Owners of business and investment Real Estate to sell their property and buy other like kind property without paying the Capital Gains Tax.
3 Types of Appraisals
Market Data Approach - Sales comparison
Cost Approach - Caculate the reproduction cost of improvements, subtract the deprecation on improvements, add the land value.
Capitalization Approach - Income - Estimates the future value of a current or estimated stream of income.
4 Elements of Value - DUST
Demand for the type of Property
Utility - Desirable use the property offers
Scarcity of properties available
Transferbility of the property to a new owner.
4 Levels of Appraisers Licenses
1) Trainee Appraiser
2) Residential Appraiser
3) Certified Residential appraiser
4) Certified General Appraiser
4 Steps of Appraisal Process
1) Definition of the Appraisal Problem
2) Gathering Data (General Data by region, city, neighborhood & Specific Data, location, lot, house improvements
3)Three Appraisal methods (Market Comparison, Cost Approach & Income Approach)
4) Correlation of Reconciliation of Value & final opinion of value (The Appraisal Report)
An orderly process is defined, planned, and the data is gathered, analyzed, and correlated to estimate the value.
4 Utilities of joint Tenancy (TTIP)
Time - interest must be acquired at the same time.
Title - interest must be acquired by the same document.
Interest - Ownership interest are always equal, benifits and burdens.
Possession - undivided interest, right to use the entire property.
5 Tests of Fixture (MARIA)
Method to determine if an item is a fixture.
Method of attachment
Relationship of the parties
5 Ways to own a business
All documents must be acknowledged before recorded.
Refers to a signed or verbal statement by the named person that he/she has signed that document of his/her own free will in the presence of a witness, usually a Notary Public.
A latin word meaning Taxed "according to value".
A tax that is charged in proportion to the value of the property.
Real property is reassessed each time it is transferred (sold) at 100% of its selling price or market value, if it is higher.
Adjustable Rate Mortgage (ARM)
(or Trust Deed) is a loan is which the interest rate fluctuates periodically, based on a specific index, which makes the payment amount also change.
Transfer title to property to someone other than the true owner.
Occupy for a five year period.
Open, notorious, contunious, hostile, under claim of right or color of title, adverse to the interest of the true owner.
Must pay all property taxes during the 5 year period.
Legal relationship between principle and agent that arises out of a contract.
Employed to do certain acts on behalf of the prinicpal who retained the agent to deal with a third party.
A clause in a mortgage or deed of trust that allows the lender to call the loan if the borrower transfers title to the property.
Transfer ownership of a property to another, either voluntarily or involuntarily.
This is a zoning act designed to control the development in the vicinity (1/4 mile wide strip) of hazardous earthquake faults for the benefit of public safety for the entire state of California.
Developments or structures in existence prior to 5/4/75, are not affected.
Are those improvements or views that increase the desirability or enjoyment rather than the necessities of the residents. Usually single-family residences.(Ocean/mountain view, city lights, jacuzzis, swimming pools, and tennis courts).
Americans with Disabilities Act (ADA)
Is a Federal Civil Rights law that applies to people with disabilities and protects them from discrimination.
Fines up to $10,000 first time violators, up to $25,000 for second offense within 5 years and up to $50,000 for a third offense within 7 years.
Annual Percentage Rate (APR)
The relationship between the total of the finance charges (interest rate, points, and the loan fee) and the total amount financed, expressed as a percentage.
According to the Federal Truth in Lending Act, the lender must disclose the annual percentage rate of a loan which is the cost of credit, including interest and other financing costs, expressed as an annual rate.
An opinion of value as of a certain date; a conclusion resulting from the analysis of facts.
Rights or property that are ordinarily transferred with land and used for its benefit, such as easements.
Belongs to, goes with, or runs with the land.
Transfers the contract rights and obligations of one of the parties to another person. A listing agreement cannot be transferrred due to the nature of the obligation imposed.
Soil added to land by an action of a body of water.
Both parties exchange promises to do or refrain from doing something. A real estate sales contract is a bilateral contract because both sides have an obligation to perform.
British Thermal Units (BTU's)
Bundle of Rights
Contractor State License Law
Documentary Transfer Tax
Effective Gross Income
Fair Market Value
FHA Minimum Crawl Space
Fictitious Business Name (DBA)
Foreign Investment in Real Property Tax Act (FIRPTA)
A lease in which the tenant pays only a fixed amount for rental and the landlord pays all aperating expenses and taxes.
