Tenancy for years
Nothing to due with years. Leasehold estates. Definite beginning and ending. No notice required
Life Estate
Freehold estates. Conventional and Pur Autre Vie (another's Life)
Periodic Tenancy
Grows out of established lease. Additional months on a lease. Notice must be given by whatever period of time is. Definite beginning but no ending
Defeasible Fee Simple Estate
dependent on the occurrence of event. IE Cheeseman Park
Dower/Curtsey-
D Man/ C Wife goes to spouse
Remainderman
Life estate designated recipient of will
Tenancy At Will
Do not have definite beginning or ending. Only 72 hour notice to tell leave. Like before selling at home. Temporary
Severalty
Only one person or married couple owns property
Tenancy at Sufferance
Starts at end of lease. Not paying rent and the difference trespassing.
Joint Tenancy
Equal owners. Same start time. Automatic Survival.
CMA
Comparative market analysis is not a Appraisal
Market Cost-
Amount used to contrast improvements plus value of land
Market Price-
Value that is sells for
Market Value-
What parties would agree to pay in an open market
Market Value Characteristic
Most probable selling price. Payment in Cash. Unrelated buyer/seller. Exposed to market for reasonable period of time. B & S fully informed on market conditions and property use and defects.
Elements of Value
D-U-S-T Demand Utility Scarcity Transferability
Principals of Value
Anticipation, Change, Competition, Conformity, Contribution diminishing returns, Supply & Demand , Plottage, Progression lowest home is high neighborhood, Regression highest home in low neighborhood, Substitution. Highest best use
Five ways to estimate Value
Sales Comparison Approach, Cost, Income, Gross Rent multiplier, Gross Income Multiplier
Used in Appraisals
Sales Comparison Approach, Cost Approach, Income Approach
Shortcut Methods for Income Properties
Gross Rent multiplier, Gross Income Multiplier
Sales Comparison Approach
Compare properties recently sold with subject property. Same neighborhood recent times. 1. Collect data on similar properties that have sold 2. Adjust comparable to make them reflect the subject property
Cost Approach
Based on buying similar land and constructing similar improvements. Only one to value land and improvements separately. 1 ~value of land and site improvements. 2 ~ current cost of construction. 3. ~accured depreciation 4. Deduct depreciation form construc
Reproduction costs
Square Foot method most common, Unit-in-place method appraisers, Quantity Survey Method most accurate, Index method least accurate
Three Classes of Depreciation
Physical Deterioration(curable), Functional Obsolescence (historical changes, curable), Economic Obsolescence (incurable, geographic changes)
Mechanics Lien
service or work done. Specific to one lien. Only lien that date work started or supply started not
Lis Pendens
Lawsuit pending can prevent transfer of property
Metes & Bounds
Property description. POB in directions, degrees, minutes, seconds and ends at POB. Irregular confirgution
Lot & Block
US Rectangular system, In neighborhood. Developments and
US rectangular System
30 states use. 306 principal meridian. Colorado is in 6th principle meridian which is located in Nebraska. Also uses latitude lines.
Township Line
Runs north and sound.
Township
6 X 6 miles. Starts in NE corner R to L. 36 sections
Tax Lien
Primary- Against specific property. Does not have ot be recorded. First position in Liens.
Range Line
Runs East and west
Section 16
SCHOOL designation.
Monuments
Permanent Structures, natural or man made
P.O.B.
Point of beginning
Judgment Lien
General Lien. Against individual not specific property. Lawsuits.
Income Approach to appraisals
Net income generates determines value. 1. Estimate potential gross income. 2. Deduct vacancy rent and bad debts. Effective gross income 3. Subtract Operating expenses= Net operating income(NOI). 4. /Estimate capitalization rate . 5. NOI/ Estimate Capitali
Gross Rent Multipler
GRM=Sales Price/Gross Monthly Rent
Gross Income Multipler
GIM=Sales price/ Gross Annual Income from all sources
Value using GRM & GIM
MV= Gross Rent(subject)* {GRM(comps) or GIM(comps)
Appraisal Steps
1 State the purpose 2 Plan the appraisal 3 Gather, Record and analyze data 4 determine the highest and best use 5 Estimate Land Value 6 ~ value by all three approaches 7 reconcile ~ for final (~weight the values each needs a different weight ) 8 Report fi
4-3-2-1 is a familiar approach to one facet of real estate practice. It normally refers to which of the following?
