accretion
avulsion
Allodial system
Arello
Blanket Mortgage
Crv
Clustering
Comparable sales
cma
conformity
cost approach
curtesy
curtilage
defeasance clause
discount point
dower
emblements
encroachment
encumbrance
et al.
et ux.
Et vir.
Express contract
external obsolescence
fha
fannie mae
finder’s fee
franchise
functional obsolescence
government backed mortgage
ginnie mae
government survey system
grant deed
gross income multiplier
gross lease
gross rent multiplier
ground lease
guaranteed sale plan
hecm
hud
Income capitalization approach
Incorporeal right
Inflation
Interim financing
jumbo loan
Littoral rights
Lock-in
Margin
Market data approach
metes and bound
mill
net lease
net listing
nonconforming use
novation
obsolescence
open-end mortgage
open listing
origination fee
package mortgage
participation mortgage
pud
plat
pre-approval
prequalification
principal meridian
pur autre vie
qualifying ratio
respa
rectangular survey system
regulation z
riparian rights
severalty
tenancy by the entirety
tenancy in common
torrens system
truth-in-lending
law
wraparound mortgage
the increase or addition of land resulting from the natural deposit of sand or soil by streams, lakes or rivers
the removal of land from one owner to another when a stream or other body of water suddenly changes in channel
in the United States, a system of land ownership in which land is held free and clear of any rent or services due to government
Association of Real Estate License Law Officials
a mortgage in which more than one parcel of real estate is pledged to cover a single debt
certificate of reasonable value –once the appraisal has been performed on a property being brought with a VA loan, the Veterans Administration issues a CRV
the grouping of home sites within a subdivision on smaller lots than normal, with the remaining land slated for use as common areas
recent sales of similar properties in nearby areas that are used to help estimate the current market value of a property
competitive market analysis (CMA)an analysis intended to assist a seller or buyer in determining a property’s range of value
an appraisal principle that asserts that property achieves its maximum value when a neighborhood is homogeneous in its use of land; the basis for zoning
an appraisal method whereby the value of a property is calculated by estimating the cost of constructing a comparable building, subtracting depreciation, and adding land value
the statutory or common law right of a husband to all or part of real estate owned by his deceased wife, regardless of will provisions, recognized in some states
area of land occupied by a building, its outbuildings, and yard, either actually enclosed or considered enclosed
a clause in mortgage that renders it void where all obligations have been fulfilled
1% of the loan amount charged by a lender at closing to increase a loan’s effective yield and lower the fare rate to the borrower
the right of a widow in the property of her husband upon his death in non-community property states
cultivated crops; generally considered to be personal property
a trespass caused when a structure, such as a wall or fence, invades another person’s land or air space
anything that affects or limits the title to property, such as easements, leases, mortgages, or restrictions
abbreviation for the Latin phrase et alius, meaning “and another”
abbreviation for the Latin term et uxor, meaning “and wife”
Latin term meaning “and husband”
an oral or written contract in which the terms are expressed in words
a loss in value of a property due to factors outside the property, such as a change in surrounding land use
Federal Housing Administration (FHA) an agency within the U.S. Department of Housing and Urban Development (HUD) that insures mortgage loans by FHA-approved lenders to make loans available to buyers with limited cash
Federal National Mortgage Association (Fannie Mae) a privately owned corporation that buys existing government-backed and conventional mortgages
a fee or commission paid to a mortgage broker for finding a mortgage loan for a prospective borrower
in real estate, an organization that lends a standardized trade name, operating procedures, referral services, and supplies to member brokerages
a loss in value of a property due to causes within the property, such as faulty design, outdated structural style, or inadequacy to function properly
a mortgage that is insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) or the Rural Housing Service (RHS)
Government National Mortgage Association (Ginnie Mae)a government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). Ginnie Mae manages and liquidates government-back loans and assists HUD in special lending projects
a method of land description in which meridians (lines of longitude) and base lines (lines of latitude) are used to divide land into townships and sections
a deed that includes three warranties:(1)that the owner has right to convey title to the property,(2)that there are no encumbrances other than those noted specifically in the deed, and (3)that the owner will convey any future interest that he or she may acquire
a rough method of estimating the market value of an income property by multiplying its gross annual rent by a multiplier discovered by dividing the sales price of comparable properties by their annual gross rent
