Term
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Definition
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Term
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Definition
Movable (chattel and personalty are other names) |
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Term
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Definition
Once personal property but now real property.Examples - Fructus naturales(flowering bushes), a mail box, a chandelier. |
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Term
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Definition
not considered a fixture (crops that require annual planting and cultivation) |
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Term
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Definition
IRMA: Intent, Relationship, Method, Adaptability |
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Definition
not important in determining a fixture |
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Term
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Definition
Items attached to real property by a tenant under a commercial lease. Considered personal property and removable once lease is finished |
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Term
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Definition
Agricultural Fixtures (fence) are considered fixtures and not removed by tenant at the end of a lease. |
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Term
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Definition
Lifetime ownership. Fee Estate (inheritable) includes: Fee simple absolute, FSD, FS to a condition subsequen. non-fee estate (not inheritable) Includes: life estate |
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Term
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Definition
ownership with no limits (highest form of ownership |
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Term
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Definition
it terminates automatically, automatically reverts to original owner, if pre-determined event happens |
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Term
Fee Simple subject to a Condition Subsequent |
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Definition
Does not automatically revert. If condition is violated the owner can regain property by legal action |
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Term
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Definition
Right to own a property (sell, mtg., lease) but only for your lifetime. Cannot will the property. |
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Term
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Definition
Using the wood on the property for personal use. Cannot sell wood on a life estate, its considered a "waste of the life estate." |
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Term
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Definition
Estate for years, Estate from year to year, Estate at Will, Estate at Sufferance. |
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Term
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Definition
Friendly basis. either party can terminate without notice. |
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Term
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Definition
Periodic Tenancy - a tenancy of indefinite duration |
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Term
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Definition
Begins and ends on a certain day. Terminates automatically. |
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Term
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Definition
tenant entered lawfully, but remains unlawfully. Also called holdover tenant. possession is on a hostile basis |
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Term
Week-to-week Tenancy notice |
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Definition
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Term
Month-to-Month Tenancy notice |
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Definition
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Term
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Definition
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Term
Tenancy by the Entireties |
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Definition
Husband and Wife. Automatic survivorship. Will cannot override survivorship. Favored in NC |
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Term
Termination of Tenancy by the Entireties |
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Definition
1. death of husband or wife 2. mutual agreement 3. divorce. (if couple continues after divorce to own, it is tenancy in common. |
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Term
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Definition
Ownership legally favored in NC between two or more ppl not married. Survivorship does NOT exist |
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Term
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Definition
Legal process to pass ownership to heirs |
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Term
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Definition
force division of the property in tenancy in common |
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Term
Tenancy in common "encumber" |
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Definition
each owner may encumber his part, but not the whole property. |
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Term
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Definition
Not favored in NC. Ownership is equally divided with right of survivorship. |
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Term
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Definition
from paint to paint. Air space only, |
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Term
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Definition
condos after 1986 must record declaration (description), detailed plat, prepare bylaws |
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Term
Right to cancel new condo |
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Definition
within 7 days of execution of contract |
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Term
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Definition
party walls, land underneath, |
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Term
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Definition
You own shares of stock in a corp that owns the entire land. NO FEE SIMPLE OWNERSHIP |
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Term
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Definition
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Term
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Definition
ownership to the waters edge |
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Term
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Definition
to the center of the body of water |
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Term
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Definition
ownership on tidal body of water. Ownership to the average high water mark. |
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Term
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Definition
A right, privilage or improvement that passes with the real property. i.e. riparian rights,air rights, subsurface rights,easement |
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Term
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Definition
right to land that diminishes the value. i.e. Lien, |
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Term
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Definition
taxes owed to the state (NC) |
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Term
Personal property tax lien |
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Definition
taxes owed to the county and/or city on personal property |
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Term
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Definition
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Term
Mechanics lien must be filed within |
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Definition
120 days of the last day of labor or materials furnished |
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Term
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Definition
Takes preciseness over other types of liens except for real property taxes |
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Term
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Definition
Real property tax. tax value is equal to property market value |
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Term
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Definition
reassessment of ad valorem taxes every 8 years |
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Term
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Definition
withing OR every 4 years, county and city taxes can be adjusted. |
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Term
What lien is superior to all other liens? |
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Definition
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Term
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Definition
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Term
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Definition
