Real estate flashcards.txt

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Real estate flashcards.txt
2010-05-23 09:47:22
Real estate Florida

Real estate vocabulary for state test in Florida
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  1. Absentee Owner
    A property owner who does not live on the property but instead has a manger who supervises the property for him/her.
  2. Appraisal
    The act of process of developing an opinion of property value as of a specific date
  3. Business Opportunity
    The brokerage of business property: the purchase, sale, or lease of this type of real estate.
  4. Follow-up
    The practice of keeping up with a customer after a sale to

    foster goodwill and potential referrals.
  5. Comparative Market Analysis
    A system of comparisons of recently sold, pending or currently for sale home prices in a specific area for houses that are similar in size and features to the subject property; it is prepared by a real estate professional before or in conjunction with obtaining a listing to assist the seller in determining an initial asking price for the property or in the case of the buyer an acceptable offer price.
  6. Property management
    The operation of an owner�s property by a professional property manger for compensation. Such operation entails the marketing of a space, advertising and rental activities, collections, recording and remitting of rents and may include maintenance of the property, tenant relations, hiring of employees, keeping proper accounts and rendering periodic reports to the owner.
  7. Special-purpose Property
    • A property that because of its unique design or use has limited marketability; existing structures on the property
    • cannot easily be altered for another usage.
  8. Subdivision Plat Map
    A tract plan for the layout of lots and their amenities as part of a subdivision.
  9. USPAP
    Uniform Standards or Professional Appraisal Practice:

    An annual of the Appraisal Foundation to define key appraisal terminology and offer guidelines for completing nonbiased and accurate appraisals.
  10. Real Estate Brokerage
    • Provide limited representation in real estate transactions, facilitate in transactions as non-representatives or serve as agents. Including:
    • * Financing, title and property tax transfers
    • * Interpretations of market conditions
    • * Finesse in moving real estate
  11. 5 main areas of sales specialties
    • * Residential
    • * Commercial
    • * Industrial
    • * Agricultural
    • * Business
  12. Broker
    • A licensee who acts to bring together the contracting parties in a real estate transaction.
    • An agent who negotiates contracts, purchases, or sales in return for a fee or a commission
  13. 3 types of residential construction
    • * Tract homes
    • * Custom homes
    • * Speculative homes
  14. Plat map
    Demarcates the scale and positioning of lots along streets and indicates where sewer and water lines will lay.
  15. Custom homes
    • * Has a contracted buyer.
    • * The buyer plays a role in the development plans for this unit.
  16. Speculative home
    • * Do not have certain buyer.
    • * Built on a premise that some undetermined buyer will buy it at a later date.
  17. NAR
    • * National Association of REALTORS.
    • o Regulatory entity concerned with the instruction and professionalism of those in the industry
    • o Uses Multiple-Listing Services (MLS)
    • - Mapping software through which members may access internet property listings, map or even select real estate agents
  18. IRS Section 1031
    • * Provides a way of avoiding property sales tax through a tax-deferred exchange of "like kind properties" by delaying capital gains taxation that would otherwise occur in the event of an outright sale of property.
    • * This only applies to business & investment property
  19. Adjudication Withheld
    This is when a court does not convict an individual of a legal offense, but still holds the individual responsible as if guilty. In other words, this issue is resolved judiciously.
  20. Appraiser
    A person who engages in the procedure of estimating the value of real property or personal property.
  21. Caveat Emptor
    Latin phrase meaning: "Let the buyer beware"

    Primarily emphasizes for the buyer to be careful when buying anything, because in the long-run they will deal with the consequences.

    That's why FL setup FREC & FREAB to keep things under control
  22. Compensation
    When a thing of value is exchanged for something of equal value; a trade. A property owner gives his or her property to a buyer and receives compensation for the property given in the form of cash or some other property.
  23. Nolo Contendere
    • * Latin phrase meaning: "I do not wish to argue."
    • * A type of plea to a legal charge, which basically means that the defendant neither denies nor confirms the charges brought against him.
    • * Often take to as a sign of guilt, despite the lack of an actual admission.
    • * Also called "no contest"
  24. Prima Facie Evidence
    Established as fact unless contradictory evidence is produced

