Term
Which of the following statements regarding POA responsibilities and duties is true?
1.) A POA's responsibilities are limited to notifying residents who are out of compliance.
2.) If there's extra money in the bank, the POA board members can keep it as payment for their service.
3.) POAs are in charge of collecting fees that cover costs for individual units' wear and tear.
4.) POAs can place liens on properties if owners don't pay their dues. |
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Definition
| POAs can place liens on properties if owners don't pay their dues. POA liens are called super liens and supersede all other liens except for property tax liens. |
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Term
| A developer constructing a new condominium must submit a ____________ to the Common Interest Community Board. |
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Definition
| The instrument that must be provided to the Common Interest Community Board is the declaration. The owner providing the instrument is called the declarant. |
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Term
Which of these statements about the Virginia Residential Landlord and Tenant Act is true?
1.) The act doesn't apply to landlords with fewer than 25 dwelling units.
2.) The act doesn't list tenant obligations.
3.) The act establishes both landlord and tenant obligations and remedies.
4.) The act prohibits leases longer than one year. |
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Definition
| 3.) The act protects the rights of both landlords and tenants and covers both parties' obligations, remedies, and retaliatory conduct. It doesn't concern itself with the length of leases, and it applies to all landlords, even those with fewer than 25 units. |
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Term
Which of the following activities involve excavation and require the worker to call 811?
1.) Arborist Mick is trimming 15 large trees on Gina's farm.
2.) Gloria is taking advantage of the nice fall weather and planting 50 tulip bulbs.
3.) Harold's Demolition company has been given the job to destroy and remove a large outbuilding on Jeff's property.
4.) Licensee Abby is selling her client Deb's house, and is installing a "For Sale" sign out front. She isn't using tools. |
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Definition
3.) Harold's Demolition company has been given the job to destroy and remove a large outbuilding on Jeff's property.
Demolition work falls under the category of excavation and requires that the worker call 811 before starting. |
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Term
| Merv knows that three-bedroom properties with two bathrooms sell quickest in his market. In an ad for a new listing, he says, "Bonus room could easily be a third bedroom." Marla and Tom visit the property with their agent, and Tom, a construction supervisor, notes that the bonus room couldn't be easily converted to a bedroom because it's too small, it has no egress and no heat source, and you must walk through a bathroom to get to it. Is Merv guilty of misrepresentation? |
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Definition
Yes, because he should have known there would be major issues converting that room to a bedroom.
Though Merv didn't market the property as a three-bedroom home, his experience should tell him that converting the bonus room to a third bedroom would not be easy, as he noted in his ad. |
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Term
Which of the following is a statutory duty a Virginia agent owes to seller clients?
1.) Disregard fair housing regulations.
2.) Negotiate a sale that meets the buyer's objectives.
3.)Receive and present all offers in a timely manner.
4.) Share confidential information shared by the seller with the buyer's agent. |
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Definition
3.) Receive and present all offers in a timely manner.
A statutory duty of agents representing sellers is to present all offers in a timely manner. |
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Term
| Samantha is selling her condo. A potential buyer has just asked for her Homeowners Association's (HOA's) disclosure packet. What should Samantha say? |
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Definition
"Great. I'll submit a written request for your packet to my HOA first thing tomorrow morning. How do you want it delivered?"
Samantha, as the seller, must now contact her HOA board in writing and ask for the disclosure packet to be sent to the potential buyer. |
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Term
Calla has a client, Trevor, who wants to find a property to lease. Which of the following is NOT a duty she owes him?
1.) Calla agrees to not show the apartment that Trevor likes to any other potential tenant.
2.) Calla deposits Trevor's down payment in a fund and creates a transactional record for it.
3.) Calla explains to Trevor that she can't find him a place to rent in an "all-Mexican apartment complex," because such an arrangement violates fair housing laws.
4.) Calla walks Trevor through the addenda in an apartment lease agreement, explaining what each one means. |
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Definition
1.) Calla agrees to not show the apartment that Trevor likes to any other potential tenant.
Calla needs to abide by fair housing laws, take good care of Trevor's money, and help him understand apartment leases. She does not need to agree to not show an apartment to other potential tenants. |
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Term
| If Gus has the kind of license that requires 16 hours of continuing education, what else is true about his situation? |
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Definition
Gus has to affiliate with a licensed broker.
Gus has a salesperson's license, which means he must affiliate with a licensed broker. |
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Term
| In addition to undivided loyalty, what other duty does a client give up when agreeing to a dual agent relationship? |
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Definition
Advocacy
When licensees act as dual agents, they cannot advocate for either side. Doing so could be interpreted as the agent putting one client's interests ahead of the other's. Licensees can't do this. |
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Term
Which of these statements describes the purpose of Virginia agency?
1.) To advertise the services of a brokerage
2.) To compete effectively with other brokerages
3.) To protect consumers by keeping them informed
4.) To protect licensees from liability |
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Definition
3.) To protect consumers by keeping them informed
Agency disclosures help ensure that consumers know the nature of the agency relationship and the agent's duties to the client and to customers. They clarify who represents whom in a transaction. |
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Term
| How do you change supervising brokerages? |
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Definition
Notify your current brokerage and file a transfer request with the VREB containing both your and your new broker's signatures
When changing brokerages, you must notify your current brokerage and file a transfer request with the VREB containing both your and your new broker's signatures. |
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Term
| Business is slow and you've decided to pull in some more clients with a marketing campaign claiming you're the top-producing real estate agent in town. What type of violation are you committing? |
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Definition
Misrepresentation
Claiming you are the top-producing real estate agent in town when you're not is false or misleading advertising and is considered a misrepresentation violation. |
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Term
Buyer Tony is interested Seller Rilla's property. Tony's agent provides him with the Residential Property Disclosure Statement and Tony makes an offer which Rilla accepts. 2 weeks later, Tony discovers that there are plans to build a school next door to the house. He wants to terminate the contract because this wasn't disclosed. Which of the following is INCORRECT?
1.) If Rilla know about the school and failed to disclose it, Tony may terminate.
2.) If this was a concern to Tony, it was up to him to research it prior to entering into the contract.
3.) The law doesn't require Rilla to make any disclosure regarding the planned school.
4.) Tony may not terminate on this basis because Virginia is a "caveat emptor state." |
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Definition
1.) If Rilla know about the school and failed to disclose it, Tony may terminate.
Even if Rilla had prior knowledge of the school, she still wouldn't have had to disclose it. Tony should have done his homework. |
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Term
Which of the following is true about for sale signs in Virginia?
1.) They must be created only by a firm's sponsoring broker.
2.) They must include the firm name and primary or branch office phone number.
3.) They need to include the city and state where the agent is licensed.
4.) They should include the agent's work number. |
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Definition
2.) They must include the firm name and primary or branch office phone number.
For sale signs need to display at least the firm name and primary or branch office phone number. |
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Term
| What law requires that sex offender registry information be made available to the public? |
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Definition
Megan's Law
Megan's Law makes sex offender information available to the public. Many states have websites that provide this information. |
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Term
| A Virginia landlord has an available unit, but refuses to show it to several applicants. These applicants are all single women with children; the applicants who are shown the apartment are all individuals or couples without children. In what way is the landlord violating fair housing law? |
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Definition
He is discriminating against people based on sex and familial status by refusing to show available housing.
This landlord's action discriminates by refusing to show available housing to prospective tenants based on protected class status. |
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Term
| It's January, and the pool at Roger's listing has been prepped for winter for several weeks. The homeowner assures Roger that it's in good working order. Roger has no reason to disbelieve the homeowner, so he tells prospective buyers that the pool is fine. The property sells, spring comes, and the new owners call to complain that the pump doesn't work, and the pool drain appears to be clogged. What best describes what Roger has done? |
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Definition
Unintentional misrepresentation
Roger took his client's word as the truth and ended up committing unintentional misrepresentation. |
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Term
Which of the following is true about the Chesapeake Bay Preservation Act and its effects?
1.) Anyone who is selling property in the area that's affected by this act must provide additional disclosures to potential buyers.
2.) The act protects the Chesapeake Bay waterways, so houses in this area require extra disclosure forms for any sales transactions.
3.) The act restricts growth along the Chesapeake Bay waterway, so owners with properties affected by the act can't build on to them.
4.)Those who want to buy a property in an area affected by this act should work to find out how the additional restrictions affect the property. |
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Definition
4.) Those who want to buy a property in an area affected by this act should work to find out how the additional restrictions affect the property.
Even though this act may affect certain properties, it's still the buyer's job to determine what those effects are |
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Term
| Broker Joseph tells his client that a property is zoned as residential, even though he knows it's zoned as commercial. This violation is an example of ______. |
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Definition
Making a substantial and willful misrepresentation
This a direct example of a misstatement of a material fact, and is therefore a substantial and willful misrepresentation. |
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Term
| Anna engaged Christopher as her listing agent. During the relationship, Anna shared information about her motivations for selling and the price she'd be willing to accept. The termination date listed on her agreement with Christopher has come and gone without a sale. Anna decides to re-list her property with a new agent. Christopher has a new buyer client interested in Anna's property. Can he use the information shared by Anna when he was her agent? |
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Definition
No, the duty of confidentiality survives the relationship.
