in inactive?
The sales associate's license will be cancelled
Who must approve advertisements by a sales associate?
The sales associate's principal broker.
Breakpoint:
The sales threshold over which percentage rent is due. It is calculated by dividing the annual base rent by the negotiated percentage applied to the tenant's gross sales.
Fully modified pass-through
The security holder receives payment of both principal and interest, whether or not is has been collected.
Modified pass-through
The security holder receives the interest portion of the payment, whether or not it has been collected, and the principal payment when it is collected.
Frontage
The specified number of linear feet for a lot which fronts a dedicated street.
Journal
The sponsoring broker must keep a journal for each escrow account. This journal must show the chronological sequence in which funds are received and disbursed by the sponsoring broker.
Ledger
The sponsoring broker will keep a separate ledger or a separate section of each ledger (as he or she chooses) for each of the various kinds of real estate transactions, such as leases and sales.
A certified appraiser is one who has received certification by:
The state in which the appraiser operates
Statute of limitations
The statute of limitations restricts the time period for which an injured party in a contract has the right to rescind or disaffirm the contract. A party to a voidable contract must act within the statutory period.
Chain of title
The succession of property owners of record dating back to the original grant of title from the state to a private party.
What sanctions can the Commission order against a licensee for improper conduct?
The suspension or revocation of a license; a fine of up to $1,000; placing a licensee on probation for 12 months.
Lease-Purchase
The tenant agrees to purchase the property, but operates under the lease until the terms of the purchase agreement are fully satisfied.
What must a cooperation agreement between an out-of-state broker and cooperating Kentucky include?
The terms of cooperation and compensation; a description of the parties and the commercial real estate; a definite start date and a definite termination date of the cooperation agreement.
What type of information is found in the Loan Calculations section on page 5 of the Closing Disclosure?
The total amount of all payments on the loan, the dollar amount of the finance charges over the life of the loan, the amount financed, the annual percentage rate (APR), and the total interest percentage (TIP)
Tax Base
The total of the appraised or assessed values of all real property within the areas boundaries Tax Base =Assessed values -exemptions
Central Business District (CBD)
The traditional business core of a community which typically is the location where a high concentration of business locations and activity are located within a typically relatively small region of an urban region (e.g., retail and services sector).
utilities
The type, capacity, quality, and cost of utilities are particularly important for certain uses and users.
display ads
These ads are run in other sections of the newspaper, not in the classified section. They usually combine institutional and product advertising to build the name recognition and image of the company, while showcasing specific properties.
Classified Display Ads
These ads combine some aspects of display advertising with the classified ad format. They are printed in the classified section of the paper, but use graphic elements, such as larger type, borders and illustrations, and white space to create a strong impact on the readers.
Customer
Third Party in the Transaction
Small Business Administration (SBA)
This agency provides grants and loans, directly and indirectly, for homeowners, business owners, and commercial property owners. Some of the best leveraged and priced mortgage loans available for a multitude of urban properties come from SBA.
Exclusive buyer agency agreement
This agreement is also known as the exclusive right to represent. With the signing of this agreement, the buyer is legally bound to compensate the agent when the buyer purchases any property of the same type as described in the contract.
Exclusive buyer agency agreement
This agreement is also known as the exclusive right to represent. With the signing of this agreement, the buyer is legally bound to compensate the brokerage firm when the buyer purchases any property of the same type as described in the contract.
E-Tickler system
This allows for ongoing contact with your customer/client base. In addition, you have promised an update to a client/customer within 7 days—this allows you to make that contact in the timely manner promised. An e-tickler system makes it easy to make and keep commitments.
Operating budget
This annual budget includes the income and expenses for ongoing operations.
Negative Amortization Cap
This cap limits the amount of unpaid interest that the lender can actually add to the principal balance. Usually a negative amortization cap limits the total amount the borrowers can owe to 125% of the original loan amount.
Defeasance Clause
This clause states that if the borrower repays the debt when due that words of grant are void and the mortgage is canceled and title is given back to the borrower.
Demising Clause
This clause talks about the landlord leases the property and the tenant takes possession of the property.
Department of Housing and Urban Development (HUD)
This department works on national housing needs. It helps poorer families to buy homes.
Estate at Will
This estate has no time limit. The possession is given with permission but there is no agreement about the rent. This estate can be terminated by either party at any time, with proper notice.
Exclusive-Agency buyer agency agreement
This exclusive contract is between the agent and the buyer. However, with this type of agreement the agent is entitled to payment only if he or she actually finds the property that the buyer purchases. If the buyer finds a property himself or herself, the buyer does not owe the agent a commission.
Exclusive-agency buyer agency agreement
This exclusive contract is between the brokerage firm and the buyer. However, with this type of agreement the brokerage firm is entitled to payment only if the designated agent or another brokerage company actually finds the property that the buyer purchases.
Local Legislature
This governmental body (for example: A City Council) adopts and amends the comprehensive plan, zoning, and land use regulations as well as may issue building permits and perform additional administration functions.
The Environmental Protection Agency (EPA)
This group is one of the most controversial and powerful federal entities in recent times. They have the ability to stop a development proposal completely should they determine that the proposed development site may adversely impact protected wetlands regions, oceans, bays, lakes, streams, or even underground waterways.
due on sale clause
This is a form of acceleration clause that requires the borrower to pay off the entire mortgage debt when the property is sold. The due-on-sale clause is also known as an alienation clause, a non-assumption clause, a call clause or a right-to-sell clause.
Open buyer agency agreement
This is a non-exclusive agency contract between a buyer and a broker. A buyer can enter into similar agreements with an unlimited number of other brokers. Only the broker who actually locates the property that the buyer eventually purchases is entitled to the commission.
Open buyer agency agreement
This is a non-exclusive agency contract between a buyer and a designated agent. A buyer can enter into similar agreements with an unlimited number of other designated agents.
Inbound marketing
This is akin to a more modern version of permission-based "Reverse Marketing" where prospects confirm upfront that they approve of receiving content from business professionals such as real estate agents.
Euclidean II
This is an updated modification of Standard Euclidean zoning which allows for "hierarchical order nesting," or placing one previously disallowed zoning designation within another such as Planned-Unit Developments (PUD) mixed uses.
