Nevada and National Real Estate

Personal property: Manufactured homes

Made in factory, moved and installed anywhere. In some states, it is personal property. If it is permenently fixed to land, the land is included to also be considered as real property.

Master planned communities

Many of these communities develop plans that include recreation centers, parks, playgrounds, and other amenities, as well as reserve places for schools, churches, retail establishments, etc.

State fair housing laws

Many states have addressed areas still not covered by federal legislation, and as a result, there are also state laws in the form of municipal laws and regulations that you will have to know about as an agent.

Usury

Many states have established the maximum amount of interest a lender may charge on certain types of loans.

Determine anual taxes due for property

Market Value ($MV) x Assessment Ratio (AR%) = Assessed Value ($AV), Asset Value ($AV) x Tax Rate (TR%) = Annual Taxes ($AT)

Assessed value

Market value as established by the county assessors is multiplied by the assessment ratio of ___35% yielding this. $MV x AR% = $AV

Multiple Offers

"accept one offer in writing, and reject all other offers in writing", to the legally complex and technically hazardous - "counter all offers in writing."

Pur autre vie

"for another's life". If the life estate is based on the life of someone other than the life tenant.

The FDIC defines *predatory lending*

"imposing unfair and abusive loan terms on borrowers" where the lender takes unfair advantage of the borrower. common with high interest consumer credit such as *payday loans, credit cards, and subprime loans*.

Nevada does not recognize

"transactional", agency, or "limited" agency representation.

NRS 645.630 violation would be found guilty of g. If he or she is required to maintain a trust account:

(1) Failing to balance the trust account at least monthly; and (2) Failing to submit to the Division an annual accounting of the trust account

NRS 645.633 violation 3. section 2. In connection with any property for which the person has obtained a property management agreement pursuant to NRS 645.6056:

(1) Is convicted of violating any of the provisions of NRS 202.470; (2) Has been notified in writing by the appropriate governmental agency of a potential violation of NRS 244.360, 244.3603 or 268.4124, and has failed to inform the owner of the property of such notification; or (3) Has been directed in writing by the owner of the property to correct a potential violation of NRS 244.360, 244.3603 or 268.4124, and has failed to correct the potential violation, if such corrective action is within the scope of the person's duties pursuant to the property management agreement.

NRS 645.633 violation 3. The Commission may take action pursuant to NRS 645.630 against any person who:

(a) Holds a permit to engage in property management issued pursuant to NRS 645.6052; and (b) In connection with any property for which the person has obtained a property management agreement pursuant to NRS 645.6056.

REQUIRMENTS FOR A VALID DEED

*grantor and grantee - the grantor must be competent *consideration - legal consideration can be "good or valuable" *words of conveyance - granting clause *execution - the grantor must sign the deed *delivery - title does not pass until the deed is delivered and accepted *legal description of the property

In a deed of trust, the trustee holds

*naked title* to the property and has been given the power of sale by the *trustor (borrower)*.

REQUIRED ELEMENTS OF A VALID CONTRACT: 5. Consideration

May be money, anything of value, or just a statement that consideration exists, such as "for continued love and affection" or "for good and valuable consideration."

There are two sources for anti-trust laws for Nevada brokers

- state law (NRS 598A) and federal law (Sherman Act87 and the Clayton Act88).

Subsurface rights

Mineral rights consist of rights to subsurface land and profits. These may or may not be included in the sale of real property.

Elements of VA loans:

1. 1 to 4 family, owner occupied, residential properties to qualified veterans. 2. This is a true, 0% down payment loan. However, there are out of pocket expenses. 3. The buyer pays a funding fee of either 2.15% for first-time users, or 3.3% for subsequent users. This funding fee works much the same as the MIP in an FHA loan, but is not considered an "insurance premium" - it's a "guarantee program." The veteran buyer may pay the fee at close of escrow, but normally the veteran elects to roll the funding fee into the loan. The funding fee may be waived for veterans with service related disabilities depending on the degree of disability. Borrowers with a down payment have a reduced funding fee. This fee changes from time to time. 4. There is no maximum VA loan amount. There is a maximum VA guarantee. The guarantee is what the government promises to the lender if there is a shortage from foreclosure. The guarantee provides the lender with a guarantee for the first 25% of the loan up to $60,000. Lenders are typically willing to lend up to four times the guarantee. 5. The property must be appraised by a certified VA appraiser. The VA appraisal is called a certificate of reasonable value (CRV). The CRV may have appraisal conditions which must be corrected before VA will guarantee the loan. 6. Discount points may be paid by either party. 7. VA loans are always budget loans. 8. VA loans are assumable with qualifying by the assumption buyer. 9. VA Loans have a 30-year maximum term. 10. The partial vet's entitlement can be restored in one of two ways: a. The veteran sells the property and pays off the VA guaranteed loan. b. The veteran sells the property to another qualified veteran who agrees to substitute his entitlement for the selling veteran's entitlement. 11. If the veteran did not use all of his entitlement in the purchase of the property, he will still have a partial entitlement which would be his total entitlement minus the portion used.

Elements of FHA programs:

1. 1 to 4 family, owner-occupied residential properties; 2. The buyer pays a Mortgage Insurance Premium (MIP) both in an up-front payment and also monthly for the life of the loan. The amount, or percentage, for these two costs changes from time to time. 3. The maximum FHA loan is set regionally. 4. 3.5% minimum cash contribution by the buyer which is technically not just a down payment as a portion of these funds can be applied to certain closing costs; 5. The property must be appraised by a certified FHA appraiser. The FHA appraisal is called a conditional commitment. The conditional commitment may have "appraisal conditions" which must be corrected before FHA will insure the loan. 6. Discount points may be paid by either party. 7. Loans are always budget loans with principal, interest, taxes, and insurance (PITI) and the mortgage insurance premium is included in the monthly payment. 8. FHA Loans are assumable with qualifying by the assumption buyer. 9. FHA Loans have a 30-year maximum term. 10. There can be no junior liens (2nd mortgages) at close of escrow. You cannot finance the minimum cash contribution.

Once the offer is received, the offeree may:

1. Accept; 2. Counteroffer; 3. Reject; 4. Do nothing; 5. Withdrawal or revocation.

An "adequate" property description has been defined as either:

1. Address of the property or; 2. Assessor's Parcel Number (APN).

REQUIRED ELEMENTS OF A VALID CONTRACT:

1. Competent Parties 2. Offer and Acceptance 3. Legal; Legality of Object 4. Informed Parties 5. Consideration COLIC.

Contracts for real estate have two additional elements (requirements):

1. In writing and signed 2. Description of the real estate

Disclosure to Each Party to the Transaction

1. Material facts about the property; 2. The licensee's agency status; 3. The licensee's compensation sources; and 4. The licensee's interest in the transaction or property (if any).

3 Legal tests to determine if an time is real property (fixture) vs personal property

1. Method of annexation 2. Adaptation to real estate 3. Have the parties agree to its status in an offer to purchase

Three physical characteristics of land:

1. Nonhomogeneity - no two pieces are exactly alike. A more current term is uniqueness. Each piece of land is unique. 2. Immobility - land cannot be moved - a person must go to the land. 3. Indestructibility - durability - it will always be there.

Basic types of listing agreements:

1. Open listing; 2. Exclusive agency listing; 3. Exclusive right to sell listing.

Terminating Brokerage Agreements

1. Performance; 2. Expiration; 3. Revocation; 4. Abandonment; 5. Mutual consent; 6. Death, bankruptcy, or loss of competency; 7. Material change; 8. Destruction of the property; 9. Agency coupled with an interest.

Termination and Assignment of Contracts

1. Performance; 2. Mutual agreement; 3. Impossibility; 4. Operation of law.

Four economic characteristics of land:

1. Scarcity - in short supply where demand is great - (a lot in Manhattan is more valuable than a lot in upstate New York.) Scarcity is usually based on geographic considerations. 2. Modification - land use and value are greatly influenced by improvements made by man to land and to surrounding parcels of land. 3. Fixity - land and buildings and other improvements to land are considered fixed or permanent investments - they are not liquid assets. 4. Situs - location preference, or location from an economic rather than a geographic standpoint. (This can change over time as people change.)

Specific Terms of enforceable exclusive brokerage agreement by law:

1. The agreement in writing; 2. signed by both the broker and the client or their authorized representatives; 3. The contract must have a definite termination date; and 4. The agreement may not require the client to notify the broker of the client's intention to cancel the exclusive features of the brokerage agreement once the agreement is terminated.

CONTRACT PERFORMANCE:

1. Valid; 2. Void; 3. Voidable; 4. Unenforceable.

Finance charges

1. interest charged on the loan; 2. loan fees (such as the loan origination fee); 3. discount points; 4. appraisal fees; 5. mortgage guarantee/insurance costs; 6. credit reports or other fees charged in connection with researching the borrower's credit history; 7. other service charges or fees charged as a requirement for obtaining the loan.

Types of encumbrance

1. lien charge against property as security for a debt. 2. A reservation, imposed by the grantor, withholds title to a part of the land described in the deed (Example: an easement or mineral rights). 3. When a structure or improvement overlaps or trespasses onto another's property it is an encroachment. 4. An easement allows limited use or enjoyment of another's land. It is a right in land and should be created in writing and recorded. It is use without possession.

Consumer Credit Protection Act, Truth-In-Lending Act, Regulation "Z" Transactions covered:

1. loans to individual consumers (not business loans); 2. loans with more than 4 installment payments; 3. all consumer real estate loans where a lien will be placed against the residence of the consumer; 4. the loan balance equals or exceeds $25,000 or is secured by an interest in real property or a dwelling.

Real Estate Settlement Procedures Act (RESPA) applies to

1. new first mortgages (also refinances if it creates a new first mortgage); 2. on 1 to 4 family homes, and, 3. are "federally related" in some way; a. FHA, VA or RECD loans; b. loans by a federally chartered lender; c. loans by a federally insured lender. 4. any Lender who makes $1,000,000 or more in loans.

SALES CONTRACTS should contain:

1. physical description of the property being purchased; 2. identification of the parties; 3. agreed upon purchase price; 4. earnest money deposit (not legally required but requested in practice); 5. additional down payment (amount and when to be paid); 6. escrow company and escrow officer; 7. general terms and conditions of the transaction; 8. personal property included (if any); 9. financing contingencies (if any); 10. various required disclosures; 11. specific conditions to be; accomplished by the seller (usually repairs); 12. appraisal conditions (if any, also usually repairs); 13. contingencies (contract condition to be met or the contract is voidable); 14. liquidated damages; 15. closing date; 16. pro-rations; 17. possession date; 18. signatures and dates.

Reverse annuity mortgage (RAM) loan will be paid off upon the occurrence of:

1. sale of the home; 2. death of the borrower; 3. expiration of the loan.

Not covered under Real Estate Settlement Procedures Act (RESPA) are:

1. seller financing under $1,000,000; 2. land loans; 3. investor or commercial loans; 4. second mortgages; 5. assumptions (provided there are no changes in terms).

In considering the depreciation, the appraiser will determine if the depreciation is *curable or incurable*

1. that the depreciation can be cured (fixed or repaired), and; 2. that the added value to the property by curing the depreciation will be more than the cost to cure it.

In a deed of trust, there are these parties:

1. the *trustor* (the borrower); 2. the *trustee* (an independent third party chosen by the lender); 3. the *beneficiary* (the lender).

This right to rescind the agreement applies only to:

1. the creation of any monetary encumbrance on the personal residence of the consumer, including second mortgages or other junior liens, refinancing, home improvement loans, or transactions which create a potential mechanic's lien against the consumer's personal residence; 2. EXCEPTION: The loan which finances the original purchase of the consumer's personal residence (the first mortgage) does NOT have a right of rescission.

NRS 645.635 violation by 4. Failure to deliver to the seller in each real estate transaction, within

10 business days after the transaction is closed, a complete, detailed closing statement showing all of the receipts and disbursements handled by him or her.

1 acre

43, 560 sq. ft.

General Warranty Deed AKA warranty deed, or grant bargain, and sale deed.

5 warranties: 1. Warranty of Seisin 2. Warranty Against Undisclosed Encumbrances 3. Warranty of Quiet Enjoyment 4. Warranty Further Assurance 5. Warranty Forever

Duration of Reverse annuity mortgage (RAM)

5, 10 or 15 years

Eminent Domain

5th amendment of the US Constitution; best known as prohibiting self-incrimination, and as the due processes clause, also contains the following language "...nor shall private property be taken for public use without just compensation".

Sections

640 acres (43,560 square feet)

Executory Contract example

A 30 year mortgage is "executory" until the making of the last payment, if not paid off in full sooner. It is not "executed" until it is paid in full.

Equity of redemption

A borrower's right, up to the moment of a foreclosure sale, to step in and pay what he owes and reclaim property forfeited sur to mortgage default - equitable redemption

Reasonable care

A broker must always exercise reasonable care when representing a principal.

Bilateral contract example

A buyer offers to buy a house for $400,000 provided the seller puts on a new roof. The seller agrees, "Okay, I'll take your $400,000 offer, and I'll have a new roof on the house before close of escrow." Both parties are making promises and are undertaking performing those promises. One promise is given in exchange for another.

alienation

A change of ownership of real property or departing one's self from the property.

Lien

A charge against property as security for a debt

Subrogation Clause

A clause in a title policy that allows the title company to assume the rights of a buyer with respect to any claim against a seller, if the title company has made payments to that buyer to satisfy that claim.

Waiver Form authorized by statute and created by the Real Estate Division.

A client may elect to waive the broker's duty to present all offers by signing by the client and the broker as the brokerage relationship is between the client and the broker, not the representing salesperson or broker-salesperson.

Abstract of title

A complete history of all recorded events affecting title to the property

Severalty

A corporation takes title to real property in this.

Injunction

A court order to cease, stop, or refrain from acting - can be used to enforce C,C&R's.

Writ of execution

A court order to enforce payment of a lien

Quitclaim Deed (the "clean-up" deed of real estate)/No warranties at all

A deed with no guarantees or warranties - it offers the buyer the least protection - can be used to correct or cure a defect or cloud on title.

Enforceable

A dispute between the parties will be heard in court and a judge will "enforce" the provisions of the contract.

Periodic tenancy/Estate from period to period (Tenancy and estate are interchangeable)

A lease that automatically renews for a period of time unless one party acts to terminate it with one month's notice; such as a month-to-month lease.

Specific wrongs - redlining

A lender who refuses to lend in an area because it is populated with members of a protected class

Disclosure Required by Law:

A licensee has a duty to investigate property facts that may require certain disclosures obligatory by law.

one year

A licensee is under the duty not to disclose the client's confidential information for __________ after the revocation or termination of the brokerage agreement.

DISCLOSURE OBLIGATIONS AND LIABILITY: Principal status

A licensee must disclose if acting as this or has an interest in a particular person in a transaction.

Referral

A licensee who refers a potential client to another licensee does not need to provide the Duties Owed disclosure form if the referring licensee's only activity

General Lien

A lien attaching to all the property of a debtor not exempt from forced sale.

Specific Lien

A lien attaching to only one or more listed or specific properties

Involuntary Lien

A lien created by an outside source - law, court

Equitable Lien

A lien created by common law, (through the courts)

Statutory Lien

A lien created by statutory law, (legislation) - taxes, judgements, etc.

Voluntary Lien

A lien created by the borrower's choice - taking out a mortgage or home improvement loan

Life estate with reversion

A life estate set up so that at the end of the life estate the property goes back to the original owner

Chain of title

A list of all owners of a property from the first to the present

Change in Licensee's Relationship

A new Duties Owed form should be provided to each client. If a client's consent is required (as in when acting for two or more parties to the transaction) consent must be obtained - disclosure alone is insufficient to ensure consent.

Testator

A party who makes a will

Non-conforming use

A permissible use under former rules that is now prohibited - automatically granted when zoning regulations change.

GENERAL LEGAL REQUIREMENTS: mental status

A person must be legally competent to contract. A party's insanity, intoxication or lack of authority can make the contract void. It is old law in Nevada.

Nonhomogeneity

A physical characteristic of land stating no two pieces are exactly alike.

Condominiums

A residential, commercial or industrial complex with individual ownership of units and tenancy in common ownership of common areas/spaces in the building. Responsible for their unit.

Easement

A right in land granting limited use of enjoyment of another's land.

Short Sale

A sale of secured real property that produces less money than is owed the lender - the lender releases its lien so property can be sold saving the delay and expense of foreclosure.

short sale, chapter 6

A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.

THE WAREHOUSES:

A system is to provide the availability of mortgage money nationwide and to provide a method of allowing global funds to reach the American homeowner.

Involuntary Alienation

A transer of ownership usually through the court as in foreclosure, bankruptcy, condemnation, escheat, adverse possession or inheritance without a will - also a change of ownership through acts of nature.

Triple Net Lease or NNN

A type of commercial lease in which the lessee pays rent, plus all the operating expenses including taxes, insurance, and common area maintenance (CAM). Most common with larger commercial and industrial leases.

Percentage Lease

A type of commercial lease in which the tenant pays base rent plus a percentage of the gross business income.

Indexed lease

A type of commercial lease payment to an index for inflation/based on the economy/Consumer Price Index (CPI).

Net Lease

A type of commercial lease tenants pay base rent plus some or all of the expenses of the property

Escalation lease

A type of commercial lease that is based on the operating expenses of the property and not inflation.

Graduated Lease

A type of commercial lease with scheduled rent increases often based on expected business growth.

Ground Lease

A type of commercial where the tenant is leasing the land and pays for and owns improvement such as buildings for up to 99 years. This lease is more often for industrial or commercial land use. The tenant will build on the leased property.

Gross Lease

A type of commerial lease where the landlord pays all the expenses of the property and the tenants pay only rent. Most common in residential and small office leases.

Estate for years (Tenancy and estate are interchangeable)

A type of lease. A leasehold with a specific starting and end date - it survives death or the sale of the property.

Contract

A voluntary agreement between informed and capable parties to do, or to refrain from doing, something which is legal to do, and which is supported by adequate consideration.

capitalization rate, cap rate, desired rate of return, or return on investment

AKA "Rate (R), is the yield to the investor for investing in the income property. This rate may be determined based on the current income and value of the property, or the rate the investor demands. This rate will be compared to alternate investments such as stocks, bonds, mutual funds, and anything the investor may have an interest in.

Uses of Appraisals: 4. Federal Institutions Reform, Recovery and Enforcement Act

AKA "Savings and Loan Bailout Act," this enactment determined that one of the causes of losses in the savings and loan industry was the absence of appraisals to verify the value of collateral securing loans made.

Statute of Frauds

AKA Statute to Prevent Perjuries and Frauds. It required all real estate transactions and all other transactions where the amount involved was greater than 10 pounds sterling (UK) to be in writing. If there were no writing, the courts would not hear the case if there was a dispute.

Easements are terminated by:

Abandonment, release by easement holder (often by a quit claim deed), excessive use fo the easement beyond what is granted resulting in a court oder terminating the easement; merger of the easement holder buys land over which the easement runs. The doctrine of merger.

This is the broker's fiduciary duty. It includes:

Absolute fidelity to the client's interests; Honesty; The broker's use of reasonable skill and care in all aspects of the transaction, and Full disclosure of all issues and facts concerning the property or the transaction.

Community property

Acquired by other the husband or wife during the marriage and each spouse is presumed to own 100% interest in the community property. In an event of divorce, it will be split 50/50. No right of survivorship, but passed to heirs.