easement for a lifetime. i.e. duke power |
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Term
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Definition
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Term
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Definition
adverse possession (20 years in NC) |
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Term
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Definition
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Term
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Definition
a recorded notice informing all interested parties of legal action. |
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Term
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Definition
an improvement that extends across the boundary line of a particular property. |
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Term
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Definition
tangible evidence of title(ownership) |
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Term
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Definition
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Term
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Definition
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Term
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Definition
give a will of real property |
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Term
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Definition
will of personal property |
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Term
Elements of Adverse possession |
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Definition
OCEAN - Open, Continuous, Exclusive, Actual, Notorious for 20 years |
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Term
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Definition
residential, commercial, Industrial, agricultural |
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Term
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Definition
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Term
Who regulates subdivisions? |
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Definition
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Term
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Definition
2 or more parcels for use of development now or in the future |
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Term
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Definition
in writing, legal capacity, both grantor and grantee must be named,adequate property description, adequate language, grantor must sign, voluntary acceptance. |
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Term
non essential elements of a deed |
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Definition
date, witnessed, recorded,acknowledged or notarized, state the sale price, sealed |
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Term
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Definition
sale price/500 always round but NEVER round down. |
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Term
most desirable means of land description in NC? |
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Definition
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Term
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Definition
a report showing all conveyances and encumbrances for 30 years |
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Term
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Definition
History of title i.e. judgments, liens, taxes and encumbrances |
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Term
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Definition
report by an attorney of marketability of the title. (certificate of title) |
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Term
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Definition
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Term
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Definition
tenant has the right to leave and not pay rent |
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Term
Peaceable self help eviction |
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Definition
landlord cannot force the tenant out of property (change locks,turn off utilities) |
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Term
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Definition
the body of law that governs the relationship between agents and their principals (clients) |
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Term
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Definition
Only one of the parties is bound to act |
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Term
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Definition
both parties are bound to act. i.e. most real estate contracts are bilateral |
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Term
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Definition
a contract that has been performed in full |
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Term
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Definition
a contract that has not been fully performed |
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Term
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Definition
satisfies all legal requirements for a contract and is enforceable by law |
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Term
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Definition
not enforceable by law but still can be honored by the parties. i.e. oral contract. one party must disaffirm the contract to make it VOID |
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Term
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Definition
can be voided based on some legal principals i.e. contract with a minor |
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Term
Essential elements of a contract (mutual assent) |
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Definition
offer and acceptance, mutual agreement, meeting of the minds. |
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Term
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Definition
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Term
contracts that must be in writing (statute of frauds) |
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Definition
1.any conveyance of real property, 2.contract lasting more than 3 years,3. any contract not to compete in a certain buisness 4. promise to pay debt 5. repay debt after bc 6. options to purchase |
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Term
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Definition
Firm is guaranteed to receive a commission no matter who sells the property. |
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Term
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Definition
The firm is guaranteed a commission if anyone, excluding the owner, sells the property |
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Term
Make up of real estate commission |
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Definition
9 members total 7 appointed by the governer 1 by the speaker of the house 3 must be brokers at least 2 can't be involved in RE 3 year staggared terms |
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Term
NCREC elect a new chairperson how often? |
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Definition
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Term
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Definition
Lists, leases, buys, exchanges, auctions, negotiates, sells |
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Term
Notify the NCREC within how many days of address change? |
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Definition
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Term
trade names must be registered with... |
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Definition
county register of deeds and notify the NCREC in writing and furnish the NCREC with a copy of the certificate |
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Term
PB license is only valid when... |
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Definition
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Term
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Definition
5/5 (five intervals over a period of 5 years) may be called club membership, limited partnership, prepaid hotel res., vacation license, freehold,estate for years or vacation bond |
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Term
public offering statement is not required to... |
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Definition
disclose the number of time shares sold or the number of available sales. |
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Term
time share developer must hold all payments in escrow for |
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Definition
10 days or until canceled by the purchaser. |
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Term
Time share project must have a ... |
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Definition
project broker with a RE license A Time Share Registrar |
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Term
A time share licensee can be ... |
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Definition
reprimanded by the NCREC as well as suspending the time share project |
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Term