Method used in appraising vacant land of different depths
The most expensive and time-consuming method of estimating the cost of construction is:
quantity survey
A property with amenities is best appraised by:
comparative analysis
You would use the comparative method in the appraisal of property
Land cannot be manufactured; therefore the comparative method (market data approach) must be used to arrive at a value of land.
Constructive Notice
Seller has to provide. Part of Public record.
Merchantable Title
Transferable title, Marketable Title
Chain of Title
History of Owners
Abstract & Opinion
Only done by Attorney. History, liens, mortgages, claims, rights and recommendation
Color of Title
Appears to be defect but is not.
Police Power
Governmental Rules
Actual Notice
Tell someone something.
Cloud on Title
Defect on title and may prevent transfer of title
ILC
Improvement Location Certificate. Boundaries, improvements and based on platt map
Quiet Title Lawsuit
Correcting defect on title and removing cloud.
Agency
Relationship between Agent and principal. Represents legal authority.
Universal Agency
basically do anything for anyone. POA
General Agency
Property manager, Right to hire and fire, Necessary for function. General POA
Special Agent
Limited to specific transaction. An agency agreement
Designated Agency
If someone cannot fulfill duties someone else can do it for them. Broker to associate broker
Agent
Someone who represents a principal
Actual Authority
Agreed upon and in writing
Apparent Authority
Directed to authority
Agency by Necessity
in the event of emergency
Termination of agency by party
Performance, Resignation, Mutual Agreement, Discharged by principal, Abandonment
Termination of agency by Law
Expiration of Term, Change in Law, Bankruptcy, Death of either party, Incapacity of either party, Destruction or condemnation of improvements
Agent Duties to Principal
Care, Accounting, Loyalty, Obedience, Disclosure COALD, Performances
Commingle/ Convert
Changing between. Keep funds they way they are intended.
Principal to Agent Duties
Preform the agency contract, Compensate the Agent, Reimburse the agent for expenses, Indemnify the agent for loss suffered because of agency
Agents to Third Parties
must act honestly and Fair. Responsibility and care!
Colorado Brokerage Relationship Act
Modified in 1994 removed presumption that all brokers worked for seller. Established uniform standards for brokers. Defined buyer agency, Disclosure of brokers obligations and duties. Disclosure of types of relationships
Types of Agency Relationships
Agent of Seller, Agent of Buyer, Dual Agent illegal in Colorado, Transaction Broker
Agent of Seller
Exercise reasonable skill and care, Promote sellers interests with good faith and loyalty and fidelity, Disclose to seller known adverse material facts, Counsel Seller on benefits and risks of transaction, Account for money and property
Agent of Buyer
Similar to Seller, Includes disclosure of facts actually known, Advising of potential for vicarious liability, Includes informing seller of buyer's financial ability to preform
Dual Agency
Consent required. Eliminated in Colorado in 2003. Limits disclosures. No motivating factors, terms different financial terms, Any facts or suspicions that might stigmatize, Any material information that is not important
Transaction Broker
Eliminates Vicarious Liability, not an advocate either party. Duty of communication, advisement, negotiation, contract terms, Closing.
Commission Rule 35
Must have written agency agreements and disclosure
A transaction broker has a fiduciary responsibility to:
neither the buyer nor seller. A fiduciary relationship is the highest standard of care at law. A fiduciary is expected to be extremely loyal to the person to whom he/she owes the relationship (the "principal") and must not put personal interests before th
A buyer's interest in real property, acquired at the moment the seller and the buyer enter into a sales contract, is known as:
Equitable title A buyer has equitable title once they have an accepted offer even if the property has not closed.
Torrens Certificate
allows the transfer of title. Not used in many parts in US. Smaller areas or sparsely populated areas. Instead of title being transferred, it is the registration of the torrens certificate that allows the transfer of the title
Face to Face Closing
On the same day at the same time. With a closing agent. Take care of 2 issues. Close on Loan, Close real estate transaction
Escrow Closing
Most common closing. Different times closing. Third party handles all the documents
Good funds
Cash, bank check, tellers check, certifited funds.
Schedule of exceptions
part of Title commitment these are the exclusions that are not covered by title insurance.
Prorations
Proporatatie amount of expense that are given to buyer and seller. Example Real estate taxes. Last years expense/365= cost per day. Cost per day * amount of days that the party owes each other
Market Value
price that is listed at. Estimated value.
Market Price
Price that property sales at.
Market Cost
Cost of the replacement of the property
DUST
Appraiser method of valuation. D= Demand U= unitization of property, more uses higher value. S= Scarcity, fewer the amount higher the value, Supply. T= Transferablility, the easier the transferability the higher the value
Anticipation
Something happening in neighborhood that is going to increase or decrease the value that makes people want to either buy or sell
Plottage
2 properties together have more value then the parts .