General Agency
This is the broadest type of an agency relationship between a licensee and a principal. In this type of agency relationship, the agent may be asked to list or manage multiple properties for much longer periods of time than a typical 90 or 120-day listing term. Property Managers who work for the same client or company for several years are one of the best examples of a General Agency relationship.
Platform Frame Construction
This is the type of construction most generally used in home building. Joist are completely covered with subflooring to create a Platform
Master Plan
This term is also referred to as the comprehensive plan for a specific region. This plan is a written plan for future growth strategies for urban, suburban, and rural regions.
Net Lease
This type is also used for office and industrial properties. The tenant pays the base rent, plus some or all of the expenses connected with the operation of the property.
Percentage lease
This type is typical of retail rentals, not office or industrial. Rent is based on a percentage of gross sales generated on the leased site.
Gross Lease
This type is typically used for office and industrial properties. It is also the type of most apartment leases. The landlord pays taxes, insurance, and other operating expenses. The tenant pays a fixed rent (the base rent), plus escalations.
Euclidean Zoning Types:
This zoning type designation was originally based upon codes adopted in the town of Euclid, Ohio. This is the most common type of zoning code designation system used in America in both very small towns as well as large metropolitan cities.
Through what method may an out-of-state licensee apply for a Kentucky license?
Through license recognition.
Both the buyer and lender should have
Title insurance- Insurance for the buyer ensures a clear title and protects his or her investment. Insurance for the lender protects the lender's interest in the property.
List some common agency conflicts of interest.
Undisclosed dual agency, vendor referrals, broker-owned listings, licensees buying for their own account, the fact that the licensee is only paid if the transaction is completed, and property management subcontracting of services.
What is the first checkpoint in the leasing transaction for the agent who is representing a prospective tenant?
To sign a listing agreement with their desired agent
Spray Foam
Two-part liquid containing a polymer and a foaming agent sprayed through a nozzle into wall, ceiling, and floor cavities.
Derivative Work
Updated content based upon one or more preexisting works
Reconveyance Deed
Used to reconvey title to property back to the borrower once a debt has been paid on a deed of trust; also called a release deed
Trustees Deed
Used when a trustee conveys real estate held in the trust to anyone other than the trustor.
Sq or cubic foot method
Using this method, also called the comparative-unit method, the appraiser multiplies the cost per square foot (or cubic foot) of a recently built comparable structure by the number of square feet in the subject property
The overriding need of an office space user is which of the following?
Utility of the premises for the intended business function
Which of the following is normally NOT one of the locational factors driving an industrial user's space needs?
Visibility
a deed executed by a minor is
Voidable
Predatory lending
When a qualified borrower is approved for a mortgage loan, the loan is referred to as "A" paper. A less qualified borrower, perhaps one with credit problems, may have to take a loan at a higher rate of interest, referred to as "B" paper.
Exclusionary Zoning
When a specific geographical region does not provide enough affordable types of housing options which were suggested by the local municipality. The community is then alleged to be practicing exclusionary zoning.
Incentive Zoning
When incentives are provided to real estate developers for providing sufficient affordable housing, open space, day care facilities, or infrastructure features deemed beneficial to the city.
When is it necessary for a licensee to provide a debit and credit type closing statement to the buyer and seller upon closing a real estate transaction?
When the financial institution or the attorney involved in the real estate transaction fails to furnish a closing statement.
Dual Agency
When you represent both the buyer and the seller in the same transaction
Which industry has the highest ratio of square feet per industrial employee?
Wholesale
What is the major difference between an exclusive right to sell listing and an exclusive agency listing?
With exclusive right to sell, the broker has the exclusive right to market the property and receive a commission regardless of who procures the buyer. With exclusive agency, the owner retains the right to find a buyer and sell the property and owe the exclusive broker no commission.
A principal broker must register all branch offices with the Commission within what time frame?
Within 10 days of the creation of a branch office.
Can an applicant for a license or a licensee appeal a decision against them by the Commission?
Yes, an applicant who is not granted a license or a licensee who has a disciplinary action ordered against himself or herself may appeal the decision.
Can a licensee obtain errors and omissions insurance independently?
Yes, provided that the coverage complies with the Commission's requirements.
Can a sales associate manage a branch office?
Yes, provided the sales associate has 2 years' experience in real estate and the branch office is inside a 100-mile radius of the main office.
Water rights
are common law or statutory rights held by owners of land adjacent to rivers, lakes or oceans and are restrictions on the rights of land ownership
designated sales agent
a licensed real estate salesperson or associate broker, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction.
Landlords Agent
a listing agent who acts alone acts in cooperation with a listing agent or acts as a landlords subagent to find or obtain and tenant for residential real property.
Net listing
a listing agreement that provides for a stipulated net price to the owner and the excess over the stipulated net price to be received by the licensee as the fee compensation or other valuable consideration;
Zoning Variances
Zoning rules, codes, or guidelines may be modified with variance requests by property owners or their designated contractor, builder, attorney, or real estate agent.
Amortization plan
a borrower makes a periodic (usually monthly) payment of principal plus interest. These payments result in the loan being paid off gradually over time. - usually fixed-interest, long-term loans of 15 or 30 years. At the end of the loan term, the full amount of the principal and all of the interest is totally paid off and the balance is zero
Loan workouts--
a broker can restructure loan agreements that will work for all parties involved in a transaction.
Development and construction—
a broker with the necessary expertise can act as a consultant or project manager for a client who is developing or improving a property.
liens
a charge against property that provides security for a debt or an obligation
Lease/Rental
a contract that transfers the right to exclusive possession and use of a property for a definite period of time.
Settlement Statement
a detailed accounting of the transaction that is prepared before closing by the closing agent. The statement shows all cash received, all charges and credits made and all cash paid out.
Trust
a device by which one person transfers ownership of property to someone else to hold or manage for the benefit of a third party
Drive-in
a door that allows trucks and forklifts to enter and exit the facility without a change in elevation.
Dock-high
a door that opens at the standard tractor trailer door height (four feet) above the truck court level. Semi-dock or half dock doors open at a two-foot height to accommodate smaller trucks.
Pre-approval
a formal process that only a lender can do. When going through a pre-approval process, the buyers fill out a loan application and give the lender all of the same documentation that's required when applying for a loan after finding a home.
Truss
a framework forming a rigid structure, typically a roof support member.