Federal civil act of 1866 |
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Definition
Race (sale or rental of real and personal property) |
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Term
Fed. fair housing act of 1968 |
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Definition
Race, religion, color, national origin and sex (DOES NOT APPLY TO COMMERCIAL OR INDUSTRIAL REAL ESTATE) |
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Term
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Definition
inducing an owner to sell their property by creating fear of change |
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Term
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Definition
attempting to steer a buyer to or away from a particular area due to class |
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Term
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Definition
refusal and advertising because of discrimination |
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Term
Fed fair housing act of 1988 |
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Definition
adds Handicap status and familial status (including pregnant women) |
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Term
Federal exemptions act of 1968 |
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Definition
a. an owner selling or leasing his own property can discriminate but cannot discriminate in advertising. b. rental of 1 to 4 units if owner lives there c. a private club or religious org. when renting or selling non-commercial property to its members |
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Term
State fair housing act exemptions |
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Definition
a. does NOT exempt FSBO b. owner can discriminate in the rental of 1 - 4 unites if family member or owner lives there c. college or university can discriminate in rental of single sex dorms. |
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Term
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Definition
always go with the stricter |
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Term
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Definition
1. New constructions 2.foreclosures and 3. lease purchases where the new owner is occupying. |
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Term
if disclosure form is not presented... |
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Definition
buyer has a 3 day rescission period either from receipt of the form or formation of a contract. |
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Term
if organization hires a real estate firm ... |
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Definition
the real estate firm cannot discriminate |
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Term
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Definition
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Term
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Definition
Purchase price + closing cost |
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Term
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Definition
(buy side) purchase price + closing costs, comm, improvements |
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Term
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Definition
(sell side) selling price - closing cost, commission |
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Term
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Definition
realized basis - adjusted basis |
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Term
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Definition
1. a maximum of interest up to 1,000,000 borrowed on both residences 2. county and city tax 3. discount points and loan origination fees on the primary residence. |
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Term
to be deductible, loan origination fees and points must be paid for by.. |
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Definition
money outside of that borrowed from the lender. |
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Term
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Definition
insurance, principal payments, repairs, depreciation, homeowners ass. payments in a townhouse or condo. |
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Term
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Definition
mtg. interest, real property taxes, maintenance & repairs, property insurance, utilities, supplies, advertising, admin cost, mgm fees, salaries, depreciation, HOA dues |
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Term
What cannot be depreciated? |
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Definition
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Term
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Definition
building and improvements, except on personal residence |
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Term
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Definition
taxable from a 1031 exchange |
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Term
a principal residence CANNOT be used in a.. |
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Definition
like-kind-exchange (1031) |
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Term
Vaca home may not be deductible if used more than |
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Definition
10% of the days rented, 14 days per year...whichever is greatest |
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Term
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Definition
must be used exclusively for business |
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Term
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Definition
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Term
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Definition
all risk form (most widely used) |
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Term
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Definition
tenant policy ONLY personal property (liability included) |
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Term
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Definition
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Term
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Definition
Modified coverage - used when cost to replace house is more than market value...may be used in older homes |
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Term
Package insurance includes... |
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Definition
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Term
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Definition
an addition to an insurance policy that increases the number of perils covered. |
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Term
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Definition
a clause which means that the insured must share the loss with the Insurance company if the property is under insured. less than 80% |
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Term
flood insurance must be... |
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Definition
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Term
the wood frame method is... |
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Definition
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Term
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Definition
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Term
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Definition
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Term
Standard ceiling height is |
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Definition
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Term
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Definition
slop of roof = 12 inches in from fascia and measure up...whatever the vertical line measures to...will be for example 4/12 |
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Term
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Definition
lowest part of the structure |
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Term
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Definition
column that supports the floor framing over an open span between the foundation walls |
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Term
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Definition
the lowest horizontal wooden member of the house frame. rests on top of the foundation forming a base for the floor joists |
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Term
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Definition
attached to the sill, supports the floor and its load..spaced 16 to 24 inches apart |
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Term
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Definition
heavy wooden or steel beam that runs across the top of the piers and supports the joists |
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Term
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Definition
unfinished sheets (usually plywood) that are laid on top of the floor |
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Term
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Definition
vertical members to which coverings are applied. attached to the subfloor by the sole plate |
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Term
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Definition