Confidentiality is a duty that survives the agency relationship. The agent is required to keep confidential information that the client shares during the relationship. |
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Term
Agent Toby represents his seller clients, Mr. and Mrs. Poole. Which of these actions would violate one of the statutory duties he owes them?
1.) Toby advises them to list their house at a price that's a little lower than the Pooles first suggest.
2.)Toby brings a counter-offer to the Pooles and explains to them what it means.
3.) Toby discloses his brokerage relationship to several potential buyers.
4.) When the house is under contract, Toby receives three more offers that he doesn't present to the Pooles. |
|
Definition
4.) When the house is under contract, Toby receives three more offers that he doesn't present to the Pooles.
Toby has a statutory duty to present all offers he receives, even if the house is already under |
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Term
| Lora, a new licensee, has a landlord client named Gus who doesn't rent to smokers. "I'm not sure he can do that," she says. "Aren't smokers a protected class under fair housing laws?" How should you respond? |
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Definition
"Gus can choose not to rent to smokers, as long as he makes sure they're not protected under any local ordinance."
Since smokers aren't protected by federal or state fair housing laws, Gus can choose not to rent to them as long as he makes sure there are no local fair housing ordinances that protect them. |
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Term
| First Baptist Church in Norfolk owns two apartments next door to the church, which used to be housing for their ministerial staff. It does not rent to non-Baptists. Is this legal? |
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Definition
Yes, as long as it does not discriminate based on race, color, national origin, or familial status.
According to Virginia law, religious organizations can limit rental accommodations to members of their organization as long as they do not discriminate based on race, color, national origin, or familial status |
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Term
Which of the following statements about brokerage relationships in Virginia is true?
1.) A brokerage relationship is created through compensation (i.e., when someone pays you).
2.) Either a written or verbal agreement creates a brokerage relationship.
3.) They aren't required for commercial real estate transactions.
4.) You must enter into one before you perform any licensed activities. |
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Definition
4.) You must enter into one before you perform any licensed activities.
Before you perform any licensed activities, such as showing a property, negotiating a sales price, or offering professional advice about a given property, you must have a brokerage relationship (via a written brokerage agreement). |
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Term
| In Virginia, what information does the Megan's Law disclosure provide to buyers? |
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Definition
There is no Megan's Law disclosure in Virginia
Megan's Law applies in Virginia-it's a federal law-but no disclosure is required in Virginia. Instead, if buyers are concerned about sexual offenders, they can access the state database that provides that information. |
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Term
Felicity has been found guilty of practicing real estate without an active license. Which of the following statements about her situation is true?
1.) If she pays a fine, she won't have any other consequences.
2.) She's subject to a VREB investigation.
3.) She will have to go to public court and defend herself.
4.) She won't be disciplined, since unlicensed persons don't fall under the VREB's jurisdiction. |
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Definition
2.) She's subject to a VREB investigation.
Felicity is subject to a VREB investigation. She may have to go to court and pay a fine; the consequences aren't limited to one action, and they depend on the severity of her crime. |
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Term
Which of the following statements is true about document handling in Virginia?
1.) Licensees are required to contact the Virginia Real Estate Board if one or more transactional documents goes missing.
2.) Licensees have a responsibility to create and deliver transactional documents to every party involved in the transaction.
3.) Licensees need only ensure that their clients have copies of transactional documents.
4.) Licensees should only store documents in electronic form. |
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Definition
2.) Licensees have a responsibility to create and deliver transactional documents to every party involved in the transaction.
Licensees have a specific responsibility to make sure that all parties to a transaction have copies of all transactional documents. |
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Term
| In Virginia, how many hours of approved real estate courses must an individual complete before taking the real estate salesperson exam? |
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Definition
|
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Term
| Virginia fair housing law does not apply to any single-family house sold or rented by an owner, so long as they do not own more than ______ single-family houses at any one time. |
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Definition
three
Virginia fair housing law applies to single-family residences when the owner possesses more than three (four or more) single-family houses. |
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Term
| Virginia licensee Collette deposits an earnest money check for $10,000 in an escrow account. That Saturday, she's doing some online shopping and is ready to check out when she remembers that her credit card has a temporary stop payment on it. She uses the escrow account, knowing that she'll be able to replace the funds on Monday. Has Collette done anything wrong? |
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Definition
Yes, because this is called conversion and it's illegal.
Using client funds for personal use is called conversion, and it's illegal. |
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Term
| Seller Dom asks his agent, Chelsea, "I understand that my house is subject to extra regulations … something about the Chesapeake Bay Preservation Act? What does that mean?" How should Chelsea respond |
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Definition
| "You are under no obligation to reveal the fact that your property is affected by this act." |
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Term
| Stacey's home has been sold as a result of foreclosure proceedings. Does she need to provide the purchaser with a property disclosure statement? |
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Definition
No, transfers resulting from foreclosure sale are exempt.
Transfers to a beneficiary as a result of a foreclosure sale or deed in lieu of foreclosure are exempt from disclosure requirements |
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Term
Principal broker Tyrell has uncovered evidence that one of his licensees, Maren, has been dipping in to several escrow accounts. Which of the following actions should he take?
1.) He must immediately disburse the rest of these escrow funds according to the agreements in the relevant contracts.
2.) He needs to report this information to the VREB within three business days.
3.) He should immediately deposit his own funds in the escrow accounts to make up for the deficiencies.
4.) He should suspend Maren's license immediately for no fewer than 14 business days. |
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Definition
2.) He needs to report this information to the VREB within three business days
Tyrell must report this information to the VREB within three business days; the VREB will then take the matter into their own hands. |
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Term
Which of the following best explains the difference between misrepresentations and omissions?
1.) A misrepresentation is always intentional, while an omission is always accidental.
2.) A misrepresentation is another name for fraud, while an omission is an honest mistake.
3.) Misrepresentations are a sub-category of omissions, and are not punishable by law.
4.) Misrepresentations can be intentional or unintentional. Omissions are one type of misrepresentation. |
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Definition
4.) Misrepresentations can be intentional or unintentional. Omissions are one type of misrepresentation.
Misrepresentations can be intentional or unintentional; an omission, where a licensee omits or forgets about transaction-critical information, is a kind of misrepresentation. |
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Term
| A property has a septic system that's subject to certain maintenance requirements by the state health board, and the owner's obtained a waiver for them. What is the owner's obligation related to this? |
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Definition
The owner must provide the buyer with the septic disclosure and outline the maintenance requirements.
Septic systems on the property subject to repair or maintenance requirements must be disclosed to buyers. |
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Term
| What duty does a Virginia buyer's agent owe to sellers? |
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Definition
Honest treatment
One of the duties an agent owes a customer (and any other party they encounter related to the transaction) is honest treatment. Agents cannot lie or misrepresent information to anyone. |
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Term
In which of these scenarios would the consumer need a real estate license?
1.) Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.
2.) Mickey is selling his own home and isn't using the services of a listing agent.
3.) Peter is helping his sister, Kristen, find a new apartment and will not be compensated in any way.
4.) Ronald is acting as executor of his uncle's estate, which includes selling the property his uncle owned. |
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Definition
1.) Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.
In general, unlicensed consumers can't perform real estate activities for others for a fee. Jessie is receiving compensation and would need to be licensed to accept this without breaking any laws. |
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Term
| Karen just received her real estate license in Virginia. She must take post-licensing education this year and then she can renew her license next year. What type of license does Karen have? |
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Definition
Salesperson
Karen has a salesperson license. In Virginia, a real estate salesperson must renew their license every two years and must take post-licensing education in the first year of being a licensee. |
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Term
Which one of the following brokers is providing adequate supervision and training for their new licensees?
1.) Anita follows her licensee every day to ensure there are no mishaps or violations of regulations.
2.) Brannon reviews and discusses licensees' work to make sure it meets regulations, and provides training opportunities to all associates.
3.) Deshi only allows associates to perform real estate activities inside the brokerage itself.
4.) Pamela holds quarterly meetings that discuss performance objectives of the licensee based on the number of sales transactions completed. |
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Definition
2.) Brannon reviews and discusses licensees' work to make sure it meets regulations, and provides training opportunities to all associates.