Percentage Lease
a lease whose rental is based on a percentage of the monthly or annual gross sales made on the site. There is usually a minimum rent required in addition to the percentage of the gross.
Side-loading
a loading dock configured to permit loading and unloading through the side door of a truck.
Lis Pendens
a notice filled in the public record of a pending legal action affecting the title to or possession of property
Which answer below is the most likely to have excluded trade fixtures in a real estate sale?
a restaurant sale
Industrial park
a single tract consisting of multiple structures designed, controlled and administered by a single owner or, perhaps, an association; may be dedicated to mixed uses or earmarked for a single use, such as science and technology, research & development, or light assembly.
Non-Agency
a transaction broker is not an agent for either party but instead acts as a neutral party between both sides.
Implied Actual Authority
a type of actual authority that is granted by a principal to an agent and incidental to express authority or arises from the position held by the agent
Pleded Account Mortgage PAM
a type of graduated payment mortgage under which the owner/borrower contributes a sum of money into an account that is pledged to the lender.
Sill plate
a wooden support member that is laid on top and bolted to the foundation wall.
Radon
an odorless, colorless, tasteless, and radioactive gas created in the ground where uranium and radium exist. Radon can be an extremely deadly gas for humans, causing lung cancer after prolonged exposure. Found in homes all over the united states.Not conformed to any geographical area.
Net Listing
an owner sets a minimum amount that he wants to receive from the sale of the property and lets the broker have as commission any amount above the set minimum.
Pre-tax cash flow differs from net income insofar as it _____.
accounts for a property's financing.
mortgage assumption
act of acquiring title to a property that already has an existing mortgage and agreeing to be personally liable for the terms and conditions of the mortgage, including the payments.
real estate asset manager
acts as the property owners' agent and adviser for the property. He or she plans and directs the purchase, development, and disposition of real estate on behalf of the business and investors. A real estate asset manager focuses on long-term strategic financial planning rather than on day-to-day operations of the property.
If a property is described as "general purpose," it is ______.
adaptable for many different uses and processes
1988, the Fair Housing Amendments Act
added handicap and familial status. Exemption: Housing for older persons is exempt from the prohibition against familial status discrimination if one of the following conditions exists.
Housing and Community Development Act 1974
added sex to the list of protected classes.
Accountablity
agent must be able to account for all monies, documents and other property he or she receives. Brokers must retain these documents for at least 3 YEARS
Wrap around Loan
allows a borrower who has an existing loan to get another loan from a second lender without paying off the first loan.
Market Rent
also known as economic rent, is the level of rent that a specific type of property is likely to command under the current market conditions.
Mutual Consent
also known as offer and acceptance and meeting of the minds, requires that a contract involve a clear and definite offer and an intentional, unqualified acceptance of the offer.
Unit in place method
also known as the segregated cost method, the appraiser multiplies the construction cost (including the construction materials, labor, overhead, and the builder's profit) per square foot (or other appropriate measure) by the number of square feet (or other appropriate measure) of that component part in the subject building.
Prequalification
an Informal process - can be done by a real estate agent or by a lender. A real estate agent can pre-qualify his or her buyers by meeting with them and asking a series of questions about their financial status - income, assets, debts and credit history. Once the agent has collected this information, he or she can establish the price range of homes the buyers can afford.
undisclosed dual agency
an agency relationship in which the agent represents two principals simultaneously, without their knowledge or permission
Agency coupled with an interest
an agency relationship which the agent has an interest in the property being sold. This type of agency cannot be revoked by the principal nor is terminated once the principal dies.
Dual Agent
an agent acting as a buyers agent and a sellers agent in the same transaction
A request for arbitration is usually based on _______
an agreement for compensation between the listing broker and cooperating broker
Void
an agreement that does not meet the tests for validity and therefore is no contract at all. .
Repayment Plan
an agreement to resume making monthly payments with a portion of the past due payments each month until they are caught up.
Trade fixtures
an article owned by a tenant, attached to a rented space, and used in conducting business - also known as a chattel fixture.
Loading
an elevated platform, usually at the same height as the floor of a truck or railroad; may be open on the exterior wall of the building or covered to protect the loading area.
Fee Simple Determinable
an estate that may be inherited
Open-end Loan
an expandable loan which gives a borrower a limit up to which he or she may borrow. Each incremental advance must be secured by the same mortgage and any advances may not exceed the original borrowing limit.
Leasehold estates
are distinguished from freeholds by their temporary nature. Every leasehold has a limited duration, whether the term is 99 years or not stated at all. While the lease conveys exclusive use, it may also restrict such use to conform to the landlord's desires.
Ballon Mortgage
are partially amortized loans. This means that the monthly payments are not large enough to fully amortize the loan by the end of the term, leaving the large balloon payment due.
Antitrust laws
are state and federal laws designed to maintain and preserve business competition. These laws are based on the belief that free enterprise and healthy competition are good for individual consumers as well as the economy.
Negligent Misrepresentation
as the failure to use ordinary or reasonable care in a situation. So negligent misrepresentation is usually the result of an agent giving information carelessly or failing to verify a fact before passing it to the buyer.
International association of assessing officers
assessors should conduct a physical review of properties at least every four to six years
Ginnie Mae I MBS
based on single-family pools and are Ginnie Mae's most heavily-traded MBS product. The underlying mortgages generally have the same or similar maturities and the same interest rate on the mortgages. Ginnie Mae I payments are made to holders on the 15th day of each month.
The Standards of Practice may not _______.
be cited for Code of Ethics violations.
Adjustable-rate mortgages (ARMs)
became very popular in the 1980s when interest rates were at an all-time high. When 30-year fixed rates are in a reasonable range, the adjustable rate does not appeal to most borrowers. For a borrower that only intends to own the property for a short period of time, an ARM may be a good option.
Acceleration clause
borrower fails to pay the mortgage, maintain the property, or perform any other agreement, stipulation or condition contained in the mortgage. Any failure on the part of the borrower can result in the lender's accelerating the mortgage and taking whatever steps are needed to recover the investment.
TYPE III
brick and joist structure with masonry bearing walls; floors, trusses, and other structural framework and roof of wood or other combustible material.
Real property tax reduction-
brokers who understand the tax laws can negotiate with governmental agencies on a client's behalf to reduce the assessed value of the client's property.
