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Real Estate

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varobibe's version from 2017-04-28 00:10

Section

Question Answer
Market Data Comparison ApproachComparing like properties
Who uses the Data Comparison approach?Real Estate Agents, Appraisers, people
Who cannot use Data Comparison and uses cost replacement approach?Library, School, police station. fire house -Special purpose properties
Capitalization Income ApproachConverts Income into Value Pay more for a building b/c they have successful businesses there (selling chairs vs shoes) A lot of foot traffic.
Gross Rent Multipliersvalue / rent --Value of property ($1 mil property and brings in 100,000 that's a good deal not the value or the rent
GRM Example100,000 / 10,000 = 10 annual (price divided by rent)
DepreciationLoss in value
Wear and tearPhysical depreciation
functional obsolescenceA reduction in the usefulness or desirability of an object because of an outdated design feature
Economic ObsolenscenceOutside the property lines (can't change)
Negative AmortizationDebt goes up
Straight noteinterest only
balloon loanLarge payment due at the end
Interest Rent on moey
Who does FHA insure?Lenders
Why does FHA exist?1934-great depression Make more affordable for people to borrow money
Secondary marketresale market of loans
What is a listing?A bi-lateral contract between broker and seller to find a buyer
What is an Exclusive listing One broker
Exclusive agency listingOne broker seller can sell themselves -You're out!
Exclusive Authorization and Right to sellGet paid no matter what
Open listing whoever brings buyer gets paid
Net ListingGet commission above and beyond (Ex: listing is $500,000 and you list for $550,000 you get $50,000) conflict of interest (Could violate your fiduciary duty)
DepositShows you are serious-ex: diamond ring for engagement
ValueSTUD (Scarcity Transferability, Utility, Demand)
RESPAPrevent kickbacks-Real Estate Settlement Proceeures act
DeedEvidence of transfer of title
Title Ownership
Freehold EstateOwnership for indefinite period of time
Fee Simple EstateAbsolute ownership
Fee Simple DefeasibleCondition subsequent (Can't sell alcohol on property you may lose the property since you broke the condition)
Life EstateBased on somebody else's life
Less than Freehold EstateLease for definite period of time
Estate for YearsDefinite period of time ex 6 mos or June 1st-April 1st Summer rental
PercentagePart of your gross (business) sales go towards rent (Percentage of gross receipts)
Net LeasePay part of taxes, insurance, and maintaince
Periodic tenancy Month to month
Non conforming usegrandfather clause (Law came into effect apply for this b/c you were already doing this prior to law)
VarianceSpecial need (goes away when you move out)
1031 tax deferred exchangeGovt's incentive to purchase property-sell property, buy a new property (no taxes paid on sale)
How many days do you have before you pay taxes on a sale of a property (identify another property to purchase)?45 days
How many days do you have to "close" before paying taxes on a sale of a property?180 days
BootCreate fair market value and you have to pay taxes on it
Protecting Environment-CERCLAComprehensive Environmental Response Compensation Liability Act
Joint TenancyRight of survivorship
Tenancy in commonTTIP (Time Title Interest Possession)
Safety & Protection ClauseAn agreement for the RE broker to be paid up to a year after the listing is expired provided they introduced the buyer to the property
When a part of an agreement is changed or replaced it's calledNovation (meaning "new")
What type of approach would an appraiser use to appraise a newly built 1 year old building?Cost approach
Deed of Trust (or trust deed same thing)3 parties dealing with the loan (trustor, trustee, and beneficiary)
What does the trustor give to the trusteeLegal title (right to sell the property)
What does the trustee receive from trustorLegal Title
What role is a Beneficiary play in a deed of trustTrustor is going to borrow from them and if they don't pay, they will sell property in a foreclosure
Who has equitable title between the trustee and trustor and what does it mean?Trustor (means the right to use and posses)
What is a deed?Evidence of Transfer
General Warranty DeedCovers property entire history (Chain of title)
Special Warranty DeedOnly covers the time the owner takes over ownership (and during ownership) if something happened prior, new owner not responsible
Quit Claim DeedImmediate way to transfer interest and name on title--Releasing interest in property (getting rid of cloud on title Ex: Mechanics lien, name changes) transfer to family without warranty (transfers from grantor to the grantee)
What is a bargain and Sale deedA foreclosure or gov't transaction without any type of warranty (Type of quick claim deed) buyer beware
Package LoanFinance both real and personal property
Budget LoanTaxes & insurance lumped into your loan payments
Fully Amortized LoanTypical loan (standard 30 yr mortgage loan 360 payments "Fixed")
What is a partially amortized loan?Balloon Loan
Negative amortizationStarts at 0 and increases over time b/c not paying full amount every month so debt increases instead of decreases
Straight NoteInterest Only Loan
Term Loan30 year fixed 1st 5 yrs then adjustable rate for remaining 25 years (Good for quick flips)
Blanket loanUsed to fund more than 1 piece of real property (Covers the entire policy think cookie cutter homes, model homes 1 large piece of property and subdivided it off)
What does a homestead exemption protectEquity in your primary residence
What is Tenancy in commonHeld by two or more related, non-related, OR business entities (Not sole proprietorship)
FHA
VA
Conventional LoanLoan not insured or guaranteed by federal government
Conventional Loan-if you make less than 20% down (equity) what is requiredPrivate Mortgage Insurance
EquityPhysically going to be yours when the house sells
How many feet is 1 mile5280 ft
Primary Risk factorInsurance for high risk factor borrowers
How do you figure commissionSelling price * Rate
How many feet in a rod16.5 ft.
How many yards in a mile1760 yds.
Township is how many sections36 sections
How many acres in a section640 acres
How many miles in each section1 sq. mile
memorize
How many inches in a yard: 36 in
Question Answer
How many feet in a yard3 ft.
How do you figure taxassessment * rate
How is Mortgage Interest figuredMortgage * rate
How is Principal Interest figuredPrincipal * rate
memorize

 

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