Card Set Information

2014-08-21 12:00:08
real estate

Real Estate
Show Answers:

  1. broker
    person or company license to buy sell exchange or lease real property for others and to charge a fee for these services
  2. licensee
    a person who has satisfy the requirement set by a licensing agency for state
  3. market
    a place where goods are bought and sold where supply and demand set the value
  4. salesperson
    a licensee employed by or sociated with a broker who conducts brokerage activities on behalf of the broker
  5. supply
    of goods available in the market for sale at a price.  when supply increases prices go down.
  6. demand
    goods in the market that people are willing and able to buy for a price.  when demand increases prices go up.
  7. Brokerage
    the business of bringing people together in a real estate transaction
  8. appraisal
    the process of estimating a property market value based on established methods
  9. property manager
    person or company hired to manage property on behalf of the owner.  the scope of the work depends on the management agreement.  the basic responsibility is to protect and maximine the return on the owner's investment
  10. Financing
    Business of providing funds to make real estate transactions possible.
  11. Subdivision
    Dividing single property into smaller parcels
  12. Development
    Construction of improvements on land
  13. Home inspection
    A visual survey of a property's structure system inside conditions prepared in a report
  14. National Association of Realtors
    members are entitled to be known as realtors or realtor associates
  15. National Association of real estate brokers
    members are known as realtists.  arose out of the civil rights movement
  16. types of property
    • residential (single/multi family use) 
    • commercial (office space, Shopping Center, stores theatres, hotels and parking facility)
    • mixed use (commercial and residential in the same building)
    • industrial (warehouses, factories,  land in industrial districts, power plants)
    • agricultural (Farms, timberland, ranches, orchards)
    • special purpose ( churches, schools, cemetaries, gov't held land)
  17. characteristics of real estate
    • uniqueness (no two parcels are ever exactly alike). 
    • immobility (property cannot be relocated to satisfy demand).
  18. factors affecting supply
    • labor force availability (shortage of labor/materials).
    • construction and material costs (increased transfer costs, taxes, permits).
    • governmental financial policies (the discount rate set by the Fed, FHA & Ginnie Mae affect the amount of money available to lenders for mortgage loans, policies on taxation of real estate)
    • government controls ( land use controls, building codes zoning ordinances)
  19. factors affecting demand
    • population
    • demographics 
    • employment and wages levels
  20. Counselor
    a person who helps clients choose among various alternatives involved in purchasing, using or investing in property.
  21. Land (4)
    Earth's surface to the center, natural things permanently attached like trees, water, etc, and airspace above to infinity
  22. Real estate (5)
    Land plus all things permanently attached whether natural or artificial
  23. Real property (6)
    Real estate plus bundle of rights.  Conveyed by deed.
  24. Improvement
    Any artificial thing attached to land (building, fence, sewers)
  25. Bundle of rights
    • Possession
    • Control
    • Enjoyment
    • Exclusion
    • Disposition
  26. Title
    • Right to ownership of real property
    • Evidence of ownership by deed
  27. Appurtenance
    Right/Privilege associated with property but not necessarily part of it (parking spaces, easements, wafer rights, improvements)
  28. Surface rights
    Use of the surface of the earth.  May be transferred without transferring subsurface rights.
  29. Subsurface
    Rights to natural resources below the earth's surface
  30. Air rights
    Rights to use the space above the surface
  31. Water rights
    Common-law rights and restrictions of landowners adjacent rivers, lakes, or oceans
  32. Personal property
    • Personalty, chattels.
    • Movable property that can be owned and does not fit the definition of real property
  33. Manufactured housing
    • Modular
    • Panelized
    • Precut
    • Mobile homes (generally factory built homes before 1976

    Not constructed at the site but built off-site and trucked to a building lot where they are installed or assembled.
  34. Emblements
    Annually cultivated crops such as fruit, vegetables, grain.
  35. Fruits industriales
    Annually cultivated crops
  36. Fruits naturales
    Plants do not require annual cultivation-trees and shrubbery.
  37. Severance
    Changing real property to personal property be separating it from the land.
  38. Annexation
    Changing personal property into real property by attaching it to land.  Conveyed by Bill of sale
  39. Fixture
    Personal property permanently affixed to land such that it becomes part of real property. Belongs to the owner and is included in any sale or mortgage
  40. Legal test of fixture
    Intent: did the installer intend for it to remain permanently or be movable?

    • Method of annexation-can it be removed without damage
    • Adaptation to real estate-how is it being used
    • Agreement between the parties
  41. Trade fixtures
    Or chattel fixture is owned by the tenant not the landlord.  Special category of fixtures.  Removable roperty used in conducting a business.  Owned by the tenant, attached to the rental space.