a lease in which a tenant pays only a fixed amount for rental and the landlord pays all operating expenses and taxes
similar to gross income multiplier, except that it looks at the relationship between sales price and monthly gross rent
a lease of land only, on which a tenant already owns a building or will construct improvements
an agreement between a broker and a seller that the broker will buy the seller’s property if it does not sell within a specified period of time
home equity conversion mortgage (HECM) often called a reverse-annuity mortgage; instead of making payments to the lender, the lender makes payments to you. It enables older homeowners to convert the equity they have in their home into cash, usually in the form of monthly payments. Unlike traditional home equity loans, a borrower does not qualify on the basis of income but on the value of his or her home. In addition, the loan does not have to be repaid until the borrower no longer occupies the property
an acronym for the Department of Housing and Urban Development, a federal agency that enforces federal fair housing laws and oversees agencies such as FHA and GNMA
a method of estimating the value of income-producing property by dividing its expected annual net operating income of the property by a capitalization rate
intangible, non-possessory rights in real estate, such as an easement or right of way
an increase in the amount of money or credit available in relation to the amount of goods or services available, which causes an increase in the general price level of goods and services
a short-term loan made during the building phase of a project; also known as a construction load
a loan that exceeds Fannie Mae’s mortgage amount limits. Also called a nonconforming loan
landowner’s claim to use water in large, navigable lakes and oceans adjacent to property, the ownership rights to land-bordering bodies of water up to the high-water mark
an agreement in which the lender guarantees a specified interest rate for a certain amount of time
the difference between the interest rate and the index on an adjustable rate mortgage. The margin remains stable over the life of the loan, while the index fluctuates
a method of estimating the value of a property by comparing it to similar properties recently sold and making monetary adjustments for the differences between the subject property and the comparable property
a method of describing a parcel of land using direction and distance
one-tenth of one cent; used by some states to express or calculate property tax rates
a lease that requires the tenant to pay maintenance and operating expenses, as well as rent
a listing in which the broker’s fee is established as anything above a specified amount to be received by the seller from the sale of the property
a use of the land that is permitted to continue, or grandfathered, even after a zoning ordinance is passed that prohibits the use
the substitution of a new contract for an existing one; the new contract must reference the first and indicate that the first is being replaced and no longer has any force and effect
a loss in the value of a property due to functional or external factors
a loan containing a clause that allows the mortgagor to borrow additional funds from the lender, up to a specified amount, without rewriting the mortgage
a listing contract given to one or more brokers in which a commission is paid only to the broker who procures a sale. If the owner sells the house without the assistance of one of the brokers, no commission is due
the amount charged by a lender to cover the cost of assembling the loan package and originating the loan
a mortgage that pledges both real and personal property as collateral to secure repayment of a loan
a type of mortgage in which the lender receives a certain percentage of the income or resale proceeds from a property, as well as interest on the loan
planned unit development (PUD)- a type of zoning that provides for residential and commercial uses within a specified area
a map of subdivided land showing the boundaries of individual parcels or lots
condition where a borrower has completed a loan application and provided debt, income, and savings documentation that an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount, making assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be paid for property taxes, insurance, and so on
a lender’s opinion on the ability of a borrower to qualify for a loan, based on furnished information regarding debt, income, and available capital for down payment, closing costs, and prepaids. Prequalification is less formal than pre-approval
one of the 360 longitudinal lines used in the rectangular survey system method of land description
a phrase meaning “for life of another”. In a life estate pur autre vie, the term of the estate is measured by the life of a person other than the person who holds the life estate
calculations to determine whether a borrower can qualify for a mortgage. There are two ratios. The “top” is a calculation of the borrower’s monthly housing costs (principle, taxes, insurance, mortgage insurance, homeowner’s association fees) as a percentage of monthly income. The “bottom” ratio includes housing costs as well as all other monthly debt
