Upgrade to remove ads
Real Estate Exam 1
Terms in this set (74)
Person who acts as a go-between for buyers and sellers. (If you get paid, you are the broker and you need a license**)
Buyer agency agreement **
A principal-agent relationship in which the sponsoring broker is the agent for the buyer, with fiduciary/trust responsibility to the buyer.
Clients have a contractual agreement with the Broker, The CUSTOMERS DO NOT.
duties of a broker
provide honest and fair services in good faith.
They MUST disclose all material adverse facts.
National License law
There is NO National law. each law is established WITHIN the state of business
Is the Test and license. provides regulations (policing against misrepresentation and trust accounts.)
Trust account - Escrow Account
Account that all brokers have to receive money from the public. Example: a third party holds the money or documents until some event happens (3rd person holds the money until someone wins the bet)
Compensation and Fees are_____
negotiated. These are NOT set by the state.
These negotiated fees include success fees, Other fees like retainer or hourly fees.
Reynolds vs Binger **
license can pratic law to certain extent. court enforces
Question about Misrepresentation through omission**
The answer will be "all of the above" on the exam!! This is a fiduciary responsibility and all information must be disclosed.
There will be another answer of "10/2"
10/2 rule **
If there is misrepresentation of some problem that was omitted, the buyer has 10 days to present it and then 2 days after that to resent the offer.
composed of brokers who agree to share the listing
Equity of redemption
Gives the mortgagor the right to repurchase the real estate by paying the entire balance due prior to foreclosure
1 year and can be reduced to 6 months
Land contract **
A real estate installment agreement where a buyer makes payment to a seller in exchange for the right to occupy and use property, but no deed or title transfers until all, or a specified portion of, payments have been made.
197 property dimensions and surveys
The BUYER is responsible to measure the land or room. The seller always rounds up dramatically so the buyer is responsible to verify what the measurements are exactly.
Sue for special performance
never give up your right! the story about max of $250,000 and the house at Baylor of $3Million
seller and buyer are there and seller provides the deed and title and the buyer provides the cash
at closing, when is it paid for?
It is paid up front at "inception." The answer will have the work "inception" in it.
The BUYER is responsible for
bringing the money. Pays for the appraisal fees, and whatever it takes to pay for whatever to get it to close.
Transfer Fee or "Real Estate transfer fee"
30 cents per $100. This is determined off of the SALES PRICE and NOT the listing price.
Ownership with terms and conditions which if violated could cause the ownership to be defeated or terminated. Also called a defeasible fee
Right of property
ownership interest limited to the life of a certain person. He wanted to give the title fo the property to his kids, but wanted to give his hunting and fishing buddies the right to use the property. This can be done for a set period of time.
Fee simple interest **
One who has complete ownership rights of real estate that could continue forever and which provide that no other person can claim to be the owner of or have any ownership
Leasehold Estate **
An estate that gives the holder (Tenant) a temporary right to possession, without title.
Parents didn't like their kids, but they like their grandkids so they give a temporary title to someone of equal age of kids, but when the grandkids come of age, title transfers.
NNN lease **
Landlord has no responsibility financial or otherwise with regard to the maintenance or operations of the property. The tenant pays for everything.
Common area maintenance - different types of properties require differnt maintenance fees.
number and relationships of owning parties
Tenancy and severalty *
Cut out, sever, make it individual. One party is holding sole title and has individual ownership.
Tenancy in common **
A parcel of real estate owned by two or more people. Each can sell/convey/mortgage/transfer. Upon death: to heirs.
Joint Tenency **
ownership of undivided interest by 2 or more entities with the "rights of survivorship" Example, if one dies, the other becomes the sole owner
Rights of survivorship **
If A and B own the property and A dies, B becomes the sole owner. This is common for marital property. Simplifies transfer at death
Encumbrances to ownership **
Deed Restrictions, Liens, Easements, and Encroachments. An encumbrance is a claim or liability against real estate, held by someone other than the fee owner of the property that affects the title to the property, and therefore its value.
Lein - warranty deed
Quit claims deed - if you have an interest give and interest of something I own.
right to possess and sell the property of a debtor. Example: mortgage, mechanics, taxes, judgment.
Show up on the title records at register of deeds office.
Has right to use tract of land aka SERVIENT tenement for a special purpose, but not right to possess & enjoy tract of land (ex. privilege of laying utility lines, party driveway, drainage, ingress and egress (entering, exiting). The government does not have the right to use an easement!
