Real Estate Test + Vocabulary 2

An amortized loan refers to a financial obligation that is repaid over a period of time through a series of periodic payments. This means that the loan is gradually paid off through regular installments, which include both principal and interest. Unlike other types of loans, where the borrower may only make interest payments for a certain period of time and then repay the principal in a lump sum, an amortized loan ensures that both the principal and interest are paid off gradually over the loan term. This allows the borrower to spread out the repayment and make it more affordable over time.

The correct answer is "Rights or interests which a person has in the thing owned." This definition refers to the various legal rights and interests that a person can have in a property they own. It encompasses things like the right to use, possess, and transfer the property, as well as any other legal entitlements associated with ownership. This definition is broader than the other options provided, as it includes both the ownership itself and the rights and interests that come with it.

Amortization refers to the process of repaying a financial obligation, such as a loan or mortgage, through a series of periodic installments. These installments include both the principal amount borrowed and the interest accrued over time. By making regular payments, the borrower gradually reduces the outstanding balance owed to the lender. Amortization allows for the gradual repayment of the loan over a specified period, making it easier for borrowers to manage their financial obligations.

A subordination clause is a clause in a mortgage that states that the rights of the mortgagee (the lender) will be secondary to a subsequent mortgage. This means that if the borrower takes out another mortgage on the property, the lender of the subsequent mortgage will have priority in receiving payment if the property is foreclosed upon. The subordination clause ensures that the first mortgage lender is aware of and agrees to their position being subordinate to other lenders.

Consideration refers to something of value that is given by one party to another in order to show acceptance or acknowledgement of a contract. This can include money, services, goods, or even a promise to do or not do something. Consideration is an essential element of a contract, as it demonstrates the mutual intention of the parties involved to be bound by the terms of the agreement. It ensures that both parties have something at stake and helps to prevent one-sided agreements. Therefore, consideration is the correct answer in this context.

Assignment is the correct answer because it refers to the act of transferring the rights and obligations of a contract to a third party without canceling the contract. This means that the original parties to the contract remain bound by their obligations, but a new party is now responsible for fulfilling the rights and obligations of one of the original parties. This transfer of rights and obligations is typically done through a written agreement called an assignment.

A contract for deed is a type of agreement where the seller retains the title to the property until the buyer has made full payment. This means that the buyer does not receive immediate ownership of the property, but rather pays in installments over a set period of time. Once the buyer has completed all payments, the seller transfers the title to the buyer. This type of arrangement is commonly used when a buyer is unable to obtain traditional financing or when the seller wants to maintain some control over the property until it is fully paid off.

Cost refers to the money required to cover the expenses of materials, labor, land, and profits needed to create or develop a property. It encompasses all the financial resources needed to bring a property into existence.

In appraising income property, it is necessary to know the net income of the property in order to use the capitalization approach. Such net income is calculated by subtracting from the gross income nearly all expenses except the debt service.

A counteroffer is a rejection of an offer to buy or sell, with a simultaneous substitute offer. This means that instead of accepting the original offer, the counterparty is proposing a different offer in response. It indicates a change in terms or conditions of the original offer and signifies a negotiation process between the parties involved.

An appraisal is the act or process of developing an opinion of value as of a specific date. This involves assessing the worth or value of something, such as a property or asset, based on various factors and criteria. It is a systematic approach that requires analyzing market conditions, conducting research, and considering relevant data to determine the fair market value of the subject property. An appraisal is typically conducted by a qualified appraiser who follows specific guidelines and standards to ensure accuracy and objectivity in the valuation process.

Appreciation refers to the increase in the value or worth of something, which can be attributed to economic factors such as supply and demand. This increase can either be permanent or temporary.

All of these run with the land, including the mutual water company stock which is inseparable.

If demand is constant and supply increases, sellers compete with each other by lowering prices.

Deduction refers to an amount of money that is subtracted from income when calculating federal income tax. It is a reduction in taxable income, which helps to lower the overall tax liability.

Credit refers to a liability or equity entered in a party's favor. It represents an increase in assets or a decrease in liabilities for the party receiving the credit. This entry is made on the right side of the accounting equation and is used to record increases in revenue, income, or capital. In simple terms, credit is used to show that something is owed to the party receiving the credit.

Fee simple title is not necessarily free of loans or other encumbrances.

The appraisal process involves conducting a systematic analysis of various factors that influence the value of real estate. This analysis includes considering factors such as location, condition, size, amenities, and market trends. By evaluating these factors, appraisers can determine the fair market value of a property. This process is essential for buyers, sellers, and lenders to make informed decisions about the value of real estate.