    • Ex.: the license you are issued as a realtor is proof enough to prove
    • you are one, unless there is evidence to prove otherwise
  25. Real Estate Services
    When a real estate broker or salesperson acts on behalf of the law as an intermediary between property sellers and buyers, usually for a commission.
  26. Florida Real Estate Commission
    • * Defined in FS 475.1
    • * Composed of 7 members, each appointed by governor and approved by the state�s senate
    • * Serves 4-term; no more than 2 consecutive terms
    • * Expires on October 31
    • * Made up of:
    • o 4 brokers licensed ≥ 5 years
    • o 1 real estate sales assoc. licensed ≥ 2 years
    • o 2 members not associate with real estate
    • o 1 of the members has to be ≥ 60 years old
  27. FDIC Consumer Protection Act
    • FDIC = Federal Deposit Insurance Corporation
    • Includes laws protecting consumers in real estate industry, such as:
    • * Nondisclosure of information
    • * High settlement costs
    • * Referral fees
    • * High down payments
    • * Inaccurate records & titles
  28. Chapter 475
    Covers the authority and structure of FL Real Estate Commission (FREC) & FL Real Estate Appraisal Board (FREAB)
  29. Chapter 455
    Lists qualifications for a valid application for licensure, fees, examinations, testing and cont. ed. Requirements
  30. Regulation
    An authoritative rule dealing with details or procedure
  31. Transaction broker
    • Broker who provides limited representation to a buyer, seller, or both in a real estate transaction, but does NOT represent either in a fiduciary capacity.
    • * Customers should be dealt with honestly and fairly.
    • * No misrepresentation of a transaction to a customer
  32. Single agent
    A broker who represents, as a fiduciary � with all the responsibilities that that entails � either the buyer or seller but not both in the same transaction.
  33. Real Estate services requiring licensure
    • AAppraising
    • BBuying
    • LLeasing
    • EExchanging