Adverse Posession

Acquiring title to another's property by occupancy that is hostile, actual, continuous, visible and distinct for the statuatory period - "squatter's rights"

Changes in borders: *Accretion*

Action of water has added to land due to alluvial (washed-up) deposits belong to the landowner (accession)

NRS 645.633

Additional grounds for disciplinary action: Improper trade practices; violations of certain orders, agreements, laws and regulations; criminal offenses; other unprofessional and improper conduct; reciprocal discipline; violations relating to property management; log of complaints.

NRS 645.635

Additional grounds for disciplinary action: Unprofessional and improper conduct relating to real estate transactions

NRS 645.645

Additional grounds for disciplinary action: Unprofessional and improper conduct relating to sale of insurance for home protection

Antitrust Laws

Administered by the Federal Trade Commission (FTC), these laws were designed to prevent the formation and operation of monopolies, trusts, contracts, and conspiracies that would unreasonably restrain trade.

Advertising restrictions

Advertising of dwellings for sale or for lease must not disclose a "preference, limitation, or discrimination," based on any of the protected categories.

Changes in borders

Affected by natural changes between land and water

opinion of title

After reviewing the abstract of title and rendering an opinion as to whether the title is marketable title (good) is performed by attorney before issue title insurance.

Responsibilities relative to environmental hazards:

Agents are required, often by federal law as is the case involving lead-based paint, to disclose the possible presence of environmental hazards. • lead-based paint; • presence of mold; • asbestos; • radon gas; • toxic-waste dumping; • underground storage tanks; • contaminated soil or water; • nearby chemical or nuclear facilities.

Payment of commissions

All commissions earned by the salesperson must be paid to the broker who will share the commission with the salesperson, usually according to a predefined agreement - not form the principals.

Listings belong to brokers

All listings taken by a salesperson are taken in the name of the brokerage. Listing does not belong to salespersons. Similarly, all salesperson's activities must be carried out in the name of their brokers.

Easement by necessity

All owners have the right to access to and from their property by the use of a "public way" such as a street or highway.

REQUIRED ELEMENTS OF A VALID CONTRACT: 1. Competent Parties

All parties must be living, of lawful age, of sound mind, and mentally competent.

Supervision

All salespersons must be supervised by their respective brokers.

freehold estate

All the legal rights that attach to the ownership of real property including but not limited to the right to sell, lease, encumber, use, enjoy, exclude, will to heirs, etc. are called the Bundle of Rights.

Land

All things that are attached to the surface of the earth, below the surface (subsurface) and the air above the earth's surface (air space)

Real property: *Mixed use*

Allows for more than one use

Quiet title suit

Also called an action to quiet title - a court procedure to correct or cure a defect or cloud on the title.

Property tax

Also state tax. collected locally, base upon the assess value of the real estate (land + improvements) After the assessed and equalized value is establishments it is multiple by the tax rate ti determine the taxes due from the property $AV x TR% = $Tax

Amortization

Amortization is the pattern in which the principal of a loan is paid.

Contract requirement for real estate: 2. Description of the real estate

An accurate, valid, and sufficient description of the property will depend on the nature of the transaction's documents. Deeds, deeds of trust, and mortgages, together with other documents of a real estate transaction which will be recorded in the public records, will require a *"legal description."*

An agent's duty to third parties

An agent is required to deal with third parties in a truthful and honest fashion and is required to disclose all material facts which the agent knows about the property, or should know about the property or through the exercise of reasonable due diligence.

COLDAC: Confidentiality

An agent must keep confidential all information about the client which, if disclosed without the principal's permission, could hurt the principal's bargaining position.

DISCLOSURE OBLIGATIONS AND LIABILITY: Source of Compensation

An agent should disclose the source of any compensation that the agent will receive.

Broker

An agent who agrees to represent the interests of the principal, who agrees to let the broker exercise authority on behalf of the principal.

Deed in lieu of foreclosure

An alternative to foreclosure wherin the lender accepts a deed rather than funds to settle the debt - friendly foreclosure - voluntary deed.

Buffer Zone

An area of land separating one land use from another incompatible use such as residential from commercial.

Modification

An economic characteristic of land stating that improvements made by man will alter the value of the land and surrounding properties.

Fixity

An economic characteristic of land stating that land, buildings and improvements are considered a fixed investment - not liquid assets.

Situs

An economic characteristic of land stating that location preference from an economic standpoint can cause increased value - location, location, location.

Appraiser

An individual licensed or certified by a state authority who is educated in the field of valuation and is skilled in estimating the current value of property. Appraisers must be licensed or certified to handle federally related work on residential real estate valued at $250,000 or more.

Leasehold estate

An interest in real property giving a party possession without ownership

Estate at will (Tenancy and estate are interchangeable)

An open-ended lease that can be terminated by either party at will, but with a "reasonable" notice period.

Principles of Value: 6. Increasing and decreasing returns example

An owner is considering replacing the carpeting before putting the home on the market. The new carpet will cost $5,000. Will installing the carpet add at least $5,000 to the value of the house? If so, called the *law of increasing returns*, it should be done. If not, the *law of decreasing returns*, it should not be done.

Voluntary Alienation

An owner transfers title to another, usually with a written document, such as a deed, will, or power of attorney.

material and relevant

Anything impacting the physical condition of the property; Anything that affects the property's value or use.

Cooperative apartments

Apartments that are sold rather than rented because they were seen as profitable.

Equalization factor

Applied to adjust assessors who either tend to be high or low in their assessments

Right to survivorship AKA poor man's probate

Applies to join tenancy. Upon death of one of the joint tenants, the share of the deceased joint tenant is divided equally among those who are surviving.

Administrator

Appointed by the court to settle the estate of an intestate person.

Setting commissions

Are always negotiable between a broker and the principal. They are NOT fixed nor is there an industry standard because it is illegal by Sherman Anti-Trust Law to have "price fixing".

Assessment ratio

Artificial lowering of market value.

Hazardous Substances: 3. Asbestos

Asbestos is found in insulation and in ceiling and floor tiles. For many years, it was widely used in residential and commercial buildings.

Redemption

At any time up to the moment of the foreclosure, the borrower has the right to step in and pay what is owed and reclaim property forfeited due to mortgage default.

A defeasible fee AKA fee simple defeasible or determinable fee

Attached stipulation such as "for as long as" or "during" and provided condition is not broken, the holder remains in title or reversionary interest takes place.

NRS 645.630

Authorized disciplinary action; grounds for disciplinary action; orders imposing discipline deemed public records.

Proprietary lease

Based from cooperative apartments, this concept was created to form a coporation, which would own the building and sell shares of a stock in the building called this.

METHODS OF ESTIMATING VALUE AND BROKER PRICE OPINIONS: II. Cost approach

Based on the appraisal principle of substitution. The appraiser determines what it would cost to replace the subject property as if it were being *built from the land up*. Using informational sources available to the appraiser, the subject property is "rebuilt" on paper.

Escrow process: Fifth, after the escrowee will work with the buyer's lender to understand and monitor the progress of the loan application and underwriting activities.

Based on the close of escrow date, the escrowee will prorate all taxes, HOA charges, interest charges, and other items that will have to be divided or prorated between buyer and seller.

METHODS OF ESTIMATING VALUE AND BROKER PRICE OPINIONS: III. The income approach:

Based upon the value of an income producing property being a reflection of the Investor's required rate of return by investing in real estate. This method is most commonly utilized to determine the value of an income producing property.

Option contracts

Between the owner of the property, the *optionor*, and a purchaser who wants to have a period of time in which to decide on the purchase of the property, the *optionee*; unilateral contract in that the optionor has no obligation to perform until and unless the optionee decides to purchase.

partial release clause

Blanket mortgages has this allowing the builder to pull the parcel sold "out from under" the blanket mortgage.

Agreement: "meeting of the minds"

Both parties must agree to all the terms of the offer

360 degrees in a circle / 60' minutes in a degree / 60° seconds in a minute

Boundary line's direction may be expressed as : thence N 45' 25' 20'' East...

Building permit

Buildings codes are enforced by requiring the builder to submit plans before this can be issued and constructed can be commenced

Economic characteristics: *Durability/Permanence of investment*

Buildings, both residential and commercial, represent a large investment of capital labor.

General partnerships

Business ownership can be an arrangement between humans or combination of humans and business entities. No formal beginning needed.

Real property: *Commericial*

Business properties, office space, stores

Sale leaseback

Buyer and seller agree to leasehold, and the seller remains in possession of the sold property under agreed-upon lease terms, and compensates the buyer for the possession.

Two commonly-used types of title insurance policies

CLTA and the ALTA

Stigmatized properties

Can be causes of some event that has occurred at the property or nearby, or because of the presence of some negative factor in the local area

The loan process: 3. Loan application (1003)

Can only be formally done when a property has been identified and the borrower is in contract.

Requirements of a valid deed: Vesting clause

Choice of grantee, but may be stated by the grantor.

"Location, location, location"

Choose comps as close to the subject property as possible. In most cases, homes should be compared against comps from the same development since these homes were usually built at the same time, by the same builder.

Real property: *Special Purpose*

Churches, schools, cemeteries, etc.

Client Must Receive a Copy:

Client Must Receive a Copy: If the brokerage agreement is in writing, once it is signed by the broker and the client, the client must receive a copy. To verify that the client received the copy, the broker may have a "receipt acknowledgment" incorporated into the form.

Riparian rights

Common-law rights granted to owners along the course of a river or stream that gives the owner unrestrcted use as long as the owner does not contaminate the water. Owner typically owns land under the water to the exact center of the stream. Larger bodies of water: owner owns the edge

Events Causing Termination

Completion of the contract's purpose; Termination by Contract Term; Mutual Agreement; Impossibility of performance; Breach; Operation of law; or A party's death.

Unit of title

Condition of ownership which is common to all who hold title to property.

Exemptions to the Act

Congress decided to exempt certain individuals from the provisions of the law. These included single family homeowners, multiple-family homeowners (up to four units), religious organizations, private clubs, and senior citizens.

Assignments of contracts

Contracts are freely and fully assignable unless prohibited in the agreement and the application of *Secondary liability*.

Transfer tax

Conveyance taxes, revenue stamps, documentary stamps, or deed stamps. It is a *state* tax, collected locally, base upon the value of real property sold Paid at closing by the seller based upon declaration value

Legal life estates

Created by law. Dower, curtsey, homestead are these.

sales contract

Creates the agreement between the seller and buyer and clearly spells out the rights and duties of each party, the purchase price, and the terms and details of the transaction.

Purpose of an appraisal

Creating the current price which will most probably be paid in a market consisting of informed buyers and sellers who are acting under normal and rational motivations. Such a transaction should be at *arm's length*. It is important to note that the appraiser is giving an estimate of value.

Reversionary interest

Creator of the life estate may elect to elect for the property to revert to the original owner of the property is said to have this.

Monetary encumbrances

Deed of trust of mortgage, Property Tx, Mechanic's Lein, General Lein.

Recordation

Deeds are recorded in the county in which the land is located.

Real estate

Defined land, all improvements, artificial things attached to land such as buildings, fences, etc.

Test of intent

Defines the status of the fixture to determine if it was meant to be permanently installed on the property or removed sometime in the future

Agency

Describes the fiduciary relationship between the agent and the principal.

Littoral rights

Describes the rights of owners whose land borders large (commercial navigable) lakes, seas, and oceans.

Method of annexation

Determines how permanent an attachment is such as if it is easily removed or will it cause damage to the building

Limited partner

Do not have full right of participation in activities of the partnership and do not have obligations regards debts of the partnership.

Easement in Gross

Does not have a dominant tenement, only a servant tenement. Usually, utility easements that give permission onto property to have thing serviced.

CREATING THE OFFER:

Does not need to be in writing. Nevada's statute of frauds requires all purchase contracts for real property to be in writing. Therefore, to turn a verbal offer into an enforceable purchase agreement the contract must be in writing, state the consideration and be signed by the seller.

THE INVESTORS: The Secondary Market - 3. Insurance companies

Due to the large amounts of money life, health, and casualty they have at their disposal to invest, the making of individual residential loans is not feasible.

reversionary interest

During a defeasible fee, upon the occurence of the designated event, the title property reverts back to former grantor is said to have this.

Equitable title

During the escrow period, the buyer is considered to have this or an *equitable interest* because the buyer has the property under contract and no one else does.

Fixed place of business

Each broker must maintain a fixed place of business.

"preserved"

Each time there is a counteroffer, all of the other terms and conditions not modified by counteroffers are ________.

The Uniform Standards of Professional Appraisal Practice (USPAP)

Establishes the quality control standards applicable for real property, personal property, intangibles, and business valuation appraisal analysis and reports. Founded in the 1980s by a committee of appraisers representing the major U.S. and Canadian appraisal organizations.

Licensing

Every salesperson is licensed to a particular broker and can carry out only the activities assigned and approved by that broker.

American concept of agency:

Evolved from English Common Law and *depicts the duties and obligations* originally assigned to an agent of the crown, a very powerful position in English society. Today, agency refers to the fiduciary relationship between a *principal (the employer) and an agent (the employee)*.

Exemptions to the Act: 2. The rental of rooms or units up to four family units if the owner actually maintains and occupies one of the units as his/her residence.

Example: A female wishing to rent a room in her house and does not desire to rent to a male. It would be legal to discriminate against sex under this exemption.

Time Shares

Exclusive use of a property for a specified number of days per year, with the privilages of ownership, but without the responsibility of sole or full ownership - interval ownership

Expressed contract

Expressed means the use of words, either written or oral, to show intentions of the parties to the contract.

National Flood Insurance Program (NFIP)

FEMA (Federal Emergency Management Agency) administers this offering flood insurance to property owners and tenants, and districts can qualify for the program that enact requisite flood plain management and construction regulations.

Real property: *Agricultural*

Farms and ranches

Contracted Investigation:

Finally, the broker may, by contract, assume a duty to investigate and disclose facts that are beyond those required by law.

Land description: *Monuments*

Fixed objects such as large stones , trees, stream etc in the description.

Commission as a percentage of sale price

For example, a seller agrees to pay a 7% commission to the broker. The list price is $425,000 but the buyer and seller agree to a selling price of $400,000. The seller is now obligated to pay a $28,000 commission.

Characteristics of Value

Four influences: 1. Demand; 2. Utility; 3. Scarcity; 4. Transferability. DUST.

Personal property: Crops/Emblements/Fructus industriales

Fruits, vegetables, nuts, grasses, grains, and other annual cultivated crops

electronic format for any transaction or contract

Generally, Nevada law authorizes this in which the parties agree to conduct their business in this sort of manner. An electronic signature satisfies any statute requiring a signature lawful requirement the contract to be in writing.

*Revocation* causing Termination of Brokerage Agreements

Generally, either the broker or the seller has the right to terminate the relationship by cancelling the listing. It should be noted that the party revoking the listing may be obligated to the other for expenses or hardships.

private mortgage insurance, or PMI / Mortgage Guarantee Insurance Company, or MGIC

Given that a lender would loan only 80% without any further assurances, what they did was to provide insurance against loss on that portion of the loan above 80%.

Pior appropriation

Government has already taken and reserved the water rights for the government and can sell or lease those rights separately

Police Power (P.)

Government right to regulate and contril the character and use of property for the health, safety and general welfare of the public.

Police Power

Government's right to regulate for the benefit of the general health and welfare of its citizens. Subdivision and zoning regulations, building codes, and health and safety codes.

Easements are created by:

Granting an easement in a deed, reserving an easement in a deed, showing a landlocked condition to obtain an easement by necessity; taking an easement by a public entity by condemnation; continued long term, conspicuous, and hostile use resulting in an easement by prescription.

General Warranty Deed: 1. Warranty of Seisin

Grantor owns the property and has the right and power to convey the property.

CC&Rs known as DEED RESTRICTIONS OR DEED COVENANTS

HOA, POA. these *private controls* of land use contractual obligations that a buyer agrees to when purchasing the property. These are imposed to control land use, development and methods and materials for construction (such as style an appearance garages facing the rear of the property). Permanent in most cases.

General partner

Have full right of participation. one class of partners in general ownership that owns not/equal ownership positions, but all are jointly and severally liable for debts of the ownership.

Principles of Value: 4. Supply and demand

High Demand + Low Supply = Higher Values Low Demand + High Supply = Lower Values

Real property: *Residential*

Housing

If the offeree *does nothing*,

However, after a "reasonable time," or a date specified in the offer, if the offeree remains silent, the offeror's agent must inform the offeror that the offer is now treated as a rejection.

Lot, block and subdivision example

Identify the land description: "Lot 5 of Block 2 of Souther Subdivision plat as recorded in Map Book 21, Page 33 at the Recorded of Deeds."

Novation of parties example

If Tom presented the new baker to Ed, who allows the new baker as a substitute tenant and allows the assignment, then Tom would be off the hook by way of a novation of parties.

$10,000

If a non-broker licensee does accept or pay compensation to anyone other than the broker, that licensee is subject to a fine up to ________, , and may have conditions placed on his or her license, such as suspension, revocation, or denied renewal.

"Time is of the essence".

If a specific time period is set out in the contract, in which one of the parties is to do something, and has not done it when the allotted period of time expires, the other party may declare a breach.

Principles of Value: 5. Contribution example

If a typical swimming pool costs about $45,000 to construct, will the presence of a swimming pool add $45,000 to the value of the property when compared to similar properties without swimming pools? Normally the answer will be no.

Breach of contract

If either of the parties to a contract fails or refuses to perform any duties per the contract, it is considered to be this and the injured party has legal remedies available.

*Agency coupled with an interest* causing Termination of Brokerage Agreements

If in the listing agreement there is an obligation or personal interest, not normally undertaken by a broker, such as the broker owns a portion of the property, the seller cannot fire the broker unless the coupled interest is also terminated.

suit to quiet title

If it is discovered there is a gap in title, it may become necessary to perfect title through the court action known as this, which will often involve the use of a *quit claim deed*.

Termination and Assignment of Contracts: 3. Impossibility

If it is truly impossible for the parties to perform, the contract will be terminated by impossibility.

personal assistants

If not licensed, the assistant's activities are limited to those tasks for which a license is not required; filing, answer phones, office manager, etc. If licensed, the assistant may assist the lead salesperson in all aspects.

Principles of Value: 7. Plottage and assemblage

If several smaller parcels could be assembled into one large parcel, often the resulting larger parcel will have a greater value than the sum of the values of the individual smaller parcels.

*Abandonment* causing Termination of Brokerage Agreements

If the broker fails to actively market the property, it may be said that the broker has abandoned the listing.

Sue for damages if the *seller* defaults, the *buyer* may rescind (terminate)

If the buyer can prove there were direct monetary damages as a result of the seller's breach, then the buyer may be entitled to a judgment against the seller for the amount of damages proved. This is quite difficult to do in residential real estate cases.

*Material change* causing Termination of Brokerage Agreements

If the circumstances of the property were to change in a material way, such as zoning, placement of freeways, declaration of flood zones, or any other occurrence, which would substantially change the value, desirability, or salability of the property, these changed circumstances would permit either party to terminate the listing.

Affirmative deed restriction

If the owner or grantor of the deed wanted to make sure that the property would always be used in a certain way, this would be put in a deed.

addendum

If the parties discover a need to change or add terms later, the preparation of this in a contract to show written evidence of the agreement on those subsequent terms..

Writ of attachment

If the plaintiff in a law suit believes that defendant is disposing his assets to avoid possible judgement, the plaintiff can seek this from the court. If court agrees, this will be issued to prevent the transfer of assets until after lawsuit.