    Trade fixtures not removed on or before the last day of rental becomes real property of the landlord by accession. Not included in any sale or mortgage.
  42. Characteristics of real property
    • Economic
    • Physical
  43. Economic characteristics of real property
    • Scarcity - amount of land is finite
    • Improvements can affect land value and use
    • Permanence of investment - sewer, electricity, drainage=more permanent investment that just the building.
    • Area of preference (situs) - people's preference for a specific location affects value.
  44. Physical characteristics of real property
    • Immobility-geographic location of land can never be moved.
    • Indestructibility - land is permanent
    • Uniqueness (nonhomogeneity) - no two parcels are exactly.  the same
  45. types of housing
    • apartment complexes are groups of apartment bldgs
    • condominium
    • cooperative-shareholders
    • Planned Unit Development-combined housing, recreation and commercial units in one development
    • retirement community
    • hi rise development-mixed use combining office, retail and residential
    • converted use-convereted to residential use
    • manufactured housing-mobile home,  semi permanent foundation 
    • modular home-pre assembled at a factory, driven to the site, lowered onto the foundation. permanent foundation.
    • Time shares-multiple buyers share ownership/occupancy
  46. Ownership expenses
    Utilities, electricity, natural gas, water, trash removal, sewer charges, maintenance and repairs
  47. Determine whether client can afford
    10% down = 28% PITI or 36% PITI plus all debts.
  48. PITI
    principle, interest, taxes, insurance
  49. Tax benefits
    • Mortgage interest and real estate taxes
    • Married filing jointly-$5000 excluded from capital gains
    • Single-$250 excluded from capital gains
    • Must have occupied the residence for 2 of the last 5 yrs.

    Penalty free IRA withdrawals up to $10k, subject to income tax, all must  be used within 120 days.
  50. Tax deductions
    • Mortgage interest on 1st and 2nd homes
    • (Mortgages below $1M or $500 if married, filing separately)
    • Real estate taxes
    • Certain loan origination fees
    • Loan discount points (Paid by buyer or seller)
    • Loan repayment penalties
  51. Basic Form policy
    • Fire, lightening
    • Glass breakage
    • Windstorm, hail
    • Explosion
    • Riot/civil commotion
    • Damage from aircraft, vehicles
    • Damage fror smoke
    • Vandalism, malicious mischief, theft
    • Loss of proparty removed from the premises when it is endangered by fire or other perils
  52. Broad Form policy
    • Falling objects
    • Weight of ice, snow or sleet
    • Collapse of all or part of the building
    • Bursting, cracking, burning, bulging of steam, water heating system or appliances used to heat water
  53. Coinsurance clause
    Usually requires owner to maintain insurance equal to 80% of the replacement cost not including the land. If less than 80%, claim may receive  replacement cost less depreciation or claim may be prorated.
  54. CLUE
    Database of 5 years of personal property claims
  55. Exclusive right to sell
    One broker is paid regardless of who sells the house.
  56. Exclusive agency
    One broker paid unless seller sells the housd
  57. Open listing
    Procuring cause is paid including the seller
  58. Home warranty
    Home warranty that covers things like plumbing, electrical, heating systems, water heaters, duct work, major appliances.  May be an option in the listing contract or an offer to purchase.
  59. Net listing
    Broker receives all proceeds after a set price.  Illegal
  60. Multiple Listing Service (MLS)
    Must have written consent from seller to list property in MLS.
  61. Hold Harmless
    Indemnification wording agreed by seller and  broker that they will not sue the other for inaccurate information provided by the other whether intentional or unintentional.
  62. Anti trust laws
    • Price fixing
    • Group boycotting
    • Allocation of markets
    • Tie-in agreements
  63. Anti trust penalties
    • Individual=maximum $1 million in fines and 10 yrs prison.
    • Corporations= up to $100 million
    • Injured parties may sue for three times the damages, costs, attorneys fees.
  64. Internet listing display policy
    Current Nam policy allowing MLS members equal rights to display MLS data.
  65. Do not call registry
    • May call up to 18 months after purchase, unless consumer requests no call-effective 5 yrs.
    • May call up to 3 months following inquiry, unless consumer request no call-effective 5 yrs.
  66. UETA
    • Uniform Electronic Transaction Act:
    • Electronic Form has same effect as paper, and electronic signature has legal force and effect.
  67. E-sign
    Contracts enforceable regardless of medium created.
  68. government powers over real estate
    Police power-authority to preserve order, protect the public health and safety, and promote the general welfare of citizens.

    Taxation-charge on real estate to raise funds for government.

    Escheat-ownership transfers to the state when the owner dies with no heirs, no will, or living trust.