Real Estate Settlement Procedures Act (RESPA) a consumer protection law that requires lenders to give borrowers advance notice of closing costs and prohibits certain abusive practices against buyers using federally related loans to purchase their homes
a method of land description based on principal meridians (lines of longitude) and base lines (lines of latitude). Also called government survey system
a Federal Reserve regulation that implements the federal Truth-in-Lending Act
the rights of a landowner whose property is adjacent to a flowing waterway, such as a river, to access and use the water
the ownership of a property by only one legal entity
ownership by a married couple of property acquired during the marriage with right of survivorship; not recognized by community property states
a form of co-ownership in which two or more persons hold an undivided interest in property without the right of survivorship
a system registering titles to land with a public authority, who is usually called a registrar
also known as Regulation Z; requires lenders to make full disclosure regarding the terms of a loan
a mortgage that includes the remaining balance on an existing first mortgage plus an additional amount. Full payments on both mortgages are made to the wraparound mortgage who then forwards the payments on the first mortgage to the first mortgagee
An exculpatory clause acts as a non-recourse loan. The buyer is not personally responsible for the note. An Acceleration clause states that in event of default the whole amount of the principal becomes due and payable. An Alienation clause (“Due on sale”) states that the balance of the secured debt becomes due if the property is sold by the mortgagor without the mortgagee’s approval A defeasance clause state the lien is defeated when the debt is repaid Older FHA and VA loans are freely assumable; newer ones require the next borrower to prove financial qualification.
When a borrower uses property to secure a loan while retaining the property's use and benefit, it is known as hypothecation. Dedication is the giving of land to a municipality for public use. A contract wherein the broker represents a buyer or tenant is called a buyer broker agreement or an exclusive right to represent agreement. An appraiser does not determine value but rather provides an estimate of value.
Valuation and Market Analysis Reconciliation is analyzing the three estimates of value in the appraisal process to arrive at an estimate of market value for the property The best way to define market price is the actual selling price of a property Competition, contribution, and change are all economic principals that affect real estate. There are 4 basic characteristics of value (DUST) Demand Utility Scarcity Transferability
The economic characteristics of land are scarcity, fixity, modification, and situs. Income Approach Converting income stream into an indication of value known as capitalization. Use this formula Net Annual Income Cap rate/rate of return market value Cost Approach Used for unique properties, such as churches or government buildings. Use this formula Land Value+Building Replacement Cost – Depreciation = Value
Even though air rights are considered part of the real property, they can be conveyed separately by deed. A variance is a change in zoning requirements to lessen restrictions when building site hardships occur, such as limited building sites. Tenancy by the entirety differs from other forms of co--ownership in that neither owner can force a sale Civil Rights Act of 1866 prohibits discrimination based on race, handicap, and familiar status. The Housing and Community Development Act of 1974 prohibits discrimination based on sex. Federal law requires that a lead-paint disclosure form be given to all tenants and buyers if the building was constructed before 1978. The Federal Fair Housing Act prohibits discrimination based on sex.
The broker agrees to accept as her fee any monies received above a stipulated amount. This is improper because this arrangement constitutes A. B. C. D. a conflict of interest an option contract a risky action for the broker a net listing
ANSWER EXPLANATION: D, This scenario is known as a net listing and is prohibited in most states. This practice exposes unsophisticated owners to the potential for outrageous selling fees. Upon the buyer signing the sales agreement a licensee is obligated to give a copy to the A. B. C. D. buyer upon request buyer by law buyer after the seller signs the lender
ANSWER EXPLANATION: B, Immediately upon the buyer making the offer by signing the agreement of sale, a licensed real estate agent is obligated by law to voluntarily give a copy of that agreement of sale to that buyer.
At a general meeting of a brokers' trade association, several members begin talking about fees and business practices. This sort of activity could be considered A. B. C. D. a violation of the Sherman Anti-Trust Act. activity prohibited by the Better Business Bureau. an appropriate activity within the association. a good way for brokers to learn about the different practices nationwide.