Brannon's doing what he's supposed to do: reviewing and discussing licensees' work to make sure it meets regulations and providing training opportunities to all licensees. |
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Term
| someone who uses or purchases a product or service |
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Definition
|
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Term
| someone who's working with a real estate licensee but who isn't represented by that licensee (nor owed the full range of agency responsibilities); the customer may or may not be represented by another licensee |
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Definition
|
|
Term
| the party to the transaction who is represented (the client) |
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Definition
|
|
Term
| someone who's represented by a real estate licensee (and owed certain agency responsibilities). |
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Definition
|
|
Term
| someone in a position of trust who owes loyalty to another. |
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Definition
|
|
Term
| someone who acts on behalf of someone else. |
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Definition
|
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Term
| someone who has broad authority to act for the principal, such as someone who has power of attorney |
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Definition
|
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Term
| someone with limited authority to act on a client's behalf, such as a real estate agent or an escrow officer. This type of agent can't bind a client to a contract. |
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Definition
| special agent (aka limited agent) |
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Term
| someone responsible for handling all dealings in a given area for a client, such as a property manager. This type of agent may bind a client to a contract. |
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Definition
|
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Term
| when a licensee represents one party, either the buyer or the seller, in a transaction. Single agency firms don't permit licensees to engage in dual agency, even if the state permits it. |
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Definition
|
|
Term
| the representation of both the buyer and the seller in the same transaction. |
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Definition
|
|
Term
| when a single licensee represents both the buyer and the seller in the same transaction. |
|
Definition
| Single licensee dual agency |
|
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Term
| when two separate licensees from a single firm each represent one party (buyer or seller) in the same transaction. |
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Definition
| Designated/appointed agency (aka dual-licensed dual agency |
|
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Term
| traditionally been recognized as a situation in which a licensee brings an unrepresented buyer to a transaction. In states where sub-agency is permitted, that licensee represents and owes fiduciary duties to the seller. Today's buyers are typically represented by a licensee, thus eliminating sub-agency of this type in most transactions. |
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Definition
|
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Term
| relationships in which the licensee doesn't represent the consumer in an agency capacity but instead provides non-agency assistance that doesn't require the licensee to exercise judgment or discretion. State statutes govern non-agent duties. |
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Definition
| Non-agency relationships (aka transactional or facilitator roles |
|
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Term
| fiduciary responsibilities (duties) include: |
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Definition
obedience, loyalty, disclosure, confidentiality, accounting, and reasonable skill and care (OLD CAR).
Fiduciary duties are owed to clients, but not customers. Non-agents don't have fiduciary duties. |
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Term
following a client's lawful instructions
(Licensees may not obey a client's illegal or unethical instructions.) |
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Definition
|
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Term
| putting your client's interests ahead of others, including your own. It also means working in the client's best interests. |
|
Definition
|
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Term
|
Definition
you must disclose to your client any facts that are relevant to the transaction (aka material facts ; e.g., any information, including agency-related information, that might have an impact on the transaction).
You must keep confidential any information that could harm your client's negotiating position in a transaction. This includes your client's motivations, time frames, willingness to settle for terms/price other than those offered, and any other information your client deems confidential (unless disclosure is required by law). |
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Term
| proper handling of client property, which includes keys, funds, paperwork, and the property itself. This means no commingling or conversion of the earnest money, among other requirements |
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Definition
|
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Term
| requires agents to operate within the scope of their expertise and advise clients to seek expert advice on matters that are outside of the agent's scope of knowledge. It also refers to the expert performance of a licensee's tasks. Licensees should always encourage clients to seek an attorney's advice before signing contracts. |
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Definition
| reasonable skill and care |
|
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Term
| duties that spring from old English common law are the foundation for today's six fiduciary duties. |
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Definition
| Traditional agency duties |
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Term
| legal document that grants legal rights and powers from one person (the principal ) to another (the agent or attorney-in-fact ) to make decisions on behalf of the principal. The agent's decisions must reflect the principal's preferences and can't exceed the authority granted by the specific power of attorney document. An agent may never override the principal's wishes. |
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Definition
| A power of attorney ( POA ) |
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Term
| agency relationship that's understood and agreed to by the parties. Spoken or written words create express agency. |
|
Definition
|
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Term
Actions of the parties may create ------
which is to be avoided. All agency agreements should be in writing. General real estate discussions are safe. However, to avoid implied agency situations, refrain from making statements that may be taken as your expert opinion. Don't perform actions that only and agent should perform. |
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Definition
|
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Term
| acceptance after the fact, either through signing paperwork or through the parties' actions. If the parties choose, implied agency can be ratified through signing an agency agreement after the implied agency relationship has been created. |
|
Definition
|
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Term
| prevents one party from suing another, because the party's actions or statements implied that he or she agreed with the other party; |
|
Definition
|
|
Term
| listing in which the broker contracts with the seller to receive all net proceeds from a sale above a specified sale price. Net listings are illegal in most jurisdictions because they create a conflict of interest and encourage unethical behavior such as trying to sell a property for more than its value. |
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Definition
|
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Term
| ----- agreements allow only one brokerage to market and sell the property. However, if the seller finds her own buyer, she doesn't pay commission to the brokerage. |
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Definition
|
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Term
| ----- agreement provides the listing agent with a commission no matter who brings the buyer to the transaction. Exclusive right-to-sell agreements include definite start and end dates. |
|
Definition
|
|
Term
| ------ agreements allow the seller to work with multiple agents. They don't always result in a listing agent earning a commission, as only the agent who successfully brings a buyer will be paid |
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Definition
|
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Term
| Other licensees can't represent the buyer during the term of an -------- agreement. |
|
Definition
| exclusive right-to-represent |
|
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Term
| ------agreements allow the buyer to work with many agents during the home search process. If a buyer enters into an exclusive agreement with a broker, any open agreements are terminated. The agreement should address compensation as well as obligations the parties have to one another. Other common elements of a buyer representation agreement include a general description of the property sought by the buyer including price, location, size, etc. |
|
Definition
| Non-exclusive/open buyer representation |
|
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Term
| what does it mean when the agent has some form of ownership of, security interest in, or possession of the principal's property. The agent's compensation depends on continuance of the agency agreement. For example, a licensee sells an undeveloped acreage for a reduced cash price plus the right to an exclusive-right-to-sell listing agreement on the developed lots. |
|
Definition
| Agency coupled with interest |
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Term
| The agency relationship will end if the agency agreement between agent and client expires. |
|
Definition
|
|
Term
| If the real estate transaction with which the agent was assisting closes, then the agency relationship terminates. |
|
Definition
|
|
Term
| Force of law terminations include events that are beyond the control of the parties, such as bankruptcy of the broker or principal, property destruction, or incapacitation of the agent or principal. |
|
Definition
| termination by force of law |
|
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Term
| If the property is destroyed, or if the broker or principal dies or becomes incapacitated, then the agency relationship ends. |
|
Definition
| destruction of property/death of principle |
|
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Term
| The principal(s) and agent may mutually agree to terminate an agency agreement. |
|
Definition
|
|
Term
| A governmental police power that permits it to meet the need for public works by funding through a stable source of income that shares the burden among many citizens |
|
Definition
|
|
Term
based on the value of the real estate. General property taxes may pay for items such as
schools, police, fire, etc. |
|
Definition
|
|
Term
| imposed only on properties that benefit from the improvement, such as a tax to install a sewer line or city water line on one specific street. Other examples may include paved streets, curbs, sidewalks, or street lighting. |
|
Definition
|
|
Term
| The government's power to take private land for public use. For example, eminent domain could be used to take private property needed for a planned freeway project. |
|
Definition
|
|
Term
| The process of taking title and physical possession of private property using the government's power of eminent domain; the property owner is paid just compensation for the value of the property. |
|
Definition
|
|
Term
| The government takes private property but fails to compensate the owner; property owners are forced to file suit to obtain compensation. The taking may be physical through occupation, or regulatory, where government regulations cause the property to lose economic value. |