    Eminent domain-right of government to acquire private property for public use.
  69. condemnation
    process used to take private property
  70. enabling acts
    States authority passed on eminent domain rights to cities and counties.
  71. Estate in land
    • owner's interest in real property.
    • 1) Freehold or
    • 2) Lease hold.
  72. Freehold
    • continues for an indefinite period or forever and may be passed on to heirs.
    • 1) fee simple estate
    • 2) life estate
  73. Fee simple estate
    • Highest interest in real estate. May pass to heirs.
    • 1) absolute
    • 2) defeasible
  74. Fee simple absolute
    Highest interest in real estate, entitled to all rights to propertyby law.  May pass to heirs.
  75. Fee simple defeasible
    • Subject to specified event.
    • 1) determinable
    • 2) subject to subsequent condition
  76. Fee simple determinable
    qualified by a special limitation. "So long as", "while", "during".  Possibility of reverter immediately to original owner upon violation.  no need for court.
  77. Fee simple subject to subsequent condition.
    right to re-entry upon violation of condition but must go through court.
  78. Life estate
    • limited in duration to the life of the owner for the life of another designated person.  Not inheritable, passes by provisions of the life estate.
    • 1)  conventional
    • 2) legal
  79. Legal Life Estate
    • Not voluntarily created by owner, but by state law.
    • 1) Dower
    • 2) Curtesy
    • 3) Homestead
  80. Dower
    the life estate that a wife has in the real estate of her deceased husband.
  81. Curtesy
    the life estate a husband has in the real estate of his deceased wife.
  82. conventional life estate
    • created voluntarily for the duration of the life of the owner or some other designated person.
    • 1) Pur autre vie
    • 2) remainder and reversion
  83. Pur autre vie
    • (French, meaning "for the life of another")
    • A life estate based on the lifetime of a person other than the life tenant.
  84. Remainder/Reversion
    • Designated future ownership in fee simple estate:
    • 1) remainder=person to whom the propetry will pass when the life estate ends called the remainderman.
    • 2) reversion=if no remainderman is named, ownership reverts to original owner upon end of life estate.
  85. Homestead
    • Legal Life Estate for real estate occupied as family home. Amount of equity protected from most creditors.  Not protected from rest estate taxes or mortgage for purchase or improvements. reserve a certain amount of money for the family in the event of a court sale.
    •  Taxes and lines paid first, then homestead, then unsecured debt.
  86. Encumberance
    claim, charge, or liability that attaches to real estate such as restrictions, easements, licenses, and encroachments that affect the condition or use of the property.
  87. Liens
    a claim that provide security usually for a monetary debt or obligation of the property owner
  88. Deeds restrictions
    private restrictions that affect the use of land. Once in the deed they run with the land.
  89. CC&R's
    covenants, conditions, and restrictions-private agreements that affect use of the land. May be imposed by the developer or subdivided to maintain specific standards of the subdivision.
  90. Easements
    • The right to use the land of another for a particular purpose.  Created by written agreement between the parties.
    • 1) Appurtenant easement
    • 2) Easement in gross
    • 3) easement by necessity
    • 4) easement by prescription
  91. Appurtenant easement
    Benefit attached to the ownership of one parcel (dominant tenement) allowing this owner use of the neighbors land (servient tenement).  Must be two adjacent parcels owned by two different parties.  Runs with the land.
  92. easement in gross
    right to use someone else's land for public use
  93. easement by necessity
    created over another's property when the land has no access to a street or public way.  For necessity not convenience.  Based on court order that owners must have right to enter (ingress) and exit (egress) their land.
  94. Easement by prescription
    Created when use of another's land  is continuous, exclusive, and without owner permission for a period ranging from 10 to 21 years.  Must be visible, open, notorious and owner must have been able to learn of it.
  95. Tacking
    Successive periods of continuous occupation by different parties combined to reach the required number of total years to establish easement by prescription.
  96. Terminating an easement
    • not automatically terminated. Certainly maybe required.
    • -when the need no longer exists
    • -when the property become merged under one legal description
    • -by release of the right to the owner of the servient tenement
    • -by abandonment of the easement
    • -by non use of a prescriptive easement
  97. License
    Personal privilege to enter the property of another for a specific purpose.  Can be canceled or terminated.  Ends with the death of either party or sale of the land.
  98. Encroachment
    Structure that extends beyond the land of its owner
  99. Riparian rights
    Common law rights to owners of land along rivers, streams, etc.  Use cannot interrupt or alter flow of water or  contaminate it in a any way. In non-navigable waters owners own land under water to the center of the waterway. In navigable waters owners own land to waters edge; the state own submerged land.
  100. Littoral rights
    Water rights of owners whose land borders navigable lakes, seas, oceans.  Land owners own land adjacent only up to the average high water mark.  All land below owned by state
  101. Accretion
    gradual increase in land resulting from the deposit of soil by the water's action
  102. Erosion
    the gradual wearing away of land by natural forces such as wind rain and flowing water.
  103. Avulsion
    sudden removal of soil by an act of nature.
  104. doctrine of prior appropriation
    Use of water  (except limited domestic use) is controlled by the state rather than the land owner. To receive a permit landowner must demonstrate beneficial use such and crop irrigation.  priority determined by oldest permit date.
  105. Partnership
    • Association of two or more who carry on a business for profit.
    • 1) general
    • 2) limited
  106. general partnerships
    all partners participate in the operation/management of the business and share full liability for losses an obligations
  107. Limited Partnership
    consist of one or more general partners and limited partners.  Business run by general partner(s).  liable for business losses only to the amount invested.  must be dissolved or reorganized if one partner dies withdraws, or goes bankrupt.
  108. corporations
    Is a legal entity -an artificial person- created by charter.  managed and operated by a board of directors.  can only real estate in severalty or as a tenant in common. death of an officer does not affect title to the property on by the corporation
  109. Limited Liability Company
    members enjoy the limited liability of a corporation and the tax advantages of a partnership.
  110. condominium ownership
    • be simple title to the unit
    • undivided interest in the common elements as tenants in common
    • no right to partition
  111. right of first refusal
    owner is required to offer the unit at the same price to the other owners of the condominium or the Association before accepting an outside purchase offer
  112. Partition
    Suit to terminate co-ownership
  113. Time share ownership
    Fee simple interest for use of property during limited .  Interest never ends unless sold.
  114. Time share use
    Right to occupy terminates at end of period.
  115. real estate timeshare act
    covers management of timeshare unit and provides consumer protection for purchasers of timeshare
  116. Legal description
    Description of a parcel of land defining the exact boundaries of the property
  117. Meters and bounds
    Oldest type of legal description.  Refers to linear measurements, natural and artifical landmarks (monuments) and directions.  Always begins and ends at the POB (point of beginning).  Mets means measure, bounds means linear direction.
  118. Monuments
    Fixed objects used to identify parcel boundaries. Could be a marker set in concrete, piece of steel, metal pipe driven in the soil, wooden stake in the dirt.
  119. rectangular survey
    Established by congress in 1785.  Standardized description of land divided into rectangles based on intersection of principle meridian lines (total 37) running north/south and base lines running east/west.
  120. Ranges
    Land on either side of the principle meridians, divided into six mile wide strips running parallel to the meridians.
  121. Township tiers
    Lines running east and west,  parallel to the base lines, six miles apart forming strips of land.
  122. Township squares
    Basic units of the rectangular survey.  Formed when township lines and range lines intersect measuring one square mile (640 acres). Divided into halves (320 acres) and quarters (160 acres) that may be further divided into halves and quarters.