Enroachments
building a fence or driveway illegally extends beyond the boundaries of the land of its owner or legal building lines.
Debt Ratio
calculated based on all of the monthly obligations the borrower has, including those items or payments the borrower must make for other debts.
Apparent Authority
can also be described as Ostensible Authority, Implied Authority, or Implied Agency. The agency relationship can be observed to be valid by another principal or agent based primarily upon the actions and interactions between an agent and his or her principal.
Property management
can be defined as the administration of rental or other property by a person or a team of people who are acting for the owner. The management of the property is done for a fee.
Revocation
cancellation of the contract by one party without the consent of the other. For example, a seller may revoke a listing to take the property off the market.
permanence of investment
capital and labor used to build improvement represent a large fixed investment
Fiduciary Duties
care, obedience, accounting, loyalty, and disclosure or notice
Prepayment Penalty
charged to a seller who is paying a loan off prior to the maturity date (e.g., 5, 7, 10, or 30 years).
Secondary Mortgage Market Enhancement Act of 1984 ("SMMEA")
clarified and modified several of HUD's regulatory powers over Fannie Mae. It required HUD to respond within 45 days to any request for new program approval made by Fannie Mae under the 1968 Charter Act and authorized Fannie Mae to purchase and deal in subordinate lien mortgages.
Earnest Money Deposit
money pledged by a buyer to show good faith when making an offer to buy a home
Office/warehouse
combines office space, typically less than 25% of the total, with the more typical industrial uses. Construction is usually more substantial and costly than for bulk space, typically metal, brick, block, or wood; low to middle range of market rents; dock-high loading is common.
Lease vs. own analysis--
commercial property users who are interested only in occupying and using space for their core business purposes may not know whether it is better to lease or own their space.
Price Fixing
competitors agree to set prices or other terms and conditions for products or services rather than letting competition in the open market establish those prices.
Ground Lease
concerns the land portion of a real property. The owner grants the tenant a leasehold interest in the land only, in exchange for rent.
Type I Structure
concrete and steel structure, noncombustible roof.
Home Inspection
conducted to ensure that the home is physically sound and that all operating systems are in proper order
Valid contract
contract that is in writing is enforceable within a statutory time period. A valid contract that is made orally is also generally enforceable within a statutory period, with the exceptions noted below.
Proprietary Lease
conveys a leasehold interest to an owner of a cooperative. The proprietary lease does not stipulate rent, as the rent is equal to the owner's share of the periodic expenses of the entire cooperative.
Flex-
covers a broad range of uses, often combining one or more uses in a single facility, including office, R&D, showroom, light manufacturing, small warehouse and distribution.
Real Estate Transfer Tax
deed is taxed in every Kentucky closing. It is taxed at $.50 for each $500 of the sales price and for each fractional part of $500. This is usually charged to the seller.
PMI (Private Mortgage Insurance)
designed to make sure the lender gets his payments. If the borrower defaults on the loan and subsequent sale of the home doesn't yield enough money to repay the bank, the mortgage insurance
Comparative Market Analysis (CMA)
done by a listing agent to give the seller information about the sales prices of similar homes, so the seller can decide how much to ask for the property.
The Articles of the Code of Ethics comprise the three categories, including _______.
duties to clients and customers, duties to the public, and duties to REALTORS.
Factory built houseing
dwellings that are not constructed at the site but are built off site and trucked to a building lot where they are installed and assembled.
"filtering down"
dwellings that were formerly occupied by middle- and upper-income families decline in quality and value and become available to lower-income families.
Ziplogix, QES and Zipform are examples of ______.
e-contract forms
The office market may be divisible into distinct regions owing to ________.
economic and municipal planning considerations
In general, the office user is most concerned about ________.
employee productivity.
Income Ratio
establishes the borrower's capacity to pay by limiting the percent of gross income a borrower may spend on housing costs.
Underwriting process
evaluation process used to determine the borrower's ability to repay a loan and estimating the value of the property being used as collateral
Blanket Unilateral offer
if a seller gave permission to a broker to submit the property to the MLS, the seller was authorizing the broker to make
Which of the following is true regarding cash flow?
if debt service exceeds NOI, the cash flow will be negative.
Studs
in exterior walls of one and two-story buildings are at least 2 x 4 inches with the 4-inch dimension forming the basic wall thickness. 3 story building 3x4 or 2x6
Bait and Switch
in financing is the practice of advertising credit terms that are not actually available just to attract potential buyers into the financial institution.
Packed Mortgage
includes all the personal property and appliances that are installed on the property. This type of loan has been used extensively in the sale of furnished condominiums.
Office/service & office/showroom
includes more than 25% office space or showroom space. The combination of office use with more typical industrial uses leads to greater parking needs (ratios of 1:300 or 1:400) and 30-35% land coverage. Construction is usually more substantial than for bulk space.
Time-share
includes real property interest in a specified unit for a particular period of time
George W. Bush signed into law the Criminal Antitrust Penalty Enhancement and Reform Act 2004
increasing the maximum criminal penalty for individuals to 10 years' imprisonment and a $1 million fine, and the maximum penalty for corporations to a $100 million fine.
Calculated Rate
index plus the margin establishes the calculated rate, or note rate
Limited rights brokerage
instead of marketing the whole property with a complete bundle of rights, the broker markets single rights or groups of rights, such as air rights, mineral rights, water rights, easement rights, and options.
Financial analysis for the property owner--
institutional and private owners often need a financial analysis to forecast income and expenses.
Payment Cap
insures a set monthly payment that remains the same although the actual interest rate may fluctuate throughout the year. A common payment cap is 7.5 percent of the initial payment.
Passive Fraud
intentional nondisclosure of a material fact. This can happen if a person intentionally fails to disclose a fact or actively attempts to hide the fact.
Real Estate Counseling
involves an independent advice based on sound professional judgement regarding how to buy ,sell and invest in property.
Construction
involves remodeling, interior redecorating or new capital improvements.
Corrective maintenance
involves the repair or replacement of components which have failed or broken down.
Gross building area
is a building's total area in square feet. It is the sum of the total floor areas for an entire building, including shafts, stairwells, other vertical penetrations, basements and garages that are within the building but are not considered rentable area.
Title Insurance
is a contract obligation where one party agrees to reimburse, indemnify, or protect against any potential financial losses or damages to the subject property which may occur under the designated terms and provisions included within the title insurance contract.