Writ of execution

If the planted in a law suit obtains a final judgment against the defendant, the planted may request this to help in the collection of judgement. Court issues this to sheriff which directs sheriff to seize all property of the defendant in in the jurisdiction, sell it, and proceeds go against the judgment.

*Destruction of the property* causing Termination of Brokerage Agreements

If the property were destroyed during the listing period either the seller or the broker could, and most likely would, terminate the listing.

Loan to value ratio (LTV) example

If the purchase price is $300,000, the appraisal comes in at $290,000, and the lender is using an 80% LTV, the lender will make a maximum loan of $232,000. ($290,000 x .80 = $232,000; not $240,000 as the appraisal was the lower figure.)

*Death, bankruptcy, or loss of competency* causing Termination of Brokerage Agreements

If the seller or the broker dies during the listing term, the heirs are not bound by the listing agreement, unless the brokerage is a legal entity such as a corporation.

Automatic renewal clause

Illegal in NV

Leasehold improvements/LLL (landlord leases the leasehold improvements)

Improvements that are done to the leased space by the landlord's expense and remain in the leased space as landlord's property.

GENERAL LEGAL REQUIREMENTS: Age

In Nevada, the age of majority is 18 years old. A minor may have legal emancipation giving him or her full majority rights. Marriage alone is void

Dual agency

In a situation where one agent represents both buyer and seller, the resulting arrangement. In some states, dual agency is not allowed. In others, it is allowed, but only with the expressed, informed consent of both represented parties.

trigger term

In an advertisement is any term of the financing and "triggers" the need to disclose all credit terms - all or none.

before it is accepted or expired.

In contract law, any offer, whether oral or written, may be withdrawn (revoked) by the offeror any time

Environmental protection laws

In general, laws come from the federal government. Local and state agencies may also promote a clean and safe environment through local laws and regulations.

15 months

In most cases, during an impound account, the lender will require ___________ collected upfront for the borrower's casualty insurance and three to six months will be collected for property taxes.

Salespersons

In most communities, salespersons are formally classified as subagents, although they typically call themselves "real estate agents." There activities are also regulated by statute.

Affiliation

In most states, a salesperson and a broker-salesperson must be affiliated with either a licensed real estate broker or a registered owner-developer of new homes; affiliation should be represented by a written agreement spelling out the relationship.

Advertising requirement

In most states, salespersons may not place advertising without identifying their brokers. This requirement may include a provision for "Open House" or "For Sale" signs to similarly identify the brokerage.

Non-conventional Loans: (3) Veteran's Administration (VA) guaranteed loans

In order to stimulate the peacetime economy and to meet the needs of our returning troops, Congress passed the "Soldiers and Sailors Readjustment Act of 1944." *does not* usually *make* loans; they *guarantee* them. Loans are made through private lenders.

The contract process

In real estat, starts with the buyer making the seller an offer, but the original could conceivably come from the seller. To keep it clear, the proper way to refer to the parties during the *offer process* is to refer to them *as offeror and offeree.*

THE LENDERS: The Primary Market - 2. Banks

In recent years, they have become a major source for equity lines of credit or second mortgage financing, but are not a significant source of long-term, fully amortizing home loans because they are uncomfortable giving loans longer than 3 - 5 years.

Assigned/Designated agency

In some other states, brokers are allow for agents to represent their clients in this sort of way. This could happen when one salesperson is designated to represent the seller and another is designated to represent the buyer in the same transaction.

interim financing

In terms of construction Loan until the builder can secure permanent financing until the project is complete. The developer makes periodic draws against the maximum loan amount as construction progresses.

Commissions and fees

In the real estate industry, earned by brokers (agents) who share these commissions with salespersons (subagents) with whom they are associated and with other brokers (cooperating brokers).

Requirements of a valid deed

In writing, Valid grantor, Identifiable grantee, Consideration clause, Granting clause, Vesting clause, Habendum clause, Valide legal description, Exceptions and reservations, Grantor's signature, Attestation, Acknowledgement, & Delivery and acceptance.

fraud and such behavior is illegal.

Including a false term or fact or excluding any material term or fact from the purchase agreement in order to deceive anyone is

plottage

Increase in value if several smaller parcels could be assembled into one large parcel.

COLDAC: Disclosure

Information may reach the agent which would be significant for the client to know. The agent must keep the client informed of all material facts which may have any importance in matters where the agent is representing the client. *Duty of Further Inquiry.*

Title by Devise

Inheritance by will

Fiduciary duties and responsibilities AKA duties the agent had to perform for the king or queen

Involve "trust and confidence" and are owed by the agent to the principal in the transaction, who may be the buyer, seller, lessor, or lessee of property. The six fiduciary duties, COLDAC.

The listing agreement

Is a contract between the seller of property and the real estate broker. Note: while the sales agent is often the party who acts to create the listing, this activity is done on behalf of the agent's broker and the broker "owns" the listing..

THE WAREHOUSES: 1. Federal National Mortgage Association (FNMA "Fannie Mae")

Is a major warehouse underwriter of conventional loans as well as U.S. government insured (FHA) or guaranteed loans (VA).

Executory Contract

Is not yet fully performed.

Novation

Is the substitution of a new contract for an old one.

Novation of parties

Is where a new party is substituted for an existing one.

Fair Housing Act: Familial Status

It became illegal to discriminate against any buyer or renter based on the size of their family or on the pregnancy of a prospective tenant.

Fair Housing Act: Disability

It became illegal to discriminate in the sale or rental of a dwelling because of the disability of the buyer or tenant, any disabled person who will reside in the dwelling after it is sold or rented, or any person associated with the buyer or renter.

"as is" clause in Nevada

It found generally, that when a property was sold as this the seller's nondisclosure of adverse information (e.g., defects) will not allow the buyer to rescind the contract or sue for damages.

Fair Housing Act: Refusal to Rent or Sell

It is *not illegal* to refuse to rent or sell property to an individual whose tenancy would constitute a threat to other individuals or to their health and safety, or whose tenancy would result in damage to the building or to the property of others.

COLDAC: Loyalty

It is expected that the agent will always be loyal to the client and to the client's interests to the highest standards.

Signatures

It is important for licensees to understand types of ownership so they will know what signatures are required on the documents they use (contract forms, listings, etc.)

Methods for calculating commissions

It is important to note that commissions, or the method for calculating them, are not set by law or customary practice, but are a matter for agreement between the seller and the broker in every listing transaction.

Physical characteristics: *indestructibility*

It is permanent. May decay and reduce the desirability of the land, but buildings can eventually be demolished and the land returned to its prior state.

reasonable skill and care

It is the degree of care that a reasonably prudent real estate licensee would exercise in similar circumstances; the licensee must not act incompetently or with gross negligence.

Trade fixtures/TTT (Tenants take trade fixtures)

Items of personal property from the tenant that are made to be permanent such as fixture's in dentist's offices. Are expected to restore back to normal when tenant leaves.

Regulation Z

Its rules are applicable to all media advertising that refers to mortgage financing terms and is generally applicable in all residential credit transactions

CONTRACT PERFORMANCE: 2. Void

Lacks *visible* essential elements of a contract (offer and acceptance, legality of object, consideration); It is not binding on the parties.

Cooperative or "Co-ops"

Land and buildings owned by a corporation, occupies by shareholders in the corporation.

The steps in the cost approach: 5. Add in the land value.

Land is not depreciable and is added after the structure's depreciation is subtracted.

Parties to the lease: Owner

Landlord = LessOR; giving the rights of possession or use.

Service animals

Landlords, who will not allow pets, may not deny handicapped individuals the right to have life assisting animals, nor can the landlord charge any additional sums due to the presence of such animals (seeing eye dogs, and other such animals are considered "life assisting.")

Affirmative deed restriction example

Large pond on the property for migrating birds. The owner is a bird lover want to sell property but wants to ensure the pond will aways be there. The owner could put this restriction into deed to apply to future owners.

Actual eviction

Lawful process of removing a tenant that has overstayed the lease term with a written notice for the tenant to leave within a time period or else intervenntion by police.

Hazardous Substances: 1. Lead

Lead is found in plumbing pipes in older homes. Lead-based solder and lead-based seals could, over time, place harmful quantities of lead in the water.

Legal descriptions: *metes and bounds*

Least common Relies on a description of metes (distance and direction) First method used to convert legal description *Uses point of beginning (POB) and then direction and linear measurements to define the borders of property going back to POB*

Building codes

Left to the integrity of the builder to determine the quality and safety of the construction in the community such as having to deal with earthquakes, hurricanes, etc by the *government*

Corporations

Legal person meaning it can sue and be sued in court. Consists of 1 or more shareholders who own stock in the corporation.

Partition

Legal procedure to divide the co-owners' interests in real property.

Who Signs and Various Entities

Legally, only the seller or the seller's lawfully authorized agent is required to sign the purchase agreement.

Advertising Restrictions:

Lenders or others who are advertising credit must either refrain from stating any credit terms, or must state all credit terms. the down payment is a trigger term, and the entire credit disclosure including the APR.

Termination and Assignment of Contracts: 4. Operation of law example

Let us assume that an Iowa corporation has a contract to sell corn to Mexico. Before the terms of the contract are performed, the U.S. government prohibits further exports to Mexico for agricultural purposes. Since it would be illegal for the Iowa corporation to carry out the terms of the contract due to the newly-passed law, the contract would be terminated by operation of law.

THE INVESTORS: The Secondary Market - 4. Mutual funds

Like the pension funds, these organizations have enormous amounts of money to invest and will allocate a portion of their portfolios to residential and commercial real estate mortgages.

*township lines*

Lines horizontally parallel to the base lines 36 square miles and is divided into 36 one-mile wide and one-mile high squares called sections

Negligent misrepresentations

Misrepresentations can also be negligent or just plain mistakes; occur when a broker or agent should have known that a statement about a material fact was false. The broker's lack of awareness of the fact is no excuse.

Mechanic's lein

Monetary encumbrance. Created by state law to protect those persons who provide *labor or materials* to improve another's party.

General lein

Monetary encumbrance. Created when a person sued another in court and has obtain final judgement, in order to collect on the judgment, it is often necessary to file judgement in the public records to create this against all of the property the judgement debtor owns in jurisdiction.

Property tax lien

Monetary encumbrance. State and local government have the right to asses property taxes to provide for the costs of governing and providing services such as fire and police protection, schools, streets, etc.

Deed of trust mortgage

Monetary encumbrance. When a purchasers needs money to buy a house, the buyer may encumber the property with mortgage or this to receive the financing.

Condominium fees

Monthly assessment against each other units for the expenses of the common area including property taxes, insurance, maintenance, and management of the the condo.

Bilateral contract

More than one party is making a promise to do something.

*Expiration* causing Termination of Brokerage Agreements

Most all listings must have a fixed termination date.

Economic characteristics: *Location/Area Preference*; "location, location, location"

Most important characteristic affecting the value of a piece of property based on geography and preference for a particular area.

Economic characteristics: *Scarcity*

Most land is unused and uninhabitable, so we generally think of what is left as finite and limited.

Independent Contractor

Most non-broker licensees (salesperson and broker-salesperson) are independent contractors; nevertheless, by law they cannot enter into their own brokerage agreements with clients.

Special agency

Most often used in real estate. Created in an agreement, usually in writing; Represents the client and has all of the fiduciary duties, but has no authority to bind the client to anything. The role of this agent is simply to represent the interests of their client, but the special agent must allow the client to make the final decision whether or not to be contractually bound.

Land description: *lot, block, subdivision*

Most used in metropolitan areas in the US Plot of land is surveyed and divided into black and lots, streets, access roads, utility easements, etc. Then, blocks and lots are given numbers and letters

If offer is *accepted*,

Must agree to every detail of the offer as submitted no matter how small.

Requirements of a valid deed: Valid Grantor

Natural person, must be alive, lawful age, and full mental capacity.

Methods to remedy encroachments:

Negotiating and agreeing of the parties, removal, suit for damages by the property owner being encroached, utilization - agreement or court order allows the encroaches upon party to have the benefit and use of the thing encroaching, suit of easement by Rx because of it existing for a length of time.

"Acting for More Than One Party to the Transaction"

Nevada law provides "The same person or entity may act as the agent for two parties interested in the same transaction when their interests do not conflict and where loyalty to one does not necessarily constitute breach of duty to the other." The broker must disclose this representation and obtain the written consent of each party before proceeding

Residential Disclosure Guide.

Nevada residential sales need to present this. sales summarizes various disclosures, their purpose, who must provide them and when they are due. The licensee must have the client sign (acknowledge) the back page stating they received the Guide.

Stigmatized property

Nevada's property law contains a list of certain facts that a licensee does not need to disclose.

Physical characteristics: *Uniqueness*

No two parcels are the same. (non-homogenous/non-homogeneity)

General agency AKA often referred to as a limited power of attorney or a general power of attorney.

Normally in writing. Has the authority to negotiate contracts and to bind the client to a contract, but only within specially designated and limited areas.

Personal property

Not really real property because it can be *moved* AKA chattel

Requirements of a valid deed: Habendum clause

Not usually needed in some states. States "tp have and to hold from this day forward".

Actual Notice

Notification delivery in such a way to give legally sufficient assurance that the matter has been conveys to the recipient.

Homeowner associates (HOA) regulations

Now exists at several levels within real estate communities and have *more* control vs CC&Rs.

"pockets"

Obviously, these laws are violated if a licensee does this to an offer. when a licensee intentionally withholds presenting an offer. This is usually done when the licensee is waiting for another, preferred offer.

Constructive eviction

Occurs when a landlord is aware of a property confition and allows deterioration to the point that the building is uninhabitable and the tenants are forced to leave.

Unilateral contract

Often taking the form of an option contract. Binding on one party should the other party elect to perform under the agreement. It is one sided in that the party with the option does not ever have to perform.

Adjustable rate mortgage (ARM) element: 6. Conversion

Often, an ARM will give the borrower the option of converting to a fixed rate mortgage at various periods during the loan. Usually, these are at 3 years, 5 years, and 7 years.

The loan process: Closing

Once the approval from underwriting is obtained, processing will request loan docs to be sent to title who will arrange for the borrower to sign. The borrower will deliver their funds to title. final review and then wires the loan funds to escrow.

*Breach* terminating agency relationships in real estate

One of the parties breached the contract, failed to perform as promised, or stated performance would not occur as promised.

Discount points

One point equals 1% of the loan amount. The IRS considers a point to be a form of interest paid upfront instead of over the term of the loan

Legal descriptions

One that describes a parcel of property so well that is canon be confused with another parcel A. Metes and bounds B. US Governments Retangular Survey System C. Lot, block, subdivision

Executed contract

One that is fully and completely performed. Different context, can also mean that the contract has been fully signed by all parties.

Testate

One who has a valid will

Intestate

One without a will

broker

Only a ________ may collect compensation for real estate related services. No broker-salesperson or salesperson may accept compensation from, or pay compensation to, any person other than a broker (or owner-developer) with whom, at the time of the transaction, he or she is licensed.

Revocation

Only applies when the *buyer* defaults, the *seller* may rescind (terminate). The seller revokes the contact and retains the earnest money deposit.

Broker responsibilities

Operating as agents of clients, must respect the laws of the state in carrying out fiduciary responsibilities. While different states have different rules, the following are universal: these responsibilities also apply to associated licensees as they are "sub-agents" to the seller through their employing broker.

Judicial partition

Ordered by the court to declare a portion of property to be owned separately by partitioning party.

Rights of real property and ownership

Owner obtains the *bundle of rights*

Life tenant

Owner of a life estate that is not an heir.

Legal Bundle of Rights

Owner of the property has this, which includes possession, control, enjoyment (use), exclusion, and disposition (sell).

Easement appurtenant

Owners of a neighboring property can decide to create an easement to allow one of the owners to cross the land of another. This is not an easement by necessity, as it is not public.

estate in severalty

Ownership by one person is or sole ownership.

Estate in Severalty/Tenant in Severalty

Ownership by one person, one corporation, one partnership (non-humans). The property has been "severed" from others.

Joint tenancy

Ownership by two or more parties with rights of survivorship - must be equal shares - property passes to surviving co-owners immediately upon the death of any owner thus avoiding probate.

Tenancy in common

Ownership by two or more parties without rights of survivorship - unequal shares are permitted - upon the death of the owner property passes to heirs at probate.

Life Estate

Ownership for the duration of one's life - cannot be willed to heirs.

Freehold Estate AKA life estates

Ownership of real property and provides the bundle of rights of ownership for an indeterminable period of time. Can be either Fee Simple Estates or Life Estates.

Fee Simple or Fee Simple Absolute

Ownership with the greatest bundle of rights - the owner has all available rights to the property and can always pass it to his heirs - also called fee simple absolute

Physical characteristics: *immobility*

Parcel of land is in the same place

Condemnation award

Payment for the property

Personal property: Fixtures

Permanently *attached* to land or a building becomes part of real property such as display racks, alarm systems, heating system, etc.

License

Permission to use another's property for a particular reason - for example a theater ticket. to come onto the land for limited purpose of removing crops, timber, soil, etc. Person is receiving profits without being a trespasser, licensed, or an easement.

Variance

Permission to violate current zoning regulations - obtained by a hearing.

Remainderman

Person who becomes the owner of property at the end of a life estate, the remainderman has fee simple estate.

Personalty

Personal property

Trade Fixtures

Personal property for the purpose of the tenant's occupation or profession.

Real property

Physical land, natural features, man-made improvement to the land, and the bundle rights of ownership of real property. Both land and real estate: tights, benefits, interests that are associated with the ownership of real estate.

The rule of reason contract

Places an obligation on all of us to conduct ourselves as the "reasonable person" would, and to always act in a reasonable fashion. Reasonable conduct is a factual consideration given the circumstances of a particular event.

Public controls - Governmental powers are

Police Power Eminent Domain Taxation Escheat Zoning Ordinances

P.E.T.E.

Police Power, Eminient Domain, Taxation, Escheat

Bundle of rights consists of

Possession Contraol Enkoyme​nt Exclusion Disposition

The loan process:

Pre-qualification; Pre-approval; Loan application (1003); Processing; Underwriting; Closing.

sub-prime loans

Prepayment penalties were very common with

Escheat

Property reverts to the state when someone dies leaving no will and no heirs or kindred. Escheat can also be used if property is abandoned.

Ad valorem tax

Property tax. Tax levied based upon the property value County assessor determines the value of the property and informs the property owner of the market value of the property.

Elective share

Protects surviving spouse in the event the deceased spouse left the surviving spouse out of the will, in which the surviving spouse can have a percentage of the net estate - both real and personal property.

*Fair Housing Act*, formally known as Title VIII of the Civil Rights Act of 1968 as amended by Fair Housing Amendments Act.

Provides the basis for fair housing rights and enforcement throughout the United States. The Act also provided for accessibility requirements for covered *multi-family* housing built for first occupancy.

Economic characteristics: *Improvements*

Putting land to work in some way can raise value. Whereas, utilizing land in an undesired manner can lower the value such as est. of a dump.

Health codes

Ranging from food handling and preparation standards, to general sanitation standards, to various forms of signage such as "Wash your hands before returning to work", and other similar matters.

Opinion versus fact

Real estate agents are encouraged to be very careful about the statements they make, ensuring that the listener understands if the statement is an opinion or a fact.

Contract requirement for real estate: 1. In writing and signed

Real estate contracts and personal property contracts in excess of $500 require a written contract to be "enforceable" AKA Statute of Frauds. In the United States, similar laws have been adopted which require all real estate contracts, except short-term leases (less than 1 year), to be in writing.