a beam located above the doors and windows to strengthen the wall |
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Term
what are interior walls made of.. |
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Definition
gypsum board also called sheetrock or wallboard |
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Term
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Definition
the first layer of exterior covering applied to the walls and roof. often made of plywood, osb or fiberboard. |
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Term
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Definition
component of window that holds the glass |
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Term
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Definition
horizontal bar that divides the glass panes |
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Term
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Definition
vertical bar that divides the panes |
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
outside layer of the sheathing, the finish |
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Term
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Definition
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Term
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Definition
the overhang of the roof slope extending beyond the walls. |
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Term
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Definition
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Term
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Definition
flat board attached to the eave (the gutter is attached to the fascia) |
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Term
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Definition
sheet metal attached to protrusions in the roof to protect against water seepage. |
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Term
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Definition
R-value. the higher the R-value, the more resistant to heat flow. |
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Term
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Definition
Walls R-13. Ceiling R-30. Floors R-19 |
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Term
building code is enforced by... |
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Definition
local inspectors licensed by the state |
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Term
Any known environmental hazards are considered... |
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Definition
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Term
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Definition
in houses prior to 1978. May cause respiratory disease |
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Term
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Definition
broken down into tiny filaments and particles that become airborn |
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Term
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Definition
process to prevent asbestos from spreading |
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Term
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Definition
in about 75% of homes prior to 1978. can cause serious damage to brain, kidneys, nervous system and red blood cells. |
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Term
lead based paint requirement |
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Definition
must test for and disclose if found. |
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Term
Residential Lead-Based Paint Hazard Reduction Act |
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Definition
TWO disclosures to be given. disclosure attached to the sales contract and info pamphlet given to perspectives. |
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Term
buyers have ... to test for lead based paint |
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Definition
10 days...in those 10 days the contract is not binding. this includes FSBO |
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Term
Radon can be reduced by... |
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Definition
ventilation system or exhaust fans |
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Term
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Definition
NC Real Estate license law |
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Term
License expired not more than 6 months may... |
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Definition
pay 55 dollars to reactivate and submit a request to activate form |
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Term
Trust accounts are insured up to |
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Definition
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Term
Firms must open separate trust accounts for ... |
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Definition
each HOA, if firm is managing HOA's |
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Term
A firm or broker can deposit how much in a trust for service charges? |
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Definition
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Term
interest earned on a trust must be... |
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Definition
dispersed promptly, within 30 days |
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Term
can the broker appoint someone such as a secretary to deposit trust funds? t/f |
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Definition
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Term
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Definition
Earnest Money & security deposits (other than cash) within 3 BANKING DAYS FOLLOWING ACCEPTANCE |
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Term
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Definition
Rent, settlement proceeds, cash & other trust funds ...within 3 BANKING DAYS AFTER RECEIPT OF FUNDS |
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Term
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Definition
deposited in a trust within 3 BANKING DAYS AFTER RECEIPT |
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Term
Escrow agent Must give EM deposit to Attorney no less than... |
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Definition
10 days before anticipated closing |
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Term
Brokers do not have to keep a seperate ledger sheet for each individual property that you manage t/f? |
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Definition
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Term
is NC a lien theory state? |
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Definition
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Term
NC is a .... theory state |
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Definition
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Term
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Definition
use the mtg to as primary financing |
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Term
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Definition
uses the deed of trust as primary financing |
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Term
Who receives the mortgage? |
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Definition
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Term
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Definition
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Term
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Definition
sum due in full upon default |
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Term
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Definition
loan balance is due immediately if the borrower sells without consent of the lender |
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Term
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Definition
NC Law prohibits a prepayment on any residential loan of 150,000 Or less |
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Term
FHA and VA loans do not have |
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Definition
prepayment or due on sale clauses |
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Term
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Definition
the gradual liquidation or elimination of a debt over a period of years through regular payment of P + I |
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Term
real estate Loans are most of the time paid in ... |
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Definition
arrears (i.e. loan paid on june 1st is actually interest for may) |
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Term
GPM Graduated payment plan |
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Definition
lower than normal, increasing at certain intervals ...causing differed interest |
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Term
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Definition
(differed interest) less interest in the beginning buy payments but more as time goes on. |
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Term
Adjustable (variable) rate (ARM) |
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Definition
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Term
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Definition
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Term
