Real estate express final
What is the statute of limitations for an HCRC complaint?
180 days
What is the work status of an inactive licensee?
A licensee on inactive status is considered as unlicensed and cannot engage in the practice of the licensed profession or vocation. Any person who violates this prohibition will be subject to disciplinary action.
What is the difference between a realized and an unrealized capital gain?
A realized capital gain is an investment that has been sold at a profit. An unrealized capital gain is an investment that hasn't been sold yet but would result in a profit if sold.
month-to-month rental agreement
A rental agreement provides for a tenancy of a short period (often 30 days) that is automatically renewed at the end of the period unless the tenant or landlord ends it by giving written notice
What type of land title allows ownership that is independent to any superior power?
Allodial title
duties principals have to their agents.
Allowing Opportunity to Perform, Honoring the Agreement, Providing Compensation, Avoiding Illegal Instructions
Level of authority ratification
An agency by ratification is created by accepting circumstances that created the agency after the fact.
easement
An easement is an interest in real property that gives the holder the right to use portions of the legal owner's real property in a defined way.
tenancy by the entirety
Both spouses have an equal, undivided interest in the whole property.
What type of insurance provides coverage primarily for the liability exposure of an individual, business, or organization?
Casualty insurance
Differentiate demand from effective demand.
Demand is the desire and ability to acquire goods and services through purchase or lease. Effective demand is desire coupled with purchasing power.
Why is hypothecation important?
Hypothecation is a legal arrangement that allows a borrower to remain in possession of a property secured by a loan. The borrower retains right of possession as long as payments are made according to the loan agreement.
What information must trust fund records include?
Names of the persons from whom funds are received, for whom deposited, and to whom disbursed Dates of receipt, deposit, withdrawal, and disbursements, and amounts received, deposited, withdrawn, and disbursed Description of the trust fund and the purpose for its establishment Purposes for the money Other pertinent information concerning the trust fund transactions
Name federal and state environmental protection regulations
National Environmental Policy Act, Clean Air Act, Clean Water Act, Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
What types of demographic information can a REALTOR® share?
Needed to assist with or complete a real estate transaction or professional assignment, Obtained or derived from a recognized, reliable, independent, and impartial source and that source is disclosed in reasonable detail.
What type of population movement in Hawaii was noticed at the end of 2017?
Net out-migration
The cost approach is best used for what type of properties?
New buildings and special-purpose or unique structures
Are promissory notes and security instruments the same?
No, the promissory note is the evidence of the debt, the promise to repay the loan. A security instrument is a legal document given by the borrower to hypothecate (pledge) the property to the lender as collateral for the loan.
List three types of non-financial encumbrances.
Non-financial encumbrances are non-possessory interests that affect the physical use or condition of the property, such as easements, restrictions, and a profit-à-prendre.
What are the most frequent reasons that eviction becomes necessary?
Non-payment of rent, Violation of lease agreement rules and regulations, Tenants' holding over after their leases expire
Discuss the importance of the Sellers Property Disclosure Statement
Property disclosure statements essentially outline any flaws that the home sellers (and their real estate agents) are aware of that could negatively affect the home's value.
When is flood insurance required as part of getting a loan from a federally regulated or insured lender?
Property located in a Special Flood Hazard Area (SFHA) designated by the Federal Emergency Management Agency (FEMA) must have flood insurance.
What remedy do property owners have if a neighbor encroaches on their property?
Property owners can sue a neighbor to have an unauthorized encroachment removed or receive money damages.
List 5 of the transactional and property elements that appraisers use to explain the differences in prices paid for real estate.
Property rights conveyed, financing terms, any conditions of sale, expenditures immediately after purchase, market conditions, and the locational, physical, and legal differences
List two costs that typically are prorated at closing.
Property tax, interest on a loan assumption, and items in an escrow (impound) account
In what form are taxes attached to a property?
Property taxes generally attach to the property; they become an encumbrance on the property which the current and future owners must satisfy. This attachment is in the form of a lien.
Describe sections F through I of the sample Hawaii Purchase Contract.
Section F: Closing, Section G: Title, Section H: Cash Funds and Financing Contingency, Section I: Mandatory Seller Disclosures in Real Estate Transactions
Discuss sections J through M of the sample Hawaii Purchase Contract.
Section J: Inspection, Maintenance And Warranties, Section K: Staking and Survey, Section L: Termite Provisions, Section M: Additional Seller Obligations Regarding Documents
Describe sections N through T of the sample Hawaii Purchase Contract.
Section N: Rental Property Matters, Section O: Termination, Mediation, Arbitration, And Other Matters, Section P: Foreign Or Non-Resident Buyer And/Or Seller,
Typical activities of real estate agents include all of the following except
Staging open houses
Name the common steps in the sales comparison approach.
Step 1. Collect market data, Step 2. Select comparables, Step 3. Evaluate elements of comparison, Step 4. Verify data, Step 5. Apply adjustments, Step 6. Reconcile adjusted comparable property values
What federal agency is assigned to protect the groundwater supply?
The Environmental Protection Agency (EPA)
What is the exemption policy regarding single-family homes rented without a Broker?
The FHA doesn't apply when a single-family house is sold or rented without a broker, so long as the owner doesn't own more than three houses.
What is the ruling regarding owner-occupied buildings with four or fewer units?
The FHA generally isn't applicable when a building has two to four units, and the owner lives in one of them.
What two laws, taken together, constitute the federal Fair Housing Act?
The Fair Housing Amendments Act of 1988, taken together with the Civil Rights Act of 1968 constitutes the federal Fair Housing Act.
What was the Great Land Division called that occurred in 1848?
The Great Mahele
freehold estate
estate of indefinite duration
Recall classifications of contracts
express or implied, bilateral or unilateral, and executory or executed
nonfreehold estate.
fixed or determinable duration
ways to transfer title by operation of law
foreclosures, partition actions, bankruptcy, quiet title actions, tax sales, execution sales, and condemnation proceedings
What is the status of tools and work documents if a person is found guilty of practicing a profession without a license?
forfeited to the State by the court and turned over to the department for disposition as it deems appropriate.
A sharecropper agrees with a landowner to grow crops on the owner's land and share a portion of the harvested crop as payment for using the land. The cultivated crops are known as emblements, which are:
fructus industriales.
What does the Regulated Industries Complaints Office (RICO) do?
investigates allegations of professional misconduct by licensees and possible unlicensed activity that may be occurring in the State.
Explain the legal concept of agency
is a legal relationship in which a person (agent) is authorized to conduct business, sign papers, or otherwise act on behalf of another person (principal)
Marketable title
is a saleable title that is reasonably free from the risk of litigation over possible defects.
Indefeasible title
is a slightly lesser degree of title that states that one's title is better than anyone else claiming it.
A credit score
is a statistical summary of the information contained in a consumer's credit report.
Good title
is a title that is legally valid or effective, which can be sold to a reasonable purchaser, or mortgaged to a person of reasonable prudence as security for the loan of money.
Pre-qualification
refers to an informal evaluation of the creditworthiness of potential borrowers and gives borrowers a general idea of the amount of money that they can borrow.
Under what condition can a broker's license name include the name of a franchise?
registered with the business registration division of the Department of Commerce and Consumer Affairs.
A credit
report is a document that lists an individual's credit history.
Describe condo legal documents
Bylaws, Condominium Map, The Declaration, Master Deed
Type of maintainable work that is planned and performed on a regular basis
Routine maintainance
What type of maintenance work is planned and performed on a regular basis?
Routine maintenance
What is the first offense fine for a licensee aiding or abetting an unlicensed person directly or indirectly to evade licensing laws?
$1,000 for the first offense
What is the return on investment?
(ROI) is the profit produced by the investment.
What is the minimum annual gross income that is allowed in order to be classified as a farm operation?
$2,000
Under the Taxpayer Relief Act, how much is the tax credit for each child under age 17?
$500
What responsibility does a REALTOR® have to uncover latent defects?
(Article 2) A REALTOR® does not have any obligation to discover latent defects in a property.
The obligation to cooperate does not include the obligation to do what?
(Article 3) Share commissions, fees, or to otherwise compensate another broker.
REALTORS® may represent both parties in the same transaction provided what two elements are in-place?
(Standard 1-5) Only after full disclosure to and with informed consent of both parties
How long does the preservation of confidential information last?
(Standard 1-9) Confidentially continues after termination of agency relationships or any non-agency relationships recognized by law.
What type of demographic information cannot be given to a potential buyer?
(Standard 10-1) A REALTOR® cannot volunteer information regarding the racial, religious or ethnic composition of any neighborhood.
What factors are not considered "pertinent" for purposes of Article 2?
(Standard 2-5) Factors defined as "non-material" by law or regulation or which are expressly referenced in law or regulation as not being subject to disclosure are considered not "pertinent" for purposes of Article 2.
What does the duty to cooperate, as established in Article 3, mean?
(Standard 3-10) It relates to the obligation to share information on listed property, and to make property available to other brokers for showing to prospective purchasers/tenants when it is in the best interests of sellers/landlords.
proration
(most often one that has already been paid) between the two parties.
Name the types of property eligible for FHA insured loans.
1-4 family owner-occupied residences, rowhouses, multiplex and individual condominiums, and eligible manufactured homes (must be real property)
List properties that are suitable for Fannie Mae/Freddie Mac loans.
1-4 family unit principal residences, Single-family second homes, 1-4 family investor properties (non-owner occupied), Co-ops, condos, PDs, and leaseholds
The rights to natural resources, such as minerals, oil, and gas below the surface are part of the:
subsurface rights.
What is the rule about custodians/caretakers?
A custodian or caretaker doesn't need a real estate license, but must be employed by the owner and can only work as a custodian or caretaker for a single owner.
List 3 common VA loan programs.
30-year Fixed-Rate Loan, VA Adjustable-Rate Mortgage, VA Graduated Payment Mortgage, Construction/Permanent Home Loan, Manufactured Home Loan
Describe datum benchmark
A datum is a point, line, or surface against which measurements are made, A benchmark is a survey reference mark made on a survey monument indicating a known location and elevation
lien
A lien is a creditor's claim against personal or real property as security for a debt of the property owner
What is the education requirement in hours for a salesperson license?