Severance

Real property becomes personal property when it is "severed" from the land. Uninstall, unattach.

REO

Real-estate owned is a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction.

If an offer is *counteroffered*,

Rejects the offer as written and modifies what terms and conditions must be changed to make the offer acceptable.

Physical partition

Remainder of the owners.

THE INVESTORS: The Secondary Market

Represents those persons or businesses who *actually fund* the loan. This group is where the lenders go to get the funds to lend.

Community property statutes

Requires the existence of a state creates statutes which permits it, as not all states do. Creates the possibility that a married couple may have property which belongs solely to the wide or husband.

Subsurface rights

Rights to natural resources that exist below the surface of the earth

Compensation agreements

Salespersons are compensated based on schedules or agreements signed with their brokers, most commonly referred to as *Independent Contractor Agreements*.

Employment of salespersons

Salespersons may work for brokers either as employees or independent contractors. Most salespersons are employed as independent contractors.

Easement by prescription

Seldomly seen today. One party's conspicuous (standing out) use of a portion of another's party to cross over for a long period of time.

Dominant tenement/estate (that which dominates)

Sells his property to another, his buyer will enjoy the right of passing his property per an easement appurtenant.

Air rights

Significant part of land and may have great value such as large buildings in large cities that have been constructed​ above other objects such as railroad tracks or parking lots

Water rights

Since it moves across land. Normally regulated by the state since it is a complex legal process especially areas that are affected by water scarcity

Townhomes

Single-family dwelling which is attached to adjacent structures. It is its own parcel of land.

Termination and Assignment of Contracts: 4. Operation of law

Some contracts will be terminated by the courts or statutory prohibition.

Transaction or transactional broker

Some states deal with dual agency concerns by using the concept of this; an agent without fiduciary duties but who handles the transaction from start to finish.

REQUIRED ELEMENTS OF A VALID CONTRACT: 2. Offer and Acceptance

Sometimes referred to as "mutual assent," this element shows there is a "meeting of the minds;" that an offer was made and acceptance of that offer was reached.

Adverse possession

Squatters rights. Acquiring title to real estate by hostile possession rather than by purchase.

Adverse possession

Squatters rights. Occupation time is 10 years in Texas

Recording fees

State established charge for recording documents in the public records of the county. e.i. County recorder might charge $14.00 for the first page of a document and $1.00 for each additional page.

Requirements of a valid deed: Granting clause

States the nature and extent of the interest conveyed.

Vague References

Street addresses, assessor's parcel numbers (APN's) Not recorded General information about the location Often used in listing agreements, leases, and purchase agreements and are considered *adequate descriptions*

Subdivision regulations

Street widths, provisions for sidewalks and street lights, drainage provision, lot size, house size, house styles, roof material, exterior finishes, and a host of other matters which the community chooses to regulate.

Encroachment

Structures or improvements of one property overlap onto another's property.

Plat map

Subdivision map Regulations Granted relief from portions of the subdivision regulations Location, size, shape of building lots, the roads, sidewalks, etc.

Adaptation to real estate

Such as a refrigerator; does it stand alone (personal property) or is it built into the kitchen cabinetry with panels to match the other kitchen cabinents (fixture)

Changes in borders: *Avulsion*

Sudden removal of soil by an act of nature can cause a landowner's property to become much smaller and very quickly

If the *buyer* defaults, the *seller* may rescind (terminate) the agreement and exercise any of these options: OR If the *seller* defaults, the *buyer* may rescind (terminate) the agreement and exercise these options:

Sue for specific performance; Revocation; Rescission; Sue for damages.

Inverse condemnaton

Suit brought by the land owner alleging the government has acquired an interest in his or her property without given compensation. Such as when the government floods a former's build or pollutes a stream crossing private land

Comprehensive Environmental Response, Compensation, and Liability Act (1980), CERCLA

Superfund to clean up hazardous waste sites and to collect the costs from certain responsible persons associated with the sites.

Title

Synonymous with ownership or real property includes the bundle of rights and the deed (evidence of ownership)

Mill rate

Tax rate per thousand EX: rate of 25 mills means pwner pays $25 of taxes for every $1000 of taxable value

Parties to the lease: Non-owner

Tenant = Lessee

Option to extend or expand

Tenant wants to lease another property from the landlord, and should be spelled out in the lease.

Will

Testate Executor Title by devise Beneficiary

CC&Rs (deed restrictions and covenants, conditions & restrictions) example

That owners does not want properties to be used for the sale of alcohol. Therefore, the owner puts restriction in the deed, and this will be applied to all future owners.

BROKERAGE SIGNS

The sign must be readable from the nearest public sidewalk, street or highway. If the business is located in an office building, Hotel or apartment house, the sign must be posted on the building directory or on the exterior of the entrance to the business

Two parties

The *Grantor* is the person making the conveyance and *Grantee* is the person to whom the conveyance is made.

Uniform Residential Appraisal Report (URAR)

The *standard format* of a written appraisal as required by many institutions.

Specific wrongs

The 1968 Fair Housing Act defined prohibited practices involving housing, which involved sales, rentals, advertising, and financing.

Housing and Community Development Act of 1974

The Act's primary purpose was to end discrimination in various areas of community development. Also added a fifth protected class, that of sex/gender, to the Fair Housing Act of 1968.

"promptly" or "as soon as practicable".

The Administrative Code requires a licensee to deliver all offers

Regulation of banks

The Fair Housing Act governs the activities of the banks and financial institutions because Congress felt that lenders might discriminate in the housing and real estate industries.

"Not Available" statements

The Fair Housing Act prohibits the practice of representing, to any member of a protected class, that a dwelling is not available for sale or rental, when it actually is available.

Fair Housing Act: Two new protected classes (1988)

The Fair Housing Amendments Act added two major sets of provisions that apply to disabled persons and families with children 18 years old and under, bringing the total number of protected classes to seven.

Fair Housing Act: A fifth new protected class (1974)

The Housing and Community Development Act added *sex/gender* to the list of protected classes, bringing the total to five

Independent contractor status AKA tax status

The Internal Revenue Service (IRS) has agreed to allow real estate professionals to elect independent contractor status for tax purposes, even though they may legally be employees.

Devise

The Property

to $10,000 per charge, and they may suspend or revoke the licensee's license.

The Real Estate Commission can discipline any licensee found guilty of accepting, giving, or charging, any undisclosed commission by a fine of up

assemblage

The act of bringing the parcels together

Selective advertising

The act prohibits advertising programs that selectively market properties to minorities, especially housing which is segregated or over-priced.

Condemnation

The action of the government in taking private property under the right of eminent domain.

Form Does Not Create Agency:

The agency relationship is not created because a party signs either the Duties Owed or Consent to Act forms.

*Operation of law* terminating agency relationships in real estate

The agency relationship may be cancelled by operation of law, which occurs, for example, when the principal enters a bankruptcy proceeding and the property is transferred to a court-appointed receiver.

COLDAC: Care

The agent is required to put forth best efforts on behalf of the client and always take great care in representing the client's interests; encompasses an agent's competency or skill and knowledge.

COLDAC: Accounting or accountability

The agent may receive money, property, or other things of value which belong to the client. The agent must account to the client for these items and must use great care in protecting the client's interests.

Buyer Representation

The agreement will normally provide that the seller's broker shares the seller's commission with the buyer's broker, and to the extent that such a sharing arrangement exists, the financial obligation of the buyer to the broker will be reduced or eliminated.

Reconciliation

The appraiser must assign weights to the various results based on how relevant and reliable the findings under each approach proved out. Using a "weighted average" gives the appraiser a method of expressing confidence in the results given by the application of the various approaches.

Principles of Value: 1. Highest and best use

The appraiser must determine if the current use of the subject property (the property to be appraised) is the most profitable legal use for the property. Property should only be appraised considering differences, if any, between its current use and its highest and best use.

Principles of Value: 5. Contribution

The appraiser must determine what the market will pay for a feature or amenity. The value the feature or amenity contributes is not necessarily equal to its cost.

sold listings

The appraiser or agent will rely on the ______________ most. This establishes the market value based on recent sales.

The steps in the cost approach: 2. Determine the replacement cost of the structure

The appraiser would rely upon resource material to determine the *cost of the materials and labor* to construct a structure similar to the subject property. We acquired the land on paper and now we rebuild the structure on paper.

Open end mortgage or equity line of credit (HELOC)

The borrower establishes a line of credit secured by the real estate and can make draws against the line, much like using a credit card. the loan is considered "open ended" for future advances from the lender usually to a pre-determined amount.

Adjustable rate mortgage (ARM) example

The borrower of an ____________ is currently paying 6% interest the first year. The annual cap is stated in the note as being 1%, meaning the rate cannot go up more than 1% in any interval. If the: index is 4%; margin is 2% - 4% + 2% = 6% initial interest rate; and the index moves up to 5.5%; and the margin is always 2%, then the new interest rate would be 7.5%, but the ARM has a cap of 1%, so the most the rate can increase to is 7% - 6% + 1%.

The borrower *gives the mortgage* in order to receive the financing.

The borrower, by executing a mortgage with the lender is giving the lender *a lien* against the borrower's property.

Buyer agency

The broker is committed to the principal, the buyer, through a buyer's agency agreement even when the entire commission is paid for by the seller.

Flat Fee:

The broker may charge a client a set or this regardless of the value of the property or the type of service rendered.

Good faith

The broker must always act in the client's best interests and carry out the principal's legal instructions within the scope of the authority provided by the principal.

Presentation of offers

The broker must present all offers to the principal promptly when received. Note that the broker and the principal can agree on the timeframes for presenting offers.

*Performance* causing Termination of Brokerage Agreements

The broker performs the obligations of the listing agreement by producing a ready, willing, and able buyer at list price and terms or such other price and terms agreeable to the seller.

Rescission f the *seller* defaults, the *buyer* may rescind (terminate)

The buyer decides just to call the whole thing off, get back the earnest money deposit, and be done with it. This is a complete reversal of the contract, putting the parties back to where they were before contracting.

Sue for damages if the *buyer* defaults, the *seller* may rescind (terminate)

The buyer is required to pay the seller for any costs associated with the seller's hardship. The seller may possibly sue for the amount of the purchase price.

Did the parties agree to its status in an offer to purchase?

The buyer's offer specifically includes the personal property. Thus, making it real property.

30 seconds

The caller must inform the person who answers the telephone of the sales nature of the call within __________ after beginning the conversation and must provide the name, address and telephone number of the business or organization.

Flat fee commissions

The commission is established in the listing contract as a specific amount, regardless of what the purchase price turns out to be. If a buyer is produced, the flat fee is earned.

Principles of Value: 6. Increasing and decreasing returns

The concept of increasing and decreasing returns takes a look at whether or not the cost of making an improvement or repair adds more to the value than making the improvement or repair costs.

CONTRACT PERFORMANCE: 1. Valid

The contract contains visible evidence of all five essential elements of a contract (competent parties, offer and acceptance, legality of object, informed parties, and consideration) and is therefore binding and enforceable on all parties.

Escrow process: 8th, after the escrowee sets up separate appointments just before the close of escrow

The escrow agent will collect the buyer's funds at this time, and in all probability, these will be wire transferred to the escrow agent's bank.

Escrow process: 10th, after the escrow agent records documents and in some states, keys are given.

The escrow agent will distribute the final documents to the seller's broker, the seller, the buyer's broker, the buyer, and others. Closing has taken place.

Escrow process: Third, after the escrow company conducts a title search to determine the ownership and status of the subject property

The escrow agent will request payoffs for all of the financial items that are currently encumbering the title/"demands" such as mechanic's liens, unpaid HOA fees or fines, trash collection bills, unpaid sewer charges, IRS liens, seller's loans, etc.

Escrow process: Secondly, after the earnest money deposit has been received

The escrow company will conduct a title search to determine the ownership and status of the subject property. After this process, the title company will issue a commitment to provide a policy of title insurance on the property.

Escrow process: Sixth, after the escrowee will prorate all taxes, HOA charges, interest charges, and other items that will have to be divided or prorated between buyer and seller.

The escrowee will prepare the settlement statement, previously referred to as the HUD-1, now called the Closing Disclosure.

Escrow process: Seventh, after the prepares the settlement statement, previously referred to as the HUD-1, now called the *Closing Disclosure*.

The escrowee will set up separate appointments just before the close of escrow, for the seller and buyer to sign the documents required to transfer title. Seller: deed, several disclosures, and a few other items. Buyer: the total number of documents is limited, obtaining financing, the buyer's loan documents, which may be a substantial quantity.

Escrow process: Fourth, after the the escrow agent will request payoffs for all of the financial items that are currently encumbering the title

The escrowee will work with the buyer's lender to understand and monitor the progress of the loan application and underwriting activities.

Characteristics of Value: 3. Scarcity

The extent to which the supply in the marketplace will have an influence on the value. If there are vast numbers of similar properties, any one property's value is greatly diminished. Likewise, if there are few or no such properties, the value will increase.

Enforcement and fines

The federal Fair Housing Act is administered by the Office of Fair Housing and Equal Opportunity and supervised by the secretary of Housing and Urban Development (HUD).

General Warranty Deed: 3. Warranty of Quiet Enjoyment

The grantee will be able to enjoy ownership of the property without hearing anyone make a valid claim or superior right to the property.

General Warranty Deed: 2. Warranty Against Undisclosed Encumbrances

The grantor disclosed to the grantee all burden or impediment on the property, if any.

Special Warranty Deed/Warranty against undisclosed encumbrances

The grantor guarantees title only against defects arising during his period of ownership - prior defects are not covered.

General Warranty Deed: 5. Warranty title forver

The grantor promises that should any party be able to establish a superior claim, the grantor will pay back to the grantee the purchase title price (money back guarantee).

General Warranty Deed: 4. Warranty of further assuraces

The grantor promises that should claim of superior title be made, the grantor will defend against the claim and defeat it.

Devisee

The heir

Right of first refusal

The holder of this has the right to match any offer made on a property. A seller trying to sell a property subject to this, must contact the holder of this and provide an opportunity to match the transaction and exercise the right.

Holdover tenancy

The interest in a property held by a holdover tenant who is paying rent.

Equitable title

The interest in real property held by a buyer with a signed sales contract that has not yet gone to closing.

probate

The judicial process to prove or confirm a will, or to settle the estate of a party who dies intestate is called probate. Title to real property passes at probate and that is final in 30 days.

Probate

The judicial process to prove or confirm a will, or to settle the estate of a party who dies intestate.

Servient tenement/estate (that which serves)

The land over which the right to cross has been given is referred to this per an easement appurtenant.

Trust accounts/commingling and conversion of funds

The law may require all of these funds be deposited in a trust account, or be handled in a manner to which the principal has agreed. These funds may not be commingled (mixed) with the broker's operating funds nor may they be spent, conversion.

Discriminatory statements

The law prohibits unpublished statements which include discriminatory language or encourage discriminatory conduct, such as a landlord's instruction to his property manager that she should not rent to minorities or should give white customers a preference.

Mortgage Clauses: Due on sale clause AKA alienation clause

The lender informs the borrower, in advance, that the lender will not permit an assignment of the borrower's obligations under the note, or interest in the property, unless the lender is *paid in full*.

Relationship with a Principal:

The licensee must disclose whenever he or she has a personal relationship with a principal to the transaction.

An "interest in the transaction" occurs when:

The licensee receives, or expects to receive, compensation from more than one party; Is a party in the transaction, or Has a personal relationship with one of the principals.

Use recent comps

The more recent the sale, the better the representation of the subject's value. As a general rule, try to use sales that have closed within the *last three to four months*, but if that is not feasible, you may have to go back further and make adjustments to the comps for time.

Determining Amount

The most common way of _________ a broker's commission is as a percentage of the property's sale price. flat fee arrangements, net listings, and a "fee for services" arrangement where the client selects from a menu of services and selectively pays for each service chosen.

state law (NRS 598A) and federal law (Sherman Act and Clayton Act).

The object of these laws is to regulate trade to ensure a competitive market for the protection of the consumer. The United States Supreme Court, when defining "trade", said the term included all occupations in which men are engaged for a livelihood.

If an offer is *rejected*,

The offeree may simply say "No," and by doing so, has rejected the offer, without counteroffering. An offeree should be aware that a rejection does not obligate the offeror to do anything whatsoever.

Deed

The only instrument use for the conveyance of title of the real property.

Principles of Value: 8. Change and anticipation

The opening of new industries or the closing of sources of employment can have a great effect on values, even though they may not have any direct impact on the physical property. The appraiser, in reaching a valid estimate of the market value of a property, must take these matters into consideration in reaching an estimate of value.

option money

The optionee must usually offer this better described as the agreed valuable consideration, in exchange for the option to purchase or not to purchase.

Termination and Assignment of Contracts: 2. Mutual agreement

The parties decide they do not want to go forward and mutually agree that each should be released from the contract. By mutual agreement, the contract is terminated. This is sometimes called a *General and Mutual Release*.

legal title

The party in possession of the deed

Executor

The person named in the will to settle the estate

remainderman

The person who gets the property after the life estate is ended.

Unilateral contract example

The police will pay $5,000 for information leading to the arrest and conviction of a certain criminal. The police have no obligation to do anything until someone performs by providing information that leads to the arrest and the conviction of the criminal. Then, and only then, are the police obligated to pay the $5,000.

Client

The principal to whom the agent is expected to give advice and counsel during the period of agency.

Principles of Value: 2. Substitution

The principle of substitution is based on the likelihood that the market will not pay substantially more for one property over another if the properties are substantially the same.

Annexation

The process of attaching personal property so that it becomes real property thus creating a fixture.

The loan process: 4. Processing

The processors will verify all information provided to the loan officer, order the appraisal as well as title documentation, flood certifications, insurance, verify employment and asset account information, obtain any missing documentation, and lock the rate prior to underwriting.

Characteristics of Value: 1. Demand

The property has to be wanted in the market or else it has little or no value. *Effective Demand* refers to the market having the capacity or ability to purchase the property.

obsolescence: a. Physical depreciation

The property is in a bad state of repair, or some of the components of the property are nearly worn out.

obsolescence: c. External/Environmental/Locational/Economic

The property is located in an "environment" or in a "location" in which the market will penalize the value, such as the subject property being adjacent to a waste facility.

obsolescence: b. Functional depreciation

The property is out of style for the market place, or features of the property, although working properly, are inadequate for the property.

Characteristics of Value: 4. Transferability

The property must be able to be sold from one owner to another. If the property cannot be sold due to restrictions on its ownership, such as a burden on title, the property's value is greatly diminished.

Characteristics of Value: 2. Utility

The property must be useful in the eyes of the market. If the real estate is not useful (not good for anything) it has little or no value.

Principles of Value: 3. Conformity

The property should be consistent with the nature of its location and the other surrounding properties.

*Destruction* terminating agency relationships in real estate

The property was condemned, or destroyed by fire, flood, war, wind, etc.

*Completion* terminating agency relationships in real estate

The property was sold or transferred, so there is no further need for the agency. This is also referred to as *fulfillment or performance*.

Environmental Impact Statement (EIS)

The purpose of is to identify the anticipated effects of developing a new project as they pertain to the safety and health of the public.

REQUIRED ELEMENTS OF A VALID CONTRACT: 3. Legal; Legality of Object

The purpose underlying the contract must be legal.

Common interest communities (CICs)

The purpose within a communities of homes is to set standards of behavior and living for a defined community through CC&Rs that all homeowner's agree then they buy a home in that community.

