Real Estate Trainers
Terms
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- PROPERTY
- Rights or interest in the thing you own
- Real Property
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1. Immovable
2. Bearing Wall
3. Not a lease-hold estate - Fixtures
-
1. Incorporated into land
2. Not cost
3. Not time of attachment - Trade Fixtures
- Business Office
- Run with the Land
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1. Appurtenant
2. Easements, water co. stocks, covenant, minerals
3. No seperate conveyance - Personal Property
-
1. Hypothocated
2. Alienated
3. May become real property -
Fee Simple Estates
(Fee Estate)
(Estate in Fee) -
1. Indefinate duration
2. Free Hold
3. Most Interest
4. Not free of encumbrances
5. Estate of inheritance - Fee Simple Defeasible
- No alcohol
- Life Estate, Property is leased
- Owner dies, lease terminates
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Less-Than-Freehold Estates
(Leases) -
1. Lessee
2. Not necessarly to sign
3. 6 months, Estate for Years
4. Personal Property(Chattel Real) - Sublease
-
1. Transfers Possession
2. Can sublease or assign if not prohibited. - Quiet Enjoyment
- Paramount, no intrusions
- Abandonment
- Tenant leaves voluntarily
- Percentage lease
- Based on gross receipts
- Security deposit
- Furnished or not
- Estate for Years
- Fixed period
- License
- Personal revocable
- TITLE VESTINGS
- Tenancy = method
- Severalty
- Individual
- Joint tenancy
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TTIP: time, title, interest, possession
1. Cannot Will
2. Free of unsecured debts - Tenancy in Common
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1. Can convey seperately
2. Unity of possession - Community Property
- Husband and Wife
- Agreement to Sell
- Unenforceable
- Cloud on Title
- Single woman married
- Quiet Title Action
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1. Remove a cloud
2. Court action to remove a cloud. - Alienation
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1. Convey
2. Opposite of acquisition - Eminent Domain
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1. Compensation paid
2. For Public Use
3. Taken by the Government
4. Individuals don't have - Police Power
- Zoning
- Escheat
- Individuals don't have
- Accretion
- Natural causes
- Avulsion
- Dam brakes
- Probate Sale - Commission
- Set by court, court order
- Intestate Succession
- No Will
- DEEDS - Purpose
- Transfer interest
- Grant Deed
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1. Executed when signed
2. Not necessary to be recorded. - Quitclaim Deed
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1. Conveys rights of Grantor
2. No covenants - Deed Essentials
-
1. Granting clause
2. Legal competence of Grantor
3. Not acknowledged
4. Delivered and Accepted -
RECORDING:
Contructive Notice -
1. Given by recording
2. First to possess or record, gets property - Acknowledgement
- Employee without interest
- ENCUMBRANCES
- Limits Title
- EASEMENTS
- Encumbered
- Prescriptive Easements
-
1. No confrontation with owner.
2. can easily be terminated for "non-use" - Termination of Easements
- Dominent Tenament records "Quitclaim Deed"
- Appurtenant Easements
- Buyer has same rights
- Confirmed by
- "Quiet Title" suit
- Private Restrictions
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1. 4 Lots
2. Grantor or developer - Condition
- Penalties are more severe
- Public Restrictions
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1. Public Health, Safety, Morals, Welfare.
2. 1 Lot = Variance - Changes can be initiated by
- Owner, subdivider, government
- Commercial to residential
- Down-Zoning
- ENCROACHMENTS
- Sue neighbor
- Liens
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1. By month; a charge imposing.
2. Trust Deed or Mortgage - Specific Lien
- Trust Deed
- General Lien
- All Property
- PROMISSORY NOTES
- Evidence of debt
- Amortization
- Liquidation
- Level Payment
- Payment applied to principle increases.
- Negative Amortization
- Payments don't cover interest
- GPAM Loan
- Differs some principle payments.