Listing Agreement
Broker is hired as an agent of the seller. To find a ready willing and able buyer for the sellers property
Types of listing agreements
Open listing, Exclusive Agency. Exclusive right to sell. Net Listing
Open listing,
Who gets listing? Any # of brothers at the same time. Paid? Only broker who sells property, Common? No
Exclusive Agency.
Who gets listing? One broker. Paid? No commission if seller sells property. Common? Not uncommon
Exclusive right to sell.
Who gets listing? One broker. Paid? Brokers receives commission regardless of who sells property. Common? Most common
Net Listing
For of commission. Broker commission is any amount above a net amount the seller receives
A listing contract under which the broker's commission is contingent upon his producing a ready, willing, and able buyer before the property is sold by the seller or another broker is known as:
an open listing
Misrepresentation by a party to a contract differs from fraud as to the:
requirement of intent
A listing broker should tell a prospective tenant everything about a property except that:
the owner will accept less than the listed price
Consideration is
not required in An agency agreement
Listing agreements must include:
A definite termination date
VA loan
The original veteran is responsible for the assumption, when the new buyer does a non-qualifying assumption. The funding fee may be financed.
Freddie Mac, Fannie Mae, and Ginnie Mae have in common the purpose of
replenishing funds of mortgage originators by purchasing their existing mortgage loans
Interest charged on amortized loans:
The interest is computed on the declining loan balance. As debt goes down, so does the interest.
The type of plan for a loan calls for payments of interest only, with the principal to be paid in full at the end of the loan term is called a(n):
A straight loan contains a STRAIGHT payment plan.
A type of junior mortgage in which the existing mortgage amount, plus any additional purchase funds, is loaned to a buyer by the seller is known as:
wraparound mortgage "wraps around" -- in other words, another lender, usually the seller, finances a borrower by lending an amount over and above the existing first mortgage amount without disturbing the first mortgage
With an FHA loan and a VA loan, if the appraisal is lower than the contract price:
the purchaser has the right to back out of the contract without repercussion
A promissory note calling for payment of interest only during its term is called a(n):
straight note
Discount Points
form of prepaid interest. A borrower buys a point and in return gets a lower interest rate on the loan. Each discount point generally costs 1% of the total loan amount and depending on the borrower, each point lowers your interest rate by one-eighth to on
A Certificate of Reasonable Value is commonly used in the real estate business. It is issued by the:
Veterans Administration. A CRV is used by the Veterans Administration to estimate a property's value.
FHA has developed several loan programs designed to
insure housing loans.
The person who gets a real estate loan by signing a note and mortgage is the:
Mortgagor
A note in which the principal amount is systematically reduced through regular payments of both principal and interest is known as a(n):
amortized loan
Conventional loans refer to loans that:
typically have a maximum loan to value ratio of 80% without private mortgage insurance
Primary Mortgage Market
Lenders that originate mortgages. Profits- finance charges, interest Income, Servicing loan.
Secondary Mortgage Market
Raises capital for lenders by buying and selling loans. Major Participants- Fannie Mae
Fannie Mae
Government sort of agency. Not private company with stock. Buy loans for securities. Largest. Federal National Mortgage Association. FHA insured loans
Ginnie Mae
Government Agency. Special assistance. VA and FHA no conventional. Secondary market for those types. Government National Mortgage Association. Buys loans of low to moderate income homebuyers
Freddie Mac
Government Agency. Secondary market for conventional loans. Federal Home loan Mortgage Corp. Public company by fed.
Private Conduits
Private companies that buy mortgages
Straight Loans
interest only with balloon at the end. Keeps monthly payments low. No part is principle. Most people can afford larger home. Term Loans. Home improvement or second mortgage
Amortized Loans
Traditional Loans. Interest High to low. Most Common. Typically 15 to 30 years. Each payment lowers interest. Equal payment each month. Taxes and insurance can shift. Each payment is interest and principle
Manually Amortize loan
1. annual interest= Current loan Balance * Interest rate 2 Annual interest/12= monthly interest 3. Monthly payment - monthly interest= Principal 4. Loan Balance-Loan paid= New loan balance
Adjustable Rate Mortgages
ARMS. % and payment and shift. Changes based on economic index. Caps on payment cap, Rate of % and Total % in loan life. Adjustment Interval. Teaser rates. Have convertible feature. Short term living.
