CE SHOP California Real Estate Principles

CONTRIBUTION, PRINCIPLE OF

An appraisal principle which holds that the value of real property is at its best when the improvements produce the highest return proportionate with their cost - the investment.

Easement by Prescription

An easement acquired by continuous, open, and hostile use of the property for the period of time prescribed by state law.

Estate at will

An occupation of space, for an indefinite period, which can be terminated by either the lessor or lessee at any time. Also referred to as tenancy at will.

Appraisal Report

An opinion of a property's market value given to a lender or client with detailed market information.

rectangular (government) survey system

Based on two sets of intersecting lines: principal meridians (north and sounth) and base lines (east and west).

competition, principle of

Business profits encourage competition, which ultimately may reduce profits for any one business

Warranty Deed

Offers the greatest protection that a deed can give.

Percentage Lease

One that bases the amount of rent on a percentage of the sales generated in the space.

How many feet in an acre?

43,560 feet

Trade Fixtures

Personal property used in a business and can be removed by the lessee when the lease terminates.

Acceleration Clause

a statement in a credit contract that requires you to repay the entire loan immediately if you miss a payment

living trust

a trust that takes effect while the grantor is still alive

Depreciable Base

acquisition cost of an investment property plus any improvements or renovations

Defeasance Clause

A clause used in leases and mortgages that cancels a specified right upon the occurrence of a certain condition, such as cancellation of a mortgage upon repayment of the mortgage loan.

due on sale clause

A clause, included in many mortgages, permitting the lender to require the borrower to repay the outstanding balance when the property is sold. Prevents loan assumption.

Alienation Clause

A contract clause that gives the lender certain stated rights when there's a transfer of ownership in property. (Often called a due-on-sale clause.)

Express Contract

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

Executed Contract

A contract that has been completely performed by both parties.

executory contract

A contract that has not yet been fully performed.

Voidable Contract

A contract that may be legally avoided at the option of one or both of the parties.

Trustee's Deed

A deed executed by a trustee conveying land held in a trust.

Executor's Deed

A deed executed by an executor to convey title to real property owned by a decedent who left a valid will.

Deed in Lieu of Foreclosure

A deed given by the mortgagor to the mortgagee when the mortgagor is in default under the terms of the mortgage. This is a way for the mortgagor to avoid foreclosure.

Quitclaim Deed

A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest.

Redlining

A discriminatory real estate practice where minority groups are prevented from obtaining money to purchase homes or property in white neighborhoods. The practice derived its name from the red lines depicted on cadastral maps used by real estate agents and developers. Today, redlining is officially illegal.

Joint Tenancy

A form of concurrent ownership, which occurs when two or more persons own a single estate in land, with right of survivorship. Must have equal shares, right to partition.

Radon

A gas that arises from the earth where radioactive materials are present. Causes lung cancer

VA-guaranteed loan

A government-guaranteed loan designed to help veterans obtain home mortgage loans for which they might not otherwise qualify.

Condemnation Clause

A lease provision which specifies that proceeds be paid to the landlord in the event the leased premises are acquired by the government through condemnation.

Net Lease

A lease requiring the tenant to pay not only rent but also costs incurred in maintaining the property, including taxes, insurance, utilities, and repairs.

Strict Foreclosure

A legal procedure which enables the lender to take title from a defaulting borrower without a foreclosure sale. The court grants the borrower a specified amount of time to pay off the loan. If the debt is not paid, title is awarded to the lender.

mortgage lien

A lien or charge on the property of a mortgagor that secures the underlying debt obligations.

Conventional Loan

A loan that requires no insurance or guarantee.

Predial Servitude

A predial servitude is a charge on a servient estate for the benefit of a dominant estate. Estate is a distinct corporeal movable

Blockbusting

A process by which real estate agents convince white property owners to sell their houses at low prices because of fear that persons of color will soon move into the neighborhood

If buyer signs agency agreement. but natural disaster destroys property? what happens

Agreement is terminated by force of law

Steering

Channeling prospective buyers or tenants to particular neighborhoods based upon their race, religion, national origin, or ancestry.

Personal servitude

Charge on a thing for the benefit of a person. There are three: usufruct, right of use, and habitation.

Tenancy in Common

Co-ownership of property in which each party owns an undivided interest that passes to his or her heirs at death.

CMA

Comparative Market Analysis

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act

Extended title insurance policy

Covers defects of an incorrect survey and boundary encroachments - Buyer will post likely pay for this policy -typically purchased for lender

Cap Rate

Divide the income by the property value.

contractor licensing requirements

Homeowners are exempt if they are working without the intention to sell. Work that costs $500+ requires a license

Income Tax Lien

Lien for non payment of income tax to the IRS

Level of government where building codes are enforced

Local

M.A.R.I.A

Method Adaptability Relationship Intention Agreement.