- Interest Rates Affected by
- Not unemployment
- Simple Interest
- Home loans
- Variable Interest
- Rate can increase or decrease
- Effective Interest Rate
- Rate paid
- Nominal Interest Rate
- Rate specified in Note.
- Negotiable Instrument
- Not a mortgage
- Straight Note
- No principle payments made
- Balloon Loan
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1. Partially amortized
2. Entire balance due - Holder in Due Course
- No knowledge of defects
- Discounting
- Selling for less
- Default
- Foreclose for full amount
- More Than One Borrower
- Jointly and Severally
- Trustor
- Signs the Deed
- Beneficiary
- Loans money
- Right to Sell
- Trustor to Trustee
- Terminated
- Reconveyance Deed
- Court Sale
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1. 1 year redemption period.
2. Trustor possesses the property. - Trustee's Sale
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1. 3 months before publishing
2. Right of Reinstatement
3. Most expedient - Deed in Lieu of Foreclosure
- Lender assumes Junior Liens
- Request for Notice Protects
- Beneficiary of Second Loan
- Lender's Basic Protection
- Borrower's equity
- Priority
- Recorded first
- Blanket Mortgages
- More than one property
- Release Clause
- Releases portions of the property.
- "Assume"
- Relieves Seller
- "Subject To"
- Seller's liable
- Subordination Clause
- Future loans have priority
- Acceleration Clause
- Unpaid sum due
- Open-End
- Borrow additional money
- Beneficiary Statement
- Gives current balance
- Prepayment Penalty
- Trustor making advance payments.
- Mechanics Liens
- Verified and recorded
- Mechanics Lien: Priority
- Earlier than recording
- Mechanics Lien: Notices
- Completion sessation non-responsibility.
- Lis Pendens
- May affect title
- Lis Pendens is effective until:
- Judgement rendered or lawsuit dismissed.
- Execution
- Court order to sell
- Injunction
- Court order to stop
- Chain of Title
- Important when deciding to issue title policy.
- Abstract of Title
- Written summary of documents
- Preliminary Report
-
1. Seller is Trustor
2. Remove "Mechanics Liens" - Standard Policy of Title Insurance
-
1. Most Buyers obtain
2. No survey or on-site inspection. - Protect Against
- Forgery, improper delivery
- Extended Policy
- Covers improvements on adjoining land.
- ALTA Policy
- Includes a survey
- Exclusions
-
1. Zoning
2. No policy covers everything - Search
- County Clerk, County Recorder, Federal Land
- REAL ESTATE LAW
- Commissioner makes Rules & Regulations.
- ILLEGAL ACTS
- District Attorney prosecutes
- Misrepresentation
-
1. Obvious knowledge caused
2. No expenses on income property - Blind Ad
- No Brokers name
- Misleading Advertising
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1. Misleading map
2. Move right in, major repairs - Secret Profit by Non-Licensee
- No cause for action
- Referral Fees
- Both Broker and Sales Person
- Gifts
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1. Microwaves are okay, reveal to all.
2. $50 is okay - Commingling
- Funds from Brokers own Property
- Not a Member
- Not a Realtor (N.A.R.) Nat'l. Assoc. of Realtors
- Saleserson as independent contractor
- Broker still liable for conduct
- Unlicensed assistant
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1. Broker must read advertising.
2. Must be supervised on internet.
3. Both guilty if solicits Buyers or Sellers. - MANAGE PROPERTY
- Broker
- LOAN BROKER LAWS
- Disclosure given to Borrower when signed.
- Advertisement
- 800-FOR-A LOAN
- DESK COST
- Total expenses divided by no. of salespersons
- COMPANY DOLLAR
- Income minus commission
- TRUST FUND ACCOUNT
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1. Separate Trust Funds
2. Any employee of a Broker - ETHICAL PRACTICES
- Honesty and fairness
- RECOVERY ACCOUNT
- Only pay recovery acct. plus interest.
- SELLING TRUST DEEDS
- Advertising must include interest rate and discount.