|
Definition
|
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Term
| The state's power to take the property of a decedent who dies without a will, heirs, or creditors. When the state claims property through escheat, it can dispose of the property to benefit the public. |
|
Definition
|
|
Term
| the government's authority, at any level, to do what it can to ensure the health, safety, and welfare of its citizens. |
|
Definition
|
|
Term
| a police power exercised by a state, county, city, or town government that classifies land based on its current or intended usage. |
|
Definition
|
|
Term
| list the Zoning classifications |
|
Definition
Residential
Commercial
Combination/mixed use
Industrial
Agricultural
Open space
Parkland
Recreation area |
|
|
Term
| ----- zoning allows otherwise prohibited development in return for the developer providing a community benefit. |
|
Definition
|
|
Term
| ----- zoning regulates the density of a given area by requiring certain building height limitations, lot width, setback requirements, etc. |
|
Definition
|
|
Term
| ---- zoning is a way to ensure the visual and architectural consistency of an area. |
|
Definition
|
|
Term
| the process of assigning a lower-density use zone to an area previously allowing a higher density. Density zoning refers to a number of things per unit, such as houses per acre. |
|
Definition
|
|
Term
| ----- zoning rezones a specific property for use within another zoning area |
|
Definition
|
|
Term
| a zoning action that Deviates from current zoning but is grandfathered in (such as a home built years ago in an area that's now commercially zoned). Buyers should never assume a nonconforming use can continue after the transfer of ownership or the destruction of improvements. |
|
Definition
|
|
Term
| a zoning action that temporarily halts new property development |
|
Definition
|
|
Term
| a zoning action that Allows use that's not normally permitted but is considered an "allowable" use within that zoning, such as a church within a residentially zoned area |
|
Definition
| Special use permit (aka conditional use permit |
|
|
Term
| a zoning action that Permits deviation in the zoning ordinance requirements; typically granted when the zoning has created a hardship or burden on the property owner. Both special use permits and variances require a public hearing before they're granted. |
|
Definition
|
|
Term
|
Definition
| oversees challenges to zoning actions. |
|
|
Term
|
Definition
| nsures that community growth is controlled and orderly; the board develops the master plan (also known as comprehensive plan), which includes a budget. In a city, this is known as urban planning. Planners often account for topography (the physical and natural features of an area). |
|
|
Term
| land that's divided into lots for development. |
|
Definition
|
|
Term
| map of a subdivision that represents a tract of land, showing the boundaries and location of individual properties, streets, easements, and other pertinent information. A developer submits the plat map to a planning board or zoning commission. |
|
Definition
|
|
Term
| Meetings held by planning and zoning boards must be open to the public because of sunshine laws. At the federal level, the -------- is part of the Freedom of Information Act (FOIA) . Each state usually has its own version of FOIA or a sunshine law. |
|
Definition
|
|
Term
| areas that are saturated by water in an amount sufficient to support vegetation that grows in the saturated soil. |
|
Definition
|
|
Term
| act that provides guidelines for waters, including wetlands. Only certain structures can be built on wetlands. |
|
Definition
|
|
Term
| low lying areas of property that are susceptible to flooding because of their proximity to a water source. Flood zones may be either base (100-year floodplain or 1% chance of a flood in a specific area in a given year) or moderate (500-year floodplain or a .2% chance of flooding in a specific area in a given year). |
|
Definition
|
|
Term
| fibrous material that's dangerous when it begins to deteriorate and becomes friable (easily crumbled or reduced to dust), was used in many materials before the 1970s because of its fire-retardant qualities. Inhaled particles can cause lung damage. |
|
Definition
|
|
Term
| can be found in paint, plumbing, dust, soil, and drinking water. Lead causes many health issues, particularly among infants, children, and the elderly. In children, lead-related issues can include behavioral problems, learning disabilities, seizures, and even death. |
|
Definition
|
|
Term
| requires contractors who perform tasks that may disturb lead-based paint to be certified and to follow lead-safe work practices. |
|
Definition
| Lead Renovation, Repair, and Painting (RRP) Rule |
|
|
Term
| occurs naturally in the environment and can be found in soil and well water, enters a home through the building's cracks and crevices, and experts believe it can cause lung cancer. |
|
Definition
|
|
Term
| promoted by excessive moisture and lack of air circulation. Excessive levels cause allergic reactions or act as a respiratory irritant in individuals who are sensitive to it or immune-compromised. In some cases, may release potentially toxic substances. |
|
Definition
|
|
Term
odorless, colorless toxic gas that's formed whenever fuel is burned. Gas and oil furnaces, gas
refrigerators, clothes dryers, ranges, water heaters, and space heaters produce carbon monoxide, as can fireplaces,
charcoal grills, and wood-burning stoves. |
|
Definition
|
|
Term
are organic compounds that contain carbon, chlorine, and fluorine. CFCs haven't been
linked to health concerns, but they have been linked to ozone depletion. |
|
Definition
| Chlorofluorocarbons (CFCs) |
|
|
Term
used in a variety of building products, is a colorless chemical with a strong odor. It's emitted as a gas and
is classified as a volatile organic compound (VOC) . It's considered to be a "probable" carcinogen, and in a substantial
portion of the population, is a respiratory, eye, and skin irritant. |
|
Definition
|
|
Term
are mixtures of a number of man-made chemicals. PCBs are odorless, tasteless solids
or liquids and, prior to being banned in 1979, were used in industrial products and chemicals such as caulking compounds,
transformers (including those in fluorescent lighting fixtures), and hydraulic oil. |
|
Definition
| Polychlorinated biphenyls (PCBs) |
|
|
Term
water that is under the earth's surface. Mining activities, landfill drainage, leaking underground storage
tanks, contaminated storm drains, and agricultural pesticides contribute to groundwater contamination (and therefore,
potential contamination of private and public drinking water sources). |
|
Definition
|
|
Term
typically huge excavated areas where waste is buried underground. Federal, state, and
local governments regulate waste site placement, construction, and content. Rural properties or properties that were once
in rural areas but have been swallowed up by a metro area may also contain sites where property owners once dumped
trash. |
|
Definition
| Waste disposal sites (landfills) |
|
|
Term
| Properties that have been contaminated by commercial or industrial use may be referred to as ------- |
|
Definition
|
|
Term
established to
clean up closed, abandoned, or uncontrolled hazardous waste sites and spills. |
|
Definition
| The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) |
|
|
Term
added an "innocent landowner" defense to CERCLA.
Landowners who performed their due diligence when purchasing a property may be held innocent of clean-up liability if
the property is found to be contaminated. |
|
Definition
| The Superfunds Amendments and Reauthorization Act (SARA) |
|
|
Term
| The property owner is responsible for cleanup, regardless of who's at fault. |
|
Definition
|
|
Term
| Each of the responsible parties is personally responsible for damages. |
|
Definition
| Joint and several liability |
|
|
Term
: Both the current owner and prior owners are liable.
If liable parties aren't doing cleanup, the EPA can hire its own contractors, do the clean-up work, and then bill the parties. |
|
Definition
|
|
Term
rules established by developers or homeowners associations that govern
properties and owners in the community |
|
Definition
| covenants, conditions, and restrictions (CC&Rs) (aka restrictive covenants) |
|
|
Term
requires that certain types of contracts, such as for a property ownership transfer, be in writing to
be legally enforceable and to prevent injury from fraudulent conduct. |
|
Definition
|
|
Term
occurs when the parties enter into an agreement voluntarily with full understanding of contract
terms. |
|
Definition
|
|
Term
is something of legal value offered by one party and accepted by another, e.g., the buyer's promise to pay
the full purchase price, and the seller's promise to transfer marketable title through delivery of a deed. |
|
Definition
|
|
Term
is something of legal value offered by one party and accepted by another, e.g., the buyer's promise to pay
the full purchase price, and the seller's promise to transfer marketable title through delivery of a deed. |
|
Definition
is something of legal value offered by one party and accepted by another, e.g., the buyer's promise to pay
the full purchase price, and the seller's promise to transfer marketable title through delivery of a deed. |
|
|
Term
| means that the contract results in a legal outcome. |
|
Definition
|
|
Term
---- type of contract means the parties entered into the agreement voluntarily. Mistakes, misrepresentation, fraud,
duress, or undue influence create a situation in which the consent is not real. |
|
Definition
|
|
Term
| Contracts signed under which circumstances are unenforceable... |
|
Definition
Contract is for an illegal purpose
One or more of the contract parties was under duress or undue influence
One or more of the contract parties committed misrepresentation
Contract terms are patently unfair or violate public policy
Contract contains errors |
|
|
Term
refers to the concept that if a court deems a term in the contract to be unenforceable, the remainder of the
contract remains enforceable. |
|
Definition
|
|
Term
a ----- contract is one that appears valid, but one or both parties have a legal right to disaffirm it. This could be
because one of the parties lacks legal competence, or because there was a mistake or misrepresentation, causing a failure
of reality in consent. The contract is voidable by the incompetent or misled party but enforceable against the other party. |
|
Definition
|
|
Term
| a ----- contract isn't a contract at all because it lacks one or more of the requirements for a valid contract. It has no legal force or effect; it's unenforceable |
|
Definition
|
|
Term
a ---- contract is one in which all parties to a contract have met all contract terms. A contract for the sale of real
estate is executed by the delivery and acceptance of the deed and the payment of the purchase price. (Note that you may
also see the term "executed" used to refer a document that's been signed.) |
|
Definition
|
|
Term
Contracts are ----- until all of the promises in the contract have been completed. A contract for the sale of real
estate is executory until the deed is delivered and accepted. |
|
Definition
|
|
Term
Most contracts include a ------ that describes how contract-related notice may be made and when notice
is considered to have been received. For example, a purchase or listing contract may permit contract parties to
select whether notices may be delivered electronically. |
|
Definition
|
|
Term
| occurs when one party fails to meet contract obligations. The innocent party may take any one of several actions as a remedy to the breached contract. |
|
Definition
|
|
Term
| When a breach occurs, the innocent party may unilaterally terminate the contract. This is known as ---- |
|
Definition
|
|
Term
| when one party meets some, but not all, of the terms of the contract. The innocent party may agree to accept partial performance, perhaps in return for some sort of compensation. |
|
Definition
|
|
Term
| a ----- seeks to force a party to make good on the promises made in some way. |
|
Definition
| specific performance suit |
|
|
Term
| Many real estate contracts include a ----- clause that limits buyer damages to a return of the earnest money if the seller breaches the contract. |
|
Definition
|
|
Term
| the parties have met all contract terms and are discharged from their contractual obligations. |
|
Definition
| Contract discharge (aka performance, execution) means |
|
|
Term
one of the parties ends the contract before it's fully performed. The
terminating party may owe duties or compensation to the other party. |