    • A Auctioning
    • R Renting
    • MMarketing
    • S Selling
  34. Broker
    An agent employed to effect bargains and contracts, as a middleman or negotiator, between other persons, for a compensation commonly called brokerage. He takes no possession, as broker, of the subject matter of the negotiation. He generally contracts in the name of those who employ him and in his own.
  35. EDO
    The Escrow Disbursement Order is an order to disburse claims on escrowed property.
  36. Equitable
    • * Possessing or exhibiting equity
    • * The monetary value of a property or business beyond any amounts owed on it in mortgages, claims, liens, etc.
  37. DBPR Powers & Duties
    • * License Renewal: supervises the renewals
    • * Executive Director: appoints director for each board
    • * Budget: presents annual budget to FL legislature
    • * Training: training of new members
    • * Regulation: ensures rules are implemented
    • * Rule-making: establishes processes & procedures
    • * Recording: records & ensures accurate transcription
    • * Selection: chooses investigators
    • * Screening: screens all applications
  38. Blanket Mortgage (210)
    Contains a release clause, allowing the borrower to pay a specified amount to release a single lot from the blanket so it can be sold to a buyer upon completion of the construction
  39. Deed of Trust (210)
    It temporarily conveys title to a property to a third party called a trustee, until the mortgage loan debt is repaid or until default occurs
  40. Income Participation Mortgage (210)
    Allows the lender to share in the income generated by the mortgaged property
  41. Shared Appreciation Mortgage (211)
    Allows the lender to gain a share of the appreciation in value of a mortgaged property; usually limited to a few years
  42. Equity Appreciation Mortgage (211)
    Permits the lender to share in the ownership with the borrower
  43. Piggyback Appreciation Mortgage (211)
    • * Involves the cooperation of 2+ lenders in the origination of 1 loan
    • * Reduces lender risk by dividing the mortgage loan amount between 2+ lenders
  44. Term Mortgage (211)
    • * Also called straight-term mortgage
    • * Provides for payments of interest only during the term of the mortgage
    • * Principle amount borrowed is repaid in a lump sum payment, called a balloon payment at the end of the term
  45. Budget Mortgage (211)
    • * Has payments that include principal & interest + 1/12 of the annual real estate tax & home insurance
    • * Also known as PITI payment
  46. Reverse Annuity Mortgage (211)
    • * Passed as part of the FL Home Equity Conversion Act of 1988 to assist homeowners 62+ years old
    • * Allows homeowners to receive a lump sum or a monthly advance on a line of credit based on the equity in their homes
    • * Lender repaid when property is sold or when owner dies
    • * If funds are insufficient to repay the lender, the Home Equity Guarantee fund reimburses the lender
  47. Purchase Money Mortgage (211)
    • Any mortgage loan obtained from any source used to purchase a real property
    • Ex: seller financing the purchase
  48. Lien Theory
    • * Borrower holds title
    • * Lender has lien
    • * Satisfaction of mortgage
    • * Florida uses this one
  49. Title Theory
    • * Borrower
    • * Lender or trustee holds title
    • * Reconveyance Deed gives the borrower the deed
    • * Georgia uses this one
  50. Exculpatory Clause
    • * Excuses the borrower from the deficiency
    • * Lender will have to deal with the sale being lower than the original loan
  51. Adverse possession
    • * Hostile
    • * Open
    • * Taxes paid
    • * Claim on title
    • * Adverse possession
    • * Notorious
  52. Characteristics of Value
    • * Demand
    • - Lending standards dropped, then demand goes up
    • - House flipping
    • - Mortgage fraud drives the prices higher up
    • * Utility: usefulness, broad market appeal
    • * Scarcity/Supply
    • * Transferability
  53. Value Adjustment Board
    • Made up of:
    • * 3 county commissioners
    • * 2 county school board members
    • It analyzes the property value that has been filed by the owner as needing a value adjustment and the appraiser not having granted it
  54. Physical deterioration
    • Includes ordinary wear & tear caused by:
    • * Use
    • * Lack of maintenance
    • * Exposure to the elements
    • * Physical damage
    • These are said to be curable.
    • Ex.: brittle roof shingles or worn out AC
  55. Functional Obsolescence
    • Anything that is inferior due to operational inadequacies, poor design, or changing tastes and preferences
    • Ex.: poor traffic pattern, outmoded design, too few bathrooms
  56. External Obsolescence
    • Any loss of value due to influences originating outside the boundaries of the property
    • Ex: an expressway being built behind the house
  57. Capitalization Rate
    • Net Income from a real estate investment
    • Present value
  58. Types of businesses that can register with DBPR to perform brokerage services
    • * Sole proprietorship
    • * Corporation for profit
    • * Corporation not for profit
    • * Limited liability company
    • * General partnership
    • * Limited partnership
    • * Limited liability partnership
  59. Types of businesses that can NOT perform brokerage services
    • * Corporation sole
    • * Cooperative association
    • * Business trust
    • * Unincorporated association
    • * Joint venture
  60. Types of businesses that provide protection from personal liability & is required to file with the Secretary of State
    • * Corporation for profit
    • * General partnership
    • * Limited liability corporation
    • * Cooperative association
    • * Limited partnership
    • * Limited liability partnership
    • * Business trust
  61. Types of businesses that provide protection from personal liability & do NOT have to file with the Secretary of State
    • * Sole proprietorship
    • * General partnership
    • * Joint venture
    • * Corporation sole
    • * Unincorporated association
  62. Mortgagor
    Property owner: the party who gives the mortgage to the lender to secure the loan
  63. Mortgagee
    The lender: the party that receives the mortgage from the property owner
  64. Regulation Z
    • * A federal law requiring lenders to fully disclose in writing the terms and conditions of a mortgage, including the annual percentage rate and other charges.
    • * Also called Truth in Lending.
    • * Published by the Board of Governors of the Federal Reserve System
  65. Tenant at Sufferance
    A tenant who remains in possession of a property after the termination of a lease without the landlord�s agreement
  66. Granting Clause
    • In a deed it:
    • * Names parties
    • * Describes the property
    • * Shows legal considerations
    • * Provides words of conveyance
  67. Law of Agency
    Agency law is concerned with any "principal"-"agent" relationship; a relationship in which one person has legal authority to act for another. Such relationships arise from explicit appointment, or by implication. The relationships generally associated with agency law include guardian-ward, executor or administrator-decedent, and employer-employee.
  68. Purchasing subject to the mortgage
    • Agency, in its legal sense, nearly always relates to commercial or contractual dealings.
    • A buyer takes over the seller�s mortgage payments, but does not assume liability
  69. Florida Uniform Lands Sales Practices Act
    Requires registration of subdivisions of 50 or more lots
  70. Condemnation
    The process by which eminent domain occurs
  71. Amortization
    The process by which a mortgage loan is paid off in equal payments consisting of principal and interest
  72. Ad valorem
    Market value