periodic interest rate cap (anniversary cap) |
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Definition
limits the amount of increase of decrease in the interest rate at each adjustment date |
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Term
Life of loan cap (lifetime cap) |
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Definition
Establishes a ceiling that the interest rate cannot exceed during the life of the loan |
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Term
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Definition
limits actual amount of increase per month (could result in negative amortization) |
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Term
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Definition
interest only loan (principal is payed in full at the end of the loan term) BALLOON PAYMENT |
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Term
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Definition
holds the deed of trust (legal title) for the lender until it is payed off and handles foreclosure. is appointed by the lender |
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Term
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Definition
gives the trustee the right to not wait for a court ordered foreclosure |
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Term
right of defeasance (defeat) |
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Definition
right to clear the title, pay off the debt in full. |
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Term
the trustee does not have to ... |
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Definition
1.be an attorney 2. does not need a real estate license |
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Term
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Definition
advertise for 30 days at the county courthouse |
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Term
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Definition
advertises in the local newspaper for 30 days |
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Term
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Definition
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Term
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Definition
waits for an upset bid "statutory redemption period" 10 days |
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Term
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Definition
if bid is upset the statutory redemption period must be repeated |
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Term
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Definition
trustee delivers to the highest bidder |
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Term
the borrower has the right to... |
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Definition
step up and pay debt in full anytime during the foreclosure procedure. this will stop the foreclosure and give legal title |
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Term
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Definition
borrower can receive any surplus after foreclosure sale. borrower may be obligated to pay the difference if sale does not exceed debt. |
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Term
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Definition
prohibitsa loan assumption. but FHA and VA loans have no due on sale clause |
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Term
if buyer takes title without knowing about an existing mtg... |
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Definition
he is not responsible for the debt...the seller remains liable |
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Term
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Definition
not insured or guaranteed by any government agency. most popular type of loan |
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Term
noninsured conventional loan must have.. |
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Definition
a downpayment of 20% 80/20 loan to value ratio |
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Term
insured conventional loan |
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Definition
requires lower down payment. Loan to value ratio may be 95/5. requires PMI insurance |
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Term
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Definition
increase the loan yield for lender or investor |
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Term
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Definition
1 point = 1/8% on 30 year loan 2 point = 1/4% 4 points = 1/2% 6 points = 3/4% 8 points = 1% |
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Term
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Definition
make loans, it insures them. It does not insure investors, it insures owner occupied property 1 to 4 family homes. |
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Term
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Definition
Mortgage insurance premium |
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Term
FHA Loans have greater risk than insured conventional loans? t/f |
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Definition
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Term
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Definition
most popular of FHA programs. |
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Term
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Definition
graduated payment mortgages |
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Term
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Definition
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Term
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Definition
guaranteed, NOT INSURED by the VA. has a DIRECT LOAN PROGRAM |
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Term
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Definition
the maximum amount that the VA will guarantee. there is no maximum loan amount but it is usually about 4 times the entitlement. |
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Term
In a VA loan the lender... |
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Definition
must release the vet from liability of the loan, not the VA |
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Term
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Definition
a. purchase or construction of 1 to 4 units family residence b. purchase of condo or townhome. c. mobile home. d. home improvements |
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Term
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Definition
may be required..a certain % of the loan amount..it can be financed. |
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Term
There is usually no...on VA loans |
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Definition
down payment...unless the sale price exceeds appraised value. |
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Term
CRV (certificate of reasonable value) |
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Definition
not used with any other type of loan. ONLY VA. it establishes Max value and loan amount. |
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Term
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Definition
loan made directly from the seller to the buyer. takes precedence at foreclosure over judgment and mechanics liens.SELLER IS NOT ENTITLED TO A DEFICIENCY JUDGMENT |
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Term
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Definition
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Term
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Definition
ordinary mortgage which allows borrower to add on more funds |
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for more than one parcel of RE. often used by developers |
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covers real and personal property |
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Reverse Annual Mortgage (RAM) |
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lender pays the property owner |
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wraps around the first mortgage |
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mortgages and deeds of trust are valid between the immediate parties... |
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EVEN IF THEY ARE NOT RECORDED |
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there are mutual savings banks in NC? t/f |
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DOES NOT service loans for investors |
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DOES service loans for investors |
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sale of mtgs. to investors, providing the primary market with more funds |
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VA, FHA and conventional loans |
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it approves "loan poolers" |
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primarily purchases conventional loans...but may also purchase FHA and VA loans. |
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lending institution approval of the loan |
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lenders will not accept income unless it is reported for income tax? t/f |
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Deprec. per year X years
100% - total deprec.