|
Definition
|
|
Term
When one party to a contract agrees in writing that the other party is no longer held to the provisions of the agreement,
this is called ----- |
|
Definition
|
|
Term
Contract ----- generally results from an operation of law, such as breach of contract, destruction of
the object of the contract, etc. If the contract is rescinded, it is terminated, and the parties are legally returned to their
position before there was a contract. For example, if one party breaches the agreement, the other may legally have the
right to rescind the agreement. |
|
Definition
| rescission (cancellation) |
|
|
Term
Parties to the contract may terminate the contract through ------. This is best accomplished through mutual
written release. |
|
Definition
|
|
Term
| to transfer contractual rights or duties to a new party. |
|
Definition
|
|
Term
| ------occurs when one contract is substituted for another. |
|
Definition
|
|
Term
| In a ---- contract, both parties have obligations. |
|
Definition
bilateral
(Most real estate contracts are bilateral. For example, a purchase
contract contains promises by both parties, so it's bilateral.) |
|
|
Term
In a ----- only one party makes a promise. An option contract is one example of a unilateral real estate
contract. |
|
Definition
|
|
Term
An ---- is an addition to an existing document, such as an offer to purchase. It adds terms not addressed in
the main body of the contract form. |
|
Definition
|
|
Term
An ----- is a change to an existing contract between parties. It changes one or more of the original
contract terms. |
|
Definition
|
|
Term
| Other names forms (drafted by a licensed attorney) used to write a sales contract are: |
|
Definition
Offer to purchase
Sales agreement
Contract of purchase and sale
Purchase agreement
Earnest money agreement
Agreement of sale |
|
|
Term
means that parties agree to strictly adhere to the deadlines listed in the contract. If specific deadlines aren't stated, performance must take place within a reasonable amount of time (often as
determined by the courts). |
|
Definition
|
|
Term
| Lenders charge ----- as compensation for processing a new mortgage loan. |
|
Definition
| loan points (aka loan origination fees) |
|
|
Term
| Borrowers may choose pay ---- at closing to permanently reduce a loan's interest rate. |
|
Definition
|
|
Term
the ratio of the loan amount to the property value (sales price or appraised value,
whichever is lower) |
|
Definition
| loan-to-value ratio (LTV) |
|
|
Term
| ----- is a fee paid back to a lender for the use of its money |
|
Definition
| interest (the amount of interest paid with each mortgage payment typically decreases over the life of the mortgage.) |
|
|
Term
| ------ is a measure of both the interest rate and other fees associated with a mortgage loan. |
|
Definition
| APR ( annual percentage rate ) |
|
|
Term
Lenders typically ------ interest rates for a period of no more than 90 days. While the exact period is up to the lender, if
the closing process takes more than 90 days, borrowers should expect that they may face an interest rate change. |
|
Definition
|
|
Term
Lenders may require ----- on conventional loans when the down payment is less than
20% and loan-to-value ratio is in excess of 80%. |
|
Definition
| private mortgage insurance (PMI) |
|
|
Term
|
Definition
| principle, interest, taxes, and insurance...AKA budget mortgage |
|
|
Term
documents that are executed (signed) when a borrower receives a mortgage loan. These
instruments include a promissory note and a security instrument. |
|
Definition
|
|
Term
| the borrower's promise to repay the mortgage loan. Promissory notes are negotiable instruments which means they can be transferred to another holder. |
|
Definition
|
|
Term
Promissory notes are almost always accompanied by a ----- that pledges the financed property as
collateral for the mortgage loan and gives lenders the right to foreclose if the borrower defaults on the mortgage loan. |
|
Definition
|
|
Term
| ----- involves three parties: the trustor (borrower), the beneficiary (the lender) and the trustee |
|
Definition
|
|
Term
| States that use a deed of trust as the primary security instrument are referred to as ------ |
|
Definition
title theory states
(because the lender/trustee holds legal title to the property until the mortgage loan is paid in full.) |
|
|
Term
Borrowers hold ----- which means that they have possessory rights (can live in and use the property) and have the right to obtain
legal title once they've paid the loan off. |
|
Definition
|
|
Term
| If ----- becomes necessary, a ----- clause in the deed of trust permits the lender to use a non-judicial foreclosure process |
|
Definition
|
|
Term
| involves two parties: the lender and the borrower. |
|
Definition
|
|
Term
| States that use a mortgage as the security instrument are referred to as ------. |
|
Definition
|
|
Term
| If foreclosure becomes necessary, the lender may have to use a ----- process. |
|
Definition
|
|
Term
The ------ orders the lender or trustee to immediately release full title to the borrower once the loan
is paid in full. The lender is then prevented from pursuing additional payment after the payoff. |
|
Definition
|
|
Term
| An ------ makes the entire debt due immediately if there's borrower default. |
|
Definition
|
|
Term
a ------ (also known as alienation clause) requires the borrower to repay the loan when transferring
ownership to another. |
|
Definition
|
|
Term
A ----- clause permits the lender to charge a specified amount for interest lost when a borrower
sells or pays off a loan early. |
|
Definition
|
|
Term
| loans that aren't government insured or guaranteed. |
|
Definition
|
|
Term
| The Federal Housing Financing Agency (FHFA) imposes ----- on the amount homebuyers may borrow. |
|
Definition
| loan limits (maximum loan amounts) |
|
|
Term
A conventional loan that fails to meet Fannie Mae and Freddie Mac guidelines for credit scores, LTV, and/or loan
amount is considered ------. |
|
Definition
|
|
Term
a conventional non-conforming loan because it exceeds conforming loan limits but meets other
conforming loan requirements. |
|
Definition
|
|
Term
---- applies to all FHA loans for the life of the loan; it's paid as an upfront charge at
closing then as an annual premium until the loan is paid off or refinanced. |
|
Definition
| mortgage insurance premium (MIP) |
|
|
Term
FHA imposes a maximum loan amount (aka ------- ) that it will guarantee for each borrower. These loan limits typically mimic conventional conforming loan limits. Buyers who wish to borrow more than these limits must make
up the difference with their down payment. |
|
Definition
|
|
Term
| An------is one in which the loan principal is paid down over the life of the loan. |
|
Definition
|
|
Term
A ---- loan will be paid in full after the last scheduled loan payment (or sooner if the borrower makes
additional principal payments during the loan term). The monthly principal and interest payment amount is the same each
month. The principal portion of the payment increases each month, while the interest portion decreases. |
|
Definition
|
|
Term
| A ------ loan includes partial amortization over the loan term and a balloon payment at the end of the term, where the borrower pays off the loan in one lump sum. |
|
Definition
|
|
Term
An ------ is one in which the interest rate fluctuates based on some selected economic
index. |
|
Definition
| adjustable-rate mortgages (ARM) |
|
|
Term
| Rate adjustments are based on ---- such as London Interbank Offered Rate (LIBOR), from which lenders determine their margins and the rate charged per adjustment. |
|
Definition
|
|
Term
------ may be experienced with some ARMs. This occurs when a payment fails to cover the amount of
interest due. When this happens the difference between interest owed and interest paid is added to the loan's principal. |
|
Definition
|
|
Term
A ------ for deed requires the buyer to make installment payments to the seller for property purchase.
The seller retains the title while buyer gets equitable title. |
|
Definition
|
|
Term
| A ------ is a loan a seller issues to the buyer as part of the purchase transaction. This typically occurs in situations where the buyer cannot qualify for a mortgage through traditional means. |
|
Definition
|
|
Term
| With a ------ the seller holds a mortgage that wraps the new buyer's mortgage around the seller's existing mortgage. |
|
Definition
|
|
Term
National banks that offer consumer and business loans for resale on the secondary
mortgage market |
|
Definition
|
|
Term
| Take savings deposits and make loans |
|
Definition
| Savings and loan associations |
|
|
Term
Member-based cooperatives that take deposits, offer savings vehicles, and provide credit
for auto and home loans |
|
Definition
|
|
Term
| Match consumers with lenders; don't fund loans |
|
Definition
|
|
Term
| Make loans using in-house loan processors and underwriters |
|
Definition
|
|
Term
| Lenders in the primary mortgage market put together packages of conforming loans and sell them to the ---- to free up funds that provide additional consumer loans. |
|
Definition
| secondary mortgage market |
|
|
Term
| Secondary mortgage market payers purchase lender loan packages and re-package them into ------. |
|
Definition
| mortgage-backed securities (MBS) |
|
|
Term
lending institutions that buy loans from other
lenders and investors and make up the secondary market. |
|
Definition
| Fannie Mae , Freddie Mac , Farmer Mac , and Ginnie Mae |
|
|
Term
| Fannie Mae and Freddie Mac are ---- which is a privately-held corporation that has a public purpose. |
|
Definition
| Government Sponsored Enterprises (GSEs) |
|
|
Term
The ---- of 1968 requires lenders to disclose credit terms and conditions when advertising
triggers loan terms, so as not to mislead consumers. |
|
Definition
| Truth in Lending Act (TILA) |
|
|
Term
| ---- in ads that would require the full disclosure of all terms include down payment, payment amount, number of payments, and interest rate (other than APR). |
|
Definition
|
|
Term
----- requires mortgage lenders to follow TILA disclosure requirements for real estate advertisements that
include credit terms. |
|
Definition
|
|
Term
| The ------ of 1974 prohibits lenders from making credit unavailable or offering less-favorable terms based on protected class status (race, color, religion, national origin, sex, marital status, or income source) vs. creditworthiness. |
|
Definition
| Equal Credit Opportunity Act ( ECOA) |
|
|
Term
| a loan category that has certain affordability features. |
|
Definition
|
|
Term
| ----- provides buyers with the costs they are likely to pay at settlement and discloses the mortgage loan specifics, such as its key features, costs, and risks. |
|
Definition
|
|
Term
| Lenders must provide the ----- at least three business days before closing, provides final loan details, including the loan terms, projected monthly payments, fees and other closing costs. |
|
Definition
|
|
Term
| unfair or abusive lending to buyers |
|
Definition
|
|
Term
Property falsely appraised at a higher value, then quickly sold, with the buyer taking
the "equity" in the property |
|
Definition
| illegal property flipping |
|
|
Term
When an investor receives title to a property- often by using a straw buyer-doesn't make the
mortgage payments, and usually rents out the home until foreclosure occurs. |
|
Definition
|
|
Term
| buyers who Conceal their real identity behind someone else's name and credit |
|
Definition
|
|
Term
An appraiser secretly works with a borrower and provides a misleading appraisal report to
the lender |
|
Definition
|
|
Term
| lending money at an excessive (illegal) rate |
|
Definition
|
|
Term
| ----- analyze the borrower's credit, capacity, and collateral. They'll review loan documentation to determine the borrower's ability to repay the loan (capacity), ensure that the property value is adequate to support the loan (collateral), and verify the borrower's financial ratios (credit). |
|
Definition
|
|
Term
| the borrower's projected monthly housing expense (principal,interest, taxes, insurance, second liens, and association fees) divided by income. |
|
Definition
| the housing ratio aka the front end ration |
|
|
Term
the total of all the buyer's debt obligations
divided by income. |
|
Definition
| debt ratio (aka debt-to-income ratio or the back-end ratio |
|
|
Term
The tenant stays after the right to possess has terminated. The tenant is known as a
holdover tenant. |
|
Definition
|
|
Term
| The lease's duration is unknown when it's created. |
|
Definition
|
|
Term
The lease terminates automatically when the specified period (day, week, month, year, etc.)