Liquidated damages

The remedies either party may recover through litigation may be limited by the terms of the contract. If the contract pre-addresses the damages that may be received in the event of default, those remedies are considered to be this.

Eminent Domain (E.)

The right of government to take private property for public use.

Taxation (T.)

The right of government to tax real property.

Escheat (E.)

The right of the governemt to take real property if an owner dies without a will and with no heirs or no kindred.

Bundle of rights: *Control*

The right to control the property; to use for any legal purpose

Bundle of rights: *Exclusion*

The right to keep other from having access to the property

Bundle of rights: *Possession*

The right to possess and occupy the property

Bundle of rights: *Disposition*

The right to sell, will, transfer, or dispose of the property

Bundle of rights: *Enjoyment*

The right to use the property in any legal way

Littoral rights

The right to use water from a lake or ocean that borders a property.

Riparian rights

The right to use water from a river or stream that borders a property.

The IRV circle:

The rule is, the part is a percentage of the total; or the smaller number is a percentage of the larger number. The beauty of the circle is, as long as you have any two of the three numbers, the circle will tell you the mathematic formula to follow. "I" equals Income (net operating income); "R" equals Rate (rate of return or capitalization rate); and "V" equals Value.

Common Law Terms:

The rules of agency evolved from the common law. Agency law defines the duties and responsibilities a real estate licensee has to the client.

Exclusive right to sell listing

The seller agrees to hire the broker on an exclusive basis and agrees to pay a commission to the exclusive broker when the exclusive broker, or any other broker, produces a ready, willing, and able buyer at list price and terms or such other price and terms agreeable to the seller. The seller gives exclusivity to the broker and agrees that all other brokers must go through the exclusive broke. Sellers owes commission to broker.

Exclusive agency listing

The seller agrees to hire the broker on an exclusive basis, and agrees to pay a commission to the exclusive broker when the exclusive broker, or any other broker, produces a ready, willing, and able buyer at list price and terms or such other price and terms agreeable to the seller. The seller gives exclusivity to the broker without owing commission.

Open listing

The seller agrees to pay a commission to any broker who procures a ready, willing, and able buyer at list price and terms, or such other price and terms agreeable to the seller. The seller gives no exclusivity to the broker, and the seller may sell the property himself without owing a commission to any broker. The seller may also have several open listings in effect.

*Mutual consent* causing Termination of Brokerage Agreements

The seller and the broker cooperatively agree to terminate their relationship.

Rescission if the *buyer* defaults, the *seller* may rescind (terminate)

The seller decides to call off the contract and return the earnest money deposit to the buyer. This is a complete reversal of the contract, putting everyone back to where they were before contracting.

Wrap around mortgage AKA all-inclusive deed of trust example

The seller has a $50,000 balance on his mortgage. He sells his house for $325,000 and takes a down payment from the buyer of $25,000 and creates a $300,000 wrap around mortgage. The buyer is paying the seller based on the $300,000 wrap, and the seller continues to make payments on the $50,000 underlying mortgage.

Tenancy/estate at sufferance / holdover (Tenancy and estate are interchangeable)

The status of the lease is expired and the tenant remains in possession without landlord's consent AKA trespasser. Landlord is "suffering" because of the tenant's presence.

*Expiration* terminating agency relationships in real estate

The term of the agency agreement has run out or expired. This happens frequently with listing agreements when a home fails to sell within the term of the agreement.

Required Disclosure to Other Parties

There are potentially four other entities to whom a licensee has a disclosure duty: 1. The licensee's broker; The Nevada Real Estate Division;The public (by way of advertising); and 4. Applicable law enforcement agencies.

REQUIRED ELEMENTS OF A VALID CONTRACT: 4. Informed Parties

There can be no fraud, no misrepresentation, and no duress. The parties are fully informed, aware of the conditions of the agreement, and consent to the terms.

Statute of limitations

There is a legal limit to the time frame under which the injured party can legally sue the breaching party and this limit varies from state to state.

The "Sun City Exception"

There is an exception for rental or ownership based communities specifically for senior citizens. may have a prohibition against children in the project.

*Note:* The appraiser adjusts the sold price of the comparable upward or downward - not the subject property because

There is no price of the subject to adjust!

Hazardous Substances: 8. Electromagnetic fields (EMFs)

These are fields generated by the movement of electrical currents, such as in power transmission lines.

comparables

They are recently sold properties that resemble the subject property but are not identical, and therefore some adjustments may be required.

Equal Credit Opportunity Act (ECOA)

This act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives income from a public assistance program.

Familial status

This amendment was added in 1988 to offset the discrimination that was occurring against families who had minor children and who were seeking to rent property.

METHODS OF ESTIMATING VALUE AND BROKER PRICE OPINIONS: I. Market data or comparable sales approach

This appraisal approach is the most common particularly for residential properties. The appraiser looks for properties which have *sold recently, in close proximity, and comparable* in features and amenities to the subject property.

COLDAC: Obedience

This did not represent a problem, since there could be no real conflict between the crown's requirements and those of the third parties with whom the agent was dealing. In modern society, however, the agent is obviously not representing the crown, but another individual; does not permit breaking the law or concealing material facts from others.

If the licensee advertises a property, the advertisement must identify the licensee's licensed status.

This disclosure must be made whether the licensee is acting as an agent or as a principal.

Universal agency

This form of agency is created in a written, *unlimited power of attorney*, which grants the agent the authority to do anything the clients could do for themselves.

Hazardous Substances: 4. Urea formaldehyde foam insulation (UFFI)

This has been used as an insulation in residential and commercial buildings. Ingestion and inhalation present significant health hazards.

Package mortgage

This instrument provides financing for both the real estate and the personal property that goes with it. are loans that cover major appliances like refrigerators, washers and dryers, window treatments, equipment, furniture, etc. that are all included in the purchase price.

Broker Protection Period:

This is a contract clause that gives the broker the right to collect a commission for a set time after the brokerage agreement ends. To collect a commission, the broker must have introduced the property or buyer to the client during the brokerage agreement period.

paired sales analysis

This is done by finding other properties which have recently sold and are similar to each other (not necessarily similar to the subject property) one of which has a pool, the other does not. If all other amenities are fairly equal, the difference in price paid should represent the value the market considers the pool adds

The steps in the cost approach: 1. Determine the value of the land

This is done by looking to see what comparable parcels of land have recently sold for; "land value" Remember, this approach calculates the cost to rebuild the *property from the "ground" up*, hence we start with the value of the land.

a life estate pur autre vie

This is if the life estate is based on the life of someone other than the life tenant.

Assessor's Parcel Number (APN)

This is the "account number" assigned by the county assessor to each parcel within the jurisdiction for purposes of recording payment of taxes.

The loan process: 5. Underwriting

This is the final review and decision making process pertaining to granting the loan.

Termination and Assignment of Contracts: 1. Performance

This is the most desirable outcome. The parties perform all of their duties and receive all of their rights as agreed.

Civil Rights Act of 1866 (Reconstruction Act)

This law provides that all persons born in the United States are declared to be citizens, regardless of race or color, and shall have the right to enter into contracts, to sue, inherit, acquire and dispose of property, and shall equally benefit from the law "as do white citizens." Classes protected by this law are race and color.

Oil and Gas Lease

This lease gives the tenant the right to extract oil and gas from a specific property

Sue for specific performance if the *buyer* defaults, the *seller* may rescind (terminate) or if the *seller* defaults, the *buyer* may rescind (terminate)

This legal action will require the buyer to perform all duties as specified in the contract.

A client's duty toward the agent/ Duty of Indemnification

This means should an agent suffer an injury (now most likely a financial one) while acting in the client's behalf, the client must indemnify, or secure against loss, the broker or agent.

If the offered withdrawals or revocates,

This notice of acceptance may be oral and given to the offeror directly or through his agent. Once notice of acceptance has been received, the offeror may not withdraw the offer.

Antitrust Laws prevents *Allocation of customers*

This occurs when several firms agree to divide markets and refrain from competing for customers.

Agent of the buyer

This relationship is created in the buyer's brokerage agreement where the buyer is the client and the broker is the special agent. The sales agent involved on behalf of the broker is technically a special subagent, who owes the fiduciary duties to the buyer through the broker.

Agent of the seller

This relationship is created in the listing agreement where the seller is the client and the broker is the special agent. The sales agent involved on behalf of the broker is technically a *special subagent*, who owes the fiduciary duties to the seller through the broker.

Agent for the owner-investor

This relationship is created in the property management agreement, between the broker and the property owner. This relationship is a general agency, and an agent of the brokerage would be a general, subagent of the owner through the broker.

DISCLOSURE OBLIGATIONS AND LIABILITY: Agency Relationship

This requirement is defined in the law of every state, along with a requirement that it occur early in an agent's interaction with clients and customers usually at the time of the first meaningful contact with a client, or to be among the first documents signed by a buyer or seller.

Cooperating brokers

This term is reserved for buyer brokers who work with (cooperate with) listing brokers to produce a buyer who is ready, willing, and able to purchase.

Broker price opinion

This tool to determine value is requested by a third party such as the lender in the case of foreclosure and by a relocation company in the event of an executive transfer that will result in a buyout. The report is more detailed than a CMA generally because the party making the request is not familiar with the subject property or the area.

latent defects

Those defects that are not visible. These may be known or unknown to the seller or agent. If these are known, both the seller and the agent have a responsibility to reveal them.

Written Contracts:

Though it is legal to have oral brokerage agreements, all exclusive agency brokerage agreements must be in writing. Under Nevada law, written brokerage contracts have certain statutory requirements regarding terms, form, and distribution.

Implied Brokerage Agreements:

Though not favored by the courts, under some circumstances, a court will find a broker is owed compensation under an implied brokerage agreement.

"client's agent"

Thus, in a technical sense, when a salesperson is referred to as the is not this - it is the broker who is.

Title by Descent

Title to real property held by those who inherited the property without a will

Ordinary life estate

Title to the property will pass upon death of owner to a remainderman.

Earning commissions

To be entitled to a brokerage commission for listing or selling a property, a broker must: • be licensed; • be the procuring cause (the cause of the chain of events that caused the sale); • be employed by the principal; • act according to the laws of agency.

Three (3) business day right of rescission

To protect the consumer from areas in which abuse has occurred, the law provides this.

Reversionary interest example

Tom wanted his brother, Berry to have the title of the home Tom current owns. Tom does not want Berry's heirs to have the title of the house when Berry dies so that Tom's heirs may inherit it when Tom dies.

Remainder interest example

Tom wants his sister, Alice to take title of Tom's old ho home after Berry's death rather than Berry's heirs. Tom could grant life estate to Berry but have Alice as the remainderman.

$1530

Transfer tax example: If the transfer tax in the state is $2.55 per $500.00 of value (or any portion thereof), the sale of a $300k home would result in a transfer tax of?

Limited partnerships

Two classes of partners are created in this with one minimum general partner, and unlimited limited partners.

joint tenancy

Two or more natural owners who have 4 unities of titles: 1. Equal right of access and possession; 2. Equal interests; 3. Acquired their title all at the same time; 4. Acquired their title all in the same document.

tenancy/tentants in common

Two or more owners who have only "one unity of title". This is a right of equal access and possession; undivided.

earnest money deposit

Typically money that accompanies an offer to show the buyer's "earnestness" in completing the contract as it is often sacrificed upon a breach of contract.

Consent to Act form

Under existing law, regardless of which parties are being represented, seller and buyer or another mixture, each party must be given this and the opportunity to reject this type of agency relationship.

The FHA today:

Under the Department of Housing and Urban Development (HUD), these loans remain viable financing alternative to home buyers, and in particular, first time home buyers.

Handicapped persons

Under the amendment to the 1968. A landlord may not deny a handicapped person access to rent a unit, even though it may pose a potential risk to the handicapped person.

Leased free

Under the statute of frauds, a lease for one year or more must be in writing for it to be enforceable; landlord still owns the place but gave *rights to possession and use* of the property without *owning it*.

Two federal laws that govern electronic commerce:

Uniform Electronic Transaction Act (UETA); and electronic Signature in Global and National Commerce Act (E-Sign)

Types of Agency

Universal Agency, General Agency, Special Agency, and Subagency.

PRESENTING THE OFFER: Time in Submitting Offer

Unless a client has signed a waiver, the licensee must present all offers made to or by the client as soon as practicable

Land description: *US Government Rectangular Survey System*

Used in 1785 when US was still new in hopes of precisely identifying parcel References *principal meridians, base lines, range lines, township lines*

Trade fixtures in commercial spaces

Usually installed in a rented space by the tenant must be removed by the final day of the tenant's occupancy. If they are not removed, it becomes property of the landlord through *accession*.

Parol Evidence Rule

Verbal words and representations will not be binding nor overrule any written agreements.

Determinable

Violation of the condition, or termination of the conditional use resilts in reversion to the grantor, automatically.

Real property: *industrial*

Warehouses and factories

riparian rights or littoral rights

Water rights

Metes and bounds example

What kind of land description is this: Commencing at the intersection of west line Apple Valley Rd and the north line of Edison Lane; thence west 200 feet along the north line of Edison Lane; thence north 15 degree east to the center thread of Blue Ridge Lake...thence southerly along the west line of Apple Valley Road to the point of the beginning, being 160 feet more or less."?

US Government Rectangular Survey System Example

What kind of land description is: "The S 1/2 of the SW 1/4 of the SW 1/4 of Scetion 15, Township 14 North Range 4 West of the 6th Principal Meridian"?

Volunteered Information:

When the licensee has volunteered specific information or claims an expertise in a certain topic, the licensee will be held responsible for its reasonable accuracy.

Entitlement to commissions

When a broker, employed by a seller, successfully finds a buyer who is ready, willing, and able to complete a transaction based on the terms and conditions in the listing, the broker has earned commission - even if the sale is not completed because of a principal's default.

Reservation

When a grantor withholds title to a part of the land transferred by a deed.

secondary liability

When one party desires to assign his rights, obligations, and benefits under the contract to a third party, that original party will remain liable for performance and obligations should the third party fail to perform.

Duty of Further Inquiry

When representing a seller or a buyer, an agent is required to "discover and disclose" any material fact or material defect of which the agent knows or should have known.

Undivided interest

When there is more than one owner of a property. No owner can claim a specific physical portion of the property as their own.

Price per *front foot*

Whenever land dimensions are given, the first dimension is always this - that border of the property which is adjacent to the road frontage.

Hazardous Substances: 6. Mold

While some molds are benign or even beneficial, others can cause allergic reactions when inhaled or touched.

Changes in borders: *Erosion*

Wind, rain, flowing water has removed land through the process of erosion and replaced it with water *no longer* belongs to the owner.

Private mortgage insurance

With a conventional loan, the lender does not have government insurance or a guarantee and has only the collateral property and the borrower's credit scores and history to rely upon in making the lending decision.

Priority

With mortgages, this refers to the order in which these mortgages were recorded; it which lender will be paid first, then second, etc., in the event of a foreclosure sale.

Requirements of a valid deed: Acknowledgement

Witnessing by witnesses of the grantor signing the deed.

The doctrine of merger

You cannot have an easement over yourself, so that would terminate the easement.

Implied Contract example

You sit down at a table at a restaurant and order dinner. It looks like you have contracted with the restaurant to purchase and pay for your food. You may say, "I'll have the Surf & Turf," but your actions of being there and ordering are speaking contract much louder than words you may actually say.

Adjustable rate mortgage (ARM) element: 5. Ceiling and floor AKA lifetime cap

_______ represents the maximum interest rate the borrower can be charged anytime during the life of the loan. Likewise, the _________ represents the minimum interest rate the borrower will have to pay anytime during the life of the loan.

"procuring cause"

a broker earns a commission with an open agreement only if the broker is the _________ of the transaction - that is, the broker finds a buyer ready, willing and able to purchase on the seller's precise terms.

Limited Liability Company (LLC)

a business structure that is a hybrid of a corporation and a limited partnership.

NRS 645.633 violation is guilty of l. Recording or causing to be recorded

a claim pursuant to the provisions of NRS 645.8701 to 645.8811, inclusive, that is determined by a district court to be frivolous and made without reasonable cause to NRS 645.8791.

Contingency

a clause written into a contract stating some event must be completed before all of the duties of the contract can be or will be performed; include new loan approval, sale of current residence, inspections to be conducted, etc. If not fulfilled or waived, the contract is voidable.

Hazardous Substances: 9. Carbon monoxide (CO)

a colorless and odorless gas that occurs as a byproduct of burning certain types of fuels. It can pose a significant health hazard if not properly ventilated.

Mortgage

a contract which creates a monetary lien against real property. most frequently used in the states east of the Rocky Mountains.

Non-Natural person

a corporation, a limited liability company (LLC), a partnership or a limited partnership.

QUITCLAIM

a deed that gives NO warranties or guarantees and offers the least protection. It is used to clear a cloud on title or to cure a debt in title. used in divorce.

Bargain and Sale Deed/Implied warranty of seisin

a deed with only one covenant. (Trustees, executors, sheriffs, and officers of the court use this.) This deed does not provide any warranties about the condition of the title, but only promises the grantor has the right to convey the title.

BARGAIN AND SALE DEED

a deed with only one covenant. this deed does not provide any warranties about the conditions of the title but only promises the grantor has the right to convey the title.

Elements of Negligence: breach

a duty by not doing something one is obligated to do ("nonfeasance"); by doing something one is not supposed to do ("malfeasance"); or by doing something in a careless or haphazard manner ("misfeasance").

material fact

a fact that would be important to a reasonable person in deciding whether to engage or not to engage in a particular transaction; or would affect the price paid. It is an important fact as distinguished from some unimportant or trivial detail.

Wrap around mortgage AKA all-inclusive deed of trust

a form of seller financing (purchase money mortgage) available only where there is *no existing due on sale* clause in the original mortgage document. The seller *still owes* on the original mortgage (the underlying mortgage) and continues to make those payments.

Natural person

a human being

absolute fidelity is breached when

a licensee withholds an offer from the client in order to purchase the property himself.

Elements of Negligence: caused the harm example

a listing agent inadvertently tells the buyers that the sellers are divorcing and need to sell quickly. This is an unauthorized disclosure of a seller confidence.

Requirements of a valid deed: Exceptions of reservations

a. Grantor will make the grant subject to an exceptions, encumbrances or liens on title which will not be removed by the grantor. b. Grantor may create a restriction or easements.

NRS 645.630 violation would be found guilty of a. Making any

a. Making

In appraisal sources of depreciation AKA *obsolescence*:

a. Physical depreciation b. Functional depreciation c. External/Environmental/Locational/Economic Obsolescence

Requirements of a valid deed: Delivery and acceptance

a. intended by the grantor. b. commence during the lifetime of the grantor.

Violation of NRS 645.630 results in

administrative fine of not more than $10,000 for each violation he or she commits or suspend, revoke, deny the renewal of or place conditions upon his or her license permit or registration, or impose any combination of those actions, at any time if the licensee, property manager or owner-developer has, by false or fraudulent representation, obtained a license, permit or registration, or the licensee, property manager or owner-developer, whether or not acting as such.

A licensee's duties are divided into two types;

affirmative prescriptions - "you shall", and prohibitions - "you shall not". In other words, it is illegal.

NRS 645.633 violation is guilty of f. Failure to include a fixed date of expiration in any written brokerage

agreement or failure to leave a copy of such a brokerage agreement or any property management agreement with the client.

Oral Contracts:

agreements are legal contracts in which a broker agrees to represent a client with the intention or expectation of compensation and there is no written contract. No oral brokerage agreement may be exclusive.

