State Exam Prep Material

New

Long-Term Learning

Learn efficiently and remember over time.

Start Long-Term Learning

Get personalized study reminders at intervals optimized for better retention.
Track your progress on this set by creating a folder
Or add to an existing folder

Add this set to a folder

  • Real Property

    land, Improvements attached to the land, and the rights to use them

    Personal Property

    right or interest in things of a temporary or movable nature chattel personalty. Ownership transferred by a BILL OF SALE

    Fixture

    Personal Property attached in such a way to make it real property.

    Annexation

    Process of attaching personal property to real property making it a fixture

    Severed or Severance

    Real property being removed becoming personal property

    Trade Fixtures

    required to carry out a business example would be commercial cooking equipment in a restaurant

    Accesion

    Acquiring trade fixtures by non removal prior to termination of lease

    Land 3 physical characteristics

    nonhomogeneity, immobility, indestructibility

    Nonhomogeneity

    no to pieces are exactly alike

    immobility

    land cannot be moved - a person must go to the land

    indestructibility

    durability - it will always be there

    Land 4 economic characteristics

    scarcity, modification, fixity, situs

    scarcity

    short supply where demand is great example lot in Manhattan v. a lot in upstate NY

    modification

    land use and value are greatly influenced by improvements made by man to land and to surrounding parcels of land

    fixity

    land and buildings and other improvements to land are consideration fixed or permanent investments- they are not liquid assets

    Situs

    location preference location,location,location

    Metes and Bounds

    legal description of land that always has a point of beginning that is also the end. The oldest used in 13 original colonies

    Lot,Block, and Subdivision

    recorded map or plat, it is the most common description in residential ing agreements

    Monuments

    permanent surveyors markers often starting point for metes and bounds example Iron pipe, oak tree

    Rectangular/ Government Survey

    takes into consideration base lines, meridians, townships and sections.Townships and Sections are located in Ranges. Example S7T3R2 means Section 7 Townships 3 Range 2

    Township

    36 Sections

    Section

    640 Acres 1 square mile

    Acre

    43,560 square feet

    Plat

    map of a town, section, or subdivision

    Plot

    map or layout of improvements on a property site. The property site is also called a lot or parcel

    Encumbrance

    limitation on your rights. It may also called cloud on a title.

    Voluntary lein

    created by the borrowers actions such as taking out a mortgage

    Involuntary lein

    created by law ie. ad valorem tax lein

    Specific lein

    attaches to one or more specific properties ex mortgage

    General lein

    attaches to all property of the debtor example tax lien

    Lein

    created by recording a judgement

    writ of execution

    party wins and is unable to collect,he can secure a writ of execution from the courts to enforce payment.

    reservation

    withholds title of part of the land Ex. easement or mineral rights

    encroachment

    structure or improvements overlaps onto another's property

    easement

    limited use or enjoyment of another's land written or verbal or implied

    easements can be terminated

    merger of adjacent property, release, or abandonment

    Easement appurtenant

    Dominant estate uses driveway of servient estate to access their property

    Easement in Gross

    belongs to a person or corporation example would be utility easement

    License

    permission to do a particular act , go fishing or ticket to Football game

    Adverse Possession (Squatters rights)

    occurs when property is acquired from the rightful owner through the State of Limitations

    Estate

    interest in real property

    Freehold estate

    ownership, Bundle of Rights, for indeterminate length,Ownership with the greatest bundle of rights Fee Simple or Fee Simple Absolute

    Non-Freehold estate or lease-hold

    has a termination date

    Defeasible Fee, Conditional Fee, Qualified Fee, Qualified Defeasible Fee

    ownership with conditions or terms which if violated could cause the ownership interest to be defeated or terminated.

    Life Estate

    ownership for the duration of someone's life. Owner called Life tenant. Remainderman person getting the estate after owner dies

    Reversion

    life estate is setup so that at the end of the life estate the property goes back to the original owner

    Estate in severalty or Sole ownership

    Ownership by one person

    Tenancy in common

    Ownership by two or more without rights of survivorship goes to your heirs not the other owners

    Joint Tenancy

    Ownership by two or more with rights of survivorship goes to other owners overrides a will

    Trust

    if a property is held by one party for the benefit of another

    Syndicate

    when two or more parties join together to create and operate a real estate investment

    4 leasehold estates

    Estate for years, periodic Tenancy, Estate at will, tenancy at sufferance

    Estate for years

    lease with specific starting and ending date EX.12 Month lease on a Apt.

