Focus Areas

An adverse material fact

negative property information that could reduce the property's value

The only time single agency exists is when

one agent and one firm represent one side of the transaction

Unilateral Contract

only one party makes a promise. An option contract is one example of a unilateral real estate contract.

Right-of-way

provides a pass-through to other property but doesn't allow usage of the land.

Timeshare estates can be

sold or passed down to heirs. Like other forms of fee simple ownership, timeshare estates can be sold or passed down to heirs.

Contract rescission (cancellation)

generally results from an operation of law, such as breach of contract, destruction of the object of the contract, etc. If the contract is rescinded, it is terminated, and the parties are legally returned to their position before there was a contract. if one party breaches the agreement, the other may legally have the right to rescind the agreement.

A partially amortized loan

includes partial amortization over the loan term and a balloon payment at the end of the term, where the borrower pays off the loan in one lump sum.

The doctrine of estoppel prevents

individuals from making an assertion or claim, even by actions or behavior, and later denying it.

A periodic estate (aka estate from period to period)

is a lease that automatically renews at the end of its term (such as a month-to-month lease).

An estate for years (type of leasehold estate)

is a lease that ends on a specific date and must be renewed by mutual agreement between the landlord and tenant.

An estate at will

is a lease without an established ending that can be terminated by either party.

Fee Simple Defeasible

is a type of freehold estate in which ownership is subject to either the occurrence or non-occurrence of a particular event. The two categories of fee simple defeasible estates are fee simple determinable and fee simple subject to condition subsequent.

Option Contract

is an offer to purchase a specific piece of real estate without the obligation to buy it. potential buyer (optionee) is usually required to pay an option fee to the seller (optionor). If the optionee decides not to exercise the option and purchase the property, the optionor typically retains the option fee.

An estate at sufferance

is one in which a tenant (referred to as a holdover tenant) didn't leave when the lease expired.

Conversion

is using trust funds for anything other than their intended purpose

Usury

lending money at an excessive (illegal) rate

Inverse condemnation

occurs when a property's value is negatively affected by government regulation, but the owner is not offered just compensation according to the requirements of the Takings Clause.

Novation

occurs when one contract is substituted for another. The agreement may be between the same parties, or a new party may be substituted (this is novation of the parties). The intent between the parties is to discharge the old obligation, releasing the original party from those obligations.

ownership in severalty

one person owns the property with no joint interest by any other person. With the death of an estate owned in severalty, the estate passes either according to instructions in the owner's will or according to state law.

Defeasance Clause

orders the lender (or the trustee, if a deed of trust secures the loan) to immediately release full title to the property to the borrower once the loan is paid in full.

Freehold Estate

property ownership lasting indefinitely Three types of freehold estates exist. 1. Fee simple estate 2. Fee simple defeasible 3. leasehold estate

the term for seller financing that's typically used to bridge the gap between the home's list price and the institutional loan, though it can also be used to finance the entire purchase price.

purchase money mortgage

Transfer tax is calculated based on

purchase/sale price

When you are developing your short list, look for lenders who have

real-word experience, a reputation for excellence, and competitive pricing.

The duties of a leasing agent include

referring the client to an expert when the question or issue is outside the real estate professional's areas of expertise.

Severability

refers to the concept that if a court deems a term in the contract to be unenforceable, the remainder of the contract remains enforceable.

Truth in Lending Act (TILA) of 1968

requires lenders to disclose credit terms and conditions when advertising triggers loan terms, so as not to mislead consumers.

Downzoning

result in lowering density, and also reduces possible uses and potential value.

Consideration

something of legal value offered by one party and accepted by another, e.g., the buyer's promise to pay the full purchase price, and the seller's promise to transfer marketable title through delivery of a deed.

Fee Simple Estate/Fee Simple Absolute

type of freehold estate that conveys the most rights available. Property held as a fee simple can be sold and is inheritable.

Express agreements may be

verbal or written

Soft spots and mounds may indicate that the property was used for

waste disposal

Commingling

when trust (escrow) funds are mixed with personal or brokerage firm funds. (mixing money)

Designated/appointed agency (aka dual-license dual agency )

when two separate licensees from a single firm each represent one party (buyer or seller) in the same transaction.

fully amortized loan

will be paid in full after the last scheduled loan payment (or sooner if the borrower makes additional principal payments during the loan term). The monthly principal and interest payment amount is the same each month. The principal portion of the payment increases each month, while the interest portion decreases.

Joint and several liability: (contaminated Land cleanup)

Each of the responsible parties is personally responsible for damages.

most common type of buyer representation agreement?