Balloon Loans
Generic name. Payments do not fully amortize loan. Big payment due at end of term. 5/25 example 5 year balloon with a 30 year amortization
Conventional Loan
Not insured or guaranteed by government. Most secure. 80% loan to Value ratio. Private Mortgage Insurance can be added higher than 80% LTV. Front end ratio cannot exceed is 28%. Back end ALL monthly payment cannot exceed 36% gross monthly income
Non-conventional Loan
FHA- insured loans VA- Guaranteed Loans.
FHA
Federal Housing administration. Only insure loans. Made by federally qualified lenders. Always Upfront mortgage ratio 29%. Back end Ratio is 41%. Set by Region. Closing cost maybe financed. No prepayment penalty. Down payment 3-5%
VA Guaranteed Loan
Dept of Veteran Affairs. Only guarantees a portion of a loan does not insure or make them. Loans are made by Va approved lenders. Allow Veterans and surviving spouses to borrow money for the purchase of a home that they would not otherwise be able to affo
Front end ratio
cannot exceed is 28%. IS only mortgage
Back end
ALL monthly payments
Blanket Loans
Multiple properties. Contains partial release clause. May contain partial satisfaction clause
Buy downs
party other than buyer pays down the mortgage similar to discount points. Builder incentive
Home equity loan
Second mortgage. Using equity to create loan.
Construction Loan
Short term loan replaced with long term after completion. Money Disbursed as needed. Only amount on you borrow. Interest on the charged
Reverse Annuity Mortgage
Elderly person with little or no debt on property. Based on life expectancy and value of property. Payments are added to loan balance. Loan not repaid till death or sell
Package loan
Personal and Real property in one loan.
Wraparound loan
Junior>existing loan. Existing must be assumable. New lender pays old existing loan payment. To stop foreclosure.
RESPA
1974. Real estate Settlement Procedures act. Problem Kickbacks creating inflation. Faciiting bait and switch tactics. Prevents kickbacks. Requires lenders to provide good faith estimate. Requires Uniform Settlement Statement or HUD-1 24hrs before closing.
Trust in lending act
Regulation Z. Force lenders to inform borrowers of true cost of credit. Applies to any real estate loans and non-real estate loans under $25,000. Right of Recession. Disclosure. Truth in Advertising . does not limit the interest that can be charged, only
Equal Credit Opportunity Act
Protect borrowers from discrimination. Minors are not protected. Race, Color, Religion, National Origin, Sex Marital Status, Age, Dependence of public assistance
Right of Recession-
midnight of 3rd day following signing of loan documents to walk away cuz costs to high. Not first real estate loans. Applies to 2nds and refinancing. Time share has 5 days.
Truth in lending Disclosures
Finance charges and interest Rate. APR. Amount Financed. Total amount of payments
Truth in Lending Advertising
Amount of Down payment. Number of Payments. Period of Payments. Amt of financing charges. IF one in add all must be in Add
Novation
one party to a contract was discharged and another party took her place
initials P.M.I. in financing circles apply to
private mortgage insurance
Einstein bought a property from Plato. Einstein agreed to pay Plato $1615 per month for the next 15 years. Then the total balance will be due and legal title will change hands at that time. This is called a:
Land contract. If title does not pass until he property has been paid in full then it is a land contract and the payment are going directly to the seller.
Mortgagor
the Borrower. Trustor
Mortgagee
Lender. Beneficiary
Hypothecation
Pledging property as collateral to secure a loan without giving up possession
Senior Mortgage
Priority Mortgage
Subordination Agreement
Adjusts priority of loans
Equity
Owners interests in property. Also known as risk capital and Liable Capital
Title Theory
Ownership is transferred to lender, Borrower has equitable Title until they pay off mortgage
Lien Theory
CO. Mortgage creates lien on property. Public trust holds lien via a deed of trust. Mortgagor has title. Mortgagor retains title. Public trustee with borrower default imitates foreclosure. Release of Deed or deed Reconveyance. Trustor= Mortgagor, Trustee=
Intermediate Theory
Variation of others, mortgagor retains Title but lender can take title with default. Lender
deed of Reconveyance
When loan is paid off the lender releases the deed. Issued by Public Trustee to show that the debt has been paid off
Promissory Note
Contract between borrower and lender. Negotiable instrument. Contract detailing the terms of a promise by one party to pay a sum of money top the other. The terms of a note typically include the principal amount, the interest rate if any and the maturity
Mortgage
Deed of trust. Parties name. Consideration. Date. Words of conveyance. Has to have legal description. Security instrument. Conditions. Signature of trustor. Acknowledgement. Recorded.