Mortgage Clauses: Acceleration clause

allows the lender to call all payments due if the borrower defaults. This allows for a foreclosure of the entire outstanding balance. This clause "accelerates" the time for which payment is due to now.

THE INVESTORS: The Secondary Market - 2. Pension funds

although these organizations place a majority of their funds in equities (stocks and bonds), many pension funds will allocate a portion of their investment portfolios to residential or commercial real estate mortgages.

Balloon Loan

amortizes at the stated interest rate and term, as if it were a fully amortizing loan, but requires an *early payoff*.

Whether the licensee's interest is in the transaction or in the property, the disclosure must be in writing

an oral disclosure does not satisfy the regulations.

patent defects

an archaic term, but still used in construction, which are accessible, un- hidden, visible defects

Hazardous Substances: 2. Lead-based paint

an be found in homes built prior to 1978. Discovery was made that lead-based paint was often eaten by small children as they chewed on cabinet doors and trim. Lead-based paint, if ingested, can result in brain damage and death.

Impound accounts AKA escrow accounts

an impound account is established to hold funds for the future payment of the borrower's property taxes and casualty insurance.

The loan process: 1. Pre-qualification

an interview, in person or by phone, between the lender and the borrower. The lender will typically obtain consent and run a credit report to look for red flags. Calculations as to debt to income ratios and debt to housing expense ratios are done.

Hazardous Substances: 7. Radon

an odorless, colorless, radioactive gas produced naturally by the radioactive materials in the ground. It represents another environmental hazard and has been linked to lung cancer.

Market value

an opinion of what a property would sell for in a competitive market and is the goal of the appraiser.

*An offer becomes a contract when the offer has been accepted by the offeree*

and *communication* of that acceptance has been received by the offeror.

In real estate agency relationships, the *agent is the broker*

and the *principal is the buyer* or seller client.

When doing interest calculations, it is necessary to determine the current outstanding balance on the loan

and then multiply it by the *annual interest rate* to calculate the interest for one year. monthly interest, divide the annual interest by 12 to get the amount of interest for one month.

Procuring cause

and therefore entitlement to the commission, is earned by the licensee who caused a "chain of events" to occur that led to the sale.

Americans with Disabilities Act (The ADA)

anti-discrimination law that deals with physical workplace accommodations for disabled persons; banned discrimination based on the status of a person's handicap, and also addressed the issue of accessibility for "public buildings" or "buildings open to the public."

NRS 645.633 violation is guilty of h. Gross negligence or incompetence in performing

any act for which the person is required to hold a license pursuant to this chapter

NRS 645.633 violation is guilty of b. Violating any order of the Commission

any agreement with the Division, any provisions of this chapter

Purchase money mortgage

any portion of the purchase price which the seller "carries." In real estate, the owner of the property being sold may be in the position to act as the lender through *promissory note* and *deed of trust or mortgage*, or by a *contract for deed*.

Mortgage Fraud: appraisal fraud:

appraisal value is overstated. identity theft is another type.

Prepayment penalties

are associated with loans that are paid off early, before the end of the term; it is typically only for a designated period of time such as within the first two to three years.

Commissions

are considered "earned" when a contract is executed by a ready, willing, and able buyer and a seller who has agreed to all terms; normally paid at delivery of the deed; at the closing.

Material Facts: By law, certain facts that a party may consider material

are deemed not material.

Pending sales

are formerly active listings that are now under contract but not yet closed.

Elements of Negligence: duty

are found in statute, regulation, common law, and contract. Those sources outline what must be done and avoided in the licensee's relationship with his or her client, other parties in the transaction, the public, the licensee's peers and broker, and the Real Estate Division.

Withdrawn listings

are properties that were taken off the market for a variety of reasons such as the seller's decision not to move, the market was not willing to meet the seller's price, or the seller terminated the listing relationship with the broker.

Vacancies and bad debts

are those losses to the gross income the owner incurred due to units being vacant for any length of time and for rents that should have been, but were not, collected. When expressed as a percentage, they reflect a percentage of the GSI.

*housing expense-to-income ratio* (front end ratio) and the *total debt service-to-income ratio* (back end ratio)

are two important mathematical factors considered in the qualification process.

NRS 645.633 violation is guilty of k. Knowingly permitting any person whose license has been revoked or suspended to act

as a real estate broker, broker-salesperson or salesperson, with or on behalf of the licensee.

General lien

attaches to all the property of the debtor, not exempt from forced sale. (ex. judgment or IRS lien

Specific lien

attaches to one or more specific or named properties (ex. a mortgage)

Specific wrongs - blockbusting

attempting to create panic selling by creating a sales contract with a member of a protected class with the intent to use the sale to a protected class member as a method of inducing owners in the area to sell, before the neighborhood becomes too "mixed" or the homes lose value

The Nevada Real Estate Division (RED)

authority includes the ability to compel disclosure of a licensee's books and papers. Failure to disclose information when validly requested by the RED, subjects the licensee to RED discipline and the possibility of criminal action.

Broker Liability

b. Broker Liability - The broker gives the salesperson, or broker-salesperson, authority to act for the broker.

Specific wrongs - altering terms in a contract to purchase or to lease a property

because the prospective buyer or tenant is a member of a protected class

Specific wrongs - refusing to sell a property, or to lease a property,

because the prospective buyer or tenant is a member of a protected class

Specific wrongs - denying service as a real estate professional

because the prospective client is a member of a protected class

NRS 645.630 violation would be found guilty of j. Accepting other than cash as earnest money unless that fact is communicated to the owner

before his or her acceptance of the offer to purchase and that fact is shown in the receipt for the earnest money.

NRS 645.635 violation by Failure to submit all written bona fide offers to a seller when the offers are received

before the sells accepts an offer in writing and until the broker has knowledge of that acceptance, except as otherwise provided in subsection 4 of NRS 645.254.

NRS 645.635 violation by 6. Failure to produce any document

book or record in his or her possession or under his or her control, concerning any real estate transaction under investigation by the Division.

Mortgage Fraud: liability fraud:

borrower fails to disclose financial obligations

Mortgage Fraud: Income fraud:

borrower misrepresents income

In the absence of an index and a cap Adjustable rate mortgage (ARM),

borrowers could be subject to arbitrary interest rates at the whim of the lenders. The lenders are limited as to what an adjusted rate can be because of these two elements.

*Mutual agreement* terminating agency relationships in real estate

both parties agree to cancel the agency relationship

Limited agency

broker contractually limits duties and liabilities by agreeing to perform only certain acts of representation

transaction agency

broker is not representing either party but only hired to facilitate the transaction. there are no fiduciary.

NRS 645.635 violation by 2. Negotiating a sale, exchange or lease of real estate, or communicating after such negotiations

but before closing, directly with a client if the person knows that the client has a brokerage agreement in force in connection with the property granting an exclusive agency, including, without limitation, an exclusive right to sell to another broker, unless permission in writing has been obtained from the other broker.

NRS 645.630 violation would be found guilty of e. Failing to maintain, for review and audit

by the Division, each brokerage agreement and property management agreement governed by the provisions of this chapter and entered into by the licensee.

The six fiduciary duties, COLDAC.

care, obedience, loyalty, disclosure, accounting, and confidentiality — often remembered by the acronym COLDAC. (Remember: "COLD Air Conditioning.")

uperfund Amendment and Reauthorization Act (1986). SARA

clarified regulations regarding hazardous waste and limited liability for some parties, including innocent landowners and real estate brokers.

THE LENDERS: The Primary Market - 4. Mortgage bankers AKA loan originators

common in the market. work as a "middle man" between mortgage brokers and the ultimate investors. Some have funds of their own with which to fund the loan, but will normally then sell the loans they have created to liquidate capital to lend again.

Advanced fee:

compensation collected by a broker from a client before services are rendered. It may be collected in advance for listing or advertising a property or a business for sale or lease.

The Commission may discipline a licensee if it finds the licensee has not disclosed, in writing, that the licensee:

compensation from any person who will perform services related to the property, or received compensation from more than one party.

ABSTRACT TITLE

complete history of a title

Conflicts inherent in dual agency

conflicts of interests; Sellers typically want the highest price, with the best possible terms, and a quick closing. Buyers want the lowest possible price, with the best possible terms, and a closing date that allows for mortgage application processing and due diligence.

Air rights

consist of the right to use open space above your land. Air rights can also be sold or leased. They can also be transferred by easement as in elevated highways. Air rights can be taxed separately from the land.

material defects

construction defects that have not been resolved

Cooperative apartments co-op, as a stockholder has to

contribute their proportion share of operating expenses of the building such as taxes, insurances, utilities, maintenance and other costs and expenses.

Estates in severalty or sole ownership

corporations or partnerships often hold this title. If only 1 signature is required to sell a piece of property, then there is only 1 owner.

Operating expenses

costs associated with operating the building such as utilities, taxes, management fees, etc. and should not be confused with "debt service fees" which are incurred as a result of financing the original purchase of the property. When expressed as a percentage, they express a percentage of the EGI.

Assigned Agency

created when a broker represents more than one party in a transaction, the law provides an "Ethical Wall" wherein the broker is allowed to assign a separate agent to each client. broker does not need to use the "Consent to Act" form.

Fiduciary duties of a property manager

creates a general agency; the broker doing property management, or agents within the brokerage authorized by the broker to engage in the property management activity, are serving the client in a general agency relationship as there will be some authority extended from the client to the property manager to bind the client or the client's property to contract.

Amenities - Other factors also contribute to the subject property's value, in some instances, such as:

curb appeal; condition of exterior nearby parks and shops; neighborhood condition; traffic or noise; school district.

DISCLOSURE OBLIGATIONS AND LIABILITY: Material and Relevant Facts

data, or information which the agent knows, or which by the exercise of reasonable care and diligence, the agent should have known, relating to the property that is the subject of a transaction.

NRS 645.633 violation is guilty of i. Any other conduct which constitutes

deceitful, fraudulent or dishonest dealing.

CC&Rs

deed covenants, conditions and restrictions commonly referred to as Deed Restrictions

brokerage agreement

defined as an oral or written contract between a client and a broker in which the broker agrees to provide real estate related services in exchange for valuable consideration.

Principal

delegates authority to the agent to represent the principal's interest in a transaction. The principal is obligated by contract to compensate the agent and not hinder the agent's ability to fulfill the agent's fiduciary obligations.

The loan process: 2. Pre-approval

demonstrates the borrower's ability to qualify subject to conditions being satisfied. Often done in the form of a pre-approval letter, this document strengthens the buyer's position as the buyer negotiates a purchase agreement with the seller.

the Uniform Residential Landlord Tenant Act, URLTA provisions

deposits, including security deposits and last month rent deposits, cannot exceed 3 times the monthly rent; reasonable rules and regulations concerning the property and the tenant's use and enjoyment of the property can be adopted by and enforced by the landlord; the tenant may not deny landlord reasonable access to the premises for the purposes of inspection or making repairs.; the landlord may not use the right of access to harass the tenant and, except in the case of emergency, will give the tenant 24 hours prior notice of access; the landlord cannot retain the tenant's personal property for unpaid rent unless the landlord has been granted an order of attachment or garnishment by a court.; *the purpose of the URLTA is to assure the parties to the lease that neither the tenant nor the landlord has unreasonable rights solely as a function of their respective positions. *

Mortgage Clauses: Assumption clause

describes under what circumstances, if any, the lender will allow another person to assume the mortgage or deed of trust.

Mixed use projects

designed around different but compatible users in it, such as residential, retail, restaurant, etc.

Reverse annuity mortgage (RAM)

designed mainly for older homeowners who own their homes free and clear, or who have very large equities, but who do not wish to sell or cash out the equity in their homes in one lump sum. In effect, the RAM borrower is drawing out equity in the home monthly.

Generally, the source and amount of compensation is

determined by agreement between the broker and the client. negotiable between the broker and the client. determined as a percentage of the value of the property's sale price, a flat fee (allocated in various ways), or by law.

Incurable depreciation

dictates that the loss in value is either unfixable or not cost effective to make the repairs. a. Physical depreciation can be curable or incurable; b. Functional depreciation can be curable or incurable; c. Environmental or locational obsolescence is always incurable as you cannot move the land.

The beneficiaries of the trust

do not have the authority to sell trust property.

Long term mortgage rates are

driven by the yield on the 10-year treasury bond.

DUTY OF INQUIRY AND "SHOULD HAVE KNOWN"

duty to disclose to each party to the transaction any material and relevant facts, data, or information which he or she knows, or which, by the exercise of reasonable care and diligence, should have known, relating to the property.

Elements of Negligence:

duty, breach, cause and harm

Though a brokerage agreement ends,

each party may continue to have certain responsibilities stemming from the contract.

"brokerage agreement"

employment contract wherein the broker agrees to provide real estate related services for valuable consideration or compensation. It may be either oral or written.

NRS 645.630 violation would be found guilty of c. Accepting a commission as a real estate broker-salesperson or salesperson from anyone

except the licensed real estate broker with whom he or she is associated or the owner-developer by whom he or she is employed.

NRS 645.630 violation would be found guilty of k. Upon acceptance of an agreement, in the case of a broker,

failing to deposit any check or cash received as earnest money before the next banking day unless otherwise provided in the purchase agreement.

NRS 645.630 violation would be found guilty of i. If in the case of a broker-salesperson or salesperson,

failing to place in the custody of his or her licensed broker or owner-developer, as soon as possible, any deposit or other money or consideration entrusted to him or her by any person dealing with him or her as the representative of his or her licensed broker.

To verify compliance with these laws, the Real Estate Division requires each brokerage agreement be kept by the broker for

five years from the date of closing or last activity on the transaction

Uses of Appraisals: 2. to establish value

for insurance companies using a "co-insurance" clause in their policies. In residential homeowner insurance policies, the insured is normally required to carry insurance equal to at least 80% of the property's value.

NRS 645.633 violation 2. The Commission may take action pursuant to NRS 645.630 against a person who is subject to that section

for the suspension or revocation of a real estate broker's, broker-salesperson's or salesperson's license issued by any other jurisdiction.

If a owner of a property does not have an ingress (entrance) or egress (exit) from their property, they can

force the creation of an easement by necessity.

A substantial number of division disciplinary hearing cases concern agency disclosure form violations. These violations include:

forms not given to clients, forms not completed correctly, and those lacking required signatures or missing necessary information.

Hazardous Substances: Leaking underground storage tanks (LUST)

found in older gas stations and other facilities where gasoline and other petroleum products were stored in steel or iron underground tanks. The primary hazard is leaking and the contamination of ground water as the petroleum product leaches further into the soil.

Nevada recognizes two types of agency concerning real property:

general agency and special agency

Lease-purchase agreement/lease options and purchases/lease with option to b

gives a tenant the right to purchase at a future date. The price is set when the agreement is negotiated. It is advantageous to the tenant-buyer. (There are no forms for this, need an attorney)

Mortgage Clauses: Assignment clause

gives the borrower notice that the lender will likely be transferring the mortgage or deed of trust to another party AKA Secondary Mortgage Market sometime after the closing on the loan.

Monetary lien or monetary encumbrance

giving another the right to repossess or foreclose against real or personal property and to sell the property to pay that debt or obligation owed to the lienholder.

Punitive damages

go above and beyond the liquidated damages and may be sought to "punish" the breaching party and compensate the injured party.

NRS 645.633 violation is guilty of e. Guaranteeing, or having authorized or permitted any person to

guarantee, future profits which may result from the resale of real property

General Warranty Deed

guarantees and protects against defects. It offers the buyer the best protection. Warrants title to the sovereignty of the soil. It is the most common deed and the one mentioned in the sales contract. A buyer who wishes to ensure that the seller is conveying good title should request a this.

SPECIAL WARRANTY DEED

guarantees title only against defects arising under the grantors period of owernship. defects existing before that time are NOT covered.

NRS 645.633 violation is guilty of d. A conviction of, or the entry of plea of guilty,

guilty but mentally ill or nolo contendere to: 1. A felony relating to the practice of the licensee, property manager or owner-developer; or 2. Any crime involving fraud, deceit, misrepresentation or moral turpitude.

Duty of Further Inquiry

he agent must keep the client informed of all material facts which may have any importance in matters where the agent is representing the client. If the agent acquires information which would cause a reasonable person to ask some questions, the agent is expected to do so.

special agency

hich the agent is given limited authority to act for the client within certain restrictions and for specific transactions

THE INVESTORS: The Secondary Market - 1. Large investors

high wealth individuals and corporations with excess funds to invest and often find the relative safety and security of real estate loans appealing.

Fee simples estate absolute

highest quality interest in real estate in that the holer has all the right recognized by law forever and upon death of owner to be inhiritable to heirs. the ideal form of ownership.

If a limited partner dies,

his limited partnership share passes to his estate, much like share of stock in a corporation.

A licensee will not be permitted to pervert his authority to

his own personal gain in severe hostility to the interest of his principal.

Married Parties: Since Nevada is a community property state,

if a buyer is married both spouses must sign the purchase contract. During the sale of the property, spouse does not have to sign.

Release of a limiting of or affirmative deed restrction can only be done

if the grantor, the grantor's successors, or oder of the court determines that it impedes the fire transfer of real estate serves no useful purpose.

A licensee is not required to perform services or give advice

if the service or advice requires expertise outside the realm of real estate related services or for which a separate certification or license is required.

*range lines*

imaginary lines vertically to the base lines to the principal merdians range

Nevada's Seller's Real Property Disclosure Statement (SRPD)

important in ensuring the buyer is aware of what the seller knows about the property, most buyer's agents require the seller to provide this within a set time frame after signing the purchase agreement.

Requirements of a valid deed: Attestation

in a dded is the notary public's attestation that the signing parties appeared before the notary, swore they were who they said they were, and signed the deed.

Specific wrongs - using discriminatory statements

in advertising

Bundle of rights

include possession, control, enjoyment, exclusion, and deposition.

Mortgage Clauses: Prepayment clause

informs the borrower under what circumstances the lender will accept payment, in whole or in part, before the due date.

Non-conventional Loans: (2) FHA insured loans

introduced the concept of long term, fully amortizing loans. Loans are made through private lenderss. They *do not make loans*, they *insure* them.

Antitrust Laws prevents *Tie-in agreements*

involve agreements to sell customers one product or service only if they purchase another product.

The closing AKA settlement AKA *in escrow*.

is "opened" by placing the accepted agreement into the hands of the escrow agent along with the earnest money deposit (EMD).

Real-estate owned or REO

is a class of property owned by a lender - typically a bank, government agency, or government loan issuer - after an unsuccessful sale at a foreclosure auction.

Deed of Trust

is a contract which creates a monetary lien against real property. most frequently used in the states west of the Rocky Mountains.

Contract for deed AKA Land Contract, or Installment Contract

is a form of seller financing. the *vendor (seller) retains legal title* to the property but transfers *equitable title to the vendee (buyer)*.

promissory note

is a legal document which creates and identifies the debt.

encumbrance

is a limitation on your rights, also know as a cloud on the title

Subagent

is a person to whom agency has been delegated, always by an agent who is responsible to a principal and always with the permission of the principal; assist in carrying out client-based functions on behalf of the principal. Note that they from the same company have the same fiduciary duties and responsibilities as the original agent.

Lis pendens

is a recorded notice filed against a specific property, meaning that some form of lawsuit has been filed, but not yet resolved in court. May become the responsibility of a new owner, if not settled prior to closing.

broker-salesperson

is a sort of hybrid license, and this licensee meets the requirements of a broker, but chooses to work in a sales or management capacity for the broker.

