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Real Estate 2

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bjtmeyer's version from 2017-04-20 01:23

Section

Question Answer
Cost ApproachEstimate current replacement cost
Subtract for depreciation
Add the current land value
Square foot methodL x W
Purpose of appraisalEstimation of market value
Characteristics of ValueUtility (is it useful?)
Scarcity (Is there a limited supply?)
Demand (If low demand, appraise lower. If high demand, appraise higher)
Transferability (Can you get a clean title transferred legally?)
Depreciable BaseLand never depreciates
Highest and best useThe first thing considered. A decision to replace a 2-family structure with a commercial building.
SubstitutionTaking like properties and comparing
ConformityConforms to the neighborhood for the highest value
ContributionEx. adding on a new bathroom addition to add value
How does an appraiser estimate the value of each house?Residential/Vacant land, Substitution (comps), Competitive market analysis (sales comparison)
Cost approachEstimate current replacement cost, Subtract for depreciation, Add the current land value
Cubic foot methodL x W x H
Physical deteriorationDeferred maintenance, sagging floors
Functional ObsolescenceProblems inside the property such as going through the kitchen to get to the bedroom (bad floor plan)
External (economic) obsolescenceProblems outside the property, usually incurable (air pollution).
Market Data ApproachResidential and vacant land
Cost approachTheaters, churches, special purpose stuff
Income approachRentals, investment properties
Activities requiring a a real estate licenseSell
Purchase
Leasing commercial property
Auction or assist in procurring bids
People exempt from licensure requirementsOwner dealing with owner's own property
Licensed attorney performing attorney's duties
Person acting under court's authority such as a receiver (bankruptcy), trustee (trust), administrator (die without will), executor (die with a will), guardian (minors)
Government officers or employees performing government duties
Railroads; public utilities (gross easement)
Employees selling or leasing corporate property who own at least 5% of corporate stock
Agricultural leasing
Supervising brokerBroker of main office
Holds all licenses of main office
Branch brokerResponsible for running branch office
Holds all licenses of branch office
Can be both the supervising broker and branch broker at the same time
Associate broker (glorified salesperson)Has passed the broker exam and requirements but chooses to work for another broker
Cannot hold licenses of others
SalespersonPerforms all acts under the broker's supervision
Can NOT hold licenses of others
Can hire and train other sales people with the broker's approval. The broker is responsible.
Kansas Real Estate Commission5 members appointed by governor
At least 3 members must have been brokers for 5 years
At least one is a public member, employ director...director does not vote.
KREC DutiesRevoke, suspend, restrict licenses or censure licenses, fine up to $1000 per violation or $5000 for an aggravated offense such as RISK OF LOSS to a customer or client
Fails to disclose client's or customer's ability to perform under the terms of agreement
Purposely withholds information
Qualifications for license for Kansas residentsPass both parts of exam within 6 months prior to application
Submit documentation (for original or renewal of license) concerning pending charges, plea of guilty or no contest, or conviction offense (other than minor traffic violations) including final discharge from probation
Suspension of any professional or occupational license
Salesperson - recommended by your employing broker certifying to be honest, trustworthy, have integrity and competence
Broker - must be active in real estate sales (in any state) 2 of the past 5 years
For license renewalFile renewal form
Pay renewal fee
Have continuing education classes completed BY THE LAST CALENDAR DAY OF THE MONTH PRECEDING EXPIRATION DATE.
Reinstatement Fee$50 within 6 months after expiration
Registered offenderCannot apply for license until 15 YEARS after discharge from post release supervision
Non-registered offenderCannot apply for license until 5 YEARS after discharge from post release supervision
Non-resident license requirementsLicensed in home state
Must be associated with broker licensed in Kansas
Fingerprints for KBI/FBI background check
Pass Kansas portion of exam
30 hour practice course for salespersons
4 hour Kansas law course for Brokers
Office not needed in Kansas
Transfer of licenseBroker returns license to KREC; KREC sends license to new broker
Salesperson can not work until transfer is complete
All listings stay with current broker
Inactive licensesYou make deactivate your license upon request
It will be held by KREC (you are no longer licensed with your broker)
You must renew ever 2 years on an inactive status or license will relapse
Continuing education is not needed
You cannot do any activities that require a license while inactive
You can reactivate by completing any required continuing education and any other conditions mandated by the KREC
Reporting of information to KREC (within 10 days in writing)Any court suit regarding real estate sales or commission disputes and the results of the suit
Any arrest, indictment or conviction for a major offense which need to be reported to KREC within 10 days by supervising or branch brokers
Change of personal name or business name
Change of personal or business address
Any rejection or suspension.revocation of license in another state
Trade NamesRegister name and obtain approval from KREC Broker's name must be posted somewhere in office
Upon change of company name or addressThe Broker must notify KREC in writing and return all licenses to KREC
Disclosure requirementsYou must disclose your status as a licensee when buying or selling property for yourself or your company in writing on the sales contract