ends. |
|
Definition
|
|
Term
| The lease automatically renews at the end of each period specified in the lease. |
|
Definition
|
|
Term
A ---- lease allows specific rent increases at future dates. It's a type of variable lease that permits an increase/decrease in rent during the lease period. The increase can be based on a number of factors, such as
changes to appraised value, index, or time. |
|
Definition
|
|
Term
One party owns the land and a different party owns the improvements. Land is leased on a long-
term basis, often 50-99 years. The lessee builds and owns an improvement, such as an office building, on the leased land. The rent paid is referred to as ground rent. At the conclusion of the ----------, the improvements
become the lessor's property. |
|
Definition
|
|
Term
| Provides for rental of floor space of wide-open loft spaces. The tenant may divide the space but can't make structural changes. |
|
Definition
|
|
Term
| When a tenant wants to buy a property but can't (either due to financing, title, or tax issues), a ------ may be an option. |
|
Definition
|
|
Term
When the owner of a building sells the building (usually to an investor) and then leases the
building back. Owners will usually do this as a way to raise extra capital. The original owner gains access to the equity, and the new owner has a reliable source of rental income. |
|
Definition
|
|
Term
Often used for minerals, oil, or gas, a company will enter into a lease agreement with
the landowner. The company explores the land, looking for minerals, oil, or gas in exchange for a cash payment to the landowner. If the company finds the item, the landowner usually gets a percentage of the item's value. If
nothing is found, the lease expires. |
|
Definition
| Sub-surface leasing rights |
|
|
Term
is a sample law that states may follow in enacting their own
landlord-tenant legislation. The purpose of this act is to base landlord-tenant law on contract law instead of common law,
thereby providing more specific guidance to both landlords and tenants. |
|
Definition
| The Uniform Residential Landlord Tenant Act (URLTA) |
|
|
Term
| the legal process used to physically remove the tenant. |
|
Definition
|
|
Term
| The tenant is prohibited from quiet enjoyment of the premises and vacates prior to termination of the lease agreement. |
|
Definition
|
|
Term
The landlord takes matters into his own hands and evicts the tenant without using
legal procedures. |
|
Definition
|
|
Term
| Common fiduciary duties performed by property managers include (OLD CAR): |
|
Definition
Obedience: Agents must obey all of the landlord's lawful instructions related to managing the property.
Loyalty: Agents must put the landlord's interests ahead of all others', including their own.
Disclosure: Agents must disclose all material facts related to managing the property.
Confidentiality: Agents must maintain the landlord's personal and financial confidentiality, disclosing nothing
that would damage the landlord's ability to negotiate for the best rental price and terms.
Accounting: Agents must account for all money or property belonging to the landlord.
Reasonable skill and care: Agents are obligated to use reasonable skill and care when performing the duties
prescribed by the parties' agreement. |
|
|
Term
Usually covering a one-year period, this report projects the income and expenses of operating
the property. |
|
Definition
|
|
Term
Usually created monthly, this report shows the current financial status of a property. It
accounts for income received (such as rent, late fees, etc.) and expenses paid (such as utilities, personnel, repairs,
etc.) |
|
Definition
|
|
Term
Prepared on a monthly, quarterly, semi-annual, or annual basis, this report shows
whether the property profited during the period or suffered a loss. |
|
Definition
| Profit and loss statement |
|
|
Term
This report compares actual results from the profit and loss statement to those
projected on the operating budget. |
|
Definition
| Budget comparison statement |
|
|
Term
| negative property information that could reduce the property's value. |
|
Definition
|
|
Term
| a hidden property condition that's not likely to be discovered through a general review or inspection. |
|
Definition
|
|
Term
Other states subscribe to a ----- doctrine and are not considered full disclosure states.
In these states, the seller makes no representations about property conditions, and the burden is on the buyer to perform
due diligence. |
|
Definition
| " buyer beware " (aka caveat emptor ) |
|
|
Term
prohibits housing discrimination based on race or color. There are no exemptions under
this law. It is never legal to discriminate on the basis of race. This act protects the rights of U.S. citizens to buy, sell,
convey, inherit, and possess property. The act failed to have an immediate impact on discrimination because no agency
was assigned to enforce it. |
|
Definition
| The Civil Rights Act of 1866 |
|
|
Term
Title VIII of the Civil Rights Act of 1968 is the ------ . This act prohibits housing discrimination based on
race, color, national origin, and religion. |
|
Definition
|
|
Term
| The ---- of 1974 added sex to the list of protected classes. |
|
Definition
| Housing and Community Development Act |
|
|
Term
The ----- of 1974 requires lenders to give consumers equal access to credit. The act
prohibits discrimination based on race, color, religion, national origin, sex, marital status, or age with respect to granting
credit and requires lenders to respond to all loan applications within 30 days, giving reasons for any application rejections. |
|
Definition
| Equal Credit Opportunity Act (ECOA) |
|
|
Term
The ----- of 1988 extended fair housing protection to cover familial status and disability and provides remedies to victims of housing discrimination. It requires that owners make reasonable accommodations to
property rules, policies, and practices to provide persons with disabilities appropriate access. |
|
Definition
| Fair Housing Amendments Act |
|
|
Term
an illegal, discriminatory practice by lenders or insurance companies that refuse or limit business within specific geographic areas based on the demographics of the area rather than on the creditworthiness of the specific
borrower |
|
Definition
|
|
Term
the act of inducing property sales by threatening that the changing demographics or the entry of a minority resident will decrease values. Licensees who engage in this behavior for their own profit are guilty of violating
fair housing laws. |
|
Definition
|
|
Term
the act of guiding prospective buyer/tenants to or away from a location based on their membership in a
protected class. Licensees who engage in this practice are guilty of a fair housing violation. |
|
Definition
|
|
Term
| ---- prohibits protected class-based discrimination in the delivery of commercial and public programs, services, and activities. |
|
Definition
(HUD), Title II of the Americans
with Disabilities Act of 1990 |
|
|
Term
| Statement that appears to a reasonable person as an exaggeration that wouldn't be relied on. |
|
Definition
|
|
Term
| A statement, photo, or ad that a reasonable buyer would consider to be reliable. |
|
Definition
|
|
Term
A statement made by a person who should have known it to be false; becomes fraud when
it's intentional. |
|
Definition
| Negligent misrepresentation |
|
|
Term
| Acting outside the scope of your license by offering legal advice is ----- and may result in you losing your license. This includes drafting contract language. |
|
Definition
| unauthorized practice of law |
|
|
Term
| involves an agreement (or collusion) between competitors (brokers) to fix contract terms, services, or products at a specific price or level, such as suggesting there's a "standard" fee for broker compensation. |
|
Definition
|
|
Term
| involves an agreement between brokers to divide up the market and then refrain from competing for business. |
|
Definition
|
|
Term
| include providing a service dependent on the customer/client obtaining (or not obtaining) another service from a specific provider. |
|
Definition
|
|
Term
| an agreement between two or more parties who conspire to not do business with a particular person or company. |
|
Definition
|
|
Term
A ---- antitrust violation is one in which the competing firms agreed to violate antitrust laws. A per se violation means
that authorities don't need to make any additional inquiries about the violation to impose penalties. The fact that collusion
existed is enough. |
|
Definition
|
|
Term
The earth's surface extending downward to the center of the earth and upward to infinity, including permanently
attached natural objects |
|
Definition
|
|
Term
| Land, plus all things permanently attached to it naturally or artificially |
|
Definition
|
|
Term
| Real estate, plus the interests, benefits, and rights included with real estate ownership |
|
Definition
|
|
Term
| Artificial attachments to land that include things such as fencing, buildings, and walkways |
|
Definition
|
|
Term
| Enjoyment, disposition, possession, control, and exclusion; often referred to as "bundle of rights" |
|
Definition
|
|
Term
| Five basic tests to determine if an item is real or personal property: MARIA |
|
Definition
Method of annexation : This refers to whether the item is attached to the property and how permanent the attachment is.