Tenancy by the entireties

is a specific type of joint tenancy where the *co-owners are husband and wife*. One advantage of this type of ownership is that it avoids probate. (This is also true of joint tenancy.)

TENANCY BY ENTIRETY

is a specific type of joint tenancy where to co owners are husband and wife. *avoids probate

Customer

is a third party for whom a service is provided by the agent.

FEDERAL FINANCING REGULATIONS AND REGULATORY BODIES: Consumer Credit Protection Act, Truth-In-Lending Act, Regulation "Z"

is aimed at promoting the informed use of consumer credit by requiring disclosures about its terms and costs. In general, this regulation applies to each individual or business that offers or extends credit to consumers.

Buyer Qualification: pre-qualification

is an informal discussion between the lender and the borrower that can be conducted in person or by phone. The lender will ask questions about income, long-term debts such as car payments and credit cards, and will seek consent to run a credit report and evaluate the borrower's credit score.

EQUITABLE TITLE, chapter 4

is an interest created by a legal document, such as that eld by a buyer w/ a signed sales contract, who has not yet gone to closing. the buyer has an equitable estate or equitable title.

Title

is both the ownership of something and the legal evidence of that ownership - a deed

Lien

is charge against property as security for a debt.

Trusts and Guardianships:

is created by an individual, called the settlor, who allows the legal title to specific property to be held in the name of the trust for the benefit of others or the settlor.

chain of title

is created making sure the title company can "link" each owner from the current owner all the way back to the first owner with no gaps (breaks) in the links.

Net listing commission

is established by what the seller must "net" from the sale. If the seller tells the broker that from the sale the seller must net $75,000 after satisfying a mortgage in the amount of $165,000, and the broker may keep anything over those amounts (there is no set commission amount or rate), the broker is likely dealing with a net listing.

The primary distinction between *misrepresentation and fraud*

is intent Both acts equate to the communication by the licensee to a party in the transaction of inaccurate information. Both acts equate to the communication by the licensee to a party in the transaction of inaccurate information.

salesperson

is licensed to work for, and under the supervision of, a broker.

Requirements of a valid deed: Grantor's signature

is needed on the deed. If it is a business entity, evidence that the party signing for the bunnies entity is allowed.

Sexual orientation

is not a protected class for housing in either Nevada or federal law.

Appurtenance

is often used to describe rights, privilages or improvements that belong to and pass with the land.

*Rural Economic Community Development Administration (RECD)*, formerly known as the Farmer's Home Administration (FmHA).

is permitted to operate only in communities with less than 20,000 population.

Partition

is procedure to divide the co tenants interest in real property. it can be court or voluntary action. partition would divide the property into pieces and end the joint tenancy. **can result in court ordered sale w/ multiple owners unable to agree on division, us or sale of the property (divorce).

Legal title

is secured when the closing is completed, the deed transfers title from the seller to the buyer, and the deed is recorded; means that the holder does legally own the property.

Financing

is simply the borrowing of money from a private party or a professional lender; borrowing may be unsecured (no collateral, only the credit worthiness of the borrower is considered), or the borrowing may be secured (real or personal property is given to assure repayment of the loan).

market analysis

is taken from the data contained in the local multiple listing service (MLS).

broker

is the "in charge" licensee responsible for the brokerage; usually the owner.

The steps in the cost approach: 3. Determine accumulated depreciation

is the *reduction in value as a result of age, poor state of repair, poor design, etc.* We depreciate the building of the comparable on paper to mirror the subject property.

Antitrust Laws prevents *Price-fixing*

is the act of agreeing to set prices or fees at a predefined level, as opposed to allowing markets and market forces to set them. This is illegal.

Brokerage

is the business of bringing two parties together; in real estate, brings a buyer and seller together for a fee. In montages, they brings a borrower and a lender together for a fee.

A buyer's brokerage agreement

is the exact same concept substituting the purpose which is to locate a property that meets the desire, price, and terms of the purchaser and to represent that buyer and negotiate on the buyer's behalf

puffing or puffery,

is the exaggeration of a property's benefits such as "This home has the best curb appeal on the block."; is legal because it is based on individual opinions, but agents must make sure that none of their comments or statements about real estate can be treated as fraudulent.

Effective gross income, or adjusted gross income,

is the income actually collected or earned. It is the GSI less the V/BD.

Prime rate

is the interest rate charged by banks to their most creditworthy customers (usually the most prominent and stable business customers).

Standard of Care:

is the legal level against which a person's behavior is judged. It stems from the idea that a "reasonable person" will act in a certain way - usually with prudence, diligence, and care not to harm anyone or anything.

negligent misrepresentation

is the misstatement of information without knowing any better, perhaps even believing the information being communicated is accurate.

ZONING

is the most common example of police power - zoning regulations are local laws to control land use. R-! means residential/single family only.

Single or sole agency

is the most common form of agency and the one least likely to create liability for a broker; broker represents only one party in a given transaction.

Level payment, fully amortizing loan

is the most common in residential lending. The amount of the payment remains the same over the life of the loan, however the components of principal and interest change with each payment.

The role of the agent in American concept of agency

is to deal with third parties on behalf of the principal.

replacement cost

is used for cost approach by the appraiser. Represents the theoretical building of a substantially similar property, using currently available materials and construction techniques.

" as is"

is used in many listings to communicate the fact that a property is being sold in its "known" present condition. It does not mean that a seller has been absolved of all responsibility relative to defects of which he or she is aware.

Earnest money is not consideration

it is an inducement to negotiate. It is presented with an offer to indicate the genuineness of the offer.

Property conditions

it was always incumbent on the buyer to discover all of the possible things wrong with a property before the purchase was consummated. Caveat emptor.

If a property is significantly better than surrounding properties,

its value will *regress (regression)* downward toward the value of the surrounding properties.

Metes and bounds descriptions refer:

latitude, longitude, degrees, minutes and seconds

Ad valorem taxes

levied based on the properties value.

Housing and Urban Development (HUD)

makes information available to the public regarding the process to citizens who feel they were discriminated against illegally.

A licensee must disclose to all parties any

material and relevant facts relating to the property.

Equity loans or home equity lines of credit (HELOC)

may be done when the homeowner has a substantial amount of equity in the property and wishes to use that equity (by borrowing against it) for some other purpose.

Exemptions to the Act: 4. Private clubs providing lodging which it owns or operates for other than a commercial purpose,

may limit rental or occupancy to its members and give preference to its members.

Exemptions to the Act: 3. Religious or church related non-profit organizations

may restrict the use of property owned by the organization by only allowing members of that religion to occupy the property.

absolute fidelity

means a licensee must put the client's interests ahead of the licensee's interest.

*Assumption* of a mortgage

means a person is acquiring property with an underlying loan and agrees to personally take over financial responsibility for the mortgage.

Naked title

means that the holder does not actually own the property, nor may he occupy or enjoy the right of ownership. The holder does have the power to sell the property under the terms of an agreement, such as the right of a trustee in a deed of trust.

A *balloon loan* stated as a "30 due in 5"

means that the loan will amortize on a 30 year amortization schedule, but the entire outstanding principal balance will be due at the end of 5 years.

Material is if the property was used to manufacture

methamphetamine and the property was not rehabilitated.

Mortgage Fraud: occupancy fraud:

misrepresenting that borrower will take occupancy

CONTRACT PERFORMANCE: 3. Voidable

missing non-visible elements (competent parties, informed parties); appears to be valid but may be disaffirmed because it is missing competent parties (legal capacity) such as a minor, or is missing voluntary, informed parties such as a contract executed under misrepresentation, fraud, or duress.

THE WAREHOUSES: 2. Government National Mortgage Association (GNMA "Ginnie Mae")

mission was to attract the maximum available mortgage capital into the American mortgage market. provide a mortgage backed security which was completely backed by the *"full faith and credit"* of the United States government.

The anti-trust laws cover these main areas of activity:

monopolies, tying arrangements, boycotting and price fixing.

Join tenants may:

mortgage an individual's interest without permission from other tenants (does not destroy join tenancy); sell an interest without permission of other tenants(destroys join tenancy); seek physical or judicial partition.

THE LENDERS: The Primary Market - 3. Mortgage brokers

most common in the market. takes the application for the loan from the borrower, then "shops" the loan to find an investor who will make the loan and who will offer competitive terms.

Graduated payment mortgage

most often seen when interest rates are high and/or the borrower is not able to qualify at the higher interest rate. The lender makes the loan with a provision that the starting payments are lower than what would otherwise be required to pay the principal and interest on the loan; negative amortization

Requirements of a valid deed: Valid legal description

need for the property being conveyed; either: (a) lot, block, and subdivision; (b) metes and bounds; (c) reference to the USGS survey.

Requirements of a valid deed: in writing

needs to also be signed by all owners of the interest being sold.

Offers: Death of buyer or seller

no specific Nevada law saying what happens to an outstanding offer when this occurs. general contract law provides that if an offeree dies before accepting an offer, the offer immediately terminates.

The law recognizes three types of behavior that can create liability -

not doing what one is required to do, doing what one is not supposed to do, and doing something one is supposed to do but doing it in a wrong (negligent) way.

VOLUNTARY ALIENATION

occurs when an owner transfers title to another. *ownership is most often transferred by deed, patent, power of attorney or will.

Antitrust Laws prevents *Group boycotting *

occurs when several businesses get together and agree to withhold their patronage or not use a particular organization, possibly an escrow company, or home warranty company, or lender.

EXCLUSIVE" REPRESENTATION AGREEMENTS

occurs when the broker is the client's sole real estate agent.

Boycotting

occurs when the government finds there is a consensus among members of a trade or profession to isolate or limit a specific competitor's access to the market.

Elements of Negligence: damages or harm

occurs when the licensee breaches a duty and that breach causes an injury, loss or detriment to the client.

Implied agency

occurs when the parties involved "act like" or "imply" that an agreement has been reached. Once this occurs, an implied agency agreement has been created, though this may have been done accidently, inadvertently, or unintentionally.

NRS 645.633 violation is guilty of c. Paying a commission compensation or a finder's fee to any person for performing the services

of a broker, broker-salesperson or salesperson who has not secured a license pursuant to this chapter. This subsection does not apply to Paying a commission, compensation or a finder's fee to any person for performing the services who has not secured a license payments to a broker who is licensed in his or her state of residence.

NRS 645.630 violation would be found guilty of b. Making any false promises

of a character likely to influence, persuade or induce.

In Nevada, it is not material if the property was the site

of a homicide, suicide, death, felony, transitional living for released offenders, sex offenders in or near, occupied by a person with AIDS or any other disease not transmitted through occupancy of the property.

promissory note is a contract and the equivalent

of an I.O.U.; creates the debt between the borrower and the lender; evidence of the debt; a negotiable instrument, meaning the lender may sell the note *without consent* from the borrower in order to liquidate the lender's funds.

Uses of Appraisals: 1. to verify value

of collateral for lenders (this is the greatest use of appraisals).

NRS 645.633 violation is guilty of a. Willfully using any trade name, service mark or insigne

of membership in any real estate organization of which the licensee is not a member, without the legal right to do so.

A licensee cannot be held liable for a seller's failure to disclose information that is

of public record and which is readily available to the client. The caveat is that the licensee must reasonably not know of the client's misstatement or concealed fact.

NRS 645.645 violates if 2. Misrepresents the provisions

of the contract of insurance for home protection.

The forms are prepared and distributed by the Real Estate Division and reflect not only the requirements of statute (NRS 645.252(1)) but also

of the real estate administrative code (NAC 645.637).18 Each form must be fully filled-in, signed and kept in the broker's transaction file for *five years*.

The Real Estate Commission, the body charged with hearing the Division's disciplinary cases, has found the incorrect execution

of these forms amounts to gross negligence by the licensee, therefore, it is incumbent upon each broker to ensure the Duties Owed and Consent to Act forms are properly completed and signed.

TESTATE

one who has a valid will *executor *title by devise *beneficiary

INTERSTATE

one without a will - the court will appoint an administer to settle the estate of an interstate person. *administrator *laws of descent and distribution *title by descent

THE WAREHOUSES: 3. Federal Home Loan Mortgage Corporation (FHLMC "Freddie Mac")

operates under a congressional charter and is "stockholder owned." Its function is to purchase qualified residential mortgages from the originators. do not contain U.S. government backed loans; these are the so called conventional mortgages.

NRS 645.635 violation by 3. Failure to deliver within a reasonable time a completed copy of any purchase agreement

or offer to buy or sell real estate to the purchaser or to the seller, except as otherwise provided in subsection 4 of NRS 645.254.

NRS 645.630 violation would be found guilty of h. Commingling the money

or other property of his or her clients with his or her own or converting the money of others to his or her own use.

NRS 645.645 violates if 3. Misappropriates any fees

or premiums collected for the insurance for home protection.

NRS 645.635 violation by 1. Offering real estate for sale or lease without the knowledge and consent of the owner

or the owner's authorized agent or on terms other than those authorized by the owner or the owner's authorized agent.

Housing for Older Persons Act (1995)

outlines the requirements for the persons who are 55 years of age or older exemption established in the Fair Housing Act.

Tenants in common may:

own unequal shares as long as the total interests equal 100%; may have acquired their individual interests different times and/or documents; may sell of mortgage their interests without offering to, or gaining permission from, any other other tenants in common; natural or non-natural; have interests that are inheritable; have interests that may be partitioned (by either physical or judicial partition).

Separate property

owned by an individual prior to marriage or acquired after marriage as a gift or inheritance.

life tenant

owner of life estates who has all the rights and duties of an owner, except the right to choose who will get the property upon his or her death.

Joint tenancy

ownership by 2 or more WITH rights of survivorship (very uncommon/no used in TX) *upon your death, you share goes to surviving co-owerns, immediately. *poor mans will (eliminated a need for a will & overrides a will) *right of survivorship *avoids probate - title passes at death

Tenancy in common

ownership by 2 or more WITHOUT rights of survivorship. *most common *willable *estate of inheritance *unequal interest allowed (you may sell your share w/ out permission of the other owners) *title passes at probate

life estate

ownership for the duration of someone's life.

Surface rights

ownership rights in a parcel of real estate that are limited to the surface of the earth

Defeasible Fee or Conditional Fee

ownership with conditions or terms, which if violated, could cause the ownership interest to be defeated or terminated. When the ownership is defeated, it reverts, or goes back, to the original grantor or the grantor's

Fee simple defeasible

ownership with conditions or terms, which if violated, could cause the ownership interest to be defeated or terminated.

Additional HOA documents are

part of a the CIC resale package that include: governing docs,ents, the associates by-laws, a current financial statement and operating budget, information, regarding litigation (taking legal action), a copy of the minute from a recent board meeting of HOA & CC&Rs.

TESTATOR

party who makes a will

EXECUTOR

person named in the will to settle the estate

A licensee must disclose in writing to the parties whenever the licensee has a

personal interest in either the transaction or the property. Such disclosure ensures everyone is aware of the licensee's potential conflicting loyalties.

TITLE INSURANCE

policy agrees to compensate or reimburse the insured against any losses sustained as result of defects in the tile, other than those exceptions listed in the policy. protection is forged deeds, illegal acts of trustees, guardians or attorneys, false claims or ownership and human error in copying and recording. Loss of destruction of records is also covered. a standard title policy will not provide protection for survey or boundary problems -- additional cover can be purchased for these issues

CONTRACT PERFORMANCE: 4. Unenforceable

ppears to be valid, but if there is a disagreement between the parties in the performance of duties and the receipt of rights, the courts will not get involved in a resolution.

Section 504 of the Rehabilitation Act (1973)

prohibits discrimination against people with disabilities in programs and activities conducted by HUD or that receive financial assistance from HUD. This includes public housing, public university housing, government run housing programs, etc.

Fair Housing Act: Wide applicability

prohibits discriminatory conduct by many kinds of legal entities.

NRS 645.630 violation would be found guilty of l. Inducing any party to a brokerage agreement,

property management agreement, agreement of sale or lease to break it in order to substitute a new brokerage agreement, property management agreement, agreement of sale or lease with the same or another party if the inducement to make the substitution is offered to secure personal gain to the licensee or owner-developer.

Homestead laws

protect a homeowner's personal residence from certain creditors; designed to protect homeowner from forced sale of home to satisfy certain debts.

A licensee may not take an undisclosed profit at the expense of another party, nor may the licensee

purchase or sell the property of a client through the use of a third person without full disclosure and the client's consent.

Nevada's protected classes

race, religious creed, color, national origin, disability, ancestry, familial status and sex.

NRS 645.630 violation would be found guilty of d. Representing or attempting to represent a

real estate broker other than the broker with whom he or she is associated, without the express knowledge and consent of the broker with whom he or she is associated.

NRS 645.633 violation is guilty of g. Accepting, giving or charging any undisclosed commission

rebate or direct profit on expenditures made for a client.

Equitable title

refers to a financial "interest" in the property.

Vicarious liability

refers to a situation where the employer is held responsible for the actions or omissions of its employees/independent contractors.

Expired listings

reflect properties which did not sell during the period of the listing. It is often because the price was too high. Sometimes the property did not sell because it did not show well or was not properly marketed.

Requirements of a valid deed: Consideration clause

reflecting one of these 4 types of consideration: actual consideration (purchase price); normal consideration ($1 and other consideration); good consideration (for love and affection); legal consideration (for value received).

Gross scheduled income, or potential gross income

reflects the income the property should have earned had there not been vacancies or bad debts and before the operating expenses were calculated.

five years

regulations require a broker to maintain brokerage transaction files for ________; "regulatory compliance fee."

Compensatory damages

reimburse the injured party for actual losses suffered

Agency

relationship between a principal (client) and an agent (broker) arising out of a brokerage agreement in which the agent agrees to do certain acts on behalf of the principal in dealings with a third party

expressed agency

relationship occurs when a formal document is signed, binding the parties to an agency relationship. Once signed, a listing agreement, buyer's brokerage agreement, or similar document, creates an agency relationship.

Annual Percentage Rate (APR):

represents the finance charges, expressed a percentage when applied to the unpaid balance of the loan; must be disclosed, in writing, to the borrower as a percentage rate & in total dollars charged.

Adjustable rate mortgage (ARM) element: 3. Interval

represents the frequency in which the interest paid by the borrower will change.

THE LENDERS: The Primary Market AKA loan originators

represents those persons or businesses who actually make the loans.

Statute of frauds

requires contracts for the sale of real estate to be in writing to be enforceable in court. The contract is also the complete agreement of the parties and neither party should rely on verbal representations made by anyone.

Mortgage Clauses: Defeasance clause

requires the lender to issue a *satisfaction of mortgage* indicating the loan has been paid in full.

NRS 645.252

requires the licensee to disclose any material fact relating to the property which he knows, or which by the exercise of reasonable care and diligence, should have known.

OPTION TO PURCHASE AND LEASE WITH OPTION

requires the seller to hold open to the buyer, for a set time and with set terms, the right to purchase the property. Depending on its wording, the option's consideration may be independent of the purchase agreement and non-refundable, or it may be incorporated into the property's purchase price once the option is exercised.

Personal property: Trees,

rocks, bushes, and other land scraping does not require cultivation on annual ba​ses and is considered part of land​ (real property).

Telephone Consumer Protection Act of 1991.

rules prohibit the sending of unsolicited fax advertisements. "Unsolicited advertisement" is defined as "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission."

NRS 645.635 violation by 9. Refusing because of race, color, national origin, sex or ethnic group to show

sell or rent any real estate for sale or rent to qualified purchasers or renters.

Constructive Notice

service delivery of information by posting, publication, and/or recording.