60 hours
Typically, how about many weeks before a license renewal deadline does the Professional and Vocational Licensing Division mail out a notice?
8 weeks prior to the renewal deadline
Differentiate between debits and credits.
A credit is the reduction or elimination of an asset or expense. A debit shows the amount owed.
Approximately what percent of the state's gross product is derived from the service industry?
90%
What role does a Distressed Property Consultant perform?
A Distressed Property Consultant provides mortgage assistance relief services.
Describe a property condition assessment (PCA).
A PCA is similar to a home inspection.
What is it called when a lender and a borrower share ownership of a property?
A Shared Equity Mortgage
What source can a condominium hotel operator use to recover funds due to a dishonest hotel worker?
A condominium hotel operator can seek restitution from a fidelity bond policy.
What lien protects payment for labor, services, or materials supplied in improving, repairing, or maintaining real property?
A construction lien
Define the duty of disclosure.
Agents must disclose to their clients any information that may benefit their clients' position in a negotiation.
Describe a conventional non-conforming.
A conventional non-conforming loan (also called a portfolio loan) does not meet the Fannie Mae or Freddie Mac lending guidelines.
What is the function of a board of equalization?
A board of equalization determine property values in cases of disputes between jurisdictions.
Differentiate between a buyer's market and a seller's market.
A buyer's market is more supply than demand. seller's market there is more demand than supply.
Explain the difference between a commercial email message and a transactional email message.
A commercial email message is "any electronic mail message with the primary purpose of which is the commercial advertisement or promotion of a commercial product or service."
What determines proof of a timely renewal date of a license?
A completed renewal application sent by United States mail is considered timely filed if the envelope bears a postmark of the required renewal date.
Differentiate between a debt-to-income ratio and a loan-to-value ratio.
A debt-to-income ratio (DTI) is a ratio derived by dividing the borrower's total monthly obligations (including housing expense) by his or her gross monthly income. A loan-to-value ratio (LTV) is the ratio of the loan amount to the property's appraised value or selling price, whichever is less.
Name the parties to a deed of trust.
A deed of trust has three parties—borrower (trustor), lender (beneficiary), and neutral third party (trustee).
What is the difference between a delinquency report and a vacancy report?
A delinquency report shows the tenants who are behind in rent payments and the number of payments missed. A vacancy report shows the number of units vacant, but available for rent.
Describe how wills transfer ownership
A devise is a gift of real property by will. The decedent is the devisor, and the heir is the devisee.
What is the ADA definition of disability?
A disability is "any physical or mental impairment that substantially limits one or more of an individual's major life activities."
Name elements to include in a disaster plan.
A disaster plan should include information about property improvements, the location of an emergency headquarters, staff training and assignments, and informing tenants.
Differentiate between fixed-rate loans and adjustable-rate loans.
A fixed-rate loan has two distinct features—fixed interest for the life of the loan and level payments. An adjustable-rate loan or adjustable-rate mortgage (ARM) is a loan with an interest rate that adjusts in accordance with a movable economic index.
What is the status of a tenant's lease in the event of a foreclosure?
A foreclosure extinguishes all prior interests in a property, including a leasehold.
Describe the features of GPMs.
A graduated payment mortgage (GPM) is a fixed-rate loan with initial payments that are lower than the later payments. GPMs have negative amortization.
Describe hard money loans and who makes them.
A hard money loan is any loan used to take cash out of a property.
Explain the difference between a home equity loan and home equity line of credit.
A home equity loan (HEL) is a hard money loan for a lump sum that is repaid in equal monthly payments over a set period. A HELOC works like a credit card by establishing a revolving credit line against the borrower's home.
Under what conditions may a homeowner cancel his or her participation in a FEMA Group Insurance policy?
A homeowner may cancel his or her participation in the Group Policy at any time during its policy term, provided that he or she has purchased new NFIP flood insurance coverage.
Give an example of an over improvement.
A house overbuilt for the neighborhood
What is the definition of a kuleana?
A kuleana is a homesite contained within the larger piece of property called an ahupua'a.
What are typically considered usual hours to allow a landlord to enter a unit with proper notice?
A landlord may only enter a unit during reasonable hours. Usually between 8 am to 9 pm.
Usually, rent is due on the 1st of the month. What happens when rent is not received on time?
A late charge is added to the amount due and a Notice to Pay or Quit may be served on the tenant.
Define legal description.
A legal description is a written description of property that identifies the subject piece of property as precisely as possible.
Explain the difference between a lender and a third-party originator.
A lender originates, underwrites, and funds the loan. Third-party originators originate but do NOT underwrite or fund loans.
What is the difference between a purchase money loan and a hard money loan?
A loan used to purchase property is a purchase money loan. Any loan used to take cash out of a property is a hard money loan.
Under what condition can a licensing authority issue a temporary license to a military spouse?
A military spouse can perform specified services under the supervision of a professional licensed in Hawaii.
Describe the difference between mobile homes and manufactured homes.
A mobile home is a factory-built home manufactured prior to June 15, 1976, constructed on a chassis and wheels. Manufactured homes are homes built in a factory after June 15, 1976 and must conform to the Manufactured Home Construction and Safety Standards (HUD code).
Name the parties to a mortgage.
A mortgage has two parties, the borrower (mortgagor) and the lender (mortgagee).
Which type of loan could result in a balloon payment?
A partially amortizing loan
How long must a person wait to apply for a new license after revocation?
A person may apply for a new license after five years from the effective date of the revocation
What influences a person's investor profile?
A person's age, income, wealth, and tax situation
proforma income statement
A proforma enables investors to project the investment real estate's cash flow, tax benefit or losses, sales proceeds, and key returns into future years.
What is an REO property?
A property that a lender has foreclosed on or has obtained title through a deed in lieu of foreclosure
Define protected class.
A protected class is a group that is protected from illegal discrimination under federal or state law.
According to the ADA, what is a public accommodation?
A public accommodation is a private entity that owns, operates, or leases a place designed to provide products or services to the public.
When does a purchase-money mortgage become most popular?
A purchase-money mortgage is more popular in a buyer's market when there are more homes than there are buyers.
With what type of mortgage does the lender make payments to the homeowner
A reverse mortgage
Why should a licensee review the listing efforts when presenting an offer to a client?
A review is important because it helps set the stage for the sellers' reaction to the offer to be presented.
What is the definition of a short sale?
A short sale is any sale where the purchase price will not pay off the mortgage or other liens and clear the title.
How does NAR® describe a stigmatized property?
A stigmatized property is "a property that has been psychologically impacted by an event which occurred, or was suspected to have occurred, on the property, such event being one that has no physical impact of any kind."
What is a teaser rate?
A teaser rate is a low, short-term introductory interest rate designed to tempt a borrower to choose a loan.
written lease?
A written lease gives a renter the right to occupy a rental unit for a set term -- most often for six months or a year but sometimes longer -- as long as the tenant pays the rent and complies with other lease provisions. Unlike a rental agreement, when a lease expires it does not usually automatically renew itself.
What four options does a seller have when presented with an offer?
Accept it, Reject it, Counteroffer, Fail to act
Explain actual age, effective age, and economic life.
Actual age is the real age of a building. Effective age is not determined by the actual age of a building but by its condition and usefulness. Economic life is the estimated period over which a building may be profitably used. Economic life is usually shorter than physical (actual) life.
levels of authority
Actual authority, Apparent authority, Ratified authority
Name two riders used with security instruments.
Adjustable rate rider, balloon rider, condominium rider, and biweekly payment rider
List at least two legal powers of a Licensing Authority?
Adopt, amend, or repeal rules. Grant, deny, convert, forfeit, renew, reinstate or restore licenses. anything to do with rules.
What is the most important factor for a prospective homebuyer to consider in the decision to purchase?
Affordability
What do people who invest in income properties want?
After-tax cash flow
Name the six protected classes under Hawaii law.
Age Ancestry Gender identity or expression Human immunodeficiency virus (HIV) infection Marital status Sexual orientation
How are Condominium Hotel Operators (CHOs) classified with the REC?
All CHOs must register with the REC as a sole proprietor, partnership, limited liability company, or corporation.
How many days does an applicant have to close under the Hula Mae Program rules?
All loans must close within 60 days.
When do all real estate licenses expire?
All real estate licenses expire on December 31 of an even-numbered year.
List two types of housing covered by the Fair Housing Act.
All residential property owned or operated by the Federal Government. Single-family homes owned by private persons, including corporations or partnerships, even if a broker is not used to sell or rent the home. Multi-family dwellings with four or more units, including rooming houses. Multi-family dwellings with four or less units, if the owner does not live in one of the units.
What is the term given to property that is held via hereditary rights and passed on from decedent-benefactor to heir?
Allodial
Estate taxes target what level of American taxpayers?
American taxpayers who are in the top 2 percent of the nation's wealthiest people.
What law protects individuals with disabilities?
Americans with Disabilities Act of 1990
Define amortization.
Amortization is the liquidation of a financial obligation on an installment basis.
What does an "as is" clause mean in a seller's statement of condition?
An "as is" clause indicates that the seller will not be responsible for the cost of repairing any defect—not that there are no defects on the property.
What is the difference between an addendum and an amendment?
An addendum to a real estate contract is a document that is attached to and made part of the original contract. An amendment is a change in terms to an already agreed upon, fully executed contract.
What is it called when a court acts as an impartial referee between the prosecution and the defense?
An adversarial system
Buyer brokerage agreement
An employment contract between a buyer and a broker.
Listing agreement.
An employment contract between a seller and a broker.
Define estate.
An estate is the ownership interest or claim a person has in real property.
In construction lending, what is the difference between an interim loan and a takeout loan?
An interim loan is a short-term loan that finances construction costs, such as the building of a new home. Takeout loans are permanent, long-term loans used to pay off any interim construction loans.
When does an offer become a contract?
An offer becomes a contract when the offer is accepted, that acceptance is communicated to the other party, and all signatures and initials are obtained from both parties.