The correct answer is "A person who engages in the procedure of estimation the value of real property or personal property." This answer accurately describes the role of an appraiser, who is responsible for determining the value of real estate or personal belongings.

The usual waiting period for the final disbursement is 35 days after the recording of the Notice of Completion. It would be hazardous to advance the final disbursement before that time for fear that there might be subcontractors who have not been paid and will file mechanics’ liens. The subcontractors are wiped out 31 days after recording the Notice of Completion.

The District Attorney prosecutes violations of the Real Estate Law within the county where the violations occur.

Since the sellers paid one month's interest in advance, this must be returned to them by the buyer. This will be a debit on the buyer's statement. $4415 X .006 (7.2% divided by 12) = $26.49

The correct answer is "Appraisal Value". In the context of the question, an appraisal value refers to an estimate of the amount of a particular value, such as market value, assessed value, or insurable value, based on the given assignment. This means that it is a professional assessment or valuation of the worth or value of something. An appraisal report is a document that provides the details and findings of the appraisal process. Assessment value refers to the value assigned to a property for tax purposes. An annuity is a financial product that provides a series of payments over a certain period of time.

Debit refers to an amount owed or due. It is the opposite of credit, which represents an amount received or owed to someone. When a person or a company debits an account, it means they are recording an increase in the amount owed or due. Therefore, the correct answer is Debit.

Bankruptcy is the correct answer because it refers to a provision in Federal Law where a debtor surrenders their assets and is relieved of the obligation to repay their unsecured debts in the future. Bankruptcy is a legal process that allows individuals or businesses to seek relief from their debts when they are unable to repay them. It provides a fresh start for debtors by allowing them to eliminate or restructure their debts under the supervision of a bankruptcy court.

The best appraisal methods would be the replacement cost approach and the capitalization of the net income approach. The gross rent multiplier could be very inaccurate and there would probably by very few shopping center sales for you to use the market approach.

The broker's action is not permissible because it goes against the fiduciary obligations that the agency owes to both buyers. By withholding the second offer from the seller and not making them aware of it, the broker is not acting in the best interest of both buyers and is not being transparent in their dealings. This could potentially lead to a conflict of interest and unfair treatment of the buyers.

Traditionally lenders want borrowers’ “budget” mortgage payment (PITI—Principal + Interest + Taxes + Insurance) to be not more than 28% of their gross monthly income: 28% x $3,000 = $840.

An annuity is a contract where a lump sum or scheduled premiums are paid out. It is a financial product that provides a series of regular payments to an individual over a specified period of time. This can be used as a retirement income stream or to meet other long-term financial goals. Annuities are often used to ensure a steady income flow and provide financial security in the future.

The appraisal principle that states that the highest property values are realized when improvements are proportional to one another and the land in size and type is called "Balance". This means that in order to maximize the value of a property, the improvements made on the land should be in harmony with each other and with the land itself. This principle emphasizes the importance of maintaining a balance between the various components of a property, such as the buildings, landscaping, and size/type of land, in order to achieve the highest possible value.

A deed is a written instrument, often with a seal, that transfers property ownership from one party (the grantor) to another party (the grantee) when properly delivered and executed. It is a legally binding document that conveys a property interest and provides evidence of ownership. Unlike a contract, which is a mutual agreement between parties, a deed specifically deals with the transfer of property rights. An abstract of title is a summary of a property's ownership history, while an affidavit of title is a sworn statement regarding the ownership of a property.

Constructive Notice refers to the legal concept that information or documents are considered to be publicly available and accessible to anyone who wants to inquire or investigate. In the context of the given question, the act of recording documents and making information accessible to prospective buyers and lenders is a form of Constructive Notice. This means that when documents are recorded, such as property deeds or liens, it becomes public knowledge and anyone interested in buying or lending against the property can access and rely on that information. Constructive Notice helps to protect the rights and interests of buyers and lenders by ensuring transparency and disclosure of relevant information.

The Americans with Disabilities Act is a law that prohibits discrimination against individuals with disabilities in various areas such as employment, public services, telecommunications, public accommodations, and commercial facilities. This means that individuals with disabilities should have equal opportunities and access to these areas without facing discrimination based on their disabilities.

A Deed of Reconveyance is a legal document that is used to transfer the title of a property from the trustee back to the trustor (borrower) once the loan has been fully paid off. This deed serves as proof that the borrower has fulfilled their obligations and is now the rightful owner of the property. It is an important step in the mortgage process and provides security to the borrower that they have successfully completed their loan payments.

