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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Term
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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
|
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
|
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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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
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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
|
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
|
Definition
|
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Term
|
Definition
| sum due in full upon default |
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Term
|
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
|
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
|
Definition
|
|
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
|
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
|
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
|
Definition
| waits for an upset bid "statutory redemption period" 10 days |
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Term
|
Definition
| if bid is upset the statutory redemption period must be repeated |
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Term
|
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
|
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... |
|
Definition
| he is not responsible for the debt...the seller remains liable |
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Term
|
Definition
| not insured or guaranteed by any government agency. most popular type of loan |
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Term
| noninsured conventional loan must have.. |
|
Definition
| a downpayment of 20% 80/20 loan to value ratio |
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Term
| insured conventional loan |
|
Definition
| requires lower down payment. Loan to value ratio may be 95/5. requires PMI insurance |
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Term
|
Definition
| increase the loan yield for lender or investor |
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Term
|
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
|
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
|
Definition
| Mortgage insurance premium |
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|
Term
| FHA Loans have greater risk than insured conventional loans? t/f |
|
Definition
|
|
Term
|
Definition
| most popular of FHA programs. |
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Term
|
Definition
| graduated payment mortgages |
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Term
|
Definition
|
|
Term
|
Definition
| guaranteed, NOT INSURED by the VA. has a DIRECT LOAN PROGRAM |
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Term
|
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... |
|
Definition
| must release the vet from liability of the loan, not the VA |
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Term
|
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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Term
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Definition
| for more than one parcel of RE. often used by developers |
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Term
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Definition
| covers real and personal property |
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Term
| Reverse Annual Mortgage (RAM) |
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Definition
| lender pays the property owner |
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Term
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Definition
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Term
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Definition
| wraps around the first mortgage |
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Term
| mortgages and deeds of trust are valid between the immediate parties... |
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Definition
| EVEN IF THEY ARE NOT RECORDED |
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Term
| there are mutual savings banks in NC? t/f |
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Definition
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Term
| DOES NOT service loans for investors |
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Definition
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Term
| DOES service loans for investors |
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Definition
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Term
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Definition
| sale of mtgs. to investors, providing the primary market with more funds |
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Term
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Definition
| VA, FHA and conventional loans |
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Term
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Definition
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Term
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Definition
| it approves "loan poolers" |
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Term
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Definition
| primarily purchases conventional loans...but may also purchase FHA and VA loans. |
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Term
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Definition
| lending institution approval of the loan |
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Term
| lenders will not accept income unless it is reported for income tax? t/f |
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Definition
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Term
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Definition
Deprec. per year X years
100% - total deprec.
amount / deprec ( 00.0 to .000 |
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Term
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Definition
sell price - original price = amt. recieved
amt. rec. / original price = % |
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Term
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Definition
pur. price-loan amt. = orig. equity
sale price - purchase price = profit
profit / original equity = % |
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Term
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Definition
| the most likely price a buyer would be willing to pay |
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Term
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Definition
| is the actual price paid for the property |
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Term
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Definition
| total of past expenditures to obtain improvements to the property |
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Term
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Definition
| Concept of value - Desire, Utility, Scarcity, transferability |
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Term
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Definition
| the property being appraised |
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Term
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Definition
| properties in the area that have sold and closed |
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Term
| Sales comparison approach |
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Definition
| the most reliable appraising approach for single family homes and land |
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Term
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Definition
| universal residential appraisal report |
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Term
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Definition
| similar in age, location and characteristic. sold within 12 months and under typical open market conditions |
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Term
| Do not use current listing prices or pending sale prices for comps...t/f |
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Definition
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Term
| In appraisal NEVER adjust the.. |
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Definition
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Term
| When the property is superior to the comp... |
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Definition
| the sale price of the comp. will be adjusted UP |
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Term
| When the property is INFERIOR to the comp |
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Definition
| the comp will be adjusted DOWN |
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Term
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Definition
| deriving a final estimate of value from the indicated values of the comps. |
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Term
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Definition
| most like the subject property and need little adjustment |
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Term
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Definition
| based on the summation of the land and building value. building value equals replacement or reproduction cost (new) less depreciation |
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Term
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Definition
| sales comparison approach |
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Term
| Cost approach may be used for |
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Definition
| schools, churches, public hospitals, fire stations, libraries, gov. agencies, historic structures (have no comps) |
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Term
| 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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Term
| quantity of survey method (cost approach) |
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Definition
| a complete breakdown of all materials, equipment, labor, indirect costs and builder profits. |
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Term
| Unit in place method (cost approach) |
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Definition
| break down of construction cost into seperate units i.e roof masonry wall.. |
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Term
| square foot method (cost approach) |
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Definition
| cost per square foot based on similar area structure. |
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Term
| The square food method is the... |
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Definition
| most widely used method of estimation |
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Term
| the cost approach determines |
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Definition
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Term
| in an appraisal the effective age is more important than the... |
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Definition
|
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Term
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Definition
| 1.age/life method 2. market abstraction method. 3. breakdown method |
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Term
| age/life method (Depreciation) |
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Definition
| 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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Term
| market abstraction method (depreciation) |
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Definition
| compares to depreciation on comps. |
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Term
| breakdown method (depreciation) based on.. |
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Definition
| (most difficult) 1. physical deterioration 2. functional obsolescence 3. economic obsolescence |
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Term
| physical deterioration and functional obsolescence are caused... |
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Definition
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Term
| economic obsolescence is caused by... |
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Definition
| outside forces and is incurable. |
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Term
| income or income capitalization approach |
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Definition
| FOR INCOME PRODUCING PROPERTIES. value is appraised based on the net income both now and in the future. |
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Term
| Net operating income (NOI) |
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Definition
| Gross rent X occupancy rate) - operating expense. |
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Term
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Definition
| total possible income. based on market rent (typical tenant on similar property) or actual gross rent received. |
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Term
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Definition
| if a property has a "vacancy rate" of 5% then the "occupancy rate" will be 95% |
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Term
| Formulas used in the Capitalization approach |
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Definition
1) NOI (net operating expense) / cap rate = value
NOI / cap rate = value
value X cap rate = NOI |
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Term
| Gross rent multiplier (GRM) = |
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Definition
sales price (comps) divided by gross rent
Market value = gross rent X GRM (Gross rent multiplier) |
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Term
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Definition
| final step in appraisal. does not average the three approaches, but puts the most weight on the approach appropriate. |
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