What is the lease clause that gives the tenant the right to extend the lease for an additional period of time and sets forth the terms for the renewed lease?
An option to renew
List two RESPA disclosures that loan servicers must make after settlement.
Annual Escrow Statement, Servicing Transfer Statement
condominium issues, such as gaining access to documents and being aware of the rules and guidelines found in the bylaws.
Any owner may make a motion to amend the bylaws at a regular association meeting or a special association meeting called for that purpose.
What is the time limit on a forfeited license?
Any person who fails to have the person's license restored within one year from the date of forfeiture
What is the maximum fine that can be imposed for each law violation?
Any person who violates the law can be fined not more than $5,000 for each violation.
What is a business opportunity?
Any type of business that is for sale or lease.
What are the two reporting options that appraisers use for written reports?
Appraisal Report or Restricted Appraisal Report
Which appraisal board establishes the minimum education, experience, and examination requirements an individual must meet in order to become a state licensed or certified appraiser?
Appraiser Qualifications Board (AQB)
What types of environmental hazards usually need to be disclosed to buyers?
Asbestos, radon gas, lead-based paint, underground storage tanks, any other contamination, or hazardous waste
How often must the Hawaii Civil Rights Commission (HRC) provide a comprehensive written report to the governor and to the legislature?
At least annually
How long must escrow accounts records be held?
At least three years.
responsibilities of unit owners
Attending condominium meetings, Voting, Serving on committees, Assisting in other affairs of the association whenever, possible
Name the four strategies to remove or minimize risk.
Avoid risk, reduce risk, transfer risk, and retain risk
List five types of advertising that licensees use.
Billboards, Brochures, Business stationery and cards, Displays, Radio or television broadcasts, Signs, Social media
Name three fiduciary lenders.
Commercial banks, Thrifts (savings associations, savings banks, mutual savings banks)Credit unions, Life insurance companies, Pension funds
Among the Big Island, Kauai, and Maui, which island offers the most opportunity for home ownership?
Big Island
In a mortgage, who retains possession of the property?
Borrower (mortgagor)
In a deed of trust, who retains possession of the property?
Borrower (trustor)
Who are the parties to a promissory note?
Borrower and lender
What 6 elements are required by the TRID Rule for an application?
Borrower's name, Borrower's monthly income, Borrower's social security number to obtain a credit report, Property address, Estimate of the value of the property, Mortgage loan amount
Give two reasons when subprime financing may be necessary.
Borrowers in the subprime category include those who have low credit scores or no credit score, income that is difficult or impossible to verify, an excessively high debt-to-income ratio, or a combination of these factors.
Is Hawaii a statutory or common law state or both?
Both
Differentiate between real estate agents as statutory nonemployees for IRS purposes and as independent contractors for state licensing purposes
Brokerage firm is an independent contractor. RE sales associates are statutory non employees
Real property includes real estate and the
Bundle of rights of property owner ship
What are the two basic ways to file a fair housing complaint?
By an administrative process By filing a lawsuit in court
How does a lease identify a particular property?
By giving the street address or any description that makes the property identifiable to the parties. It does not have to be a legal description, although that is the best format for a long-term lease.
List two tasks that buyers must complete prior to the closing meeting.
Buyers must complete any major contingencies that are present in the contract of sale that are their responsibility. These might include arranging for new financing or getting approval to assume a loan.
How should a licensee handle a backup offer?
By law, a backup offer must be presented to the seller unless the seller has indicated otherwise in writing.
What are two disadvantages to digitally-sent offers?
By sending offers and counteroffers digitally, there is a greater chance for misunderstanding and for "agent abandonment" issues to arise on the part of a client.
What term means the the land is being used on continuous and regular basis for agricultural activities with the purpose of generating income or economic benefit
Commercial agricultural use
Direct marketing is a prospecting strategy. Give three examples of direct marketing.
Cold calling, Direct mail, Email
Name the factors known as the "Three Cs" of credit.
Capacity, credit, and collateral
What expense is called the forgotten expense?
Capital expenses
The IRS Publication 527 lists the most common rental expenses that may be deducted from total rental income. What cannot be deducted?
Capital improvements
What are the six fiduciary duties?
Care, Confidentiality, Disclosure, Loyalty ,Obedience, Accounting
Which statement shows the sources of cash received and how that cash is spent?
Cash flow statement
What is the earliest law protecting individuals in the lease or purchase of real property?
Civil Rights Act of 1866
Most lenders provide borrowers with a loan commitment letter that has "prior-to-documents" conditions (PTDs). List 3 standard PTDs.
Clear title, Appraisal value exceeds mortgage amount, Mortgage insurance Hazard and possibly flood insurance, Lender's policy of title insurance, Survey Termite inspection and certification, Other inspections common in the area (radon, lead paint, mold or water quality)
What are the expenses buyers and sellers normally incur in the transfer of ownership of real property that are over and above the cost of the property?
Closing costs
What is the accounting of funds made to the sellers and buyers?
Closing statement or settlement statement
Differentiate between collateral and lien.
Collateral is something of value given as security for a debt. A loan secured by a lien on real property (whether a mortgage, deed of trust, or land contract) makes the real property the collateral for the loan.
After leasing the property, what type of interactions do property managers have with tenants?
Collecting rents, enforcing rules, handling complaints, and evicting tenants when necessary
common law agency
Common law agency gets its authority from the customs that originated from pre-colonial England
common vs statutory law
Common law unwritten laws established by courts. Statutory laws are written and passed by a legislative body
The Real Estate Commission measures an applicant at a hearing on the following 5 competencies:
Competency, honesty, truthfulness, financial integrity, and fair dealing.
Identify the elements of a valid contract
Competent parties capable of contracting, Lawful object, Consideration, Offer, Acceptance, Written instrument,
What May the licensing authority impose upon a licensees license after a hearing has been conducted in accordance with state law
Conditions or limitations
Which of the following is NOT personal property?
Condominium
Name the properties that should not be appraised using the cost approach.
Condominiums and unimproved land
types of CID ownership
Condominiums, co-ops, planned developments, and other housing developments comprised of individually owned units, in addition to shared facilities and common areas
Define common interest communities AKA CIDs
Condominiums, cooperatives, planned unit developments, retirement communities, vacation timeshares, and other housing developments comprised of individually-owned units
What type of property was deliberately omitted in the Hawaii Land Reform Act?
Condos
List three names for conforming loans.
Conforming loans are called "A" paper loans, prime loans or full documentation (full doc) loans.
With what type of loan does the borrower pay interest on only the money that has been actually disbursed up to the payment date?
Construction Loan
What are other terms given to an agreement of sale loan?
Contract of Purchase, Contract for Sale, Contract Agreement, or Sale Agreement
Option contract
Contract to keep an offer to purchase open for a set period of time
Define conveyance.
Conveyance is the act of transferring an ownership interest in a property from one person to another.
What is another name given to a conveyance tax?
Conveyance tax is also known as a transfer tax, a deed tax, mortgage registry tax, or stamp tax.
coops
Cooperative ownership of an apartment unit means that the apartment owner has purchased shares in a corporation which holds title to the entire apartment building
Recall subdivision regulations and building codes
County and city agencies regulate and enforce the development of subdivisions and building and safety codes.
What does CCR stand for
Covenants, Conditions, and Restrictions
Name three types of lots.
Cul-de-sac, corner lot, interior lot, flag lot, key lot, and T-intersection lot
What are the two major categories of real estate money laundering risk factors?
Customer Risks, Transaction Risks
Anytime real estate solicitation involves the use of the telephone, cell phone, fax, or email, you will have to comply with which prospecting laws?
Do Not Call, Do Not Fax, and CAN-SPAM laws
Anytime real estate solicitation involves the use of the telephone, cell phone, fax, email, the sales associate must comply with all of the following except
Do not mail law
List 4 standard items found in Fannie Mae/Freddie Mac Uniform Security Instruments.
Date of its execution, name(s) of borrower(s), name of lender, reference to the promissory note including amount of loan, joint and several liability, description of property securing loan
Describe the typical clauses found in most purchase agreements
Dates & Parties, Legal Description and Street Address, Purchase Price & Earnest Money Deposit, Disclosures, Property Inspections, Evidence of Title, Date and Place for Closing, Proration of Costs Related to the Sale, Possession of Property, Time is of the Essence & Expiration of the Offer, Signatures and Copies
In general, what do lenders use to assess a borrower's capacity?
Debt-to-income ratios
Name five documents needed for closing meetings.
Deed, survey, property tax bill, homeowner's insurance policy, title information, flood insurance policy, termite inspection certificate, offset statement, beneficiary statement, bill of sale for personal property, etc.
What are the most common types of security instruments that create voluntary, specific liens against real property?
Deeds of trust and mortgages
Define deferred maintenance.
Deferred maintenance is when obvious repairs are needed, but postponed.
What is the definition of "normal wear and tear" as it applies to a rental unit?
Deterioration or depreciation in value by ordinary and reasonable use but does not include items that are missing from the dwelling unit.
agency disclosure rules
Disclose who is representing and confirmation of the disclosure
operation of the Board.
Discuss and vote upon personnel matters, Discuss any pending or potential lawsuits, Protect the interests of the association while negotiating contracts, leases, and other commercial transactions
Veterans may pay reasonable and customary charges. Name three charges that veterans cannot pay.
Document preparation fees, escrow charges, fees charged by brokers, finders or other third parties, interest rate lock-in fees, loan application/processing fees
property transfer processes according to dower, curtesy
Dower and curtesy provide a surviving spouse with a means of support upon the death of the other spouse.
What is the purpose of the Fair Housing laws?
Fair Housing laws were created to put an end to discriminatory practices involving any activities related to housing.
How many sections are in a township?
Each township is divided into 36 squares, called sections. Sections are one mile square and contain 640 acres.
List the ways easements can be created.
Easement by express grant, Easement by implication from prior use, Easement by necessity, Easement by prescription
What type of value is based on what an individual is willing to pay?