amount / deprec ( 00.0 to .000 |
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sell price - original price = amt. recieved
amt. rec. / original price = % |
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pur. price-loan amt. = orig. equity
sale price - purchase price = profit
profit / original equity = % |
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the most likely price a buyer would be willing to pay |
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is the actual price paid for the property |
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total of past expenditures to obtain improvements to the property |
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Concept of value - Desire, Utility, Scarcity, transferability |
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the property being appraised |
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properties in the area that have sold and closed |
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Sales comparison approach |
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the most reliable appraising approach for single family homes and land |
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universal residential appraisal report |
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similar in age, location and characteristic. sold within 12 months and under typical open market conditions |
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Do not use current listing prices or pending sale prices for comps...t/f |
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In appraisal NEVER adjust the.. |
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When the property is superior to the comp... |
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the sale price of the comp. will be adjusted UP |
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When the property is INFERIOR to the comp |
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the comp will be adjusted DOWN |
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deriving a final estimate of value from the indicated values of the comps. |
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most like the subject property and need little adjustment |
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based on the summation of the land and building value. building value equals replacement or reproduction cost (new) less depreciation |
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sales comparison approach |
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Cost approach may be used for |
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schools, churches, public hospitals, fire stations, libraries, gov. agencies, historic structures (have no comps) |
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3 methods of estimating building cost |
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Definition
1. quantity survey method 2. unit-in-place method, 3. square foot method |
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quantity of survey method (cost approach) |
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a complete breakdown of all materials, equipment, labor, indirect costs and builder profits. |
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Unit in place method (cost approach) |
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break down of construction cost into seperate units i.e roof masonry wall.. |
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square foot method (cost approach) |
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cost per square foot based on similar area structure. |
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The square food method is the... |
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most widely used method of estimation |
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the cost approach determines |
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in an appraisal the effective age is more important than the... |
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1.age/life method 2. market abstraction method. 3. breakdown method |
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age/life method (Depreciation) |
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effective age divided by the number of years in economic life of the structure. for example if the effective age is 20 years and the economic life is 50, then 20 / 50 = 40% depreciation |
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market abstraction method (depreciation) |
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compares to depreciation on comps. |
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breakdown method (depreciation) based on.. |
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(most difficult) 1. physical deterioration 2. functional obsolescence 3. economic obsolescence |
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physical deterioration and functional obsolescence are caused... |
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economic obsolescence is caused by... |
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outside forces and is incurable. |
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income or income capitalization approach |
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FOR INCOME PRODUCING PROPERTIES. value is appraised based on the net income both now and in the future. |
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Net operating income (NOI) |
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Gross rent X occupancy rate) - operating expense. |
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Term
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total possible income. based on market rent (typical tenant on similar property) or actual gross rent received. |
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if a property has a "vacancy rate" of 5% then the "occupancy rate" will be 95% |
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Formulas used in the Capitalization approach |
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1) NOI (net operating expense) / cap rate = value NOI / cap rate = value value X cap rate = NOI |
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Gross rent multiplier (GRM) = |
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sales price (comps) divided by gross rent
Market value = gross rent X GRM (Gross rent multiplier) |
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final step in appraisal. does not average the three approaches, but puts the most weight on the approach appropriate. |
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