Adaptability for use : This refers to how an item is adapted to the real property. If removing an item would change or eliminate the use of the property, it's likely real property.
Relationship of the parties : In general, the courts tend to favor a tenant's take on an item over the landlord's and a buyer over a seller.
Intention in placing : If an item was intended to be temporary, then it's less likely to be considered real property.
Agreement of the parties : If the parties have agreed whether an item will stay or go, this is the simplest and first
test. |
|
|
Term
| Anything permanently attached to the land or to permanent structures on the land |
|
Definition
|
|
Term
Fixtures that are removed from the improvement before an agreement of sale become personal property again
through the process of ------ |
|
Definition
|
|
Term
Cultivated crops are called ---- and are considered personal property, even though they're part of
the soil. |
|
Definition
|
|
Term
| The process of converting personal property to real property |
|
Definition
|
|
Term
| This is anything that's attached to leased land or structures that's used in conducting business. |
|
Definition
|
|
Term
| The geographic location of land is fixed and can't be changed. |
|
Definition
|
|
Term
| Improvements may deteriorate over time, but not land itself. |
|
Definition
|
|
Term
| One piece of land is never exactly like another. |
|
Definition
| Uniqueness/nonhomogeneity |
|
|
Term
| You can't make more land; what we have now is what we'll always have. |
|
Definition
|
|
Term
| Some improvements are long-term, stable investments with stable returns over time. |
|
Definition
|
|
Term
| A property's value depends in large part on its location. |
|
Definition
| Situs/location/area preference |
|
|
Term
| A ------- permits a specific parcel of property to be located by a trained surveyor. |
|
Definition
|
|
Term
| ----are the direction and distance of a line forming the property's boundary |
|
Definition
|
|
Term
----are physical features that define
the boundaries of the property. |
|
Definition
|
|
Term
----- descriptions are characterized by a point of beginning, which is where
the description both begins and ends. It also uses monuments to mark boundaries. The monuments are thought to have
more credibility than the measurements. |
|
Definition
|
|
Term
A permanent physical marker used in a metes-and-bounds description that can be man-made or natural. It
may be a tree, creek, rock, or a stake placed in the ground. |
|
Definition
|
|
Term
The -------, regulated by the U.S. Department of the Interior's Bureau of Land
Management, divides land into townships and further into sections and fractions called sections . |
|
Definition
| rectangular government survey system |
|
|
Term
| the north-south line that runs through an initial point in the RGSS. These descriptions also use compass point directions (northwest; southeast; etc.). |
|
Definition
|
|
Term
| the east-west line from which measurements originate. |
|
Definition
|
|
Term
| East-west lines of a survey |
|
Definition
|
|
Term
|
Definition
|
|
Term
-----begin with a reference to either metes and bounds or RGSS, then divide the land into lots with
numerical descriptions of each parcel. A plat with the lot descriptions is recorded in the land records. |
|
Definition
|
|
Term
| the actual area a tenant may rent and on which the landlord bases the rent. |
|
Definition
|
|
Term
| includes the specific area(s) the tenant will use. |
|
Definition
|
|
Term
A ------ is a horizontal point of reference from which surveyors measure the depth and height of various land
elevations. |
|
Definition
|
|
Term
A ------ is a point where the exact elevation is known and marked with a brass or aluminum plate.
Surveyors can use this as a starting point to measure other elevations. |
|
Definition
|
|
Term
| -------are the rights to drill or dig for minerals on the property. |
|
Definition
| Mineral rights , aka subsurface rights |
|
|
Term
| ----- refer to the right to use the area in the sky above a property. |
|
Definition
|
|
Term
| ------- rights address water that moves through a property, such a river or stream. |
|
Definition
|
|
Term
| ----- rights address static water, such as a pond, lake, or ocean. |
|
Definition
|
|
Term
----- says that the first party to physically take water from a source and put it to beneficial
household, agricultural, or industrial use will continue to have a claim to the water. |
|
Definition
|
|
Term
| Process by which water carries rock, sand, and soil and causes land build-up |
|
Definition
|
|
Term
| New deposits of land that are the result of accretion |
|
Definition
|
|
Term
| Gradual loss of land due to a natural force |
|
Definition
|
|
Term
| A sudden loss of land by a swift, large-scale change in water flow |
|
Definition
|
|
Term
| When water gradually recedes and uncovers new land |
|
Definition
|
|
Term
----- is a non-possessory right acquired by one party to use another party's land for a special use. These are often
acquired through a written agreement. |
|
Definition
|
|
Term
| The property on which the easement lies |
|
Definition
|
|
Term
| The property or individual who uses the easement holds the ------- |
|
Definition
|
|
Term
| Attached to a specific parcel of land, transfers ("runs") with the land, and gives the "dominant tenement" rights to use adjoining property/servient tenement |
|
Definition
|
|
Term
| Granted to a specific individual or business rather than attached to the property itself |
|
Definition
|
|
Term
| In order to remove an easement through ----the dominant estate owner must take some action that shows a clear intent to stop using the easement. |
|
Definition
|
|
Term
| Easement termination by ------- occurs when the owner of either the servient or dominant estate purchases the other property. A property owner can't have an easement over his or her own land. |
|
Definition
|
|
Term
| This easement type can only be created for the purpose of ingress and egress. |
|
Definition
|
|
Term
| This easement isn't legal, and is created through the continued, uninterrupted, obvious, exclusive, and adverse use of someone's property without permission. |
|
Definition
|
|
Term
| ----- provides a pass-through to other property but doesn't allow usage of the land. |
|
Definition
|
|
Term
| temporary permission for one person, at the discretion of the property owner, to do something on another's land without actually possessing any interest or ownership in the land. |
|
Definition
|
|
Term
| ----- are structures or objects built on another's land without permission. |
|
Definition
|
|
Term
| an interest in real property where the owner's possession of the property isn't of fixed duration, as it would be in a lease (leasehold estate ). |
|
Definition
|
|
Term
| type of freehold estate that conveys the most rights available. Property held as a fee simple can be sold and is inheritable. |
|
Definition
| Fee simple estate (aka fee simple absolute) |
|
|
Term
a type of freehold estate in which ownership is subject to either the occurrence or non-
occurrence of a particular event. |
|
Definition
|
|
Term
| the current property owner conveys ownership to a new owner as long as some event does or doesn't occur. |
|
Definition
| a fee simple determinable estate |
|
|
Term
the current property owner conveys ownership
to a new owner on a specific condition. |
|
Definition
| fee simple subject to condition subsequent estate, |
|
|
Term
a lease that ends on a specific date and must be renewed by mutual agreement between the
landlord and tenant. |
|
Definition
|
|
Term
| is an estate in which the holder has a possessory interest in a property but no ownership. |
|
Definition
|
|
Term
| is a lease that automatically renews at the end of its term (such as a month-to-month lease). |
|
Definition
| periodic estate (aka estate from period to period) |
|
|
Term
| a lease without an established ending that can be terminated by either party. |
|
Definition
|
|
Term
| a tenant (referred to as a holdover tenant) didn't leave when the lease expired. |
|
Definition
|
|
Term
| one person owns the property with no joint interest by any other person. |
|
Definition
|
|
Term
is a form of co-ownership in which each co-owner is entitled to possession of the whole. An
owner's ownership is inheritable and, upon the owner's death, doesn't necessarily pass to the other owners. |
|
Definition
|
|
Term
| a form of co-ownership in which equal ownership requires unity of time, title, interest, and possession. |
|
Definition
|
|
Term
| Joint tenancy includes the right of------ which means that the surviving co-owner(s) will own the property of a joint tenant who dies. |
|
Definition
|
|
Term
| A ----- is owned by several joint owners, each of whom has the right to use the property under the specific terms of a time-sharing agreement. |
|
Definition
|
|
Term
| ownership typically involves ownership of a unit within a building and not the structure itself or any land. It also includes undivided shared interest in the common spaces. |
|
Definition
|
|
Term
members own shares in a corporation that owns the building. Members don't own real estate. Each
owner's right of possession of his/her individual unit comes from a proprietary lease. The corporation that owns the real
estate pays the single property tax bill. |
|
Definition
|
|
Term
| single-family homes but typically share walls with neighbors. |
|
Definition
|
|
Term
| Ownership in a -------, a mixed-use development that has both residential and commercial units, consists of a parcel of land, any improvements, and shared common areas. |
|
Definition
| planned unit development ( PUD ) |
|
|
Term
| A ---- is a type of freehold estate in which ownership is limited to someone's lifetime. The future owner is determined based on the life estate's terms. |
|
Definition
|
|
Term
| An ------ is based on the life of the estate holder/life tenant. For example, Christine gives her son a ------- in a property, and the estate lasts until her son's death. |
|
Definition
|
|
Term
A ---- is based on the life of someone other than the holder of the life estate/life tenant. For example, Jarrod grants his ex-wife, Margo, a life estate ------ in a house where Jarrod's mother Rose and Margo, who cares for Rose, both reside. The life estate stipulates that Margo's interest in the property will cease when Jarrod's
mother dies. |
|
Definition
|
|
Term
| Ownership will pass to a remainderman instead of the party who established the life estate. |
|
Definition
|
|
Term
| Ownership will revert to the life estate originator (or the originator's successors and heirs). |
|
Definition
|
|
Term
| the rights extended to a property owner to use the physical components of land, such as the surface, sub-surface, and air rights. |
|
Definition
|
|
Term
| The bundle of rights includes-----. |
|
Definition
Possession : This means that the titleholder may possess (be on) the property.