Economic value
Level of authority Actual
Either the principal may have expressly conferred authority on the agent, or authority may be implied
What can a tenant do who is or has been a victim of domestic violence?
End the lease early without any further obligation to pay rent for the rest of the lease term, Request that the landlord change the locks to the rental unit
What tool is readily available to address the risk exposures faced by the real estate industry?
Environmental Insurance Policies
Distinguish between equitable title and bare legal title.
Equitable title is the right to obtain absolute ownership to property when legal title is held in another's name. Bare legal title is title that lacks the usual rights and privileges of ownership.
List two advantages of investing in real estate.
Equity buildup, use of leverage, appreciation, cash flow, tax benefits
Which type of estate is the most complete form of ownership?
Estate in fee, sometimes called fee or fee simple estate
What are leasehold estates generally classified as?
Estates in personal property
Name six property management positions.
Executive manager, asset manager, regional manager, property supervisor, Community association manager, facility manager, on-site manager, leasing agent, building engineer, maintenance supervisor, bookkeepers, and admin assistants
Name the three reasons why a land description and survey is required in a real estate transaction.
Existence of the property, Relationship of the property to adjoining properties, Relationship of occupied lines to recorded lines
Acts of the parties that can terminate a brokerage relationship are all of the following except
Extinction of the subject matter
List 3 common FHA loan programs.
FHA 203(b) Residential Loan, FHA 203(b)(2) Loan, FHA 251 Adjustable-Rate Mortgage, FHA 255 Home Equity Conversion Mortgage (HECM), FHA 203(k) Rehabilitation Loan, Title 1 Home Improvement Loan, Energy Efficient Mortgage (EEM)
For what reasons may a landlord evict a tenant?
Failure to pay rent, A tenant's failure to maintain the property as required under Hawaii's Residential Landlord-Tenant Code, Improper or unlawful use of the rental unit
What are the two most common forms of landlord default?
Failure to provide services and maintaining the property condition.
Describe the purpose of Fannie Mae and Freddie Mac underwriting guidelines.
Fannie Mae and Freddie Mac underwriting guidelines determine which properties are suitable, set maximum loan limits, and set debt-to-income ratios for conforming loans.
Name two government-sponsored enterprises (GSEs) that participate in the secondary market.
Fannie Mae, Freddy Mac
Which of the following is not a financial statement used by property managers?
Feasibility analysis
What are the two categories of encumbrances?
Financial encumbrances and non-financial encumbrances
Why do people purchase property?
Financial reasons, Psychological reasons, To live in, As an investment
Name the two main types of risk tolerance that investors have.
Financial risk tolerance and emotional risk tolerance
Which reports evaluate the property manager's effectiveness in handling the property?
Financial statements and operating reports
List two disadvantages of using the sales comparison approach.
Finding enough recently sold similar properties to get comparable values, Correctly adjusting amenities to make them comparable to the subject property, Older sales unreliable with changing economic conditions, Difficulty in confirming transaction details
What does it mean if a homeowner receives a Certificate of Flood Insurance from FEMA?
Flood insurance has been provided under a Group Flood Insurance Policy following a Presidential disaster declaration.
Foreign buyers must hold what documents to use a U.S. property as a permanent residence?
Foreign buyers must have a Green Card or a Visa
List two unfair business practices.
Fraud, misrepresentation, false advertising, and oppressive or unconscionable acts or practices committed by businesses against consumers or other businesses
What is the biggest problem facing foreign buyers in Hawaii?
Funding
Identify at least two estate tax deductions.
Funeral expenses, Payments to satisfy outstanding debt, The value of the property intended for donation, Any state death taxes, The value of property that transfers to a surviving spouse
Who notifies the borrower if the servicing rights to the borrower's loan are sold or assigned to another loan servicer?
Generally, the current loan servicer must notify the borrower 15 days before the date of the loan transfer.
What is the conducting of non invasive geophysical operations, including geochemical operations and remote sensing called
Geothermal resources exploration
What is the basis of ethics?
Golden Rule Ethic of Reciprocity
The kinds of deeds commonly used for private grants do not include
Government deeds
Name the parties in a life estate in reversion.
Grantor and life tenant
Historically, land titles were transferred in Hawaii using what methods?
Grants, Royal patent grants, Land patent grants, Sold outright to private individuals
What type of loan is a fixed rate mortgage on which the monthly payments increase over time according to a set schedule?
Growing-Equity Mortgage (GEM)
Name the four changes in a neighborhood life cycle.
Growth (development), maturity (stability), old age (decline), and revitalization (renaissance)
Hawaii's land use initiatives
HILT works with private landowners, community groups, and government partners to protect Hawaii's precious lands.
In Hawaii, what two documents mandate and regulate the professional behavior of real estate licensees?
Hawaii Revised Statutes (HRS) and Hawaii Administrative Rules (HAR).
With what other states does Hawaii have reciprocity?
Hawaii does not have a reciprocity agreement with any other state.
How are Hawaii's transfer taxes applied?
Hawaii's transfer taxes are applied on a sliding scale based on the purchase price of the home.
Under Hawaii's Residential Landlord-Tenant Code, what must the owner do if he or she offers to rent the property and lives off-island?
He or she will need to find an on-island agent to act on his or her behalf.
Name two transactions that still use the HUD-1 Settlement Statement.
Home-equity lines of credit (HELOCs), reverse mortgages, and mortgages secured by a mobile home not attached to real property
What is homestead property?
Homestead property is the home (primary residence) occupied by a family that is exempt from the claims of, or eviction by, unsecured creditors. A homestead generally consists of the home, fixtures and land that a person occupies as a residence.
requirements to obtain real estate by adverse possession
Hostile (meaning without permission, though the definition can vary by state); Actual (meaning physical occupation); Open and notorious (meaning the possession is obvious to onlookers); and Exclusive and continuous for a certain period of time.
What is the rental period, per tenant for a Hotel/Resort classification?
Hotel/Resort use means the property rents as a short-term rental with rental terms shorter than 30-consecutive days per tenant.
What type of modifications are public accommodations required to make?
Modifications must be readily achievable and reasonable
Name three professional property management organizations.
IREM, NAA, NARPM, BOMA, SIOR, ICSC, CAI
List the steps when creating a risk management plan.
Identification, assessment, and mitigation
When is an application considered to be abandoned?
If an applicant fails to provide evidence of continued efforts to complete the licensing process for two consecutive years
Regarding an environmental impact statement, in what phase does clean up occur?
If the contamination is confirmed, a Phase III remediation will take place. This cleanup activity may involve state, federal, and private organizations.
What can happen if the property owner does not pay the taxes by the due date?
If the property owner does not pay tax by the due date, the taxing authority may assess penalties and interest.
What is the status of a lease if the tenant dies?
If the tenant dies, the lease does not terminate. It becomes part of the tenant's estate, which is bound by the terms of the lease.
List three disadvantages of investing in real estate.
Illiquidity and immobility, Large initial investment and transaction costs, Increased burden of management, Tax burdens, Government interference, Economic downturns
How does immobility affect the value of real property?
Immobility may make it difficult to sell the property if buyers are not interested in its location.
What are the three physical characteristics of land?
Immobility, indestructibility, and heterogeneity
What are the five economic characteristics that affect the value of real property in the marketplace?
Improvements, Location, Supply and demand, Scarcity, Permanence of investment
Most states require a smoke detector to be installed in what part of the residence?
In a central location outside each sleeping area
What is the main feature of a community property state?
In a divorce, spouses split assets and debt 50/50 or along other agreed-upon lines.
Compare a lien theory state with a title theory state.
In a lien theory state, title to real property is vested in the borrower. The borrower gives only a lien right to the lender during the term of the loan. In a title theory state, title to real property is vested in the lender. In a title theory state, the mortgage states that title reverts to the borrower once the loan is paid.
Where should licensees maintain a file containing all documents on each transaction?
In the office files
Name the main goals of real estate investors.
Income, tax benefits, and appreciation
List three types of retirement community.
Independent living communities, which offer no personal care services, Congregate housing- which includes at least one shared meal per day with other residents, Mobile homes or RVs for active adults
Describe the difference between interest and compound interest.
Interest is the fee the lender charges for the use of their money. Compound interest is the interest that interest earns.
In a mortgage, who retains legal title to the property?
It depends on whether the state follows lien theory or title theory.
How does a profit-à-prendre differ from an easement?
It differs from an easement because an easement only gives the right to use the land, whereas a profit-à-prendre gives the right to remove the soil or products of the soil.
The sales comparison approach is best used for what type of property?
It is best for single-family homes or condominiums and vacant lots because sales information is readily available and easily compared.
Does the U.S. Bureau of Labor Statistics project the need for real estate brokers and salespersons to increase or decrease?
It is expected to grow by 6% from 2016 to 2026.
What is the time limit to report a change of address to the licensing authority?
It is the licensee's duty to provide written notice to the licensing authority of any change of address within ten days of the change.
What does an improvement description and survey show?
It shows the location, size, and dimensions of buildings on a tract of land.
What is it called when a person is aggrieved by a final decision and contests the ruling?
Judicial Review by Circuit Court
What is the common remedy for default of a mortgage?
Judicial foreclosure (court action)
Name two types of conventional non-conforming loans.
Jumbo loans and subprime loans
What do we call the underlying rationale that establishes laws?
Jurisprudence
List four activities that most new licensees will do.
Know your market area, Preview properties, Prospect for listings, Work with prospective buyers and write up purchase offers, Handle the paperwork and close escrow, Attend meetings
land trust
Land trusts actively work to conserve land in a community through real estate transactions with private landowners who wish to donate all or a portion of their land for conservation
Recall the rights and responsibilities of landlords and tenants
Landlords-maintained to meet bare living requirements. Tenants-taking care of the property.
What is the process called when criminals legitimize money?
Laundering
What is the concept behind following the letter of the law?
Laws, statutes, rules, and guidelines provide the foundation for professional behavior which is often referred to as the letter of the law.
In Hawaii, what are the two most common land tenure types?
Leasehold and Fee Simple
If a homeowner's insurance lapses or is canceled, what type of insurance will the lender obtain to protect its interest in the property?