    May be use within the rectangular survey when describing an irregular tract,  when a tract is too small to describe,  or when the tract does not follow the lot or block lines of a recorded subdivision
  123. Township
    Measures six miles square containing 36 sections, each one square mile.  Description includes  designation of the township tier, designation of the range strip, and the principle meridian for that area.  They are numbered right to left, left to right, left to right always starting in the upper right hand or northeast corner.  Section 16 always set aside for schools.
  124. Square mile
    640 acres
  125. Lot and Block System
    • Starts with a subdivision plat.  Numbers in a plat map indicating location of boundaries of individual property. Always refers to metes/bounds or rectangular survey.
    • Lot = number of a particular parcel
    • Block = name of subdivision

    • Description of lot from subdivision Plat includes:
    • Lot and block number,
    • number of subdivision plat,
    • name of county and state
  126. Air lots
    Division of air space above land.
  127. Benchmarks
    Brass markers set in concrete or asphault.
  128. Datum
    Point from which elevations are measured used to determine the height of a structure or establishing a street grade.
  129. Mile
    5280 feet
  130. Acre
    43, 560 square feet
  131. Square yard
    9 square feet
  132. Square foot
    144 square inches
  133. Survey sketch
    Shows the location and dimensions of the parcel.
  134. Spot survey
    Shows size shape and buildings on a lot
  135. Lien
    Charge or claim against property to enforce payment of money. Runs with the land. Lien holder must initiate a legal action to force sale of property to pay debt.
  136. Voluntary lien
    Created intentionally by property owner.
  137. Involuntary lien
    • Created by law.  
    • 1)  statutory
    • 2)  equitable
  138. Statutory lien
    Created by statute without the action of the property owner.
  139. Equitable lien
    Arises out of  common law. Court order judgement requiring debtor to pay.
  140. General lien
    Affect all the property, both real and personal, of debtor.  Attaches to real property at time of filing.  Attached to personal property at time personal property is seized.
  141. Specific lien
    • Covers property used as security. 
    • 1) vendors Lien
    • 2) mechanics Lien
    • 3) mortgage liens
    • 4) real estate tax liens
    • 5) special assessments
    • 6) utilities
  142. Vendor's lien
    Lien belonging to vendor or seller of property usually by owner financing with only personal obligation as security.
  143. Priority of liens
    • Order in which claims are satisfied, usually by the date liens are recorded in the public record.
    • EXCEPT:  real estate taxes & special assessments which take priority over all other liens.
  144. Subordination agreement
    Where the holder of a superior lien agrees to permit a junior lien holder's interest to move ahead of the prior/superior lien.
  145. Ad Valorem Tax
    According to value - General real estate tax levied for operation of government.  Specific, involuntary, statutory.
  146. General Tax Exemptions
    • Property owned by 
    • Cities
    • Schools, parks, playground
    • State and federal governments
    • Religious/charitable organizations
    • Hospitals
    • Educational institutions
  147. Assessment
    Process to assess value of  generally based on sale prices of comparable properties
  148. Equalization
    Factor used to correct inequalities in statewide tax  assessment and achieve uniformity.  Apply equalization to assessed value before applying  tax rate
  149. Tax rate
    Begins with determining the budget and appropriations, imposition of tax levy.  Based on the total monies needed for the coming fiscal year.