    Periodic Tenancy

    fixed period of time that automatically renewed EX. Month to Month

    Estate at will

    Lease can be terminated by either party at will without notice

    Tenancy at Sufferance

    Lease expires and tenant refuses to move out

    Holdover Tenancy

    holdover tenant pays rent and it is accepted

    Statutory Estate

    created by law,vary from state to state, in TX community property and homestead are statutory estate

    Government rights in land (PETE)

    Police Power, Eminent Domain,Taxation, Escheat

    Police Power

    Power given to a municipality to regulate and control the character and use of property for the health,safety,and general welfare of the public

    Zoning

    Common example of Police Power, non conforming use still grandfathered in, Example Old Apartment building in a now all residential neighborhood

    Variance

    if you violate zoning you can request this in order to fix or prevent a violation

    Buffer zone

    area of land separating one land use for another

    Eminent Domain

    The right of the government to take private property for public use through the action of condemnation

    Inverse Condemnation

    When an individual forces the govt to buy his property

    Taxation

    Property taxes are the highest priority lein on real property

    Assessed Value

    value of property for tax purposes

    Special assessment tax

    Ex. Govt provides new side walk in neighborhood can charge the owner's of neighborhood this tax

    Escheat

    Property reverts to the state dies with no will,no heirs, no kindred. Also property is abandoned

    Riparian rights

    rights for rivers,streams, small bodies of water

    Littoral rights

    Lakes, Oceans, large bodies of water

    Prior Appropriation Theory

    first landowner to claim riparian rights exclusive rights

    Market Value

    price a willing seller will sell for, and price willing buyer will pay

    4 Characteristics of Value (DUST)

    Demand, Utility,Scarcity,Transferability

    CMA Comparative Market Analysis

    a tool licensee use to determine price for their property using current ings,recent sales and expired ings

    3 Basic approaches to Appraisals

    market data or sales comparison,income or capitalization method, and replacement cost or summation approach

    Market data approach

    mostly residential properties compares sales to similar properties in the area 3-5 sales no more than 6 months old

    Income approach

    or capitalization method used for income producing properties GRM x rent = Price or use GIM

    Cost approach

    also know as summation approach how much it would cost to reproduce or build examples are churches or govt buildings,new construction

    3 types of depreciation in cost approach

    Physical deterioration,Functional obsolescence, Economic obsolescence

    Appraisers Principles to Value (9)

    Highest and Best use, Principle of Substitution, Principle of Conformity, Principle of Increasing and Decreasing Returns, Principle of Contribution, The Principle of Regression, The principle of Competition, The Principle of Change, The Principle of Anticipation

    Assemblage or plottage

    combining several parcels of land into one

    Steps in Appraisers process (5)

    1.Purpose 2. Collect and Verify info 3. Est. value using as many approaches as needed 4. Reconciliation 5. Prepare report

    Appraisers

    must follow USPAP (Uniform standards of Professional Appraisal Practice) some lenders require Fannie Mae appraisal

    Chronological age

    age of property in years

    Deferred Maintenance

    type of physical depreciation (ordinary wear and tear)

    Straight line method

    a method of depreciation of equal annual installment amounts.

    MAI designation

    Member, Appraisal Institute

    Licensed appraiser is required

    for any property worth 250,000 or more

    mortgage

    a pledge of real property as security for a promissory note

    Deed of trust

    Texas uses instead of traditional mtg contains "Power of Sale" Clause that allows for "Non-judicial foreclosure" quick foreclosure

    Acceleration Clause

    in the state of default whole amt of principal is due

    Alienation Clause

    Due on sale clause states balance is due if sold w/o mortgagee's approval

    Defeasance clause

    release of lein when debt is repaided

    Escalation Clause

    allows lender to raise existing interest rate

    Prepayment Clause

    Prepayment of mtg there is fee

    Subordination Clause

    allows lender to move or take a lower lien position

    Assumption clause

    if loan is assumed new buyers obligated to pay off loan

    straight assumption

    new buyer responsible, can not impact seller's credit score

    subject to assumption

    buyer not liable for loan can impact seller's credit score

    FHA Loan

    require occupancy, assumable, insures the loan, the insurance on a FHA loan MIP- mtg ins. Premium

    VA Loan

    Guarantees repayment of loan, The guarantee is for the top 25% of the loan, assumable, require occupancy

