Term
| Physical characteristics of land |
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Definition
-immobile
-indestructible (durable)
-heterogenous, nonhomogenous (not all the same, unique) |
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Definition
| ones preference of location over another |
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Definition
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Definition
using someone elses money for a profit
*high risk investment |
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Term
| Economic Good of Real Estate |
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Definition
-Demand
-Utility
-Scarcity
-Transferability
-Land is not considered a liquid asset (convert to cash quickly, no high penalty) |
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Term
| Environmental concerns in realty |
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Definition
-Asbestos
-Lead Base Paint
-Urea Formaldehyde
-Radon gas (wood shed, basement)
-Underground storage tanks |
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Definition
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Definition
| most probably price realty will bring in a competitive market |
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Term
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Definition
-define the problem
-gather data needed for appraisal
-reconciliation (final step) |
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Term
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Definition
| most profitable use, not always present use (competing ranch) |
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Term
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Definition
| VALUE will increase if demand is high and supply is low |
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Term
| Increasing and Decreasing Returns |
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Definition
| When doing home improvements, there reaches a point of no increase in monetary return |
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Term
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Definition
| surround area pulls property value down |
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Term
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Definition
| surrounding area pulls property value up |
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Term
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Definition
| value of any component that's added- varies according to value it contributes to property |
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Term
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Definition
the END RESULT of adding contiguous parcels together for a value greater than individually
-assemblage is the PROCESS |
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Term
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Definition
| PROCESS of adding contiguous parcels together for a value greater than individually |
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Term
| Approaches to value - Market/Sales Comparison Approach |
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Definition
-compare similar realty and make adjustments
-when choosing comps consider location, amenities, date of sale, terms of sale
-Never adjust the subject property
-only adjust comps - comps are better = adjust down, comps are worse = adjust up |
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Term
| Approaches to value -cost approach (summation) |
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Definition
- used for new homes and **special use properties like church,school,etc.
-replacement cost
-depreciation - loss in value due to any reason (straight line depreciation)
-land value |
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Term
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Definition
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Term
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Definition
| design, outdated, outmoded |
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Term
| economic or external obsolescence |
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Definition
-outside of the property
-always incurable |
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Term
| Approaches to value - income approach |
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Definition
-income producing properties
-the property is valued according to the income it generates
-capitalization rate = expected rate of return
- rate x value = NOI |
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Term
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Definition
| makes the match between the borrower and lender |
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Term
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Definition
| funds the loan with their own funds |
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Term
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Definition
-FHA insures the lender against default
-MIP = mortgage insurance protection
-low down payment
-owner occupied
-no prepayment penalty
-12/15/89 lender approval to assume the loan
-203K |
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Term
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Definition
-guarantee from the government to the lender against default
-no down payment, 100% finance
-Certificate of Eligibility (DD214) required
-CRV (certificate of reasonable value) VA Appraisal
-owner occupied
-no prepayment penalty
-3/1/88 lender approval required to assume the loan |
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Term
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Definition
-no government backing
-based on borrower's ability to repary
-PMI = Private Mortgage Insurance |
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Term
| Secondary Loan Market (Warehousers)- FNMA Fannie Mae |
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Definition
-government
-buys FHA, VA, Conventional Loans |
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Term
| Secondary Loan Market (Warehousers)- GNMA Ginnie Mae |
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Definition
-government
-acts in tandem with FNMA |
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Term
| Secondary Loan Market (Warehousers)- FHLMC Freddie Mac |
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Definition
-government
-buys primarily conventional (standard forms) |
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Term
| Mortgage Payment Plans - Budget or PITI |
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Definition
| Principal, Interest, Taxes, and Insurance |
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Term
| Mortgage Payment Plans - Amortized |
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Definition
| Constant payment including interest and principal until paid off |
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Term
| Mortgage Payment Plans - Partially Amortized |
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Definition
| begins amortized, ends with a lump sum |
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Term
| Mortgage Payment Plans - Straight/Term |
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Definition
| Begins interest only and ends with a lump sum |
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Term
| Mortgage Payment Plans - Wraparound |
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Definition
| buyer creates a new loan wrapped around existing financing |
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Term
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Definition
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Term
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Definition
-1 point is equal to 1% of loan
-increase lender's yield not reduce consumer rate |
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Term
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Definition
combining 2 or more pieces of property on one loan
-partial release |
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Term
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Definition
| combine realty and personal property on loan |
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Term
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Definition
-interim - short term for the construction phase
-take out - permanent after construction is complete |
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Term
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Definition
| lower payments at the beginning of a loan |
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Term
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Definition
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Term
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Definition
| cap on consumer interest rates |
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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
| GRM = gross rent multiplier |
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Definition
| sales price / rent per month = GRM |
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Term
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Definition
| = loan/1000 divided by monthly payment |
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Term
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Definition
| = amount of loan/1000 X factor |
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Term
| line 700 on HUD 1 (settlement statement) |
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Definition
| sales price x commission percentage |
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Term
| no prepayment penalty on FHA or VA loans |
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Definition
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Term
| discount rate increases then... |
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Definition
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Term
| capitalization rate increases, value remains the same... |
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Definition
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Term
| no prepayment penalty on FHA or VA |
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Definition
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Term
| discount rate increases then... |
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Definition
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Term
| capitalization rate increases, value remains the same... |
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Definition
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