    Expressed in mills:  1/$1000 of a dollar or .001
  150. Tax levy
    Action taken to impose tax.
  151. Tax bill
    Tax rate applied to assessed value
  152. Penalty date
    Due date for tax payments
  153. equitable right to redemption
    When taxpayer can redeem property by paying delinquent taxes plus interest/charges prior to tax sale.
  154. Statutory right of redemption
    When delinquent taxpayer can redeem property after tax sale.
  155. Special assessments
    Taxes charged in real estate to fund public improvements
  156. Mortgage lien
    Deed of trust:  specific,  voluntary, equitable lien of real estate
  157. Mechanics lien
    Must file within a certain time frame.  Specific, involuntary, statutory lien for performance of labor or materials provided to improve real property.  Must have a contract with the owner, must file in county where property is located. Available to contractors, subcontractors, architects, equipment lessors, surveyors, laborers and other providers who perform labor or furnish material to improve real property
  158. notice of non responsibility
    a document executed by the property owner when improvements have begun but were not order by the owner
  159. Judgement
    • Decree that establishes the debt. General, involuntary, equitable lien on both real and personal property owned by the debtor for wrongful act, breach of contract or non payment of debt.  Expires but can be renewed indefinitely.  Not a lien on personal property until it is seized.  Priority established by 
    • Date judgement entered by court
    • Date judgement filed in recorders office
    • Date writ of execution issued
  160. Writ of execution
    Directs the sheriff to seize and sell debtors property to pay debt and expenses.
  161. Satisfaction of judgement
    Filed to clear the records of the lien.
  162. Lis pendens
    Litigation pending:  not a lien itself but notice of possible lien.   Onc Ed lien is actually filed it is back dated to listen pendens filing date
  163. Attachments
    Filed to prevent debtor from conveying title to previously unsecured real estate.  Wrut where Property becomes custody of court until lawsuit is concluded.
  164. Estate Tax and Inheritance Tax Liens
    General, statutory, involuntary liens that encumberance a deceased persons real and personal property.
  165. Liens for utilities
    Specific, involuntary,  equitable,  lien on property for payment of delinquent utility services.
  166. Bail bond lien
    Specific, statutory, voluntary lien against property owners real estate to post bail in lieu of cash.
  167. Corporation franchise tax lien
    General, statutory, involuntary lien on delinquent tax on corporation as a condition of allowing then to do business in the state
  168. IRS tax lien
    General, statutory,  involuntary lien on real and presonance property for failure to pay income or withholding taxes.
  169. Subject to clause
    Statement in a deed of exception or reservation that affect title to property
  170. Deed
    • written instrument used to convey title, right or interest in property. To be valid, must contain:  
    • grantor of legal age and sound mind,
    • Grantee name,
    • Statement of considerstion,
    • Granting clause [words of conveyance],
    • Habendum clause (ownership taken by grantee)
    • Accurate legal description,
    • Subject to clause (relevant exceptions or reservstions),
    • Notorious signature of grantor, 
    • Delivery and acceptance.
    • transfer date is date of delivery and acceotance.
  171. Grantor
    Owner who transfers title.  Must be of sound mind and legal age-usually 18.
  172. Grantee
    Person who acquires title to property.
  173. Consideration
    Amount or something paid for the property.
  174. Granting clause
    States rights, interest, and limitations of conveyance of property.
  175. Habendum clause
    Defines ownership taken by grantee
  176. Corporate deeds
    • Can convey property on as granted in bylaws
    • Deeds signed only by authorized officer
  177. General warranty deed
    • Defends title against grantor and all who held title.  Protection that the grantor has the right to offer what deed is conveying extending back to origin of title:
    • Seisin (possession)-grantor owns the property and has the right to convey title [may sue for full purchase price if covenant is broken];
    • Against Encumberances-from liens/encumberances [may sue for cost of removing encumberances];