Exclusive right-to-represent agreement

Easement by prescription

This easement isn't legal, and is created through the continued, uninterrupted, obvious, exclusive, and adverse use of someone's property without permission.

A fee simple determinable has limitations as to what can or can't be done with a property. It uses phrases such as

"as long as," "while," or "during" to describe the required condition.

5 essential elements of a contract

1. Both parties are legally competent 2. the purpose is legal 3. an offer was made and accepted 4. a fee has been negotiated and documented 5. contract is entered into voluntarily

Lenders may require private mortgage insurance (PMI) on conventional loans when the down payment is less than

20% and loan-to-value ratio is in excess of 80%. Loans with an LTV in excess of 80% don't conform to Fannie Mae /Freddie Mac guidelines, so lenders may require this to offset the risk

Square miles in a township

36 (6 by 6)

Other names forms (drafted by a licensed attorney) used to write a sales contract are:

Offer to purchase, Sales agreement, Contract of purchase and sale, Purchase agreement, Earnest money agreement, Agreement of sale

Life Estate Ownership

Ownership for the lifetime of a specific person: upon death land reverts to original grantor who has reversion interest

The most common mortgage loan payment includes a portion of the principal balance, current accrued interest, and a 1/12 portion of the expected annual property tax and homeowner's insurance balances due . This may also be referred to as a budget mortgage because it's easy to budget around the known monthly payment. Lenders place the property tax and insurance amounts collected each month in an escrow account and pay the annual tax and insurance bills when they come due.

PITI (principal, interest, taxes, insurance)

added an "innocent landowner" defense to CERCLA. Landowners who performed their due diligence when purchasing a property may be held innocent of clean-up liability if the property is found to be contaminated.

Superfunds Amendments and Reauthorization Act (SARA)

Which entity enforces subdivision covenants?

The civil court system

Acceleration Clause

The clause in a mortgage or deed of trust that can be enforced to make the entire debt due immediately if the borrower defaults on an installment payment or other covenant.

Physical characteristics of land include its immobility, indestructibility, and ______.

Uniqueness

When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?

The lender holds the mortgage and the note.

Escheat

The state's power to take the property of a decedent who dies without a will, heirs, or creditors. When the state claims property through escheat, it can dispose of the property to benefit the public.

Unilateral Rescission

When a contract breach occurs, the innocent party cancels the contract

Statute of limitations

a contract clause that gives a date by which all performance must be completed or the party forfeits any legal rights.

fee simple subject to condition subsequent estate

the current property owner conveys ownership to a new owner on a specific condition. For example, Trinity conveys her home to her son, Gabriel, on the condition that the property remains residential. If Gabriel converts the property to some other use, the estate doesn't automatically revert to the original owner; however, Trinity (or her other heirs or successors) has the right to re-acquire full ownership. But she'll have to go to court to do so.

What well-known economic principle says that a property's value is determined by what it would cost to purchase a similar property?

the principle of substitution

Bundle of Rights (5 rights)

the rights extended to a property owner to use the physical components of land, such as the surface, sub-surface, and air rights. Possession: This means that the titleholder may possess (be on) the property. Control: The owner controls the use of the property. Exclusion: The owner may decide who may or may not access the property. Enjoyment: The owner may use the property in any legal matter. Disposition: The owner has the right to sell or convey the property.

Wrap-around Mortgage

the seller holds a mortgage that wraps the new buyer's mortgage around the seller's existing mortgage. The seller continues to make payments on the first mortgage and buyer makes payments to the seller on the wrap-around mortgage.

What is a special flood hazard area?

An area where flood insurance is mandatory

Fee Simple Determinable

An estate which has been created to exist only until the occurrence or nonoccurrence of a particular event. Returns automatically (reverts) to owner or heir if property isn't used the way the owner instructed

Which legislative act prohibits certain types of electronic communication?

CAN-SPAM

How many feet are in a mile?

5,280 feet

How Many Acres in 1 square mile

640 acres

a map of a subdivision that represents a tract of land, showing the boundaries and location of individual properties, streets, easements, and other pertinent information. A developer submits this to a planning board or zoning commission.

A Plat Map

Taxation:

A governmental police power that permits it to meet the need for public works by funding through a stable source of income that shares the burden among many citizens

bilateral contract

A promise made in exchange for another promise, this is what most Real estate contracts are

the borrower's promise to repay the loan. When the loan is paid in full, the note is marked as paid in full and returned to the borrower.

A promissory note

Leasehold Estate

A tenant's right to occupy real estate during the term of a lease, generally considered to be a personal property interest.

What is it called when all parties sign a contract, but before the seller's acceptance is delivered to the buyer?