Mortgagors Duties
Promise to pay. Pay real estate taxes. Will take out insurance. Good repair. Removal- not to anything of value
Mortgage Clauses
Acceleration. Prepayment. Defeasance. Alienation. Waiver of Homestead Right
Mortgage Acceleration Clauses
that fully matures the performance due form a party upon a breach of contract. Prevalent in most mortgages. If behind they are allowed to move forward the due date of the loan.
Mortgage Prepayment Clauses
new financing may be cheaper because the borrower's credit rating has improved or because interest rates are lower. To compensate for prepayment risk, a prepayment penalty clause is often included into the loan contract.
Mortgage Defeasance Clauses
in mortgage reverts to title to borrower after the loan has be repaid.
Mortgage Alienation/ Due on sale Clauses
If you sale the property the mortgage must be paid off. Full balance is due on transfer of ownership. prevent the loan from being assumed.
Mortgage Waiver of Homestead Right Clauses
Today is payment is $45,000 Originally was $50,000. In a mortgage the lender will have the borrower waive right to have the first 45,000. Required that it be waived in their loan agreements. If not waived must be paid to homeowner before loans are paid of
Installment Land Contract
contract between the owner of the property(vendor) and a buyer(vendee) for an agreed-upon purchase price. Under a land contract the vendor grants equitable title to the vendee and the vendee agrees to pay the purchase price, Land contracts are used by buy
Judicial Foreclosure
Title theory states. Court order makes someone reclaim
Non-judicial Foreclosure
Lien Theory states. The lender goes the public trustee who then initiates the foreclosure process after notifying the borrower. Mortgagee's files notice of election with Public trustee and evidence of default. PT advertises notice of sale. Notice of sale
Redemption of prior sale
prior to foreclosure sale Debtor must: Give at least 1 week notice of cure before sale. Pay delinquent amount, sale expenses, late charges, attorney fees and other costs by noon on the day before sale
Redemption after sale
Varies by state. 30-45 days. New purchaser will be redeemed. Debtor must pay sale price, interest, taxes paid, other expenses and costs. After redemption period buyer exchanges certificate of purchase for sheriff or treasurer's deed. Colorado does not hav
Strict Foreclosure
With notice the courts can grant the lender ownership of property
Usury
Collecting more interest than allowed by law
Loan Origination Fee
has been agreed to by the buyer in the contract. While many lenders charge a 1% loan origination fee, it is negotiated between the lender and the buyer and referenced in the contract.
release clause in a mortgage:
Allows portions of the property, given as security, to be released from the mortgage lien upon performance of a specified act. When a blanket mortgage is used to secure a debt, there is usually a provision in the mortgage which provides for the "release
Who would sign a deed of Reconveyance?
The party holding the trust deed, (the trustee), signs the deed of Reconveyance.
A power of sale clause is found in which of the following financing instruments?
Deed of trust
littoral rights are
abutting a pond, lake, or ocean.
Riparian rights are
along a stream, river or creek;
A section
is one square mile
A voidable contract
unlike a void contract, is a valid contract. At most, one party to the contract is bound. The unbound party may repudiate the contract, at which time the contract is void. An option to purchase is a voidable contract as the holder (buyer) of the option ca
A mortgage that has not been recorded or registered in the county in which the real estate is located:
is not protected by a priority position in the event of foreclosure. An unrecorded document is not a matter of public record, and does not have a position of priority in the event of foreclosure. It is valid.
A section is 1 mile by 1 mile. How wide is a four-acre (a hint: one acre contains 43,560 sq ft) easement that runs along the western edge of a section?
33 feet. This is a hard one. A section is 1 mile by 1 mile. This means one edge of a section is 5280 feet (1 mile) long. Four acres (43,560 sq ft x 4 acres) contains a total of 174,240 sq. ft. 174,240 divided by 5280 equals 33. The dimension of this 4 acr
mechanic's lien
one of the few documents that must be recorded to be legally effective. Some others include a homestead declaration, declaration of abandonment, limited partnership agreement, satisfaction of mortgage and deed reconveyance. Deeds are almost always recorde
bundle of legal rights" is properly included in:
Bundle of legal rights is part of the definition of real property.
Private property that is abandoned is taken by the local government. This is an example of:
Escheat. This is a classic example of property that government can take over through escheat, another example would be a person dying without a will and no living relatives. The term is often now applied to the transfer of the title to a person's property
DUAL AGENCY, WHICH DUTY WOULD BE THE EASIEST TO CARRY OUT FOR BOTH CLIENTS?