    • Quiet enjoyment-guaranteed against third party claims. [grantor liable for damages];
    • Further assurance-grantor promises to delivery any instrument needed to make title good;
    • Warranty forever-grantor promises to compensate grantee if title fails.
  178. Special Warranty
    Defends title against grantor.  Guarantees that grantor received title and that property is unencumbered during time grantor held title.
  179. Bargain and Sale deed
    No guarantees,  only implies grantor hold title and possession.
  180. Quitclaim deed
    Least protection. Only conveys .  No guarantees,  no covenants, would warranties.
  181. Deed of trust
    Trustor conveys to trustee.
  182. Reconveyance Deed
    Returns title from trustee to trustor
  183. Trustees deed
    Used to covey title from trustee to other than trustor
  184. Transfer tax
    State law tax payable when deed is recorded. (Stamps may be purchased from the recorded and affixed to the deed)
  185. Transfer tax exemptions
    • Gift of real estate
    • Change not in connection with a sale
    • Conveyance between government bodies
    • Charutable, religious and educational institutions
    • Securing or releasing property as security for debt
    • Partitions
    • Tax deeds
    • Corporate mergers
    • Deeds for cancellation of stock
  186. Voluntary alienation
    Voluntary transfer of title
  187. Involuntary alienation
    when property is transferred without the owner's consent
  188. Adverse  possession
    • Involuntary transfer of property because of use by non-owner without permission.  Use must be uninterrupted for at least five years. claimant must file an action in court to receive undisputed title.  Use must be
    • Open-obvious; 
    • Notorious-known to others;
    • Continuous and uninterupted;
    • Hostile-without the owner's consent;
    • Adverse to the true owners possession
  189. Testate
    a person who has died and prepared a will.
  190. Intestate
    a person who has died without a will.
  191. Legacy
    Gift of money after death
  192. Devise
    Gift of property after death
  193. Devisee
    person who receives gift of real property
  194. Probate
    • Judicial process that held in county where property is located:
    • prove or confirms the validity of a will;
    • Determines the precise assets of the deceased person; and
    • Identifies the people to whom the assesses are to pass.
  195. Contract
    • Must be voluntary, 
    • Have a legally enforceable promise,
    • By legally competent parties,
    • Made in exchange for legal consideration,
    • For a legal act.
  196. Express contract
    Agreement of the parties expressing terms and intentions of the parties.  May be written or oral.  Statute of fraud requires real estate contracts to be in writing.
  197. Implied contract
    Agreement of the parties as demonstrated by their acts and conduct.
  198. Bilateral contract
    Both parties promise to do something.
  199. Unilateral contract
    One person makes a promise to entice a second party to do something.  Second party not obligated,  but first party is.
  200. Executed contract
    When all parties have fulfilled their promise.
  201. Executory contract
    When one or both parties still have an act to perform
  202. Valid contract
    • Offer and acceptance,
    • Consideration (something of legal value),
    • Consent-free and voluntary act of each party,
    • Legally competent parties (legal age and mental capacity)
    • Legal purpose
  203. Void contract
    Lacks one or more elements of valid contract.  Never considered a legal contracg.
  204. Voidable contract
    Appears on the surface to be valid, but may be rescinded or disaffirmed.
  205. Unenforceable contract
    Appears on the surface to be valid, but neither party can sue for performance. However,  can sue for damages.
  206. Time is of the essencd
    Contract must be performed within a specified time.
  207. Assignment of a contract
    Transfer of rights or duties under a contract.
  208. Novation
    Substitution of a new contract for an existing one.
  209. Novation of the parties
    Substitution of one party to a contract for a new party
  210. Breach of contract
    Violation of any of the terms of a contract without a legal reason.
  211. Suit for specific performance
    If a seller breaches the contact the buyer can ask the court to force the seller to go through with the sale and transfer of property as previously agreed.