Valuable Consideration

Money or something that can be converted to money

Implied Contract

Not specifically defined in words. Actions are expected based on social standards/customs. A contract formed in whole or in part from the conduct of the parties.

Plottage

Occurs when two or more sites are combined, with the result that the value of the assembled site is worth more than the value of the sum of each of the individual sites.

Fair Housing Act of 1968

Prohibited discrimination concerning the sale, rental, and financing of housing based on race. Eliminate discrimination caused by blockbusting, steering, and redlining.

Asset held In a land trust

Real Estate

Which category of appraiser can appraise one -4 unit residential property valued under 1 million and that are not complex in nature, and non-residential properties valued below 250000

Residential license

CERCLA amendment says that "innocent landowners" aren't responsible for clean-up of hazardous contamination?

Superfunds amendments and reauthorization act

Gross Lease

Tenant pays rents, landlord pays all expenses of property; most common form of residential lease

Estate at Sufferance

Tenant remains on the property, without the landlord's permission, after the lease has expired

Holdover Tenant

Tenant who remains in possession of leased property after the expiration of the lease term.

Fiduciary Duty

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.

In what way did Brown vs. Board of Education affect the way fair housing laws are implemented today?

The decision overturned the doctrine of "separate but equal"

Tenancy by the Entirety

The joint ownership, recognized in some states, of property acquired by husband and wife during marriage. Upon the death of one spouse, the survivor becomes the owner of the property.

CONFORMITY, PRINCIPLE OF

The maximum of value is realized when a reasonable degree of homogeneity of improvements is present. Use conformity is desirable, creating and maintaining higher values.

After a general plan is developed, what is the next step in the adoption process

The plan is reviewed at a public hearing by the planning commission

Probate

The process of proving in court that the will of someone who has died is valid, and of administering the estate of a dead person.

Inverse Condemnation

The taking of private property by the government without payment of just compensation as required by the U.S. Constitution. The owner must sue the government to recover just compensation.

Sublease

The transfer of part of the term of a lease, but not the remainder of it, to someone else.

prepayment penalty

a fee charged if you repay a loan before the agreed-upon time

FHA loan

a government-sponsored loan that carries mortgage insurance

Judgement Lien

a lien that is a decree issued by court

Judicial Foreclosure

allows the property to be sold by court order after the mortgagee has given sufficient public notice

Void Contract

an agreement of no legal effect

Easement Appurtenant

an easement benefits the use and enjoyment of a specific parcel of land, it is classified as an easement appurtenant. The burdened property is the servient estate, and the benefited estate is the dominant estate. An easement appurtenant runs with the land, meaning the use of the easement transfers to the next owner of the land automatically.

what must be true for a partnership tp conduct real estate activities?

at least one partner must hold a broker license

advantages for trust

avoid probate. cuz it takes years

two types pf physical deterioration

curable and incurable

The sub agency relationship

ex. Kayla is a licensee w ABC realty and lists a property for seller Devon. Maurice is a salesperson w XYZ realty group and he has a buyer customer who wants to see property.

Non-Judicial Foreclosure

foreclosure that does not require court proceedings or a judgment of foreclosure - the result of the power of sale clause in a deed of trust

When a land trust expires, the trustee must either extend the trust term or sell the real estate and ------

give the proceeds to the beneficiary

former landfillls ?

golf courses/ parks

Net Income Equation

income - operating expenses

how to improve debt- income ratio without reducing debt

increase income

Testamentary Trust

is a trust created by a will. It only comes into use when the person making the will dies.

Fixtures

items of personal property that are attached or annexed to real property

what could be a consequence if there were no secondary mortgage market

lenders might not have funds available to make new loans public

what type of agent is an escrow officer

limited agent

Good Consideration

love, affection or a promise

which legal description method uses compass headings and directions

metes and bounds

reserve fund

money that can be made available for the future expansion of a business. ALSO CALLED ESCROW ACCOUNT

Which occupancy type is eligible for a VA loan

owner occupied

what comprises sum total of buyers mortgage?

principle, interest, taxes, and insurance

Unilateral Contract

promise in exchange for an act

restricted appraisal report

provides a minimal discussion of the appraisal with large numbers of references to internal file documentation. simply a matter of filling out a form

partition

specific divided portion of property that's created as part of a. coronership termination

Single Agency

the agent represents only one party to a transaction.

describe a buydown

the borrower pays a lump sum to the lender to buy down the interest rate, lowering their monthly payment

California land title association

title insurance. shows legal description of the property and the standard its,s it covers such as encumbrances of record.

Why might a license want to make 2 visits to the property as a part of a listing presentation

use info from a tour to prepare the CMA

VOCs

volatile organic compounds. can make air quality toxic at high levels. found in some air fresheners, cleansers, paint, and building materials

When is an ease by necessity created

when a property doesn't have direct access to a road, this type of easement is created across any intervening properties.

how is priority determined when more thank one judgment lien is filed against a property?

whoever filed their claim first receives priority.