Entirely in the testator's handwriting and requires no witnesses.
Died without a will.
Community property - surviving spouse.
Seperate property - Spouse if no children exist. If one child, divided equally between spouse and child. If two or more children exist, one third goes to the spouse and two-thirds is divided between the children.
Co-ownership that gives each tenant equal interest and equal rights in the property.
Right of survivorship.
Land Sales Contract
Liquidated Damages Clause
Suit Pending - A public notice that a lawsuit has been filed that may affect the title to a particular piece of property.
Loan to Value (LTV)
Minimum Report Requirements
Mobile Home (Manufactured Home)
A fixed, visable marker used to establish boundaries for a survey.
Natual Hazard Disclosure (NHD)
Neighbor Shopping Center vs Major Shopping Center
A lease that requires the tenant to pay maintenance and operating expenses, as well as rent.
Net Operating Income
Redrafting of the agreement, substituting the new one for the old one.
The right of the government to enact laws, ordinances, and regulations to protect public health, safety, welfare, and morals.
Preliminary Public Report
1. One who authorizes another to act on his or her behalf.
2. One of the contracting parties to a transaction.
3. The amount of money borrowed in a loan, seperate from the interest charged.
Principle of Contribution
Principle of Highest and Best Use
Principle of Substitution
Principle of Supply and Demand
The judicial procedure of proving the validity of a will.
Property Taxes Due
Pur Autre Via
Quiet Title Action
A conveyance where the grantor transfers with warranty or obligations whatever interest or title he or she may have.
Real Estate Recovery Fund
Rumford Act (Now called the CA Fair Employment & Housing Act)
Stipulates that listing agents earn their commission if the property is sold within a specified period after the listing agreement has terminated. Agent must provide a list within 3 days after the listing is terminated.
A group formed to combine funds for real estate investment.
Can be partnership, corporation, limited liability company, tenance in common, or other.
A trust may be created to hold and manage property.
Straight Line Method of Deporeciation
Subdivided Lands Law
Subdivision Map Act
Tenancy in Common
A division of land, measuring 36 square miles, in the government survey system.
An item of personal property instaqlled by a commercial tenant and removable upon expiration of the lease.
Transfer Disclosure Statement
The process of evaluating a loan application to determine the risk involved for the lender.
Uniform Commercial Code
Demand - for the type of property
Utility - desirable use the property offers
Scarcity - of properties available.
Transferability of the property to a new owner.
The property owner
A contract not legallhy enforceable
The absence of a valid contract
A contract that appears to be valid bus subject to cancellation by on or both of the parties.
Worker's Comp Laws
The exercise of regulating and controlling the use of a property in a municipality.
Freehold - Ownership interest where title passes to another, includes fee simple and life estates.
Fee Simple - Highest, most complete form of ownership and inheritable.
Life Estate - last only for the life of the holder of the estate.
Non-freehold - personal rights and do not involve property ownership. Leashold interest.
Estate for years - Fixed termination date, could be up to 99 years or a few hours.
Estate at will - Allows either party to terminate the agreement at any time. California requires 30 day notice.
Estate from Period to Period - renews itself automatically from period to period, unless notice is given to terminate.
Estate at sufferance - at the end of the lease, against the wishes of the owner, the tenant remains in possession of the property.
Property lost by natural forces.
Erosion - gradual wearing away of the land.
Avulsion - violant tearing away of land, whereby the owner of the lost property has one year to reclaim the lost land.
Reliction - water recedes from the property and newly exposed land belongs to the property.
One party makes a promise and the other party does not promise, but can make a contract a binding agreement by taking some action.
When all the terms of the contract have been fulfilled.
Mutual agreement to cancel the agreement.
1% of value of the assessed value.
On January 1, a lien is placed on property for the next fiscal year's taxes.
July 1 through June 30 is the tax fiscal year.
November 1, the first installment of property tax is due.
After 5 PM on December 10 the first installment becomes delinquent if unpaid.
February 1, the second installment is due.
After 5 PM on April 10, the second installment of property tax becomes delinquent if unpaid.
One who conveys title to real property; the present owner.
One who receives title to real property.
Change to a broader range of uses, such as a vchange from residential to commercial.