    If a buyer defaults the seller can sue for damages or for the purchase price.
  212. liquidated damages
    Agreement that specifies the amount of money to which the no breaching party is entitled in the event of breach of contract.
  213. statute of limitations
    States the limits which parties to a contract may bring legal suit to enforce their rights.  any rights not enforced within the applicable time period are lost
  214. Termination of a contract
    • By partial performance-considered complete even though partial elements remain unperformed. Must have written acceptance.
    • substantial performance-contract is substantially performed but not all details are exactly as the contract requires.
    • Impossibility of performance-contract cannot be legally accomplished.
    • Mutual agreement-parties may agree to cancel the contract. 
    • Operation of law-voiding a contract with a minor, evidence of fraud, altered without written consent,  etc.
    • Recission-cancellation or termination of contract as though it never occurred.  Returns the parties to their original positions before the contract.  Monies exchanged must be returned.
  215. Equitable title
    The buyers interest in the property after buyer and seller have executed a sales contract.
  216. Contingencies
    • Conditions that must be satisfied before a sales contract is fully enforceable.  Includes:
    • the action,  the time frame and who is responsible for costs.  Can be mortgage contingency, inspection contingency, property sale contingency.  If contingencies are rejected or not satisfied, the contract is void.
  217. Amendment
    A change or modification to the existing content of a contract.
  218. Addendum
    Provision added to an existing contract without altering the content.
  219. Disclosure laws
    Help consumers make informed decisions
  220. Option
    Contract by an owner (optionor) giving a buyer (optionee) the right to buy or lease the owner's property at a fixed price within a certain period.
  221. Land contracts
    Installment contract.  Buyer (vendee) agrees to amke a down payment and pay monthly interest and principle,  taxes and insurance, gaining equitable title, and seller (vendor) retains legal title.
  222. Public records
    Records anyone interested in a particular property can review.
  223. Recording
    Placing documents in the record, must be in the county/town where property is located, recorded on first come first serve basis.

    Gives constructive notice to the world of the borrowers obligations and establishes lien priority
  224. Constructive notice
    Notice to the world of property rights and interests.  Information may be obtained through due diligence.
  225. Actual notice
    Someone who has searched the public record and inspected the property has actual/direct knowledge.
  226. Unrecorded documents
    Real estate taxes, special assessments may not be recorded until after past due.  Inheritance and franchise taxes are not recorded.
  227. Chain of title
    Record of all property owners beginning from the earliest owner. Gap in the chain is a cloud on title.  The cloud is resolve by "suit to quiet title".
  228. Title search
    Examination of all public records to determine any defects. Begins with present owner and is traced backward to its origin.
  229. Abstract of title
    Summary report to title search results prepared by an abstractor or attorney.
  230. Marketable title
    • No serious defects
    • No hazard of litigation
    • Owner has right to convey
  231. Certificate of title
    Proof of ownership, but not a guarantee of ownership. Evidence of ownership based on examination of public records. Prepared by title company, abstractor or attorney.
  232. Attorneys opinion of title
    Evidence of title based on review of the abstract
  233. Title insurance
    • Policyholder protected from future losses arising from defects in the title.
    • Standard policy-insures title as know from public record and protects against hidden defects such as forged documents, conveyance from incompetent grantors, incorrect marital status,  improperly delivered deeds. 
    • extended coverage-additional coverase against defects found by inspection of the property,  survey and certain unrecorded liens.
    • Exclusions-zoning ordinances, restrictive covenants, easements, certain water rights, current taxes and special assessments.
  234. Torrens System
    Legal registration system used to verify ownership and encumbrances.  Relies on the physical title document; a person acquires title on when it is registered.
  235. Title theory
    Mortgagor (borrower) gives legal title to mortgagee (lender) and retains equitable title.  Lender has immediate right to possession.
  236. Lien theory
    Mortgagor (buyer) retains both legal and equitable title.  Property is only security for loan.
  237. Hypothecation
    Practice of pledging specific real property as security (collateral) for the loan.  Creditor receives equitable title.
  238. Mortgage loans
    • Secured by two documents:
    • 1) Promissory note stating amount owed,
    • 2) Mortgage or deed of trust specifying collateral used as security for the loan.  Must be recorded in the recorder's office of the county where the property is located.
  239. Loan orignation fee
    Charge to cover expenses of generating a loan.  Usually 1% of the loan amount. May range from 1% to 3%.
  240. Defeasible clause
    Clause that requires the lender to execute a satisfaction when the note had been fully paid.
  241. Alienation
    Lender can demand payment in full if property is sold or permit buyer to assume mortgage at an interest rate acceptable to the lender.
  242. Subordination agreement
    When a superior lien holder subordinates to a lower lien holder with a higher amount of debt.  Both lenders must sign.
  243. Usury
    Interest in excess of that allowed by law.
  244. Interest
    Charge for the use of money.  May be fixed or assist with the prime rate.
  245. Discount points
    • Prepaid interest charged at closing.  May be paid by buyer or seller. 
    • Points=charge for points divide by loan amount
  246. Prepayment penalty
    A prepayment clause in the mortgage agreement may require payment of a penalty against the unearned portion of interest for any payments made ahead of schedule
  247. Deed of trust
    Conveys naked title (title without the right of possession).  Trustor (borrower) gives tile to a third party (trustee) to hold on behalf of the beneficiary (lender).  Must be recorded in the recorder's office of the county in which the property is located.