- MOBILE HOMES: Can sell
- Only if registered
- MOBILE HOMES: Must remove signs
- Within 48 hours
- MOBILE HOMES: Notice of Transfer
- Within 10 calendar days
- Expired License
- Can be renewed within 2 years after expiration.
- Temporary (150 day) License
- Delinquent child support
- ADVANCE FEE CONTRACT
- No guarantee of sale or lease
- FAIR HOUSING
-
1. 1968
2. Provide fair housing
3. Steering
4. Unenforceable, no effect
5. Refuse to show when our out town.
6. Blockbusting, Panic Peddling
7. No descrimination against singles
8. Dept. of Fair Employment & Housing
9. Different prices, money damages
10. Show same homes
11. No gender or ethnic quotas - ECONOMIC THEORY
- Lost interest on equity is a cost of home ownership.
- Leverage
- Borrow the maximum
- Appreciation
- Trustor
- Prices Decrease
- Value of money increases
- Seller's Market
- Prices rise
- Impact Real Estate
- Consumerism land use controls
- GNP and Employment Rise
- Income rises, home sales increase.
- LENDERS
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1. Portfolio Risk Management: "D"
2. Individual savings accounts
3. Pay any rate of interest - Insurance Companies
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1. Large loans
2. Work thru Mortgage Companies - Savings & Loan Assoc.
-
1. Most funds in Real Estate
2. Primary source - Mortgage Companies
- Sell in secondary market
- Private Lenders
- Junior loans
- Secondary Mortgage Market
- Resale market place
- Federal Home Loan Mortgage Corporation
- Maintains secondary market
- Increase Reserves
- Decreases loan activity
- Tight Money
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1. More Second Trust Deeds (TD's)
2. Sellers carry back a Second - Federal National Mortgage Assoc.
- Not a demand source for money
- Loan-to-Value
- Lower ratio - higher equity
- A Loan Commitment
- Result of income borrower & property
- Construction Loan
- Interim
- Take-Out Loan
- Long term
- Debt-Income Ratio
- Loan qualifying tool
- Mortgage Loan
- Collateralized by real property
- Mortgage Yield
- Investor's interest return
- Lenders Minimize
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1. Sub-standard loans
2. Degree of risk most important - Late Payment
- More than 10 days
- 100% Loan
- Protected by appreciation
- Amortization Tables
- Monthly payment
- Warehousing
- Collecting loans
- FICO score
- Credit history of borrower
- Security Interest
- Creditors interest in debtors property
- Discount Points
- Percentage of loan amount
- Document Reparation Charges
- Loan Origination Fee
- TRUTH-IN-LENDING
- Not agricultural
- Purpose
- Terms are met
- Annual Percentage Rate
- Cost of credit
- Advertising - Only APR is used:
- Other disclosures not required
- Right to Cancel
- Residence
- CONDITIONAL INSTALLMENT SALES CONTRACTS:
-
Seller: Vendor-Legal Title
Buyer: Vendee-Equitable Title
(Land Contract Security device) - Default, Quitclaim Deed
- Signed by Buyer only
- Loan Insured By:
- FHA or private insurer
- FHA
- Protects lender against default
- VA
-
1. No down-payment
2. No Rental property - Cal-Vet
- Land Contract
- INSURANCE
- Promise of reimbursement for damages
- Fire Insurance
- Neither gain nor lose
- ESCROW
- Financial Code
- Instructions Executed By
- Buyer, Seller, Third Parties
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Closing Statement:
Buyer Debit - Purchase price
-
Closing Statement:
Credit Seller - Prepaid Taxes
- Prorations
- Not unsecured loans
- Impounds
- Recurring costs
- Two Termite Reports
- Get instructions from Buyer & Seller
- Escrow can
- Call for funding of loan
- Report to IRS
- Escrow
- Move in Early
- Sellers written permission
- Release disputed funds
- Instructions from all parties or court order.