RSS Feed
is a family of online feed formats used to publish frequently updated blog and video information in a standardized format.
Deceptive Trade Practices Act
is a federal law that watches over business, including real estate, to make sure that fraud and misrepresentation do not take place as companies provide products and services. DTPA exists to protect the public.
Mortgage
is a financing instrument that creates a lien against a property. The lender who gives the money is the mortgagee, and the borrower who gives the mortgage is the mortgagor. The borrower retains the rights of ownership (title) to the property while the property becomes encumbered by the lien.
Homestead exemption
is a parcel of real property owned and occupied as a family home. Some states exempt a portion of the value of homestead from judgement to protect families from eviction by creditors.
Preventive maintenance
is a schedule of planned maintenance actions aimed at the prevention of breakdowns and failures.
Disclosure
to inform the client of all facts that might affect the client's interests in the transaction. This includes both the facts that the agent knows and those that the agent should have known
Swing/Bridge Loan
is a short-term loan that covers the period between the end of one loan and the beginning of another. Bridge loans are typically used in two situations. 1. To cover the time period between the end of a construction loan and the issue of a permanent loan on a property. 2. When a person needs to borrow money on his or her unsold home (a second mortgage of sorts) to fund the acquisition of a new home. This is useful when a seller will not accept a property sale contingenc
Risk
is a structured approach to dealing with the uncertainties and consequences of risk. In real estate practice, the aim is to reduce risk to an acceptable level through anticipation and planning.
Planned Unit Development (PUD)
is a type of building development with a designed grouping of varied and compatible land uses, such as housing, recreation, commercial centers, and industrial parks, all within one contained development or subdivision.
Abstract of title
is a written, chronological summary of the property's title records and other public records affecting rights and interests in the property.
Commingling
is an ILLEGAL act in which a real estate licensee places client or customer funds with his or her own personal funds. Commingling of a licensee's business and personal funds is prohibited.
Option-to-buy
is an enforceable contract in which a potential seller grants a potential buyer the right to purchase a property before a stated time for a stated price and terms. This is a Unilateral Contract
Option to buy
is an enforceable contract in which a potential seller, the optionor, grants a potential buyer, the optionee, the right to purchase a property before a stated time for a stated price and terms. In exchange for the right of option, the optionee pays the optionor valuable consideration.
Appraisal
is an opinion or estimate of the value of a property as of a specific date.
Adverse Possession
is another means of involuntary transfer. An individual who makes a claim to certain property, takes exclusive possession of it by excluding the true owner and any other title claims.
Estate at Sufferance
is created when a tenant takes legal possession of the property but then remains on the property without the owner's consent after the lease terminates. A tenant who doesn't leave when the lease expires is called a holdover tenant.
Product Advertising
is directed toward the particular properties a company has for sale. With this form of advertising, one firm's ads are in direct competition with the ads of other firms.
Initial rate
is lower than the current market rate and is fixed only for the first adjustment period set by the lender at the origination of the loan.
Will
is made my a property owner to convey title to real and personal property after the owners death.
Real Estate Settlement Procedures Act (Respa)
is of great benefit to consumers during the settlement process. RESPA requires that the parties to certain transactions receive the correct figures pertaining to their closing costs.
executed contract
is one that has been fully performed and fulfilled: neither party bears any further obligation. A completed and expired lease contract is an executed contract: the landlord may re-possess the premises and the tenant has no further obligation to pay rent.
unconscionable
is one that unduly favors the party with superior bargaining power. It is one that a mentally competent person or honest person would normally reject
Voidable
is one which initially appears to be valid, but is subject to rescission by a party to the contract who is deemed to have acted under some kind of disability.
Slab-on-Grade Construction
is probably the easiest foundation to build. It is a flat concrete pad poured directly on the ground. It takes very little site preparation, very little formwork for the concrete and very little labor to create. It works well in warmer climates, but it has problems in the north because the ground freezes in the winter.
Annual debt service
is the annual amount of principal and interest paid to a lender to service the mortgage loan on the property.
Class C
is the classification for all other space. Typically, these buildings are 15 years old or older, have some defects in design or condition, and are in unfavorable locations.
management proposal
is the employment contract for a property manager. The owner is the principal and the property manager is the agent in this agreement, which creates a general agency between the parties. As such, the property manager owes fiduciary duties to the owner.
Net operating income or NOI
is the income produced by a property after all expenses have been deducted from the gross receipts. Several factors affect the net operating income. Market rent Vacancy Expenses
Cash Flow Before Tax
is the measure of the cash received after the net operating income has been calculated and any mortgage-related expenses (called annual debt service) are paid, but before taxes are taken into consideration.
Add-on factor
is the percentage of usable area that is added to usable area to get rentable area. If rentable area is 110 percent of usable, the add-on factor is 10 percent.
Cash Flow After Tax
is the profit that the investor actually receives from income-producing property after the income taxes are paid. It is the cash flow before tax, minus the tax liability.
Duties to Realtors
is the third and final section of the Code of Ethics. We reviewed Articles 1516 which covered the Standards of Practice Realtors® are required to follow in dealing with fellow Realtors® and our brokerages. We also reviewed Article 17 which sets forth the manner in which disputes or alleged violations of the Code must be handled.
Ground Lease
is usually a long-term net lease on the land alone. The landlord owns the land, while the tenant owns the improvements.
individual property manager
is usually a real estate broker who manages properties for one owner or a number of owners. Such a manager may be a member of a small property management firm devoted to full time property management, he or she may be a self-employed manager, or he or she may be one of several managers in a large real estate firm.
One of the Strengths of the cost approach is that
is very accurate for a property with new improvements that represent the highest and best use
what is the purpose of an equalization factor in as valorem taxation?
it adjusts assessments in a locality to make them more consistent with an average level for the state and other higher level jurisdiction
One unique benefit of tablet computing is that ______.
it can access the Web through a cell signal
The Code of Ethics is referred to as a living document because _______.
it is routinely being reviewed and revised based on changes in the industry.
Real Estate
land plus all human-made improvements to the land that are permanently attached
Estoppel
legal doctrine by which a person is prevented from asserting rights or facts that are inconsistent with a previous position or representation made by act, conduct or silence.