    Provides a legal description, identifies that the property is security, identifies the lender, the borrower, and should be signed by all parties.
  248. Acceleration clause
    The right of the lender to declare the entire debt due and payable immediately if the borrower defaults on payment, does not pay taxes or insurance premiums, or fails to make necessary repairs.
  249. Assignment of mortgage
    When the lender (mortgagee) sells the note to a third party (assignee) without changing the provisions of the contract.
  250. Defeasible clause
    Provision in mortgage contract that lender will show in the public record that the debt has been paid in full and will execute a satisfaction (release or discharge)
  251. Deed of reconveyance
    When trustee delivers deed to trustor after debt is paid in full.  Should be notarized and recorded.
  252. Escrow acct
    Impound acct used to hold reserve money to pay taxes and insurance premiums
  253. National Flood Insurance Reform Act of 1994
    Requires lenders to set aside funds for flood insurance on new loans for property in flood prone areas.
  254. Subject to mortgage
    Buyer purchases property that has an outstanding balance.  Buyer is not personally obligated to pay debt in full.  Seller not purchaser may be liable in the event a subsequent foreclosure does pay off debt.
  255. Assumption of mortgage
    Buyer purchases property and assumes sellers debt.  Buyer personally obligated to pay to pay entire debt.  Must be approved by the lender.
  256. Foreclosure
    • Legal procedure where property pledged is sold  to satisfy debt.
    • 1) judicial-allows for sale after presentation of facts on court and sufficient public notice
    • 2) non-judicial-foreclosure can proceed without court action (power of sale).
    • 3) strict-papers must be recorded and filed in court, then after notice if the borrower does not pay title is transferred.
  257. Deed in lieu of foreclosure
    Friendly foreclosure, carried out by mutual agreement - not by court action.
  258. Deed to purchaser at sale
    Provided to purchaser after sale to convey whatever title the delinugent borrower had
  259. Deficiency judgement
    A personal judgement against borrower, when the foreclosure sale does not produce enough funds to pay the balance due in full.
  260. Real estate finance market
    • Three components:
    • Gov't influences - fed reserve system
    • Primary market
    • Secondary market
  261. Federal Reserve System
    Helps to create favorable economic climate. Regulates the flow of money and interest rates by controlling bank reserve amounts and the discount rates.
  262. Primary mortgage market
    • Made up of lenders that originate loans. Lenders income comes from finance charges collected at closing and recurring income that is interest collected during the term of the loan and from servicing loans.
    • Major lenders:
    • Thrifts, svgs/loans, commercial banks;
    • Insurance companies;
    • Credit unions;
    • Pension funds;
    • Endowment funds;
    • Investment groups;
    • Mortgage banking companies;
    • Mortgage brokers-not lenders but intermediaries.
  263. Fiduciary lenders
    Responsibility to protect and presefve the funds of depositors.
  264. FDIC
    FederaL Deposit Insurance Corporation - establishes standards and regulations for fiduciary lenders.
  265. Secondary mortgage market
    Loans are bought and sold from banks and savings andloans after funded.  Stimulated housing construction and mortgage markets by expanding the types of loans available.
  266. Pools
    Number of mortgage loans assembled into a package.
  267. Fannie Mae
    Federal government owned enterprise dealing in conventional, FHA and VA loans in the secondary market.
  268. Freddie Mac
    Federal Home Loan Mortgage Corporation:  government owned enterprise that provides primarily conventional loans in the secondary market.
  269. Ginnie Mae
    Government National Mortgage Association. Government agency that guarantees FHA and VA loans.
  270. Straight Loans
    Periodic payments of interest only, followed by payment of the principle in full at the end of the term.
  271. Interest-Only Mortgage
    Payment of interest only for a stated period, usually 10 or 15 years, with the principle due at the end of the term.
  272. Balloon Payment
    When the final payment is larger than the rest.
  273. Amortized Loan
    Partially pays off both principle and interest.  Paid off slowly over time. Each payment first applied to interest with any remaining portion of payment to principle.  Usually paid monthly-can be quarterly or semi annually.
  274. Adjustable rate mortgage
    ARM loan that originates at one interest rate the fluctuates up or down during the term of the loan.