EXAM REVIEW COURSE MANUAL

Transcription

1 EXAM REVIEW COURSE MANUAL I. LEGAL ASPECTS A. PROPERTY 1. Real Property 2. Fixtures 3. Run with the Land 4. Personal Property B. ESTATES 1. Freehold a. Fee Simple Estates (Fee Estate) b. Fee Simple Defeasible c Life Estate, Property is Leased 2. Less-Than-Freehold Estates (Leases) a. Sublease ERC RET

2 b. Quiet Enjoyment c. Abandonment d. Percentage Lease e. Security Deposit f. Estates for Years g. License C. TITLE VESTINGS 1. Severalty 2. Joint Tenancy 3. Tenancy in Common 4. Community Property Agreement to Sell D. TRANSFER OF TITLE 1. Cloud on Title 2. Quiet Title Action 3. Alienation 4. Eminent Domain 5. Police Power ERC RET

3 6. Escheat 7. Accretion 8. Avulsion 9. Probate Sale Commission 10. Intestate Succession E. DEEDS Purpose 1. Grant Deed 2. Quitclaim Deed 3. Deed Essentials F. RECORDING 1. Constructive Notice 2. Acknowledgment II. ENCUMBRANCES A. EASEMENTS 1. Prescriptive Easements 2. Termination of Easements ERC RET

4 3. Appurtenant Easements 4. Confirmed by B. RESTRICTIONS The More Restrictive Restricts 1. Private Restrictions a. Condition 2. Public Restrictions a. Changes can be Initiated by b. Commercial to Residential C. ENCROACHMENTS D. LIENS 1. Specific Lien 2. General Lien E. PROMISSORY NOTES 1. Amortization a. Level Payment b. Negative Amortization c. GPAM Loan 2. Interest Rates Affected by ERC RET

5 3. Variable Interest (Adjustable Rate Mortgage) 4. Effective Interest Rate Nominal Interest Rate 5. Negotiable Instrument 6. Straight Note (Interest Only) 7. Balloon Loan (Partially Amortized) 8. Holder in Due Course 9. Discounting 10. Default 11. More than One Borrower F. TRUST DEEDS AND MORTGAGES 1. General Information a. Trustor b. Beneficiary c. Right to Sell d. Terminated 2. Foreclosure a. Court Sale b. Trustee's Sale c. Deed in Lieu of Foreclosure d. Request for Notice Protects ERC RET

6 e. Lender's Basic Protection 3. Priority 4. Blanket Mortgages a. Release Clause 5. Trust Deed and Mortgage Clause a. "Assume" b. Subordination Clause c. Open-End d. Beneficiary Statement e. Prepayment Penalty G. OTHER LIENS 1. Mechanics Liens a. Priority b. Notices 2. Lis Pendens a. Lis Pendens is Effective Until 3. Injunction 4. Execution ERC RET

7 III. TITLE INSURANCE A. GENERAL INFORMATION 1. Chain of Title Abstract of Title Preliminary Report 2. Standard Policy of Title Insurance (CLTA) a. Protects Against: 3. Extended Policy 4. ALTA Policy 5. Exclusions 6. Search IV. REAL ESTATE LAW A. ILLEGAL ACTS 1. Misrepresentation 2. Commission to Buyer 3. Blind Ad 4. Misleading Advertising 5. Secret Profit by Non-Licensee ERC RET

8 6. Referral Fees 7. Gifts 8. Commingling 9. Not a Member B. BROKER RELATIONSHIPS 1. Salesperson as Independent Contractor 2. Unlicensed Assistant C. MANAGE PROPERTY D. DESK COST E. COMPANY DOLLAR F. TRUST FUND ACCOUNT G. ETHICAL PRACTICES H. RECOVERY ACCOUNT I. SELLING TRUST DEEDS ERC RET

9 J. MOBILE HOMES 1. Can Sell 2. Must Remove Signs 3. Notice of Transfer K. REAL ESTATE LICENSE 1. Expired License 2. Delinquent Child Support L. ADVANCE FEE CONTRACT M. FAIR HOUSING ERC RET