Corporations
legal entity - an artificial person- created under the authority of the laws of the state from which it receives its charter.
Constructive Notice
legal presumption that information is available and can be obtained through due diligence (care and activity). This is also referred to as legal notice.
One characteristic of a short sale transaction is that:
lenders may not allow a short sale if they discover other assets the seller concealed.
Deed Restriction
limits the use of property by current owner
resident manager
lives on the property and may be employed by a real estate broker, a managing agent or an owner to manage a property on a part-time or full-time basis.
Blanket Loan
loan covers more than one piece of property. Land developers commonly use blanket mortgages when they buy a plot of land and divide it into many separate lots. Most include a Release Clause
Sub-prime loans
loans to unqualified home buyers - those who have poor credit and whose ability to repay the loan is risky because of their income
Situs
location - the preference in a specific area
Earnest money
lso known as trust account money, is a deposit, usually made in the form of a check, to show evidence of the buyer's intention to carry out the terms of the contract in good faith.
area amenities
make one site more agreeable than another and can be critical determinants for some users. hotels, restaurants, parks etc.
Uniform Electric transactions act
makes it legal in many states to use electronic signatures in electronic transactions. These are enforceable documents in complying states.
American with Disabilities Act 1992
mandates that persons with disabilities have equal access to jobs, public accommodations, government services, public transportation and telecommunications. It prohibits discrimination in the "full and equal enjoyment of goods and services" provided by public places, including hotels, shopping centers and offices, and it applies to the lease and operation of commercial facilities.
Advertising
many not exclude language indicating preference or limitation.
In a mediation procedure, the agreement is determined by the
mediating parties.
Ginnie Mae II MBS
modified pass-through mortgage-backed securities. An issuer may participate in the Ginnie Mae II MBS either by issuing custom, single-issuer pools or through participation in the issuance of multiple-issuer pools.
Graduated Payment Mortgage GPM
monthly payment for principal and interest gradually increases by a certain percentage each year for a certain number of years and then it levels off for the remaining term of the mortgage. This type of plan might be especially attractive to someone who is just starting a career and expects that his or her income will increase over time.
Purchase Money Mortgage
most commonly a technique in which the buyer borrows from the seller in addition to the lender. The purchase money mortgage is created at the time of the purchase and delivered at the time the property is transferred as part of the sale transaction. This is sometimes done when a buyer cannot qualify for a bank loan for the full amount, so the seller "takes back" a portion of the purchase price as a second mortgage.
Shopping center-
multi-tenant structures designed to meet the particular needs of a trade area; amenities and parking are appropriate to an anticipated level of sales volume; usually managed as a single property. \
What is the legal requirement regarding the number of escrow accounts that can be opened?
no limit
an escrow account must be
non interest bearing and must be maintained in a federally-insured depository
Open listing
non-exclusive listing that allows a seller or buyer to engage a number of different brokers to sell or help purchase property. The broker who brings the buyer or finds the suitable property gets the commission. If the owner sells the property or the buyer finds his or her own property, no commission is owed to any broker.
A syndicated web distributor of listings is responsible for ______.
none of the representations about the property.
Free-standing-
normally built for one user and a specific use, such as manufacturing, distribution, assembly, packaging, etc.; the owner is frequently also the user/occupant.
Actual Notice
not only is the information available, but someone has been given the information and actually knows it.
Obediance
obey the principals directions as outlined in the contract
An adhesion contract __________.
offers one party only the option of accepting or rejecting the contract.
Class A
office space is of the highest quality. Rental rates are also at the top of the office rental scale. Class A office space is developed at superb locations with excellent visibility.
Large manufacturing-
often designed and built for particular manufacturing processes, shipping and receiving; sizes range up to 2,000,000 SF and more; subject to functional obsolescence and limited marketability when the processes become obsolete; frequently include such features as three-phase electrical power, heavy ductwork, buss ducts, pressurized air or water lines, floor drains, high capacity ventilation and exhaust systems, storage tanks and cranes.
adhesion contract
one dictated by the party who has the greater bargaining advantage. It gives the weaker party only the options of accepting or rejecting the contract.
bilateral contract
one in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party.
executory contract
one in which performance is yet to be completed. A sales contract prior to closing is executory: while the parties have agreed to buy and sell, the buyer has yet to pay the seller and the seller has yet to deed the property to the buyer.
In Rem Proceeding
one that is directed against a thing rather than against a person. typically involves a forced sale of property
authorized disbursement
one which is made on behalf of, and at the written direction of, all principals to the transaction or their duly authorized agents.
Aleatory
one whose effects are triggered by the occurrence of a chance event ("aleatory" means "dependent on chance").
unilateral contract
only one party promises to do something, provided the other party does something. The latter party is not obligated to perform any act, but the promising party must fulfill the promise if the other party chooses to perform.
Infeasibility
otherwise valid contract can be canceled if it is not possible to perform. Certain personal services contracts, for example, depend on the unique capabilities of one person, which cannot be substituted by someone else. If such a person dies or is sufficiently disabled, the contract is cancelable.
One guideline for an effective website is ______.
to make it easy to navigate.
Property management
owner may employ a broker to market, lease and maintain/ manage the owners property
Industrial property investor and user requirements are often the same because _______.
owners and users are often the same entity.
Highest and best use analysis--
owners of vacant land often need a broker to analyze the property for its highest and best use.
Littoral Rights
owners whose land borders commercially navigable lakes, seas and oceans.
In order to determine the effectiveness of technology in the company, the broker should ______.
perform an audit/assessment
Local interest rates-
permanent commercial real estate loans, construction loans, residential mortgage loans, bank deposits, consumer loans, prime rate.
The Code of Ethics prohibits REALTORS from ______.
permitting others to access listed property in a manner not authorized by the owner.
Fixtures
personal property that has been attached to land or building that, by law is becomes real property
Loyalty
place the clients interest above those of all others. Confidentiality about the principals affairs is an aspect of loyalty
Factors Affecting Demand
population demographics employment and wage levels
Redlining
practice of refusing to make mortgage loans or issue insurance policies in specific areas for reasons other than the economic qualifications of applicants.
Fair Housing Act of 1968
prohibited discrimination in housing based on race, color, religion or national origin. In 1968 in a landmark decision, the Supreme Court in Jones v. Mayer ruled that discrimination on the basis of race is strictly prohibited. This means there can be NO EXEMPTIONS OR EXCEPTIONS with regard to race.