Multiple Listing Service:

service is a member-only information dissemination service and a forum for the unilateral offer of compensation.

Giving legal advice or determining the market value of a property are

services a licensee is most commonly asked to provide

Active listings

show sellers the current competition and suggest the range in which they should price their property for sale.

Specific wrongs - steering

showing properties to a prospective buyer or tenant only in areas of the market which are predominantly of the same ethnicity as the prospect

Days on market

shows sellers how long it took for the sale price to be achieved.

A corollary to the duty to be honest is the duty to

speak the whole truth and not be misleading by silence.

Requirements of a valid deed: Identifiable grantee

such as if a person is married to someone. We would need to know to whom.

abstract of title

summarizing everything found in the public records which will include recorded encumbrances and liens.

gross rent multiplier and gross income multiplier AKA GRMs and GIMs

techniques are alternate methods for assessing the value of income producing properties from a single family home to an industrial property.

Ownership with the greatest bundle of rights

the best type of ownership - is called Fee Simple or Fee Simple Absolute. The owner has all the available rights to the property and can always pass it to his or her heirs.

Adjustable rate mortgage (ARM)

the ARM was designed to have interest rates that fluctuated with the lender's cost of funds. The ARM has the following elements: 1. Index; 2. Margin; 3. Interval; 5. Ceiling and floor; 6. Conversion.

The steps in the cost approach: 4. Subtract...

the accumulated depreciation from the replacement cost.

Implied Contract

the actions of the parties demonstrate their intent. It looks like a contracting has occurred by the appearance of things (ostensible).

Market price

the actual price at which a ready, willing, and able buyer paid for a property that is acceptable to the seller.

*Note:* If the comparable is *inferior*,

the appraiser will *add* the contribution for the amenity.

*Note:* If the comparable is *superior*,

the appraiser will *subtract* the contribution for the amenity.

the borrower/mortgagor *does not apply for a mortgage*

the borrower applies for a loan

Straight loan AKA "term loan" or an "interest only loan"

the borrower pays only interest during the life of the loan. At the end of term, the entire principal balance is paid off in full. There is no amortization.

Should the broker fail to leave a copy of the agreement with the client,

the broker is subject to a disciplinary fine of up to $10,000, and administrative action.

After brokerage agreement Termination

the broker must stop representing the client, remove any personal property from the seller's property (such as signs), account to the client for all funds, keep the client's confidences, and do nothing to harm the ex-client or interfere with the transaction even if the broker believes he or she is still owed a commission.

*Important note:* While a broker has a fiduciary duty to the principal,

the broker or agent is obligated to disclose all known material facts about the property to the customer, including those which would potentially be detrimental to the principal.

INSTALLMENT CONTRACT AKA land sale contract, land contract, contract for deed, bond for title, or articles of agreement for warranty deed.

the buyer makes periodic payments to the seller, in return the buyer receives equitable title and often takes immediate possession of the property. Legal title is retained by the seller. Upon the successful conclusion of all the buyer's payments, the seller is obligated to transfer legal title to the buyer.

"Consent to Act", outlines

the client the consequences of the licensee's multiple representation and requires the client's written authorization before the licensee may proceed with such representation.

A licensee who performs unauthorized services may be held liable not only to

the client, but to the various licensing entities and to any third-party who acts on the licensee's representations and is damaged.

Interest

the compensation paid by the borrower to the lender for the period during which the borrower has use of the lender's money.

Adjustable rate mortgage (ARM) element: 1. Index

the cost of funds indicator used by the lender. *INDEX + MARGIN = RATE*

In Title Insurance and Trust Co. v. Chicago Title Insurance Co., 97 Nev. 523, 634 P.2d 1216 (1981)

the court used both "contract for sale" and "contract of sale" for the same document - an installment contract, while in Mackintosh v. Jack Matthews,

Mechanic's lein effective as of

the date of first work or first delivery of materials, *not the date filed with public records*.

*Death/Incapacity* terminating agency relationships in real estate

the demise or incapacity of either the principal or the broker

The licensee's duty of honesty includes

the duty to deal fairly with all parties to a transaction, not just the client.

Escrow process: "Opens" when

the earnest money deposit has been received.

Escrow process: 9th, after the escrow agent collects the buyer's funds, and in all probability, wires transferred to the escrow agent's bank.

the escrow agent will *record* various documents with the county recorder to transfer the property from seller to buyer. After recordation, the agent will disburse funds to the seller, the seller's lender (if applicable), HOAs, taxing authorities, home warranty companies, real estate brokers, and others. Some states, keys are given.

A licensee owes no duty to conduct an independent investigation of

the financial condition of a party to the real estate transaction

quit claim deed

the grantor is quitting any claim the grantor may have to the property, and does not even claim to have any ownership or right to convey at all.

Condition subsequent

the grantor must take steps to reclaim the property within a reasonable period of time if the condition is violated or the conditional use is terminated.

COVENANT OF QUIET ENJOYMENT

the grantor promise the new owner will not be disturbed with claims against the property. (1 of the covenants and warranties to the buyer)

net operating income (NOI) is

the gross scheduled income of the property minus the property's annual operating expenses and also minus the annual vacancy and bad debt the property experiences.

The higher the LTV (Loan to value) ratio,

the larger the loan and the smaller the down payment required.

If the life tenant leases the property and then dies,

the lease expires.

Foreclosure

the legal process instituted by a trustee, lien holder or creditor, after a debtor's default on his or her payments. In other words, the lender begins the foreclosure.

If the borrower defaults in a deed of trust

the lender may order the trustee to exercise the power of sale and commence *foreclosure proceedings against the property.*

To ensure a client understand the license's basic duties specifically the fiduciary duty,

the licensee is required to provide the client and each unrepresented part with a state mandated form , "Duties Owed by NV Real Estate Licensee".

A licensee may not be held liable for the misrepresentations made by his client unless

the licensee knew of the misrepresentation and failed to inform the person to whom the misrepresentation was made.

Adjustable rate mortgage (ARM) element: 4. Cap

the maximum the interest rate can change in any interval.

Title theory versus lien theory

the mortgagor (borrower) gives the mortgagee (lender) legal title and retains equitable title. Legal title is returned to the mortgagor upon full payment of the debt.

The death of a partner in general partnerships causes

the partnership to dissolve or the start of a new partnership is formed.

Offeror

the party *making* the offer

Offeree

the party *receiving* the offer

Hypothecation

the pledging of property as security for a debt but retaining possession and use of the property so long as the debt is being performed as agreed. most common form of secured lending arrangements.

If a person dies without a will and there are not heirs,

the property will pass to the state by escheat.

Loan to value ratio (LTV)

the ratio between the loan being made and the appraised value of the property given as collateral, or the purchase price, *whichever is less*.

Collateral

the real or personal property upon which the lien is given to secure the borrowing.

NRS 645.645 violates if 1. Makes a misrepresentation in

the sale of insurance for home protection.

Employee status

the salespersons and broker- salespersons are *employees*. This is the relationship that transfers the obligation to train and supervise agents to the broker.

If a property is significantly poorer than surrounding properties,

the surrounding properties will tend to cause the subject property's value to *progress (progression)* upward as a result of the higher value of the surrounding properties.

If there is more than one offeree,

the surviving offeree may accept the offer.

The property manager should be fully versed on

the various federal laws dealing with the rental of property or the operation of buildings open to the public. Among these will be: • the 1968 Fair Housing Act, as amended; • the Americans with Disabilities Act (ADA); • the Uniform Residential Landlord Tenant Act (URLTA).

Inquire about "Red Flag" Issues

their importance, and agents should construct a mental checklist to ask about these when listing a property or showing a property to a buyer.

arm's length

there is no special pricing because of the relationship of the parties.

Age-restricted communities

there may be a restriction which prohibits persons under the age of 18 from residing in the residence more than 3 months in any calendar year

THE LENDERS: The Primary Market - 1. Savings and loans

these institutions accept funds from depositors and agree to keep the money safe and pay a return in the form of interest or dividends.

If the life tenant sells his or her interest in the property,

this has no effect on the remainderman. In other words, the buyer of the life estate would have to vacate the property upon the death of the original life tenant and would not receive a refund of the purchase price.

Construction Loan

this is a loan for construction purposes, usually a short term loan, two to five years depending on the length of time required, to build the project.

Price per *square foot*

this is a widely accepted concept that works well in practice. Looking at your comparables, divide the sale price by the living area square footage for each comp, and calculate an average price.

Adjustable rate mortgage (ARM) element: 2. Margin

this represents the profit and overhead the lender wants to earn above the costs of funds. *INDEX + MARGIN = RATE*

Generally, there are two types of exclusive agreements;

those in which the broker will get paid regardless of who is the procuring cause (with listings, commonly known as an Exclusive Right To Sell), and those in which the client hires the broker as an exclusive agent, but retains the right to sell or find a property without paying a commission (commonly known as an Exclusive Agency).

NRS 645.630 violation would be found guilty of f. Failing, within a reasonable time

to account for or to remit any money which comes into his or her possession and which belongs to others.

NRS 645.633 violation 4. The Division shall maintain a log of any complaints that it receives relating

to activities for which the Commission may take action against a person holding a permit to engage in property management pursuant to subsection

Whether acting as a principal or an agent, a licensee has a duty to all parties not

to be deceitful, fraudulent or dishonest.

Federal Trade Commission (FTC)

to develop criteria to determine which emails are commercial. if the recipient expresses a desire not to be disturbed or called again, the licensee must put that telephone number on an internal "do not call" list.

The licensee has a duty to disclose

to each party to the transaction any material and relevant facts, data, or information which he or she knows, or which, by the exercise of reasonable care and diligence, should have known, relating to the property.

Under common law, a broker's main duty is

to ensure the client's business and interests are carried out to the client's best advantage

The purpose of recording the deed/title

to establish the priority of the grantee over others who may claim or contend they have a claim to title to the property.

Real Estate Settlement Procedures Act (RESPA)

to inform the parties to a covered real estate transaction what the closing costs and charges are, and which costs they pay for. the borrower must be provided with a copy of the HUD booklet Shopping for Your Home Loan revised in 2010 and formerly called Settlement Costs and You.

caveat emptor

translating to "buyer beware."

Single agency

typically used in real estate. One agent represents the seller and another agent represents the buyer, in most cases. Every client who enters into an agency agreement with a broker has the right to know that in a single transaction, the agent exclusively represents only his side of a transaction.

expressed statement, wherein both the client and the broker agreed to the agency

unintentional or implied agency

Unless the brokerage agreement allows for the broker to collect if the broker is the procuring cause,

upon the end of the broker protection period, the seller may sell the property to a buyer procured by the broker and not owe the broker a commission

GIM, gross income multiplier

used on income producing real estate on a grander scale.

GRM, gross rent multiplier

used on smaller, residential property GRM = Sale Price ÷ Gross, Monthly, Rent Value = Monthly Rental Income x GRM

Methods of Financing: (1) Conventional Loans

used to describe a loan that is neither FHA nor VA: made with neither federal government insurance nor guarantees. This loan is priced, and the lending decision is made by the lender, solely on the credit history and strength of the borrower and upon the value of the borrower's collateral.

Uses of Appraisals: 3. Internal Revenue Service

uses appraisals for "means testing" to determine if the value of property owned by a tax payer is consistent with the income reported by the tax payer.

INVOLUNTARY ALIENATION

usually happens in court as in foreclosure, bankruptcy, condemnation, escheat, adverse possession or reversion of defeasible fee, partition, or inheritance with a will.

NRS 645.635 violation by 5. Representing to any lender, guaranteeing agency or any other interested party,

verbally or through the preparation of false documents, an amount in excess of the actual sale price of the real estate or terms differing from those actually agreed upon.

Prior Appropriation

water law based on the idea that "first in time is first in right."

The law provides protection for disclosure of confidential information under any one of four circumstances:

when a court of competent jurisdiction orders disclosure; when the client authorizes disclosure; third, when the licensee discloses information to the broker; when the information is required to be disclosed by law

A licensee may obtain confidential information during the course of the brokerage relationship

when the licensee is told, or inadvertently discovers, information harmful to the client's interests.

"OPEN" BROKERAGE AGREEMENT

where the broker has no exclusive representation of the client - the client may hire any number of other brokers. may be oral or written.

Implied agency

where the licensee acts as the agent of the client with the intention of representation and the client tacitly accepts those services even though there is no expressed (oral or written) brokerage agreement.

Unintentional agency

where the licensee did not intend to create or continue with the representation of the client, however; the client reasonably assumed the licensee was representing him or her.

Legislation is in place to regulate the use of *brownfields*

which are commercial or industrial sites that are defunct or abandoned and believed to be contaminated.

general agency

which the agent is authorized under a general power-of- attorney to perform all duties for the principal that the principal could perform to convey real property (general agency requires a written power-of-attorney with its special recording requirements)

NRS 645.633 violation is guilty of j. Any conduct which took place before the person became licensed

which was in fact unknown to the Division and which would have been ground for denial of a license had the Division been aware of the conduct.

RESPA regulates

who can give and receive compensation for settlement services. No person may give or accept any fee, kickback, or thing of value strictly for a referral to a settlement service provider.

mortgagor

who is the borrow*ER*; typically, the homeowner.

mortgagee

who is the lender; Typically, the bank.

In determining whether the brokerage name is "in prominence", the Real Estate Division (RED)

will consider the style, size and color of the type or font used and the location of the name of the brokerage firm as it appears in the advertisement.

Blanket mortgage

will cover multiple parcels and is common in subdivision development financing.

Sharing commissions

with brokers only with the people they employ or with other licensed brokers. When sharing with other brokers, the brokers do not have to be in the same state or country, but they must be licensed in their own jurisdictions.

Reproduction cost

would be used if the building were so unique that using available materials and techniques would not produce a substantially similar building. If the building were an historical structure having unique and features not commonly used in current-day construction, the appraiser would use reproduction costs.

The licensee should consider confidential any information that, if disclosed to the other party,

would harm the client's position.

Hypothecation example

you buy your home using a 30-year loan. You may have possession and use of the home so long as you are performing as agreed on your home loan; this is a hypothecation of your home.

Real estate licensees have a number of obligations to disclose:

• Agency Relationship; • Material and Relevant Facts; • Source of Compensation; • Principal Status.

Terminating Agency Relationships in Real Estate:

• Expiration; • Completion; • Death/Incapacity; • Destruction; • Mutual agreement ; • Breach; • Operation of law.

Issues to address in the listing contract:

• Identity of the Parties; • Description of the Property; • Duties and Rights of the Broker; • Broker Protection Clause; • Duties and Rights of the Seller; • Scope of Authority; • Commission • Acceptable Price and Terms • Personal Property Included/Excluded; • Home Warranty; • Effective Date/Expiration Date; • Any Legal Requirements; • Signatures and Dates.

Forms of legal descriptions:

• Lot, Block, and Subdivision; • Metes and Bounds; • U.S. Government Rectangular Survey.

The purchase agreement is known by many names such as:

• Offer and Acceptance (O&A); • Residential Purchase Agreement (RPA); • Purchase Agreement; • Earnest Money Receipt and Purchase Agreement; • Sales Agreement; • Purchase and Sale Agreement.

These are protected classes formed the basis of a new effort to assure the American dream of housing to all citizens.

• Race (1866); • Color (1866); • Religion (1968); • National Origin (1968); • Sex/Gender (1974); • Familial Status (1988), families with children 18 and under and pregnant women; • Disability (1988), mental or physical impairments.

All of these factors could stigmatize a property:

• a death or a homicide; • illegal drug manufacturing; • gang activity; • a suicide; • a sex offender living in the area.

The primary purpose of a title insurance policy

• assure the grantee that the status of the title is as the grantor warrants; • provide the financial assurance that title will be defended if necessary by the title insurance company; • pay the grantee the purchase price should the grantee's title be defeated by another who is able to make a superior claim.

promissory note will contain the following:

• borrower's name; • lender's name; • amount borrowed; • interest rate, or the method in which the interest is to be calculated; • date the first payment is due and the frequency of payments thereafter; • term or length of time the borrower has to repay the loan; • amount of the final payment and due date if the loan is not a fully amortizing loan; • address to which payments are to be sent; • note may reference any collateral documents such as a mortgage or deed of trust; • note may contain other provisions to which the borrower has agreed.

Exemptions to the Act: 1. Any single-family dwelling sold or rented by the owner under the following conditions. The owner:

• cannot own more than three single-family dwellings at any one time; • must currently reside in the dwelling or be the most previous resident of the dwelling; • cannot use the services of a real estate agent or company for any reason; • cannot publish or advertise in a way to violate the Act.

Other than "physical" characteristics, the appraiser might make adjustments for:

• location; • financing conditions; • non-arm's length sale; • timeliness of closing date; • terms of the transaction; • distressed seller or property.

The borrower's obligations in a mortgage or deed of trust:

• make the required payments of principal and interest when due; • pay the property taxes when due; • keep the property insured against loss through fire, windstorm, and other casualties; • keep the property in good repair; • make no alterations to the property which would decrease its value.

Agent must disclose defects and issues that they know to exist. Some of the categories of issues that must be disclosed are:

• material; • patent defects; • latent defects; • Violation of building codes must also be disclosed.

Here are some of the "red flag" issues that agents should be aware of, and ready to point out and follow up on with buyers and sellers:

• moisture or water in the basement; • cracks in foundation or basement walls; evidence of settling; • failing air-conditioning compressor; sounds noisy or won't start; • environmental hazards including radon, water contamination, asbestos, or lead paint; • underground storage tanks; pipes sticking out of the ground; • defective roofing or flashings; several colors of roofing materials on one roof; • signs of water damage on ceilings or walls; • insect infestation; • standing water outside the structure; evidence of drainage issues; • undersized electrical system; • chimney settling or separation from house; leaning, missing bricks; • evidence of dry-rot damage; • unpermitted structures of any kind.

Other documents containing descriptions of real property which will *NOT be recorded in the public records* simply require an adequate property description, such as:

• real estate purchase agreements; • leases; • listings.

A lender cannot:

• refuse to provide information regarding loans; • impose different terms or conditions on a loan; • charge different interest rates, points, or fees; • refuse to make a mortgage loan based on class; • discriminate in appraising property; • refuse to purchase a loan; • set different terms or conditions for purchasing a loan.

required to provide information in order to process and determine the qualification of the loan, including:

• tax returns and W-2's or 1099's for the most recent 2 years • provide employment information for the most recent 2-year period • copies of identification • most recent 30 days of pay stubs • if properties are owned, mortgage statements and proof of insurance and taxes for each • rental agreements of investment properties • HOA information • asset information • divorce decrees, if applicable • bankruptcy documents, if applicable

If repairs are needed, there are the ways to proceed:

• the buyer can ask the seller to fix one, two, or all of the issues; • the buyer can buy the home "as is," if the price is right; • the buyer can ask for a price reduction; • the parties can rescind the agreement.

Responsibilities of agents to customers and third parties

• understand and adhere to state and federal consumer protection laws; • understand and adhere to the ethical requirements imposed by professional organizations; • exercise care in performance; • demonstrate reasonable skill as a real estate agent or subagent • ensure honest and fair dealing with everyone; • disclose all facts that the licensee knows, or should reasonably be expected to know, that materially affect the desirability or value of the property in question.

The ADA types of disabilities protected are:

• vision impaired; • limited mobility; • confinement to wheelchair or similar devices; • hearing impaired; • alcoholism - if the person is enrolled in a recognized treatment program; • drug Addiction - if the person is enrolled in a recognized treatment program; • HIV positive or AIDS.