Lender-placed insurance, also known as "creditor-placed" or "force-placed" insurance
Name the types of insurance that lenders may require buyers to have.
Lenders may require buyers to have several types of insurance policies—homeowners insurance, flood and other disaster insurance, mortgage insurance, and title insurance.
How does the law define a Licensing Authority?
Licensing Authority means the director or any licensing board or commission under the administrative control of the director authorized by statute to grant or to deny licenses.
What other name or names are given to a 1031 exchange?
Like-Kind Exchange or a Starker
What type of reverse mortgage allows the homeowner to borrow as needed?
Line of Credit
When valuing business, what is the value of the physical assets of the company called?
Liquidation value
What are six of the more common criteria that all investors consider?
Liquidity, Leverage, Marketability, Risk, Taxation, and Burden of management
Classify types of trusts
Living trusts, Testamentary trusts
List items typically found on a pre-approval letter.
Loan program, Loan type, Loan amount, Purchase price, Qualified interest rate
What is considered the most important factor in real estate value?
Location
List three benefits of an FHA-Insured loan.
Low down payment, Competitive interest rates, Easy qualifying requirements, Reasonable loan fees
What criminal charges maybe brought against a licensee for lying to the REC?
Lying violates real estate law and may constitute a misdemeanor.
How do many leases deal with military tenants?
Many leases say that a tenant who is a member of the Armed Forces may be able to cancel the lease agreement if he or she receives a permanent change of station orders.
Define market value.
Market value is the price a property would bring if freely offered on the open market, with both a willing buyer and a willing seller.
List five types of value.
Market value, value in use, assessed value, investment value liquidation value, replacement value, mortgage value
On what island is the median home value slightly more than triple the national value?
Maui
What island is known for many celebrity homes?
Maui
What island allows for the highest home exemption?
Maui - $200,000
What is the maximum number of days that a condominium hotel operator can provide lodgings?
Maximum is 30 days
Which description is the oldest method used to describe real property?
Metes and bounds system
Name the three common ways to describe property.
Metes and bounds system, Public Land Survey System, and recorded plat system
Differentiate metes from bounds.
Metes mean measurements in length (measured in feet) from one monument to another. Bounds refer to the direction.
How does a modular home differ from a manufactured home?
Modular homes are prefabricated housing transported as modules to the building site and then permanently anchored to a foundation. Manufactured homes are housing units similar to trailers which are attached to the land and used as permanent housing.
The major participants in the secondary mortgage market are middlemen. Name three of them.
Mortgage aggregators, Housing GSEs (Fannie Mae and Freddie Mac), Ginnie Mae, Securities dealers, Investors
A lender that mortgage loans includes all of the following except
Mortgage bankers
Explain the main difference between mortgage brokers and mortgage bankers?
Mortgage brokers originate loans with the intention of brokering them to lending institutions. Mortgage brokers are NOT lenders and do not fund or service loans. Mortgage bankers originate, fund, and service loans.
List three types of security instruments used in real estate.
Mortgages, deeds of trust, security deeds, and land contracts
All of the following are parties to a deed of trust except the
Mortgagor
Identify the ways to create agency/brokerage relationships
Most agency relationships are created by express agreement or by rendering real estate brokerage services to a person
List 3 of the 5 words used to describe the terms of a loan.
Most home loans show the loan amount (principal), interest, interest rate, loan term, and a repayment schedule.
Name items included in the rent roll.
Names of tenants, unit number, unit status, amount of the rent, and other lease information
Explain some specific provisions contained in a standard Hawaii listing agreement.
Names of the parties, Term of contract, Property information, Pricing information, Description of services, Conflicts of interest, Compensation, Rights, obligations, and liabilities of all parties, Dispute resolution, Fair housing, Criminal information, Binding agreement, Fax and electronic signatures, Signatures of all parties.
What type of mortgage program is specifically designed for Native Hawaiians on Hawaiian home lands?
Native Hawaiian Housing Loan Guarantee Program
The court proceeding to divide real property owned by joint tenants or tenants in common is called
Partition action
Undivided ownership doesn't include
Partnerships
What is the filing statute of limitations regarding the Real Estate Recovery Fund?
No action for a judgment that results in an order for collection can be started later than two years from the accrual of the cause of action.
List 5 benefits of a VA-guaranteed loan.
No down payment (in most cases)Lenient qualifications, Reasonable loan fees, No PMI or MMIVA minimum property requirements, Assumable mortgage with No prepayment penalty
When must lenders ensure that BORROWERS receive the Closing Disclosure?
No later than 3 business days before consummation
Are homestead asset protection and homestead property tax exemption the same thing?
No, the homestead asset exemption protects a certain amount of equity in a person's home. A homestead property tax exemption is a property tax relief program for certain categories of homeowners.
What does the law say about the employer-employee relationship between a broker and licensee?
Nothing, However, the Commission has all the power necessary to regulate the relationships, duties and liabilities among real estate brokers and real estate salespersons in order to protect the public.
Name two types of mortgage-backed securities.
Pass-through securities, Collateralized mortgage obligations
What island has 75 percent of the state's population?
Oahu
What kinds of physical changes are oceanfront properties subject to?
Oceanfront properties are subject to sea level changes and over time those changes impact property value.
What office investigates consumer complaints in unfair or deceptive trade practices in advertising, refunds, motor vehicle rentals, door-to-door sales and credit practices?
Office of Consumer Protection (OCP)
After winning a lawsuit and getting a judgment, what creates a general lien that applies to all parcels of real property owned by the judgment debtor?
Once recorded, the abstract of judgment creates a general lien.
To meet a 1031 exemption, what is the suggested active rental period for a personal vacation home that was changed into a business?
One year
Who can amend or change a contract?
Only the principals of the contract can amend or change a contract.
What are the exceptions to the licensing requirement for property managers?
Onsite residential managers Self-managed property Custodian/caretakers
What are the two main functions of mortgage companies?
Originate loans and service loans that they package and sell
What is usually NOT covered by condominium insurance?
Outside events or damages to the building are not usually covered.
The FHA rules on housing discrimination don't pertain to a single family house that is sold without a broker as long as the owner doesnt
Own more than three houses
Describe the type of property that is eligible for a USDA guaranteed loan.
Owner-occupied new and existing homes located in a rural area, existing homes must be structurally sound, functionally adequate, and in good repair
Identify at least 2 criteria pollutants.
Ozone, sulfur dioxide, nitrogen dioxide, carbon monoxide, and lead
Discuss the basic structure of a condominium
POA Property Owner's Association, HOA Homeowner's Association, COA Condominium Owner's Association
How does one access a list of licensees?
PVL List Builder online system.
Differentiate between packing and junk fees.
Packing is the practice of adding credit insurance or other extras to increase the lender's profit on a loan. A junk fee is a questionable fee charged in closing costs that may not bear any significant relationship to the actual loan transaction.
Name four situations where a salesperson can connect with prospects.
Past customers, Open houses, For-sale-by-owners (FSBOs), Expired listings, Social spheres, Local business networks, Introductory calls, Your neighborhood or area of specialty (target market)
List three uniform covenants found in Fannie Mae/Freddie Mac security instruments.
Pay the periodic payments, maintain insurance, live on the property for at least 1 year, and maintain the property
What is the time it takes to recover an investment?
Payback period
What is the definition of a place of business?
Place of business means the physical place where business is conducted and may include a home occupation office.
If a unit that a prospective tenant wants is not currently available, what should the property manager or leasing agent do?
Place the person's name on a waiting list.
Name the lender that keeps the loans it originates rather than selling them in the secondary market.
Portfolio lender
List the steps in a leasing plan.
Prepare the property for viewing, Handle inquiries from prospects, Accept applications, Qualify prospects, Negotiate and sign the lease
Why is it not a good idea to present the offer price over the phone?
Price is only one aspect of the total picture. Often the other terms, along with the offering price, make the offer much more acceptable than price alone would indicate.
Name five financial/investment calculations and ratios.
Price per square foot, expenses per square foot, breakeven point, operating expense ratio, cash on cash return, capitalization rate, loan-to-value ratio
Like any investment, mortgage-backed securities have a default risk. Which pool of mortgages would have the least risk?
Prime
When a survey is made using the Public Land Survey System, what are the two imaginary lines that are used for measuring distances?
Principal meridians (run north and south) and baselines (run east and west)
What does the acronym PITI stand for?
Principal, Interest, Taxes and Insurance
What valuation principle is the basis for the income approach?
Principle of anticipation
When should a subagent disclose all pertinent facts to the principal's agent?
Prior to and after a purchase agreement is executed
Describe private mortgage insurance (PMI).
Private mortgage insurance (PMI) is a type of mortgage insurance from private insurance companies.
Which statement provides the net profit or loss?
Profit and loss statement
A condo property has CCRs to maintain standards in the complex. The HOA could enforce which of the following CCRs
Prohibit displaying religious items on the door to the owners house
The legal document that provides evidence of a mortgage debt is called the
Promissory note
What forms of working permits are acceptable to get a professional license in Hawaii?
Proof that the applicant is a United States citizen, a United States national, or an alien authorized to work in the United States
What is a tenant's responsibility with regard to electrical and plumbing fixtures?
Properly use and operate all electrical, plumbing fixtures, and appliances in the dwelling.
Name the two types of due diligence that are common for commercial properties.
Property condition reports and environmental site assessments
What are property values based on?
Property values are generally based on fair market value of the property on the valuation date.
Describe prospecting.
Prospecting is the process of identifying potential customers. The majority of sales associates prospect by cold calling or sending text through mailings, faxes, or emails.
Hawaii Land Sales Practices Act
Provide safeguards regulating the disposition of any interest in subdivided lands, Prevent fraudulent and misleading methods and unsound financing techniques which could detrimentally affect land purchasers and the state's economic well-being.
Name two documents that require a legal description of the real property that is sufficient to be legally binding.
Purchase agreements, deeds, and security instruments (deeds of trust and mortgages)
Which type of investor is primarily profit driven?