Civil rights act of 1866
prohibits all racial discrimination in real estate transactions
Probate
properly allocate and distribute assets of the deceased.
Joint Tenancy
property owned by two or more people, whether married or unmarried
Broker's opinion of value, or Broker Price Opinion (BPO)--
property owners, lenders and government agencies often need an opinion of value to make financing decisions, but they do not always need a formal appraisal.
Interstate land sale full disclosure act
protects consumers from fraud and abuse in the sale or lease of land. Created in 1968
Title Insurance
protects the buyer from any claims arising from a defective title
CERCLA or "superfund"
provides a Federal "Superfund" to clean up uncontrolled or abandoned hazardous-waste sites as well as accidents, spills, and other emergency releases of pollutants and contaminants into the environment.
General Liability insurance
provides coverage for risks incurred by a property owner when the public or a licensee enters the owned property (public liability). The insurer pays the covered claim and legal fees, costs, and expenses, including medical expenses, resulting from owner negligence or other causes. DOES NOT COVER PROFESSIONAL LIABILITY
Index Lease
provides for the adjustment of rent according to changes in a price index. The most commonly used indexes are the consumer price index and the wholesale price index.
Quantity survey method
provides the most accurate cost estimate because all of the building components are analyzed.
The Articles of the Code of Ethics stress the REALTOR's obligation to _______.
put agreements in writing and keep them updated.
A labor-oriented industrial user looks for space that is located close to ________.
qualified labor pools.
Class A, B and C offices properties classifies office space by ________.
quality of construction and prestige quotient of location.
In comparing an investment property to a CD, the investors interest rate on the CD is the same as the ___________ on the property.
rate of return
Growth patterns
real estate segments (retail, industrial, office, residential), business segments (high tech, manufacturing, distribution, finance-insurance-real estate, tourism, food processing, etc.)
Right-to-cure laws
regulations that allow homeowners to give builders a chance to repair defects in their homes before filing a lawsuit
metes an bounds method
relies on the properties physical features to determine the boundaries and measurements of a parcel
Housing in older person act (HOPA)
repealed the requirement that housing intended for those age 55 and older have significant facilities and services designed for seniors.
Points
represent prepaid interest and the lender charges them to get additional income on the loan. Points are paid at closing and are equal to 1 % of the loan amount.
Dual Agency
represents both sides in a real estate transaction must first get the approval of both sides after the agent fully discloses that he or she is working with both the buyer and seller or with the lessee (tenant) or lessor (landlord). A Dual Agent may earn double the commission, but they can also have double the financial and legal risks if something should later go wrong in the deal.
Headers
required at window and door openings to carry vertical loads across the opening.
National Environmental Policy Act (1969)
requires that an environmental impact statement be filed with the appropriate state or local agency before implementing new construction
Statute of Frauds
requires that certain contracts must be in writing to be enforceable. Real estate contracts that convey an interest in real property fall in this category, with the exception that a lease of one year's duration or less may be oral.
gross lease
requires the landlord to pay the property's operating expenses, including utilities, repairs, and maintenance, while the tenant pays only rent. Rent levels under a gross lease are higher than under a net lease, since the landlord recoups expense outlays in the form of added rent.
Bearing walls
support the ceiling and roof
Income Tax Liability
tax liability from a property is based on taxable income rather than cash flow.
Lease buyouts or restructuring-
tenants may use the services of an advisor to help them accomplish their downsizing or expanding objectives at the lowest possible cost.
Brokerage
term used to refer to the business of bringing buyers and sellers together to assist them in the negotiations for the sale of a property.
Usable area
that a tenant can actually occupy. It is usually measured between the inside finished surfaces of the outer walls, the tenant side of corridor walls and other permanent walls, and the centerline of demising walls that separate one usable area from another. Columns are included in usable square feet.
The primary purpose of the ______ is to protect the public.
the Preamble
With respect to website information, Article 12 of the REALTOR Code of Ethics, Standard of Practice 8 provides that ______.
the REALTOR must use reasonable efforts to keep information on websites is current.
Recording
the act of placing documents on public record
Single agency
the agent represents only one of the parties in a transaction
Rentable area
the amount of space available for rent to tenants. The area may be measured differently from one market to another.
In order to derive return on investment, the analysis must divide ________ by _________.
the analysis must divide net income by price.
Bay
the area between supporting columns and between the columns and the end wall.
The vacancy rate of an office market can best be described as ________.
the area of unoccupied and available space in relation to total space.
Tax bills are calculated based on
the assessment of the property and local tax rates
Straight land brokerage
the broker lists and sells a fee simple interest in a parcel of land to a suitable buyer.
Development land brokerage
the broker participates more actively in the development of the property to achieve its potential.
Financing
the business of providing the funds that make real estate transactions possible through loans secured by a mortgage or deed of trust on the property.
Taxation
the charge on real estate to raise funds to finance the operation of government facilities.
Subsidence
the collapse of ground into underground cavities. ex: if an underground storage tank collapses.
R-Value or R-Factor
the degree or resistance to the heat transfer.It determines how quickly heat is conducted across it. the larger the R-Value the greater the insulation.
Estates in land
the degree, quantity, nature and extent of an owners interest in real property.
Bay depth can be defined as _______.
the distance between exterior window or wall and the common area corridor.
Bay width
the distance between the sides of the bay.
Bay depth
the distance from the front to the back of the bay.
Bulk—
the generic industrial property, usually consisting of just four walls, roof, and floor, of concrete, block or metal construction; large, averaging 50,000 square feet. Bulk space is often measured in "cubes" (cubic feet). Clear ceiling height, often 20 or more feet, is important to allow fork lift operations.
Immobility
the geographic location of any given parcel of land can never be changed
Erosion
the gradual and sometimes imperceptible wearing away of the land by natural forces such as wind, rain and flowing water.
Footing
the ground itself forms the bed for the structure's foundation. That part of the foundation which transmits loads directly to the soil
Fee Simple Estate
the highest interest in real estate recognized by law
Market Value
the highest price a buyer is willing to pay and the lowest price the seller will accept.