ANSWER EXPLANATION: A, Any discussion of fees between competitors could be viewed as an attempt to conspire to set the cost of real estate brokerage services, a violation of anti-trust law. For a real estate agency relationship to be enforceable, which of the following is NOT required? A. B. C. D. The The The The principal has principal has agent must be agent must be the power to do what is being assigned. the funds to pay the agent. authorized by a written agreement. a real estate licensee.
ANSWER EXPLANATION: B, The principal cannot empower the agent to do anything the principal cannot do. There is no guarantee that the principal has the necessary funds. Which is NOT an example of a buyer agency agreement? A. B. C. D. An exclusive buyer agency. An open buyers' agency. An exclusive-agency buyer agency. A net buyer agency.
ANSWER EXPLANATION: D, There are three basic types of buyer agency agreements: exclusive buyer agency, open buyers' agency, and exclusive agency buyer agency. Which of the following listings is risky and open to fraudulent dealings? A. B. C. D. An open listing An exclusive right to sell An exclusive agency A net listing
ANSWER EXPLANATION: D, Net listings, in which the agent keeps any part of the sale price above a given amount may subject a broker or associate licensee to license revocation or suspension. When may a broker functioning as an intermediary appoint one licensee to communicate with the seller and another licensee to communicate with the buyer? A. B. C. D. when when when when in the judgment of the broker it is best to make such appointments written permission to do so has been obtained from the parties the parties have given verbal approval to make such appointments the seller has given written consent for the broker to do so
ANSWER EXPLANATION: B, The broker (intermediary) who wishes to make appointments must obtain written permission from the parties to do so and must give them written notice of who is being appointed to the seller and who is being appointed to the buyer. When a property owner leases his property, at the end of the lease he has A. B. C. D. a reversionary interest in the property. a remainderman interest in the property. 30 days to terminate the lease. a possessory right to the property.
ANSWER EXPLANATION: A, A lease is a temporary condition. Ownership remains with the owner. Revert means to "bounce back" to the owner. A comprehensive buyer representation agreement would address the A. buyer's desired property description. B. duties of the agent, termination date, and compensation agreement. C. agent's contact information. D. family contact names and numbers. ANSWER EXPLANATION: B, A buyer's representation agreement should be a specific outline of what is expected of the broker and of the buyer. Paul and John Mitchell are brothers who own a chain of auto shops. Paul Mitchell is also a real estate broker, and he's been authorized to find a buyer for their business. Paul has A. B. C. D. an ostensible agency a designated agency an agency by ratification an agency coupled with an interest
ANSWER EXPLANATION: D, Paul is not only an agent, but also has an interest (part ownership) in the property, and should disclose this to potential buyers. A subdivider must place in the public records a map of the property known as a A. B. C. D. plan zone plot plat
ANSWER EXPLANATION: D, The subdivision map, which shows lots, blocks, streets, and the like, is known as a plat. It is filed in a plat book, open to the public, and sometimes designated as a liber. A corporation holds title in the name of its A. B. C. D. charter. board of directors. shareholders. creditors.
ANSWER EXPLANATION: A, A corporation is an artificial person and holds title in the name of its charter.
Riparian rights refers to all except A. B. C. D. rivers streams waterways oceans
ANSWER EXPLANATION: D, Littoral rights include oceans. An elderly property owner dies testate. In the will, care of the family pet is assured by conveying ownership in the property to a grandson who may occupy and enjoy the property so long as the pet lives. Upon the death of the pet, ownership passes to a designated charity. Which of the following is true in this situation? A. B. C. D. The The The The charity acquired legal title on the elderly property owner's death. son may replace the pet with another of the same breed. estate is one of a life tenancy pur autre vie. son has a fee interest.
ANSWER EXPLANATION: D, An interest that exists "so long as" a condition is met is a fee simple with a special limitation.
The buyer of a cooperative apartment receives shares in the cooperative and a A. B. C. D. proprietary lease. bargain and sale deed. joint tenancy. limited partnership.