- 1-to-4 Family Residental Dwellings
- Required
- Uniform Settlement Statement
- No charge
- Buyer can require
- Specific lender
- Good Faith Estimate
- Must be furnished
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Real Property Transfer Disclosure Statement:
Given by - Transferor, even if sold "as is"
-
Real Property Transfer Disclosure Statement:
Must Reveal -
1. All known defects
2. Not repairs -
Real Property Transfer Disclosure Statement:
Amended statement - Buyer can rescind
-
Real Property Transfer Disclosure Statement:
Licensee can never - Fill out Sellers portion
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Real Property Transfer Disclosure Statement:
Defective statement - Buyer can sue within 2 years
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Alquist-Priolo Act:
Requires disclosure - Nearby earthquake faults
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Alquist-Priolo Act:
Zone extends - 1 qtr. mile wide along fault lines.
- Contracts: Bilateral
- Diligence
- Contracts: Executed
- Completely performed
- Contracts: Voidable
-
1. Binding until rescinded
2. Duress
3. Menace or threats
4. Not illegable purpose - LEGAL ESSENTIALS OF A VALID CONTRACT:
- Not money, performance or writing
- Offer and Acceptance
- Must have for Real Estate Contracts
- Capable Parties
- Minors can acquire
- Consideration
- Valuable, good, sufficient, adequate
- STATUTE OF FRAUDS
- If not to be performed within 1 year, must be written.
- Breach of Contract: Specific Performance
- Not by Broker
- LISTINGS
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Bilateral Employment Contract
(Seller is Employer - Broker is Employee) - Agency Creation
-
1. Reveal as soon as possible
2. For any period of time
3. Find purchaser - accept deposit
4. Payment of consideration is not required
5. Not voluntary offer
6. Terminated by completion - Oral Agreements
-
1. Commission permissable
2. Broker would sue Broker - Lease on Duplex
- Broker is Agent
- Subagent of Listing Broker
- Duty to Seller only
- Fiduciary Obligations
-
1. Licensee
2. Integrity, loyalty, honesty, confidentiality. - Present All Written Offers
- At same time, unless frivolous.
- Seller Fires Broker
- Liable for damages
- Broker Owes Buyer
- Fair and honest deal
- Material Facts
-
1. Must reveal
2. Leaky roof
3. Septic tank rescind - Puffing
- Exaggerated claims
- Broker promises Seller to find house
- Civil suit for damages
- Agent promises to Advertise and does not
- Actual fraud
- Protect confidential information
- After listing expires
- Deposits
- May be anything
- Seller
- Deposit belongs to Seller
- Hold deposit check or accept promissory note
- Must inform Seller
- Conflict between Buyer and Seller
- Interpleader action
- Commissions
-
1. Communicate acceptance
2. If not shared - civil suit
3. Cancels - owes both - Commission after term of listing
- Protection Period Clause (Safety Clause)
- Liability
- Damages if acts in excess of authority
- Fraudulent Misrepresentation
- Discipline, Civil, Criminal
- Exclusive Listing
- Must contain termination date
- Exclusive Agency
- Owner sells - no commission
- Exclusive Right to Sell
-
1. Pay commission
2. No procuring cause - OFFERS: Terminated By
-
1. Withdrawal gets refund
2. Debt of Buyer
3. Rejection by Offeree - OFFERS: Counteroffer
- Offeree becomes offeror
- DEPOSIT RECEIPTS: Buyer defaults, deposit is
- Divided between Seller and Agent
- DEPOSIT RECEIPTS: Time is of the Essence
- Deposit receipts
- OPTIONS: Agreement
- Not to revoke an offer
- OPTIONS: Contract
- To keep offer open
- OPTIONS: Optionee
- Not obligated to perform
- OPTIONS: Option and Listing
- Disclose offers written consent
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FEDERAL INCOME TAXES:
Marginal Tax Rate - Next dollar earned
-
FEDERAL INCOME TAXES:
Unadjusted Basis - Cost