Care. Duel agency is illegal in Colorado, however it states that do have it, it acts as a form of Transaction Broker requiring the agent to be a neutral party. Care simple means the licensee acts performs duties in a compentent fashion. Disclosure is a cl
documents accompanies the deed of trust
The promissory note is secured by a deed of trust or mortgage.
Money realized in excess of the indebtedness and the foreclosure belong to:
mortgagor. The Mortgagor is the owner of the property. The owner placed the voluntary lien on the property which the mortgage represents to secure a loan for the property. Money left over from the sale of the foreclosed property, after all obligations wer
true regarding easements
An easement is an encumbrance. An easement in gross is a personal easement usually given to utility companies. An easement is not an estate because an estate must be possessed and an easement is the right to use not the right to possess. By definition an
The PRIMARY purpose of zoning ordinances is to
implement a local master plan. Zoning ordinances control the type, location and density of building. This is why you often do not see commercial enterprises in residential areas, or apartment complexes in single family home areas. These restriction are de
following would be considered community property
Income earned by a spouse during the marriage. In a community property jurisdiction, most property acquired during the marriage (except for gifts or inheritances) is owned jointly by both spouses and is divided upon divorce, annulment or death
trust deed
Trustee oversees the provisions of the Trust Deed. The lender benefits from any action taken by the Trustee. The trustor is the borrower and has legal title in a lien theory state.
The buyers inspector noticed the damage to the basement floor and communicated this information to the buyer on March 20th.
The buyer may terminate the purchase contract in writing. The buyer also has the option to negotiate a repair cost with the seller. The buyer has the ability to terminate the contract with no penalty as long as they communicated the termination to the sel
A person seeking intervention, who believes that they have been subject to discriminatory housing practice, must:
file a written complaint with HUD within 1 year. Person seeking intervention must file a written complaint with the Office of Fair Housing within 1 year or may file in federal court within 2 years of the alleged discrimination.
Principal of Substitution, which states that no one will pay more for one item if an equally substitutable item is available at a lower price, applies to what appraisal methods
Sales Comparison, replacement cost, and income. All methods of appraisal are based upon the principal of substitution.
An appraisal principle that holds that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and
Closing instructions are to be signed by all parties
at the time the purchase and sale contract is generated. Closing instructions are to be generated by the listing broker when the property is listed, so that they are ready for the buyers signature as soon as a purchase contract is offered. Although not an
After moving in the buyers realized the Iris plants had been removed:
The seller is bound by the terms of the purchase contract, the listing broker might consider offering a financial concession to the buyer for damages. The Seller is legally accountable for the terms and condition of the purchase contract she signed. Faili
mortgage broker usually offers
Brings borrower and lender together
Colorado is a lien theory state. This means:
mortgages and trust deeds are liens and do not give the lender title to the property. Lien Theory secures the loan between the the buyer and the lender. In a lien theory state the lender does not get title they just get a lien established by a Deed of Tru
The value of all vacant land is influenced by its best potential use. One of the leading factors or influences in the valuation of urban industrial land is:
size of acreage. The vital factor for an industrial site is the size of the parcel. Industrial complexes usually require considerable space and are not concerned with exposure to the retail public.
A man earns $20,000 per year and can qualify for a monthly PITI (Principal, Interest, Taxes, Insurance) payment equal to 25% of his monthly salary. If the annual tax and insurance is $678.24, what loan amount will he qualify for given a monthly PI (Princi
$35,000. The man can qualify for a loan, but only one that the monthly payment including PITI (Principal, Taxes, Interest, Insurance) is not more than 25% of his monthly salary.
Generally a payment factor comes from a Morgage Factor Table also called an A
Personal property includes:
Chattels are personal property; fructus industriales are crops (grown with the help of man); emblements are also crops usually of a tenant farmer, all of which are personal property.
A major reason for buying and owning a condominium rather than a detached single-family home is that
a condominium tends to be more affordable. Instructor's confession. I do not like this question as I think it is entirely subjective, BUT it appears on the National licensing exam so here it is. It is as true that condo's tends to be less expensive as it
Pursuant to the Colorado Real Estate Commission approved purchase and sale contract:
the seller has a choice of providing title insurance or an abstract and opinion. Even though the commission-approved purchase contract allows sellers and sellers to choose between title insurance and abstracts, a purchaser's lender will require title insu
Equitable title is:
An interest in property created by the execution of a valid sales contract. Equitable title is created when a contract to buy & sell has been accepted by both parties
A newly appraised apartment house is valued by the income approach. Under which of the following circumstances would you deduct management cost for the net operating income?