Where are easements recorded?
Easements are contracts that are recorded on the property. ** Just because there is an easement, the government does not have the right to use it!
__________ refers to the limitation on the use of the lot such as allowable use, building lot ratio, prohibition against subdivision or more than one single detached house, street maintenance, can't have laundry lines out, etc.
If something has been on someone else's property decades before it was a problem then it is almost grandfathered in. Ex. if a fence was on someone else's property for 100 years then they don't need to take it down because it was there longer than the statutory time frame.
Extension of property
if a building extends 2 feet onto property.
Notorious (about property) **
No one was given permission to build into someone else's property
Not Notorious - Continuous **
Permission was given to build into someones property.
Adverse Possession **
When the permission was not given and the other person can actually take that property away from them.
- When the land of another private person is adversely and exclusively possessed in an open and notorious way
There are government limitations to...
Police power. Cities and counties are given certain power by state legislation
Part of Police Power
Zoning, Building code, taxation, special assessment, eminent domain, Escheat, and legal description
Dividing an area into zones or sections reserved for different purposes such as residence and business and manufacturing etc. Ex. if you build here you can only build for a specific purpose (residential, commercial, industrial, or agriculture)
Legal requirements designed to protect the public by providing guidelines for structural, electrical, plumbing, and mechanical areas of a structure.
extraction of funds to support the government to pay for things like fire, police, roads, schools, etc.
Tax or levy against only the properties that will benefit from a proposed public improvement like a sewer or paving a street.
Eminent domain **
Allows the govt to take property for public use but also requires the govt to provide just compensation for that property
Examples of Eminent domain
Road construction, schools, municipal buildings, NOT for private schools or religious schools.
The right of the government to take the property if the owner dies "intestate" and has not heirs. The State "succession" must be followed first.
Dying without a will.
Legal description **
A written description of a parcel of land which locates it precisely and will hold up in court. (Does not include address.) Metes and bounds
Metes and bounds **
A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land.
Rectangular survey *
Also called the Public Land Survey, the system was used by the US Land Office Survey to parcel land west of the Appalachian Mountains. The system divides land into a series of rectangular parcels.
Recorded plat mathod (lot and block) **
A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property)
** Particular site is in the northwest quarter of the southeast quarter of section 37 with 640 acres and range etc. How many acres of land are in that description?
You only care about the section 37 with 640. It is asking about the 1/4th of 1/4th of 640 acres --> so .25 x .25 x 640 = 40 acres.
Residential listing contract **
-Creates a relationship between seller and broker. Must be written and the copy must be given to the seller.
Exclusive listing **
seller gives the right to sell the property exclusively from a time to one broker.
An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone.
Net listing **
The broker agrees to sell the property in order to achieve a net price to the owner, and anything which is received above the net price is the broker's commission. A net listing is prohibited by the licensing law in many states.
One party listing
the listing limits the seller's obligation to pay a commission to one party - an interested buyer the listing agent has already identified. FSBO's find this arrangement acceptable because they can keep marketing the property without being obligated to a long-term listing.
Multiple listing service
A service provided by a group of real estate brokers. They band together to create a Multiple Listing Service that allows each of them to list each other's houses.
How do you find restriction to ownership?
Look at the title policy
Most common deed used by users?
A deed in which the grantor makes formal assurance as to quality of title.
Abstract of title
A history of the ownership of a parcel of land which lists transfers of title, rights, and liabilities.
Do you have to have title insurance?
NO but you SHOULD! Kept in public record - registered deed office
Insurance that indemnifies against losses resulting from undiscovered title defects and encumbrances. This will waive any claim on your property.
items of personal property attached to real property that are not removed by the seller. Ex: carpet, bookshelf
a deposit you make when you sign a purchase agreement to show that your offer is serious. Always CASH, can never be something like stock/bond, etc.
Firms that ensure that the title to a piece of property is clear and provide title insurance.
Tax benefit for ownership
capital gain- profit realized from sale.
Exemption: (less than - no tax) Single - 250K. Joint - 500k
This is on sale of property of primary residence that has owned and lived in for two of the previous 5 years.
YOU MIGHT ALSO LIKE...
1) Real Property Characteristics, Definitions, Own…
Chapter 3- part 2
Real Estate 1-3
LAW 322 ch 8
OTHER SETS BY THIS CREATOR
Real Estate Final Exam
Audit Midterm Exam
Audit Quiz 1
Financial Institutions Quiz 1