Control : The owner controls the use of the property.
Exclusion : The owner may decide who may or may not access the property.
Enjoyment : The owner may use the property in any legal matter.
Disposition : The owner has the right to sell or convey the property. |
|
|
Term
| A ------ has no defects or clouds to which a reasonable buyer would object. It's not necessarily a perfect title. Sellers can convey marketable title if the title search reveals no doubt about property ownership and there aren't any liens or encumbrances that won't be cleared at closing. |
|
Definition
|
|
Term
An ------- is one against which there may be known defects (such as easements), but the title company has
notified the parties of the defect and has agreed to insure against it (not list it as a policy exception). As the less rigid title standard, insurable title is still acceptable to most buyers. |
|
Definition
|
|
Term
| any encumbrances, such as a lien or inheritance claim, that prevents the seller from providing clear, marketable title. |
|
Definition
|
|
Term
| The grantor holds title to and possession of the property. |
|
Definition
|
|
Term
| The grantor has the right to convey both title to and possession of the property. |
|
Definition
| Covenant of right to convey |
|
|
Term
| The grantor assures the grantee that there are no encumbrances against the title other than those identified in public records or the deed itself. |
|
Definition
| Covenant against encumbrances |
|
|
Term
| The grantor assures that the grantee's use and enjoyment of the property will be unimpaired and unrestricted, subject to public police powers and private deed restrictions. |
|
Definition
| Covenant of quiet enjoyment |
|
|
Term
| The grantor promises to take whatever actions necessary (within his power) to correct any title defects. |
|
Definition
| Covenant of further assurances |
|
|
Term
| In this most important covenant, the grantor promises to protect and defend the title against lawful claims made by others. |
|
Definition
| Covenant of warranty or warranty forever |
|
|
Term
| The TRID-required settlement statement is called the -----. |
|
Definition
|
|
Term
| is a property that the seller, with the lender's permission, is selling for less than the seller owes against the property. |
|
Definition
|
|
Term
------is a formal opinion of value that a real estate appraiser assigns, based on supportable evidence, for a
specific purpose, party, and property, as of a specific date, and in accordance with Uniform Standards of Professional Appraisal Practice ( USPAP ). |
|
Definition
|
|
Term
------- estimate the value of a building or a piece of land. They may specialize in either commercial or residential
property. |
|
Definition
|
|
Term
| ------ is the process of forming an opinion of a property's value. |
|
Definition
|
|
Term
------- requires that appraisals
performed in conjunction with federally related transactions must be completed by state-certified or licensed appraisers. |
|
Definition
| The Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 |
|
|
Term
Key mortgage industry players, including Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency (FHFA)
implemented the --------. |
|
Definition
| Appraiser Independence Requirements (AIR) in 2010. |
|
|
Term
----- is the most probable price a property will sell for in an open market if neither the buyer nor the seller is
under duress. |
|
Definition
|
|
Term
| ----- is a property's objective worth and may not equal price or cost. |
|
Definition
|
|
Term
| ------ is the amount to recreate that property if it disappeared off the face of the earth today. |
|
Definition
|
|
Term
| ----- is the amount a buyer paid for a property and the seller accepted. |
|
Definition
|
|
Term
| is the amount a buyer paid for a property and the seller accepted: |
|
Definition
DUST:
Demand : How popular or desirable a property is.
Utility : The property's function.
Scarcity : Relates to market supply.
Transferability : The ease with which another person can purchase the property; a property with a title defect may suffer a loss of value because of the difficulty of being able to transfer title to another. |
|
|
Term
| What a property is worth to the person using it. |
|
Definition
|
|
Term
| What the local taxing authority thinks a property is worth. |
|
Definition
|
|
Term
| Price at which the property can be loaned on or sold for at a foreclosure sale |
|
Definition
|
|
Term
| Cost to replace or rebuild a property |
|
Definition
|
|
Term
| The return on investment a property may provide |
|
Definition
|
|
Term
| A property's value is determined in part by how well it conforms to its surrounding area (how similar it is to other properties in the neighborhood). |
|
Definition
| The principle of conformity |
|
|
Term
| A property's value is determined in part based on what else is available. |
|
Definition
| The principle of competition |
|
|
Term
| A reasonable person will not pay more for a property if a comparable one can be had for less. |
|
Definition
| The principle of substitution |
|
|
Term
| The value of any given change to the property is dependent on the value of the property as a whole. Because of this, the same improvement to different houses may result in an increase in value in one, while the other sees no appreciable change. |
|
Definition
| The principle of contribution |
|
|
Term
An increase in value that occurs by combining adjacent parcels of land into a single parcel
and
The process of combing the parcels |
|
Definition
The principle of plottage
and
The principle of assemblage |
|
|
Term
| A decline in value due to the decline in value of neighboring properties |
|
Definition
| The principle of regression |
|
|
Term
| The increase in property value from increased surrounding property values |
|
Definition
| The principle of progression |
|
|
Term
| Changes in value may be caused by the expectation of events. A suburban residential property that is located near the site of a proposed public transportation facility may see an increase in value before the actual benefit is realized. |
|
Definition
| The principle of anticipation |
|
|
Term
| ------ is a process in which an appraiser uses both superior and inferior units of comparison such as age, transaction price, etc., to determine a probable range of values for a property. |
|
Definition
|
|
Term
| ------- , also known as -------, is caused by factors outside the property (e.g., an airport is nearby, causing noise). |
|
Definition
| External depreciation, economic obsolescence |
|
|
Term
| is a form of depreciation or loss in value caused by defects in design and can occur with outdated structures or systems or when a property is overbuilt for the area. |
|
Definition
|
|
Term
| occurs with wear and tear, damage, and improper maintenance. |
|
Definition
|
|
Term
| refers to an item of physical deterioration or functional obsolescence where the cost to cure the item is less than or the same as the anticipated increase in the property's value after the item is cured. |
|
Definition
|
|
Term
| includes items not practical to correct. |
|
Definition
|
|
Term
| approach bases value on the cost to build a functionally equivalent property. |
|
Definition
|
|
Term
approach determines the cost to build an exact replica of the property with the same materials and
deficiencies. |
|
Definition
|
|
Term
| is used for the appraised value of four or fewer units. GRM = Sales price ÷ the gross monthly rent. |
|
Definition
| Gross rent multiplier (GRM) |
|
|
Term
| is used for the appraised value of five or more units (considered "commercial" property). |
|
Definition
| Gross income multiplier ( GIM ) |
|
|
Term
| An annual rate of return from an income-producing property. Used by appraisers to estimate value of rent generating properties. Used by investors to compare one investment to another. |
|
Definition
| Capitalization rate or cap rate |
|
|
Term
Real estate licensees perform ------ to help clients make price decisions. They help seller clients decide how to
price the property and buyer clients decide how much they're willing to pay. |
|
Definition
| comparative market analyses (CMAs) |
|
|
Term
----- is the amount of value or interest a homeowner has in a property less debts against the property (such as a
mortgage loan). |
|
Definition
|
|
Term
----- is calculating what "pro-rata" amount is owed by (or to) each party at closing for expenses or income
generated by the real estate sale. |
|
Definition
|
|
Term
----- items are amounts allocated to both buyer and seller that haven't yet been paid but will be paid by the buyer
after closing. These items are credited to the buyer and debited to the seller. |
|
Definition
|
|
Term
| ------ items are amounts allocated to both buyer and seller that were paid by the seller before closing. These items are credited to the seller and debited to the buyer. |
|
Definition
|
|
Term
------ is applied when real property is sold. Rates vary by state and perhaps even locality.
Payment may be negotiable between the parties. It is typically paid on the sale price. |
|
Definition
|
|
Term
| ------ tax is a tax on the recordation of the mortgage/deed of trust and is based on the loan amount. |
|
Definition
| mortgage/deed of trust recording |
|
|