A prudent investor will consider all expenses to arrive at a net income. Free rent is certainly an expense. Also, that the apartment is presently managed by the owner or by someone else, at no cost, does not alter the fact that management is necessary and
not a police power?
Liens. Liens are not laws or regulations of a government or quasi government agency
The meaning and importance of the agency relationship should be disclosed:
when confidential information is elicited or accepted. The Real Estate Commission states disclosures must be made prior to engaging in acts, which require a license.
Two brothers, John and Bill, owned valuable property left to them by their father, as joint tenants. Both married later, and then Bill died intestate. His widow would acquire:
no interest in the property. The widow would have no interest in the property since the two brothers were joint tenants, the surviving brother would now own the property in severalty.
Interim loan/ construction loan
are synonymous. An interm loan is a temporary loan used to finance the construction. It is paid off with a permanent loan.
When borrowing for the purchase of personal property; such as when acquiring a furnished home, The Uniform Commercial Code requires the borrower:
sign a security agreement and file a financing statement.
Deeds recorded with the county recorder:
provides constructive notice that the property has a new owner. Recording a deed does not guarantee ownership as the document is it not analyzed by the County Recorder. Recording places the deed into the public record which provides constructive public no
rules would a court consider in resolving a contractual ambiguity
A later document takes precedence over an earlier document. An amend/extend to a purchase and sale contract would be an example of the rule.
A buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if:
The owner withdraws the counteroffer before it is accepted. A purchase offer or counteroffer (counterproposal) can be withdrawn at any time prior to acceptance.
The easement that is not created for the benefit of the land owned by the owner of the easement, but that attaches personally to the easement owner is known as an:
easement in gross. An easement in gross is not created for the benefit of the land owned by the owner of the easement, but that attaches personally to the easement owner. An easement in gross benefits an individual or a legal entity, rather than a dominan
When someone has living heirs but dies without leaving a will (called intestate), the estate is distributed according to the:
law of descent and distribution. Intestate law, also referred to as the law of descent and distribution, refers to the body of law that determines who is entitled to the property from the estate under the rules of inheritance
VA guaranteed loans
With a VA loan the seller can pay all closing costs, the funding fee and pay off the veteran's debts. The maximum amount that the VA will guarantee is varies by region of the country, but there is no maximum loan amount.
A discrimination suit may be filed in federal court by:
the aggrieved person. An aggrieved person may file a discrimination suit in federal court. If a complaint was first filed with HUD, the federal court generally waits to hear the results of the hearing held by the HUD Office of Equal Opportunity
A broker showed an owner-occupied house that had screens, venetian blinds and a wall bed. The broker secured a buyer whose offer was accepted by the owner, and the transaction was put into escrow. The sellers will be expected to:
remove none of the items. All of the items that are permanently attached are considered real property. Reminder trade fixtures are used in conducting a business
Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had foun
Both contracts are valid. This is a case of double jeopardy. The buyer signed two purchase contracts. There is nothing in a purchase contract that prohibits the buyer from putting an offer on another property.
A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?
Agency coupled with an interest. Not only does the agent have an agency relationship with the client, the agent also has a financial interest.
An encumbrance issued by a court on a property of a defendant in a pending lawsuit for money damages is called an:
Writ of Attachment. A writ of attachment is a court order to "attach" or seize an asset. It is issued by a court to a law enforcement officer or sheriff. The writ of attachment is issued in order to satisfy a judgment issued by the court. A prejudgment wr
Ed leases store space to Pete for a restaurant, and Pete installs trade fixtures such as booths, counters and other equipment. When do these items become real estate
When the lease expires, if the equipment is not removed at that time. Trade fixtures only become realty if not removed from the premises by the last day of the lease.
The remnant of an estate that has been conveyed to take effect and be enjoyed after the termination of a prior estate, as when an owner conveys a life estate to one party and the remainder to another, is called:
the remainder estate. The remainder estate is that which is left from a life estate. Don't confuse this with reversionary interest, which is the future interest that reverts to a grantor or his heirs.
A sale and leaseback arrangement is one in which a seller sells a property to a buyer and then leases the property back. Which is correct as it applies to a sale and leaseback arrangment?