Who has the burden of proof for an assessment change when a homeowner appeals an assessment?
the homeowner
Refinance
the homeowner may be able to refinance the loan with another lender
80-10-10 financing
the institutional lender provides the traditional 80-percent first mortgage. Then the borrower gets a 10-percent second mortgage and makes a 10-percent cash down payment.
Fraud
the intentional misrepresentation of material fact
The capitalization rate of a property will indicate which of the following?
the investor's rate of return on the investment
Reverse Annuity Mortgage (RAM)
the lender is making payments to the borrower. This system allows older property owners to receive regular monthly payments from the equity in their paid-off property without having to sell.
Loan Modification
the lender may agree to change the terms of the loan to make the payments more affordable
Buydown
the lump sum payment that is made to the lender at closing usually comes from a builder as an incentive to the buyer or from a family member trying to help out. That payment serves to reduce the interest rate on the loan for the first few years.
Voltage
the measure of how much pressure the electrons are under
Amperage
the measure of the amount of electrons moving through a circuit - Calculated in watts or Kilowatts
Straight Loan or "interest only"
the monthly payments are allocated only to interest. No principal is paid off. At the end of the term, the borrower must be able to pay off the entire principal amount or get another loan. - Great choice for someone who wants to own a property for a SHORT TIME
A loan-to-value-ratio is the ratio of:
the mortgage principal to the value of the property.
If an offeree alters any part of an offer and then signs it, _________.
the original offer is extinguished and the offeror is not bound by any agreement.
Eaves
the overhands of the roof
In a real estate company, an emphasis on sound ethical and moral behavior must begin with _______.
the owner and manager
Duty of the commission
to put into effect and make known the administrative regulations to effectively carry out and enforce the provisions of the Kentucky statutes governing real estate.
Dual responsibility
to the owner and to the tenants of a property. He or she must understand that the owner is interested in the highest return from the property and the tenants want the best value for their money, including space that is properly maintained.
What does the break-even ratio measure?
the percent of gross income that is required to meet cash expenditures.
The concept of Market Value is best descirbed as
the price that a willing, informed, and unpressured seller and buyer agree upon for a property assuming a cash price and the property's reasonable exposure to the market.
Smart Growth America
the primary national organization researching and proposing more smart growth strategies in urban regions, are also alleged to provide funds for owners and developers willing to follow their higher density trends.
Universal Agent
the principal empowers the agent to perform any and all actions that may be legally delegated to an agency representative. The instrument of authorization is the power of attorney.
Appraisal
the process of developing an opinion of a property's value
Door-to-square-foot ratio-
the ratio of loading docks and drive-in doors to building square feet.
Chain of title
the record of property's ownership
Graduated Lease
the rent payments start at a fixed amount but increase as the lease term matures. The increase could be based on the increased value of the property as determined by periodic appraisals.
Eminent Domain
the right of the government to acquire privately owned real estate for public use.
Appurtenance
the right or privilege associated with real property in some way.
"Due process" includes all the following except _______.
the right to appeal to the state licensing authority.
Air Rights
the rights to use the space above the earth may be sold or leased independently provided the rights have not been limited by law.
Straight pass through
the security holder receives the actual principal and interest payments as they are received from the mortgages in the pool
Escheat
the state may require privately owned real or personal property.
Net Lease
the tenant pays not only the rent for occupancy, but also pays maintenance and operating expenses such as taxes, insurance, utilities and repairs.
Torrens System
title passes only when the conveyance has been duly registered on the title certificate itself.
One of the major objectives of having a web presence is ______.
to brand the firm with a visual mission statement.
What is the role of local tax districts?
to impose property taxes for specific municipal services
Boycott
two or more businesses conspire against another business or agree to withhold their patronage to reduce competition.
Townships
vertical range lines intersect they form squares or townships.
Warehouse/Distribution--
very large, single-story structures used primarily for the warehousing and distribution of inventory. These buildings range from 50,000 to hundreds of thousands of square feet under roof and have up to 60-foot ceiling heights to accommodate extensive racking and storage systems. These buildings may have a small amount of office space as well as numerous loading docks, truck doors and large surface parking lots for semi-trailers. Some buildings are served by rail.
All of the following are important local market trends a retail specialist should keep track of EXCEPT
voter registrations.
Civil Rights Act of 1964
was enacted to prohibit discrimination on the basis of race, color, or national origin in programs and activities receiving federal financial assistance.
Federal Trade Commission (FTC)
was formed through an act of Congress in 1914. The FTC has the power to judge whether particular trade practices are unfair. The FTC can enforce compliance with the Sherman Act and some sections of the Clayton Act.
What are the primary physical features of land that determine its utility?
water availability, soil quality, terrain, topography, climate, vegetation, elevation, minerals, configuration
Freddie Mac
were created to deal primarily with the purchase of FHA and VA loans. Because of this, there was a need to develop a mortgage-backed security for conventional loans. In 1971, the Federal Home Loan Mortgage Corporation, known as Freddie Mac, introduced the first security backed by conventional loans.
Loan Flipping
when a lender encourages a borrower to refinance a loan so that they can charge high points and fees for the new loan.
Express Agency
when an agent and a principal express their intention to establish agency.
Habendum Clause (Deed)
when it is necessary to define or explain the ownership to be enjoyed by the grantee
Co-Ownership
when title to a parcel of real estate is held by two or more individuals
Civil rights act of 1866
which prohibited discrimination in housing based on race.
Carry-over Clause or "Safety Clause"
which says that the broker is still entitled to a commission for a set period of time after the listing expires, if the property is sold to a prospect that the broker introduced to the property during the time of the listing.
shared equity mortgage
which the lender shares in the appreciation of a mortgaged property if and when the property sells. The borrower agrees to the lender's participation in the income, inducing the lender to make the loan. This is more common with commercial properties, but can also be done with residential mortgages
post and beam construction (framing)
wider beams are spaced up to eight feet apart. Floors and roofs are covered with 2-inch planks. These serve as subflooring and roof sheathing, and, where tongue-and-groove plank paneling used, provide an attractive finished floor and ceiling.
where does a property owner file an assessment complaint?
with either the assessor or the board of assessment review in the city or town where the property is located
TYPE IV
with masonry walls, but the interior wood structure consists of heavy timbers; floors and roof of wood.
TYPE V
wood-frame construction, with wood studs and load bearing walls, wood floor trusses or joists and wood roof framing.