Pure investors
What is the middleman called in a 1031 Exchange?
Qualified Intermediary
How are Real Estate Commissioners appointed?
REC board members are appointed by the Governor and confirmed by the Senate
What does RICO investigate?
RICO investigates allegations of professional misconduct by licensees and unlicensed activity that may be occurring in the State.
List the 5 protected classes under the Civil Rights Act of 1968.
Race, color, religion, sex, and national origin
List the seven protected classes under the federal Fair Housing Act.
Race, color, religion, sex, national origin, disability, and familial status
Tax rates are based on what property value concept?
Rates are based on the property's highest and best use.
How are administrative rules created?
Real Estate Commission
What state agency is allowed to inspect a real estate broker's trust fund?
Real Estate Commission
How does investing in real estate differ from investing in stocks or bonds?
Real estate is an investment in the building and the land. This makes real estate highly tangible because, unlike most stocks, you can see and touch the property.
Which of the following is not a type of settlement statements used for residential real estate transactions
Real estate seller disclosure statement
Name the four elements typically included in the sale of a business opportunity.
Real property, personal property, assumption of liabilities, and intangible assets.
In what phase of the market cycle does supply greatly outweigh demand?
Recession
What is a licensee's responsibility when environmental hazards are present in a transaction?
Recognize any potential hazards. Recommend that sellers obtain expert advice from an attorney who specializes in environmental issues or some other expert knowledgeable about these hazards.
What system describes property by identifying the registered lot and then block on a recorded subdivision plat or survey?
Recorded plat system
Which system is the easiest and most widely used method of describing land?
Recorded plat system
What is the prohibited practice of designating certain neighborhoods as areas where loans will not be made or at least will not be made to members of certain groups?
Redlining
What did the Taxpayer Relief Act do with regard to capital gains?
Reduced the top rate on profits from 28% to 20% for assets held at least 18 months, retroactive to May 7, 1997. Taxpayers in the 15% bracket now pay 10% tax.
What state entity maintains a complaint database?
Regulated Industries Complaints Office (RICO)
What state office do you contact to file a complaint against a licensee?
Regulated Industries Complaints Office (RICO).
List two types of organizations or groups that are exempt from the Fair Housing Act.
Religious organizations, private clubs that dont rent to the public, certain senior citizen housing
List three operating reports that property managers provide to owners.
Rent roll, delinquency report, vacancy report, property report, and tenant mix report
What is repayment ability?
Repayment ability means that the borrower has the financial ability to repay the loan.
Differentiate between replacement cost and reproduction cost.
Replacement cost is the cost of restoring a property to its previous condition or replacing it with something of like kind and quality. Reproduction cost is the cost of replacing the improvement with one that is the exact replica, having the same quality of workmanship, design, and layout.
For insurance purposes, differentiate replacement value form actual cash value.
Replacement value covers a structure for the amount it will cost to rebuild the same structure if it is built today. Actual cash value covers a structure at the depreciated value of the loss.
What strategy might an applicant, with a questionable background use to determine if he or she would be approved for a license?
Request for Preliminary Decision Application to the Commission.
Which segment of the real estate industry do most real estate licensees choose?
Residential sales
section 14 of the Hawaii Revised Statutes as it applies to agency.
Revocation, suspension, and/or fine
What are the four basic rights in the Consumer Bill of Rights?
Right to Safety, Right to Information, Right to Choose, Right to Be Heard
Martin purchased a parcel of land on which he intends to build a house. Which of the bundle of rights pertains to this activity?
Right to use
Name the four types of maintenance in an effective maintenance program.
Routine, preventive, corrective, and cosmetic maintenance
USDA guaranteed loans are used for what type of property?
Rural property
List three different investor motivations.
Safety of principal, Safety of income, High rates of return, Leverage, yielding higher returns on equity, Appreciation
List the types of income the FHA uses as part of its underwriting guidelines.
Salary, overtime, commissions, dividends, and any other source of income if the borrower can show a stable income for a minimum of 2 years
What are the three approaches used to appraise property and arrive at a market value estimate?
Sales comparison approach, cost approach, and income approach
common agency agreements
Sales, management, trade association, exchanges
What type of home market is hawaii
Second home market
List the types of secondary financing.
Secondary financing includes hard money loans from private lenders, swing loans, home equity loans (HEL), and home equity lines-of-credit (HELOC).
Discuss purchase contract in general and sections A through E of the sample Hawaii Purchase Contract.
Section A: Agency Disclosure, Section B: Initial Earnest Money Deposit, Section C: Offer To Buy And Purchase Price, Section D: Addenda, Section E: Property
What three actions might a landlord take with a tenant's reclaimed personal property?
Sell abandoned personal property, Store abandoned personal property at the tenant's expense, Donate such property to a charitable organization
What is the time limit for a buyer to receive a Property Disclosure from the seller?
Seller is to deliver to the buyer no later than ten (10) calendar days from acceptance of a Hawaii real estate purchase contract.
Name four disclosures that are used in most residential real estate transactions.
Seller's statement of condition, stigmatized property, natural hazards, environmental hazards, FIRPTA, disclosures about smoke detectors, and Megan's law
Differentiate between senior liens (deeds of trust or mortgages) and junior liens.
Senior gets priority over junior liens
Name the two ways that closing a real estate transaction is handled.
Settlement meeting called "passing papers" and escrow
List three federal antitrust laws.
Sherman Antitrust Act, Clayton Act, Federal Trade Commission Act
Name three types of residential property that are managed by a property manager.
Single-family homes, Condos, Duplexes, Apartment buildings and complexes
business entities that can own real property
Sole proprietorships, partnerships, corporations, and limited liability companies
What is the maximum civil penalty for a first violation of the Fair Housing Act?
Someone can be assessed a maximum civil penalty of $19,787 for his or her first violation of the Fair Housing Act.
Name the basic steps in the appraisal process.
State the problem, Determine the scope of work, Gather, verify, and analyze the data (general and site specific), Decide on the appraisal approach to be used, Reconcile the data for final value estimate, Write the appraisal report
statutory agency
Statutory agency draws from the statutes and rules created by various legislative and governing bodies.
What is the prohibited practice of directing members of certain racial or ethnic groups to certain neighborhoods and directing members of other groups to different neighborhoods?
Steering
In what type of agency relationship is the agent bringing the buyer actually working for the seller
Sub agency
What type of regulation sets standards for buildable lots
Subdivision regulation
What is the common term given to The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)?
Superfund
lien types
Superior and Inferior
Which closing statement is the one most frequently used for 1-4 residential transactions?
TRID Closing Disclosure
List two types of settlement statements used for residential real estate transactions.
TRID, ALTA, HUD-1
What is the transfer of responsibility for the property from owner to property manager called?
Takeover
Liens (financial encumbrances) can be voluntary or involuntary. Name three types of involuntary liens.
Tax liens, construction liens, and judgment liens
What government powers are fee simple ownerships subjected to?
Taxation, eminent domain, police power, and escheat.
How does the IRS definition of a first-time home buyer differ from the standard definition?
Technically, the person doesn't have to be purchasing his or her very first home. The person qualifies under the tax rules as long as that person did not own a principal residence at any time during the two years prior to the acquisition date of the new home.
Types of Concurrent Ownership
Tenancy in common, Joint tenancy, Tenancy by the entireties, Community property
What is the name for the amount of cash that is left over after the intermediary acquires the replacement property in a 1031 transaction?
That cash is known as the boot.
tax-deferred exchange
The 1031 Exchange allows an investor to exchange a property for a like-kind property and defer the gain until the property is sold.
What type of real property is exempt from the ADA requirements?
The ADA does not cover the majority of private homes.
annual property operating data report
The APOD shows a property's cash flow for the first year.
What Act was passed that established the Board of Commissioners to Quiet Land Titles?
The Act to Organize the Executive Departments
What law requires foreign entities to report transactions of farmland to the USDA's Farm Service Agency?
The Agricultural Foreign Investment Disclosure Act
land use legislation
The Air Pollution Prevention and Control Act, the Water Pollution Prevention and Control Act, and the National Coastal Zone Management Act
What is the purpose of the Annual Escrow Statement?
The Annual Escrow Statement summarizes all escrow account deposits and payments during the servicer's 12-month computation year. It also notifies borrowers of any shortages or surpluses in the account.
Banks and mortgage companies are regulated by what law that requires overseeing and reporting of large deposits of money?
The Bank Secrecy Act
role of the Commission with regard to the Condominium Property Acts
The Condominium Property Act requires a yearly audit of association financial accounts and at least one yearly unannounced verification of the association's cash balance by a public accountant. If an association is comprised of fewer than 20 owners, a majority of all the unit owners may waive this requirement at an association meeting.
In the 1960s, what groundbreaking Act provided protection for consumers?
The Consumer Bill of Rights
What Act requires the buyer who purchases real property from a non-resident of Hawaii to withhold 7.25%+ of the amount realized and remit it to the Department of Taxation within 20 days of closing unless an exemption applies?
The Hawaii Real Property Tax Act (HARPTA)
What is the tax called that is added to the daily cost of lodging?
The Hawaii Transient Accommodations Tax (TAT)
Titles of lands not presented to the board of commisioners to quiet land titles for confirmation on before February 14th 1848 were proclaimed to belong to
The Hawaiian government
What court case upheld the 1866 Civil Rights Act and the 13th Amendment to the U.S. Constitution?
The Jones v. Mayer case
What action by the United States Congress was used to annex the independent Republic of Hawaii?
The Newlands Resolution
What two funds can be combined by the REC for reinvestment purposes?
The REC may combine the Real Estate Education and Recovery Funds for the purpose of reinvestment.
List three examples of why it's not a good idea to use a residential purchase contract for the sale of a commercial property.