Acceptance

Retroactive liability: (contaminated land cleanup)

Both the current owner and prior owners are liable. If liable parties aren't doing cleanup, the EPA can hire its own contractors, do the clean-up work, and then bill the parties.

determines a probable range of property values by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison such as age and transaction price.

Bracketing

Bulk zoning regulates the density of a given area by requiring certain building height limitations, lot width, setback requirements, etc. applies to both residential and commercial zoning.

Bulk zoning

The statute of frauds requires

Contract to be in writing to be enforceable and identify parties to the contract

Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% of the purchase price in closing costs. How much money should he bring to closing?

Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a $50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05). He needs $106,250 to close ([$125,000 - $50,000] + $31,250).

Easement in gross

Granted to a specific individual or business rather than attached to the property itself

Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?

HUD (Department of Housing and Urban Development(HUD)

Prior to a certain act's existence, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. What's this act called?

Housing and Community Development Act of 1974

Following all of the client's lawful instructions describes which fiduciary duty?

Obedience

The north half of the northwest quarter of Section 6, Township 8 North, Range 68 west of the 5th principal meridian." What land description method did surveyors use for this piece of property?

Rectangular government survey - usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers.

Allentown sits on the river, and many of its bridges are in need of repair. Which police power is Allentown administration likely to use in order to fund improvements to its bridges?

Taxation - a way for a government entity to collect money.

Which type of pest may make mud tubes—tunnels that run along the walls—or shed tiny wings?

Termites

Gary's new seller client is concerned about privacy and doesn't want her listing posted on the MLS. Gary explains to her the potential impact this will have on marketing her property, but the client remains adamant. Gary doesn't list the property on the MLS. What fiduciary duty is at play?

The duty of obedience

You're working with buyers who are pre-approved for a loan of as much as $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of their first payment will go toward interest?

The formula is loan balance × interest rate ÷ months per year. Loan balance is: $200,000 × .0525 = $10,500; $10,500 ÷ 12 = $875

eminent domain

The government's power to take private land for public use. For example, eminent domain could be used to take private property needed for a planned freeway project. The government must fairly compensate private owners for property taken through this

When a loan is paid off that was secured with a deed of trust,

The lender tells the trustee(third party) to release the title reconveying title to person who paid off loan

Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?

The original sales agreement and any addenda

What's the meaning of "good faith" in relation to contract law?

The parties agree that they'll execute the contract to the best of their ability and without any fraud or misrepresentation.

Strict liability: - (contaminated land cleanup)

The property owner is responsible for cleanup, regardless of who's at fault.

The method of annexation

This refers to whether the item is attached to the property and how permanent the attachment is. planting in the ground—implies that the plantings were expected to stay with the land.

Which statement correctly identifies a federal fair housing law and what it addresses

Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.

Spot Zoning

When a particular property or group of properties is rezoned to permit a use different form the neighboring properties use.

purchase money mortgage

a loan a seller issues to the buyer as part of the purchase transaction. This typically occurs in situations where the buyer cannot qualify for a mortgage through traditional means.

Easement appurtenant

a right of use that continues from owner to owner that involves a relationship between two parcels of land: a dominant parcel that benefits from a servient parcel

The duty of accounting refers to

accounting for funds, property, and paperwork related to the transaction.

A contract involving an exchange of promises or other consideration between two parties is

bilateral contract

An indemnification clause

contractual shift of liability and obligations away from a given party.

Josie sees a few blank fields on her loan document. Her lender tells her the document is okay to sign anyway. Josie should ________.

cross through the blank fields

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)

established to clean up closed, abandoned, or uncontrolled hazardous waste sites and spills.

elements appraisers consider in the market comparison approach are applied in a specific order:

financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics.

Joint Tenancy

form of co-ownership in which equal ownership requires unity of time, title, interest, and possession. any owner's debt can attach to the ownership interest of that owner. includes the right of survivorship, which means that the surviving co-owner(s) will own the property of a joint tenant who dies. If there are only two joint tenants, the death of one dissolves the joint tenancy. The remaining tenant becomes the owner of an estate in severalty. If there are more than two joint tenants, a deceased tenant's ownership transfers in equal parts to the remaining joint owners. Survivorship takes precedence over any devisees named in a will, as well as any heirs named by laws of descent and distribution. If a joint tenant sells his or her interest, the buyer doesn't become a joint tenant with the other owners; the buyer is a tenant in common with the remaining joint owners.

Tenancy in Common

form of co-ownership in which the shares may be unequal. An owner's ownership is inheritable and, upon the owner's death, doesn't necessarily pass to the other owners.