Agency agreementsMust have an expiration date (NO AUTOMATIC EXTENSIONS) Listing may NOT include power of attorney giving broker the right to sign for the principal (client)
Sales ContractMust be in writing and include purchase price, property description, A METHOD OF DETERMINING THE CLOSING DATE, and a radon gas disclosure and lead base paint
You must give buyer (when you write the offer) and seller (when you present the offer) and estimate of their closing costs
Cannot be a party to a dual contract (MORTGAGE FRAUD - seller carries back a second mortgage which is forgiven after closing)
Seller's agents must present all written offers to the seller until closing (UNLESS seller specifically states in writing otherwise) and any counter-offers to buyers and buyer's agent promptly
Closing statementsBroker must give both buyer and seller a detailed closing statement (unless escrow handles closing)
Sales ContractRecords (contracts, closing statements) must be kept for 3 YEARS at broker's office and submitted to broker within 10 BUSINESS DAYS
What is deposited into an escrow account?Earnest money and advance listing fees (for pre-paid advertising, not staging)
Earnest moneymust be in cash unless owner is told before they accept offer, is deposited into trust account within 5 business days after acceptance with signatures of all parties. The form of earnest money is to be written on the contract
Payments from escrow accountUpon court order Upon instructions from all parties - cant disburse based solely on loan rejection - not automatic Upon broker sending certified letters to both parties
Records that are kept in broker's officeMonthly bank statements Individual ledger on each transaction Any voided trust account checks
CommissionsSalespersons and associate brokers cannot accept payment for real estate acts from anyone other than their broker. You can reduce your commission but you cannot give money to a buyer for down payment, even your own children.
AdvertisingBroker approves all advertising
Under Kansas Law, how many years does one have in which to file a complaint against a licensee?3 years
Penalties for violating license lawKREC ($1000 per violation, suspension of license, revoke license) Court (1 year in prison or fine of $100 to $1000 or both)
Revolving FundReimburses citizens who lose due to dishonest actions by licensees
Amounts payable for revolving fund$15000 per transaction (no matter how many claimants) $30000 against a licensee per year $50000 against a licensee totally. When money is paid, license is automatically revoked
If licensee does not reimburse recovery revolving fund in 30 days?License is suspended until it is paid
Education for broker licensees12 hours per renewal period (6 mandatory core and 6 elective)
Education for salesperson licensees12 hours per renewal period (3 mandatory core and 9 elective)
(BRRETA) seller's or landlord's agentbroker has entered into a written agency agreement with seller or landlord. A SALESPERSON WHO SELLS THEIR OWN PROPERTY MUST BE A SELLER'S AGENT
Buyer's or tenant's agentBroker has entered into a written agency agreement with buyer or tenant.
Designated agentlicensee affiliated with a broker is designated by the broker to act as agent for broker's buyer or seller client (the supervising broker CANNOT be a designated agent). A client is not limited to one designated agent
Transaction brokerbroker who assists one or more parties without being an agent for the parties, must protect confidential information of parties involved in the transaction
ClientSeller, landlord, buyer or tenant who has an agency agreement
CustomerSeller, landlord, buyer or tenant in which a broker is involved but has not entered into an agency agreemtn
Ministerial actsActs as a licensee may perform that do not rise to agency status; performed for a customer.
Ex Phone inquiries as to pricing of property and brokerage services
Attending open house and answering questions
Setting appointments to view property
Answering questions in the office from a customer walk-in
Accompanying an appraiser, inspector or contractor on a visit to a property
Describing a property in response to a person's inquiry
Referral to another broker
Agency AgreementLicensee CANNOT be a dual agent
A licensee is a transaction broker unless an agency agreement has been signed.
Seller or Landlord must sign written agreement before doing agency duties for a client.
Government property can be ORAL
Requirements of seller's or buyer's agentClient promotes interests of client with loyalty
Customer - disclose all material facts known by licensee including
environmental hazards
physical condition of property
material defects in property or title to property
buyer's financial ability to perform according to the contract
Transaction broker and designated agentsIf there are no designated agents, a broker can act as a transaction broker for a seller and a buyer client on an in-house sale by having both clients sign a transaction broker addendum (TBA-RES form)
If a buyer client of a designated agents wants to see a property owned by a seller client of the same designated agent, the designated agent may become a transaction broker with written informed consent of both parties - addendum must be signed before contract is signed.
Real estate brokerage relationshipsA licensee, involved with a RESIDENTIAL TRANSACTION, must be given a BROCHURE (explaining seller agency, buyer agency and transaction broker) to buyer or seller AT FIRST PRACTICAL OPPORTUNITY
Disclosure of brokerage relationship between all licenses and clients MUST BE INCLUDED IN THE SALES CONTRACT
Transaction brokerNot an agent for either party
Can disclose to the buyer or tenant all adverse material facts known by the transaction broker (environmental hazards, physical condition of property, Material defects in property or title)
Gives sellers and buyers and estimate of closing costs
KRECResponsible for providing suggested forms for real estate agents to use
memorize