The Residential Purchase Contract: Treats title issues lightly, making the purchaser take title subject to any easements, covenants, conditions, reservations or restrictions of record "which do not materially affect the value of the property." In commercial acquisitions, the buyer needs to be able to reject encumbrances, some of which are difficult to quantify as affecting the value of the property. Requires only staking and a perimeter survey, but does not provide for an ALTA survey which is what the purchaser would want. Contains references to the Mandatory Hawaii Seller Disclosure law which does not apply to commercial transactions. Requires mediation. Most commercial documents do not require mediation as the purchaser may want to go directly to Court to obtain other types of relief. Does not contain representation and warranties regarding leases or contracts and other matters such as hazardous materials. In the case of hazardous materials the Purchase Contract actually puts the sole burden on the buyer to discover them. In addition, the Purchase Contract does not have indemnification language if any such representations and warranties are breached. Does not address closing matters such as estoppel certificates from tenants, consents, rent rolls, assignment of leases, bill of sale, assignment of contracts, and trademarks.
What Act is the principal federal law that governs the disposal of solid waste and hazardous waste?
The Resource Conservation and Recovery Act (RCRA)
Define absorption period.
The absorption period is the estimated time period required to sell, lease, place in use, or trade a property in its market area at prevailing prices or rental rates.
In a short sale contract, who are the parties to the contract?
The agreement is between the buyer and the seller. They are the contract parties. The lender is not a party in the contract.
What is the income requirement for a USDA guaranteed loan?
The borrower(s) must have an adjusted annual household income that does not exceed the moderate-income limit established for the area.
What law requires creditors to clearly disclose specific credit card administrative procedures
The fair credit and charge card disclosure act
List the people who are present at a closing meeting.
The closing agent, seller, buyer, and real estate agents generally attend the real estate closing. Sometimes the title officer, loan officer, and attorneys for the buyer and/or seller also attend.
Lease agreement.
The contract between landlord and tenant.
Purchase agreement.
The contract between the seller and buyer.
What expenses does the IRS allow investors to take as deductions?
The costs an investor incurs to place the property in service, manage it, and maintain it generally are deductible.
At what level is land use predominantly controlled and enforced
The county level
Where are subdivision maps recorded?
The county recorder's office
Explain the purpose of a deed of reconveyance.
The deed of reconveyance conveys title to the property from the trustee to the borrower (trustor).
What is the difference between the GRM and the GIM?
The difference between the GRM and the GIM is that the GRM uses monthly rental income and the GIM uses all income derived from the property.
What committee deals with all issues relation to the education, research, and testing for real estate applicants and licencees
The education review committee
For a VA loan, what is the maximum guaranty that the VA will provide for the veteran's home loan?
The entitlement is the maximum guaranty that the VA will provide for the veteran's home loan.
What is the goal of the closing meeting?
The goal of the closing meeting is to transfer ownership of the property to the buyer and pay the seller for the property.
What is the most commonly used income approach when valuing 1-4 unit residential properties?
The gross rent multiplier (GRM)
Explain homestead asset protection.
The homestead asset exemption protects a certain amount of equity in a person's home by limiting the amount of liability for certain debts against which a home can be used to satisfy a judgment.
Differentiate between the nominal rate stated in the note and the effective rate.
The interest rate stated in the note is called the nominal or named rate. The effective interest rate is the rate the borrower is actually paying and is commonly called the annual percentage rate (APR).
Why should an investor examine the leases of commercial tenants?
The investor should determine the long-term viability of the lease—whether the tenant is financially strong enough to perform its obligations under the lease.
When can a late charged typically be assessed for a first mortgage lien?
The late fee is usually assessed 15 calendar days after the date the payment is due.
What is the legal premise underlying the definition of littoral rights?
The legal premise underlying the definition of littoral rights is that a lake or sea is a navigable body of water, therefore, public property owned by the state.
Why do lenders want to know the purpose of the loan?
The lender uses the purpose of the loan to determine the risk and make decisions on the type of loan and terms that the lender will offer.
What can the licensing agency do if a licensee is behind on child support?
The licensing authority can refuse to renew, reinstate, restore, deny, or suspend any license
What party uses an IRS Form 1099-Misc. to report funds paid to a cooperating broker?
The listing broker
What is a loan-to-value ratio (LTV)?
The loan-to-value ratio (LTV) is the relationship between the loan (amount borrowed) and the value of the property.
A promissory note is considered personal property and is a negotiable instrument. What is the most common type of negotiable instrument?
The most common type of negotiable instrument is an ordinary bank check.
What income is used to determine value when using capitalization rates?
The net operating income (NOI)
What topic do the non-uniform covenants primarily cover?
The non-uniform covenants primarily pertain to the remedies for default.
Which property management person is responsible for the day-to-day operations of a single property—an office building, a shopping center, or an apartment complex?
The on-site manager
Who are the parties to a property management agreement?
The owner of real property and the property manager
What is the FTC's three-part test to determine if something constitutes an unfair business practice?
The practice causes a substantial consumer injury, The harm of the injury outweighs a countervailing benefit, The consumer could not reasonably avoid the injury
Which principle of valuation is the basis for the sales comparison approach?
The principle of substitution
Which principle of valuation is recognized as being the first step in how market prices are determined?
The principle of supply and demand
Why is it important to know the purpose of the appraisal?
The purpose of the appraisal determines the type of information that should be gathered.
What is meant by the risk/return balance?
The risk/return balance is the balance an investor must decide on between the lowest possible risk for the highest possible return.
servient tenement
The servient tenement is the land being encumbered by the easement
When must the settlement agent provide the Closing Disclosure to the SELLER?
The settlement agent is responsible for preparing and providing the Closing Disclosure to the SELLER at or before consummation.
How is the taxable gain determined from the sale of a capital asset?
The taxable gain is generally the difference between the adjusted cost basis of the property and the price when sold.
What is another term given to a Tenancy at Sufferance?
The tenancy is also referred to as a holdover tenancy.
What is the not-to-exceed limit regarding a tenant getting reimbursement for mandatory repairs not completed by the landlord?
The tenant may immediately do the repairs or pay to have the work done, submit receipts to the landlord and deduct the costs of repairs from the rent. The total must not exceed $500.
Name the steps followed when a tenant does not renew the lease.
The tenant must give proper notice. The property manager should inspect the property, do an exit interview, and determine how much of the security deposit to keep for damages and how much to return to the tenant.
What are the 3 "Cs" that property managers use to qualify prospective tenants?
The three "Cs" are capacity, credit, and character.
Name the parties to a contract for deed.
The two parties are the seller (vendor) who acts as a lender and the buyer (vendee).
In the Fannie Mae/Freddie Mac Uniform Security Instruments, what is the difference between uniform covenants (promises) and non-uniform covenants?
The uniform covenants are identical in all of the Fannie Mae/Freddie Mac Uniform Security Instruments. The non-uniform covenants vary based on the type of instrument—mortgage, deed of trust, and security deed.
In the cost approach, what two elements are added together to arrive at the value of the appraised parcel?
The value of the land as if vacant and the cost to rebuild the building less the accrued depreciation
What is the commonality of interest rate, index, margin, caps, initial payment, and adjustment period?
These are the basic features of every ARM loan.
Name two specialists that an owner or property manager might employ.
These specialists include leasing agents, building engineers, maintenance supervisors, general maintenance contractors, accountants, and administrative assistants.
What is the possible capital gain exemption for a married couple when they sell their home?
They can exclude up to $500,000 if married filing jointly
John and Grace Palmer bought their home in 1994 for $150,000. They just sold it for $550,000. How much will they pay in capital gains tax and why?
They have no capital gains to pay. Their profit was $400,000 and they are eligible for a $500,000 exclusion.
How were common laws developed?
They were made by judges starting in the Middle Ages.
What is the time limit to report to the licensing authority any disciplinary decision issued against the licensee in another jurisdiction?
Thirty days
What is the Tax Map Key system?
This is the system that Hawaii has to identify the exact location of a property. The TMK has five digits.
Which is NOT one of the tests used to determine whether property is a fixture or personal property?
Time of the attachment
Define total contract price.
Total contract price means the total monetary consideration offered by the consumer for the provision of goods and services.
What is the objective of laws?
To maintain social order and give protection to all citizens
What does selling as-is mean?
To sell a home "as-is" means that you are selling the property in its current state, with an understanding that no repairs will be made and that the home will come with all its current faults and issues.
Name 3 levels of real property appraiser classifications.
Trainee Appraiser (some states do not have this level), Licensed Residential Real Property Appraiser, Certified Residential Real Property Appraiser, Certified General Real Property Appraiser
List three costs that typically are allocated at closing.
Transfer taxes, recording fees, and hazard and title insurance
What is the common remedy for default of a deed of trust?
Trustee's sale (non-judicial foreclosure)
What are the turning points and the phases in a real estate cycle?
Two turning points are peaks and troughs. Two phases are expansion and contraction.
Mortgage insurance is insurance that provides coverage for the top part of a residential loan in the event of default. List the two types of mortgage insurance.
Types of mortgage insurance include private mortgage insurance (used for conventional loans) and mutual mortgage insurance (used for FHA loans).
Name three common home loans.
Typical residential loans include conventional loans, government loans (FHA, VA, and USDA), and other loans, such as seller carryback loans.
What two verification letters do loan processors typically send out?
Typical verification letters include the Verification of Deposit (VOD) and Verification of Employment (VOE).
What entity issues land patents?
U.S. Government
Explain undersupply and oversupply.
Undersupply is too little supply for the demand. Oversupply is too many homes on the market.
Explain the importance of searching probate records
Unfortunately, a sale can be delayed or cancelled if a seller enters into a sales contract, only to later discover that he or she doesn't have the legal ability to sell the property.
What code regulates business opportunity sales?
Uniform Commercial Code (UCC) Divisions 6 and 9
What standards do all appraisers have to follow?
Uniform Standards of Professional Appraisal Practice (USPAP)
The real estate market has four characteristics. Name three of them.
Unique, Immobile, Illiquid, Limited number of buyers and sellers
classes of agents
Universal. general. special
How does Ginnie Mae differ from Fannie Mae and Freddy Mac?
Unlike Fannie Mae and Freddie Mac, Ginnie Mae is NOT a GSE, does NOT buy or sell pools of loans, and does NOT issue mortgage-backed securities (MBS).