    Qualifications for VA

    obtain certificate of Eligibility from VA,VA loan interest rates are set by mkt conditions, O down payment

    Blanket loan

    Covers one than one piece of property

    Package loan

    Includes real and personal property ex. furnished condo

    Budget loan

    includes PITI examples are FHA,VA, and most amortized fixed rate loans are budget mortgages

    Escrow acct

    taxes and insurance placed also called impound, trust, or reserve acct

    GPM Graduated pmt loan

    payments rise over years and then level off remaining term

    Conforming loans

    Loans qualified to be purchased in the secondary market

    Truth in Lending Regulation Z

    allow consumers understand the true cost of borrowing, must be giving within 3 business days

    ECOA Equal Credit Opportunity ACT

    Lenders can deny traditional financing if income is commission based.Child support is most likely reason for denial.

    FCRA Fair Credit Reporting ACT

    an individual who has been denied credit is entitled to a free credit report to determine reason for denial

    Redlining

    the refusal to lend in a particular geographic area only lenders can be guilty of this

    Mtg Brokers

    acts as intermediary between the borrower and lender

    Mtg Banker

    person or firm not otherwise in banking that normally provides his/its own funds for mortgage

    Usury

    charging an interest rate higher than the legal limit protects consumers

    Predatory lending

    lender takes advantage of a consumers lack of knowledge regarding lending practices

    Lien Theory state

    TX the lender has a lien and the borrower has title

    Principals duties (CRIP)

    Compensation, Reimbursement, Indemnification, Performance

    Agents duties (OLD CAR)

    Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care *Trust is not a duty

    Blockbusting

    panic selling

    Exclusive Agency

    broker exclusive agent but owner can sell

    Exclusive Right to sell

    broker exclusive agent receives commission no matter who sells the property

    Ratification

    agent acts w/o permission

    Estoppel

    court prevents the principal from denying that agency, agency by estoppel

    To be a Valid and enforceable (COLIC)

    competent parties, Offer and Acceptance, Legal Purpose, In writing, Consideration

    Sherman Anti-Trust Act

    prohibits monopolies

    Radon mitigation

    term used to describe methods used to lower levels of radon in homes and other buildings HUD does not require radon testing for FHA loans

    Unilateral contract

    binds only one party example an option

    Bilateral contract

    exchange promises which binds two birds ex sales contract

    Effective date

    contract is the date on which the last party signs

    Chain of title

    of all owners of the property

    Abstract of title

    complete history of all recorded events affecting the title

    Title Report

    preliminary report the current condition of title

    RESPA

    regulates closing on 1-4 family residential property w

    TREC was created

    1949

    TREC consist of

    9 3 represent general public and 6 are RE Brokers

    Broker Lawyer Committee

    writes promulgated contracts 13 members 6 are brokers 6 lawyers and 1 public member

    Dual agency same as

    Intermediary only a broker can be one

    Not required to disclose

    death by natural causes or suicide. Never disclose death due to HIV/Aids

    Stigmatized

    property where there has been a murder or alleged haunting, or in vicinity of the residence of a known sex offender

    Megan's law

    federal law requiring all states to release info to public about known sex offenders

    Puffing

    marketing use adj. and opinions rather than facts
    ex. Best water in the world

    Errors and Omissions insurance

    protects broker if the seller misrepresents property condition, the broker is unaware, and could not have detected by visual inspection

    Federal interstate land sells Full Disclosure Act

    applies to all unimproved land sold interstate. If a buyer or tenant does not receive this report before signing, he may void his contract or lease

    HOW program

    Home owners warranty corporation for new construction 10 yr plan covering defects in material, faulty workmanship, and structural problems

    Lead Based Paint Disclosure

    prior 1978

    CERCLA

    passed 1980 est. superfund to clean up hazardous waste

    Void/Invalid contract

    ex. with a person who is documented as insane

    See More

    Please allow access to your computer’s microphone to use Voice Recording.

    Having trouble? Click here for help.

    We can’t access your microphone!

    Click the icon above to update your browser permissions above and try again

    Example:

    Reload the page to try again!

    Reload

    Press Cmd-0 to reset your zoom

    Press Ctrl-0 to reset your zoom

    It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

    Please upgrade Flash or install Chrome
    to use Voice Recording.

    For more help, see our troubleshooting page.

    Your microphone is muted

    For help fixing this issue, see this FAQ.

    Star this term

    You can study starred terms together

    NEW! Voice Recording

    This is a Plus feature