The seller retains possession of the property. The seller sells the property but leases it back from the buyer. The buyer has legal title, the seller has possession. In commercial real estate a company can raise capital by selling a building to another pa
A property manager, not in a retirement community, that prefers to lease to families with few or no children may not
It is illegal to implement practices that restrict housing to families. Property managers cannot refer to " adult only" advertising, implement occupancy standards with the intent to deny housing to families or charge higher rents to families. Exceptions e
A tenant abandoned the premises used for manufacturing purposes before the term expired, but he continued to pay rent. The tenant left a water cooling system and certain electrical systems that she installed and used in her manufacturing process. The land
There was no abandonment of the lease because the tenant continued to pay rent. The tenant can remove the items since they may be considered trade fixtures. The tenant also must bring the property back to its original condition.
By will, Calhoun devises (gives in his will) his property to his daughter, Mary Calhoun, for her life (a life estate) and at her death to "her children." At Calhoun's death, Mary, 30 years of age and childless, deeds a fee simple estate (sells the propert
invalid. hough the ownership of a life estate is of limited duration because it ends at the death of the person who is the "measuring life", the owner has the right to enjoy the benefits of ownership of the property, including income derived from rent or
Recording a deed:
protects the interests of the purchaser. Recording a deed protects the interests of the buyer; it does not guarantee ownership or eliminate prior liens. Recording an invalid document does not perfect it.
Junior, who operated his brokerage office as a sole proprietor, dies. His daughter Kay, who is also a broker, wishes to take over all her father's listings. She should:
renegotiate all listings. Kay must re negotiate the listings because they terminated when her father died.
The primary survey line running north and south in the rectangular survey is a:
principal meridian. Ranges lines run north and south: the principal meridian is the primary North and south line.
A point, line, or surface from which elevations are measured is known as the:
datum. The datum is a measurement that applies to elevations.
Mr. Brooks has decided to offer to buy a farm. He has been told that farmland in the area is selling for $3,500 to $4,000 per acre. Mr. Brooks offers $3,750 per acre. The legal description of the farm is: The NW-1/4, of the SW-1/4 and the E-1/2, of the NW
The offer is $450,000 and is 120 acres. The first parcel is "The NW-1/4, of the SW-1/4 ". In simpleze this is one quarter (NW �) of one quarter (SW �) of a section. To determine one quarter of a section (SW 1/4) you divide 640 by 4 equals 160 acres. To de
most expensive method of appraisal of large, income-producing properties
Replacement cost approach. The replacement cost method is normally the most time consuming and expensive method.
Building Ordinances may specify & regulate:
materials used in plumbing. Building ordinances, also called building codes, are a set of standards established and enforced by local government that specify the minimum standards for construction. The main purpose of building codes are to protect public
A rancher owns a parcel of land on which oil is discovered. If the rancher or previous owners have not previously conveyed the oil rights, who owns the oil?
The rancher. All ownership rights are included in real property unless they have been specifically excluded.
Colorado's Brokerage Relationship Act addresses issues such as:
the "presumption" that all brokers work for the seller. "in-company" transactions. offering choices to buyer's and seller's relationships
Discrimination when selling your principal residence is legal when:
you do not discriminate in advertising. A seller should not discriminate for any reason but may, so long as the seller does not use a real estate broker, doesn't discriminate in advertising and no more than one dwelling in which the owner was not the most
considered chattels except
a kitchen sink. Everything but the kitchen sink which is considered real property. Personal property, roughly speaking, is private property that is moveable as opposed to real property or real estate. Personal property may also be called chattels or perso
Typically, the least important factor influencing the value of an owner-occupied home would be:
potential rental income. Income would only be important in commercial property,ie for apartments.
A title insurance policy differs from property and liability insurance policies in a variety of ways including
the statute of limitations for a cause of action commences at the time loss or damage occurs, and not the date the policy is issued. the premium for a title insurance policy is payable only once, and the policy remains in effect for as long as the insured
Colorado is a lien theory state. This means:
mortgages and trust deeds are liens and do not give the lender title to the property. Lien Theory secures the loan between the the buyer and the lender. In a lien theory state the lender does not get title they just get a lien established by a Deed of Tru
A trust deed is held by a private trustee in Colorado, the foreclosure must be:
Judicial. Since it is a private trustee it must be done through a judicial process, were it held by the public trustee than it could be conducted by the county trustee
An appraiser who is using the market data approach to appraise a family residence would never use the selling price of which of the following?
A similar home that was sold by owners who were forced to sell at any price because of financial difficulties. The scarcity or supply of property, the transferability and the utility all contribute to the value of property.
What would you say is the real basis for value of the average property; i.e. the economic characteristic of value?
Its relative scarcity and the demand for it. This is an example of supply and demand. All other matters affecting the property's value revolve around its usefulness and scarcity.