List four ways that lenders earn income on the loans they originate.
Up-front finance charges, Loan fees, Interest from the loan, Servicing fees, Selling the loan
Describe Hawaii's land use classification system
Urban Rural Agricultural Conservation
What do rules and regulations for residential properties typically cover?
Use of the apartment, pets, noise, parking, use of common area facilities, and guests
Name the three broad categories of investors.
Users, pure investors, and developers
Explain real estate investment trusts
When individual investors buy shares in commercial real estate portfolios that receive income from a variety of properties.
public dedications
When real estate is intended for public use
When purchasing investment property, what due diligence should investors perform?
Verify the condition of the property, leases, income, and expenses
What is the name of the property manager's thorough on-site inspection of the property?
Walk-through
Describe the process of making an offer.
When there is a buyer who wants to put an offer on a house, the licensee sits down with the buyer to fill out a sales contract form. When the buyer has included all details, such as financing, closing date, and other considerations on the contract form, he or she signs the document, it is delivered to the seller or listing agent, and there is an offer.
Where would you apply for an FHA insured loan?
With approved lenders called Direct Endorsement (DE) lenders
Explain other considerations involving working with purchase contracts, including escrow and earnest money deposits and how to avoid purchase contract mistakes and lawsuits.
Wrong names, property addresses, and misspellings Incorrect times and dates, Cross-outs, Unreadable handwriting, Unrealistic timelines, Contingencies with no expiration dates, Missing addenda, Competing addenda (Each broker using a different form for the same contingency)
Is a Leasehold Disclosure required by law?
Yes, seller to provide within 10 days of an accepted purchase contract and buyer has 10 days to review and accept.
How is straight-line depreciation calculated?
You divide the value of the improvements by the depreciable life of the property to arrive at the allowable annual depreciation.
how to prepare for a pre-listing meeting, including questions to ask the seller and preliminary property and MLS research.
You should find tax records, the property's legal description, ownership information, previous MLS data, etc. Use online searches or work with the local title company to do your research. Ask about the reason they want to sell
Allocation
assigns a cost (generally one not yet spent) to either the seller or the buyer.
timeshares.
a property with a divided form of ownership or use rights
methods of enlarging or reducing land by natural forces
accession, accretion, alluvion, reliction, erosion, avulsion, and subsidence.
Describe alienation
act of transferring or conveying real property to another—voluntarily or involuntarily.
special use permits
authorizes land uses that are allowed and encouraged by the ordinance and declared harmonious with the applicable zoning district
Ownership in severalty
alone
encumbrance
an encumbrance is another's right to use or take possession of a legal owner's property, or to prevent the legal owner from enjoying the full bundle of rights in the estate.
Special agents
are authorized to conduct either only a single transaction or a specified series of transactions over a limited period of time.
ohana dwelling laws
are secondary living units that can be either attached to or detached from the main living structure on the same property.
elective shares and seizure laws.
aw enforcement officers take assets from persons suspected of involvement with crime or illegal activity without necessarily charging the owners with wrongdoing.
renovating
bringing back a property to its normal condition
The definition of land includes all of the following, EXCEPT:
buildings.
Describe types of agency/brokerage relationships
buyer agency, seller agency, and dual agency.
How does the law define a custodian or caretaker?
is employed as an employee by a single owner and has the responsibility to manage or care for that real property left in the individual's trust.
A Planned Unit Development (PUD)
community of homes that could look like single family residences, townhomes, or condos, and can include both residential and commercial units.
Identify the ways to terminate agency/brokerage relationships
completion of performance by the licensee, expiration of the term agreed upon by the parties, termination of the relationship by mutual agreement of the parties, and termination of the relationship by notice from either party to the other.
The term "water rights" refers to the right of property owners to use water, but NOT to;
take all available water for their own personal use.
possessory interest
right to physically occupy land
Discuss the importance of private restrictions on land use
deed restrictions and CCRs. They limit what you can do on your property.
group boycotting
deliberate exclusion of a particular business or group from the benefits of competition and inclusion.
Name the 4 elements that create value (DUST).
demand, utility, scarcity, and transferability
private land use controls
developers employed comprehensive private land use controls to produce large-scale residential developments and communities
non-possessory interest
does not constitute ownership of the land itself. A present interest can be used by the owner today. A future interest cannot be used today but might be used in the future.
The person's land receiving the benefit of the easement is the
dominant tenement.
Recognize the powers of government that affect the use and ownership of real property
eminent domain, taxation, escheat, and police power.
the role that the state and county governments take in using police powers.
enforce order within their territory for the betterment of the health, safety, morals, and general welfare of their inhabitants
types of deeds used to transfer ownership of real estate
general warranty deeds, special warranty deeds, grant deeds, bargain and sale deeds, quitclaim and special use deeds, and transfer-on-death deeds.
curtesy
gives the widower a life estate in any freehold interest, such as a fee simple, held by the wife during the marriage so long as the property children of the marriage can inherit the property.
Differentiate among the types of lease agreements
ground lease is a lease for only the land, proprietary lease is used in cooperative ownership, residential lease is used for all residential property
key terms that relate to condominiums.
high-rise buildings, garden-type townhouses, and semi-detached structures
General agents
hold a more limited authority to conduct a series of transactions over a continuous period of time.
Universal agents
hold broad authority to act on behalf of the principal. For example, they may hold a power of attorney or have a professional relationship, such as a lawyer and client.
What is primary duty of a broker-in-charge?
in charge of and responsible to the principal broker for the real estate operations conducted at the principal place of business or a branch office.
elective rights laws
inheritance, which describes a proportion of an estate which the surviving spouse of the deceased may claim in place of what the decedent left them in their will.
return OF investment
initial capital invested.
Article 12 states that REALTORS® may use the term "free" in their advertising and other descriptions as long as all terms are
intelligibly disclosed at the same time.
undivided interest
interest held under the same title by two or more people whether their rights are equal or unequal in value or quantity
A credit rating
is a formal evaluation given by credit bureaus of a borrower's ability to handle new credit based on past performance.
street address
is not sufficient for a legal description.
subdivision regulations
is the act of dividing land into pieces that are easier to sell or otherwise develop, usually via a plat.
What is the breakeven point?
is the point at which gains equal losses. In real estate, it is the point at which effective gross income equals expenses.
code enforcement
is the prevention, detection, investigation, and enforcement of violations of statutes or ordinances regulating public health, safety, and welfare; public works; business activities and consumer protection; building standards; land-use; or municipal affairs.
zoning changes
is the process of changing the current zone district to a different zone district
Retrofitting
is the process of modifying equipment, installing, or constructing parts in an existing building.
building codes
is to provide minimum standards for safety, health, and general welfare including structural integrity, mechanical integrity, means of egress, fire prevention and control, and energy conservation.
service income.
laundry facilities, vending machines, video/audio rentals, and selling utility services to tenants.
zoning
legal tool used to implement the goals
Name three promissory notes in general use.
straight note, an installment note, an installment note with periodic payments of fixed amounts, an adjustable-rate note, a demand note, a fully amortized note, and a partially amortized installment note.
installment sale
payments are made by the buyer to the seller over a period of more than one year.
Explain the methods that contracts can be discharged
performance, mutual rescission, cancellation, release, revocation, assignment, novation, accord and satisfaction, and breach.
Remodeling
performing alterations and upgrades to an existing property for aesthetic appeal.
Trade fixtures used in a trade or business are:
personal property of the tenant.
What forces influence value (PEPS)?
physical characteristics, economic influences, political or governmental regulations, and social ideals
In appraisal which of the following is considered the basis of the sales comparison approach
principle of substitution
return ON investment.
profit expressed as a percentage
What are the main elements of a management plan?
property inspection, lease analysis, income and expense analysis, and the preparation and presentation of the plan to the owner.
syndication
property investors come together with pooled resources to finance the purchase of a property. This is also known as huis, which in Hawaii means a club or association.
Pre-approval
refers to a preliminary evaluation of a potential borrower's income, employment history, assets, and credit history.
comprehensive plan
regulating development and land use.
contract rent
the amount of rent paid according to the lease agreement.
Net operating income (NOI)
the income remaining after the operating expenses are deducted from the effective gross income.
lien priority
the lien's categorization as superior or junior, the date of recordation of the lien
Potential gross income (PGI)
the maximum rental income a property could generate if it is 100% leased at market rent without vacancy or credit losses.
importance of recording deeds
the new owner should record the deed to protect his or her legal interests.
Effective gross income (EGI)
the property's potential gross income plus any other income less vacancy and collection losses.
What did the Hawaii Supreme Court rule regarding the determination of the shoreline?
the shoreline should be determined by the high wash of the waves
public grants
the transfer of title by the government to a private individual.
joint tenancy
time, title, interest, and possession—must exist. If any one of the unities is missing, a tenancy in common is created instead.
fractional ownership interests
two or more people or entities own property at the same time with undivided us
tenancy in common
two or more people own undivided interests in the property.
community property
use the community property system to determine the interest of a spouse in property acquired during marriage.
Differentiate among valid, voidable, void, enforceable, and unenforceable contracts
valid is binding, w all basic elements req by law. void is a contract that lacks an element, making it not a contract. voidable is a contract that can be enforced but only one person is bound. un enforceable is a contract that the court of law cant enforce.
market rent
what a leased property would expect to rent for under current market conditions
dower
when a married individual wants to transfer real property that he or she owns in his or her own name, a release of dower rights signed by the grantor's spouse will be included in the deed.
monopoly
when a person or group has exclusive control over a product or service within a given region.
Level of authority Apparent
where the principal's words or conduct would lead a reasonable person in the third party's position to believe that the agent was authorized to act, even if the principal and the purported agent had never discussed such a relationship.
How much notice time must a landlord give tenants, when converting rentals to condominiums?
written notice to the tenant at least 120 days or 6 months prior to the termination of the lease or rental agreement.
When advertising, both HUD and the MLS list words and phrases that are considered discriminatory. List six terms that should not be used in advertising.
you should avoid any terms that pertain to race, religion, color, national origin, sex, familial status or age, and health.