Appropriation refers to the process by which a district imposes a real estate tax. It involves the allocation of funds from the district's budget to cover the costs and expenses associated with the tax. This can include expenses related to the assessment and collection of the tax, as well as the administration and enforcement of tax laws. The appropriation method ensures that the necessary funds are available for the district to carry out its real estate tax responsibilities.

The term "cost of credit" refers to the amount of money one has to pay when borrowing money, including the interest rate charged. It encompasses not only the principal amount borrowed but also any additional fees or charges associated with the loan. This term highlights the overall expense incurred by the borrower for utilizing credit facilities.

The correct answer is "The percentage of periodic payment that is applied to the reduction to the principal." This answer accurately describes the amortization rate, which refers to the portion of a periodic payment that is used to decrease the principal amount of a debt. It represents the percentage of the payment that goes towards reducing the outstanding balance, rather than being applied to interest or other fees.

Title insurance is the correct answer because it is a type of insurance that protects the buyer or lender against any financial loss due to defects in the title of a property. It provides coverage for issues such as undisclosed liens, errors in public records, or fraud. Guarantee of Title and Certificate of Title are not types of insurance, but rather documents that provide information about the property's title. Therefore, the most appropriate way to insure title is through title insurance.

The Cost Approach is a method of appraising property that takes into account the depreciated reproduction cost of all improvements, such as buildings or structures, on the property, as well as the market value of the site itself. This approach involves estimating the cost to replace the improvements on the property, taking into consideration factors such as age, condition, and obsolescence. The estimated cost of the improvements is then added to the market value of the site to determine the overall value of the property. This approach is particularly useful when there are limited comparable sales or when the property is unique and does not have a well-established market value.

The law does not prohibit a partnership between a broker and any other person including a salesperson.

The Deceptive Trade Practices Act is a law that allows an individual to sue a provider of goods or services for fraud or misrepresentation. This means that if a person is deceived or misled by a business or service provider, they have the legal right to take legal action against them. This law aims to protect consumers from false advertising, deceptive practices, and dishonest business practices. It provides individuals with a way to seek compensation and hold businesses accountable for their actions.

The creditor is intended to be protected by the protected by the publishing requirement of the Uniform Commercial code bulk sale provisions.

One of the definition of collateral from the dictionary is “property deposited as security, additional to one’s personal obligation”. In this instance a borrower used another note to secure the payment of his personal note.

A trust deed is an instrument that transfers possession of real property, typically from a borrower to a trustee, as security for a loan. It does not always transfer ownership in the property, as the borrower retains ownership rights. The trustee holds the property in trust until the loan is repaid, at which point the borrower regains full ownership. Therefore, a trust deed transfers possession but not always ownership of the property.

A tight money policy will cause a scarcity of money for financing. This usually means that there will be an increase of junior loans in real estate financing (seller carrybacks).

Baird Exchange is a type of 3-party 1031 exchange where the buyer and seller exchange properties, and then the buyer sells the property they acquired to a third party. This means that the buyer and seller are directly involved in the exchange, but the buyer ultimately sells the property to someone else. This type of exchange allows for the tax-deferred exchange of like properties.

The correct answer is the time period over which the principal amount would be retired on the basis of the periodic payments. This definition refers to the length of time it takes to fully pay off the principal amount of a loan or debt through regular, scheduled payments. It indicates the duration of the loan or debt repayment plan.

A bargain and sale deed is a type of deed that conveys all of a grantor's interest in a property to a grantee without any warranties. It typically contains only the minimum standards required for a valid conveyance. This means that the grantor makes no guarantees or promises about the property's condition or title. The grantee takes the property "as is" and assumes any risks or liabilities associated with it. This type of deed is often used in foreclosure sales or when the grantor wants to transfer their interest in the property without assuming any responsibility for its condition.

First take 60% x $20,000 = 12,000 sq.ft. This is the amount of floor space to be carpeted. Next convert 12,000 sq.ft. to sq. yd. 12,000 divided by 9 = 1333.33 sq. yd. Now take the amount of sq. yd. and multiply by the price per sq. yd. 1333.33 x $6.00 = $7,999.98 so the answer is closest to $10,000

Upon the final subdivision may being recorded. If the subdivider has dedicated an area through a Dedication Certificate and the dedication has been accepted by the properly authorized official, then the recording of the approved map would be the final step in the Statutory Dedication process.