ANSWER EXPLANATION: A, A co-op apartment is personal property, not real estate, and no deed is involved. The owners become shareholders in the overall organization and have a proprietary lease to their apartments. Which of the following changes in zoning should result in compensation to the owner? A. B. C. D. Spot zoning Down-zoning Buffer zoning "Taking"
ANSWER EXPLANATION: D, When property is rezoned so that it severely limits land use, it may be considered the same as being condemned or "taken." This is a legal issue.
The Texas Appraiser Licensing and Certification Board is an independent subdivision of the Texas Real Estate Commission that certifies appraisers under the regulations set by the Appraisal Foundation. he Special Information Booklet explains the charges that may be made at the closing and the Good Faith Estimate gives the borrower an estimate of the specific closing costs required to be paid at closing. The HUD-1 settlement statement is the final closing costs statement and may be requested by the borrower one business day prior to closing and must be provided at the actual closing. The Texas Real Estate License Act creates the Broker-Lawyer Committee to draft and recommend forms to the Texas Real Estate Commission and empowers only the Texas Real Estate Commission to promulgate and publish forms for mandatory use. The Texas Legislature enacted the Texas Real Estate License Act, a law that establishes the licensure requirement and creates the Texas Real Estate Commission to administer the law and to issue licenses. The Texas Real Estate License Act, Section 1101.358 Texas Occupations Code requires that one be at least eighteen years of age to file an application and become licensed. There is no specific period of time that one must be a Texas resident before making application for licensure. One must successfully complete a minimum of 150 hours of study in core real estate subjects including Principles of Real Estate, Law of
Agency, Law of Contracts, and one elective core real estate course. The remaining 60 required hours may be other core subjects or business related college hours. One needs a sponsoring broker to become actively involved in the brokerage business but does not need to affiliate with one until after he or she is licensed. One who files an application without first obtaining a sponsoring broker will be issued an inactive salesperson license. Responding to or facilitating inquiries about the ancestry or familial status would put the licensee in the position of violating A. only the Federal Fair Housing Law. B. only the state Fair Housing Law. C. federal and state laws as well as the Texas Real Estate Commission rules. D. only the REALTOR® Code of Ethics.
ANSWER EXPLANATION: C, Fair Housing Laws, Texas Real Estate Commission's Rule 537.19, and the REALTOR® Code of Ethics all address the issue. Facilitating such inquiries could result in suspension or revocation of one's license. Death disclosures include any death on the property other than death caused by natural causes, suicide, or accident unrelated by a condition of the property.
A broker has received the necessary written permission from the seller and the buyer to function as an intermediary. She has also received written permission to appoint salespersons to each of the parties. When the broker has given the proper written notice to each of the parties about who is appointed to whom, which of the following statements is true? A. An appointed salesperson may give advice and opinions to one of the parties. B. The broker may give advice and opinions to both of the parties to the transaction. C. Either of the appointed salespersons may give advice and opinions to either of the parties. D. The broker may give advice and opinions to only one of the parties to the transaction.
ANSWER EXPLANATION: A, The broker must remain neutral and refrain from giving advice and opinions to either of the parties. An appointed salesperson may give advice and opinions ONLY to the party to whom the salesperson is appointed. Three of the Texas Real Estate Commission promulgated addenda contain the words "time is of the essence." They are The Addendum for Sale of Other Property by Buyer, The Back-Up Addendum, and the Third-Party Financing Condition Addendum. An option clause is always interpreted under the "time is of the essence" rule. Texas courts will favor upholding the terms of a contract as long as there is evidence that the parties have acted in good faith and have accomplished the objectives of the agreement within reasonable time. Strict time frames will be enforced when the parties specifically agree in the contract that time is of the essence.
Texas Real Estate Commission Rule 537.11 requires that promulgated forms be used by licensees with limited exceptions. This scenario does not meet one of the authorized exceptions. The buyer's agent must use the Texas Real Estate Commission contract to purchase form and the Seller Financing Addendum promulgated by the Texas Real Estate Commission. Property that has never been occupied, property acquired by a lender as a result of borrower default, and property being sold by a duly appointed/approved administrator or executor of an estate are specifically listed in the list of eleven exemptions in Section 5.008. Generally all single-family, previously occupied property requires the disclosure to have an enforceable contract.