10 V. FINANCING A. ECONOMIC THEORY 1. Leverage 2. Appreciation or Inflation 3. Prices Decrease 4. Seller's Market 5. Impact Real Estate 6. GDP and Employment Rise B. LENDERS 1. Insurance Companies 2. Mortgage Companies 3. Private Lenders 4. Secondary Mortgage Market a. Federal Home Loan Mortgage Corporation 5. Federal Reserve System a. Increase Reserves b. Tight Money 6. Federal National Mortgage Association ERC RET

11 C. LENDING PRACTICES 1. Loan-to-Value 2. A Loan Commitment 3. Debt-Income Ratio 4. Mortgage Loan 5. Lenders Minimize 6. Late Payment % Loan 8. Warehousing 9. FICO Score 10. Security Interest 11. Discount Points 12. Document Preparation Charges D. TRUTH-IN-LENDING (Regulation Z) 1. Purpose 2. Annual Percentage Rate 3. Right to Cancel ERC RET

12 E. CONDITIONAL INSTALLMENT SALES CONTRACTS (Land Contract) 1. Default, Quitclaim Deed F. TYPES OF LOANS 1. Loan Insured by a. FHA 2. VA 3. Cal-Vet G. INSURANCE 1. Fire Insurance H. ESCROW 1. Instructions Executed by 2. Purpose 3. Closing Statement Buyer Debit Credit Seller 4. Impounds 5. Two Termite Reports 6. Escrow Can 7. Report to IRS 8. Move in Early 9. Release Disputed Funds ERC RET

13 I. REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA) 1. 1-to-4-Family Residential Dwellings 2. Uniform Settlement Statement 3. Buyer Can Require J. MANDATED DISCLOSURES 1. Real Property Transfer Disclosure Statement (TDS) a. Given by b. Must Reveal c. License Can Never d. Amended Statement e. Defective Statement 2. Alquist-Priolo Act a. Requires Disclosure b. Zone Extends VI. CONTRACTS A. TYPES OF CONTRACTS 1. Executed 2. Voidable ERC RET

14 B. LEGAL ESSENTIALS OF A VALID CONTRACT 1. Legal Capacity 2. Mutual Consent 3. Lawful Object 4. Consideration C. STATUTE OF FRAUDS D. BREACH OF CONTRACT 1. Specific Performance E. LISTINGS 1. Agency Creation a. Oral Agreements b. Lease on Duplex c. Subagent of listing broker 2. Fiduciary Obligations a. Present All Written Offers b. Seller Fires Broker ERC RET

15 c. Broker Owes Buyer d. Broker as Agent of Buyer (Offeror) e. Material Facts f. Puffing g. Broker Promises Seller to Find House h. Agent Promises to Advertise and Does Not i. Protect Confidential Information 3. Deposits a. Seller 4. Commissions a. Commission After Term of Listing 5. Liability a. Fraudulent Misrepresentation 6. Types of Listings a. Exclusive Listing b. Exclusive Agency ERC RET

16 c. Exclusive Right to Sell F. OFFERS 1. Terminated By 2. Counteroffer G. DEPOSIT RECEIPTS (Purchase Contract) 1. Buyer Defaults, Deposit Is 2. Time is of the Essence H. OPTIONS 1. Agreement 2. Contract 3. Optionee 4. Option and Listing VII. TAXATION A. FEDERAL INCOME TAXES 1. General Rules a. Marginal Tax Rate b. Unadjusted Basis c. Adjusted Basis d. Tax Shelters ERC RET

17 2. Personal Residence a. Deductions b. Adjusted Basis 3. Income Property a. Deductions b. Depreciation c. Operational Loss d. Capital Expenditures e. Loss Upon Sale 4. Exchanges (1031) a. "Boot" Receiver b. Basis of New Property 5. Sale-Leaseback B. PROPERTY TAXES 1. Tax Bill 2. "Ad Valorem" 3. Property Reassessed a. Over-Assessed 4. Dates 5. Delinquent Tax Sale ERC RET

18 C. ASSESSMENT LIENS 1. Mello-Roos VIII. SUBDIVISIONS A. SUBDIVISION MAP ACT 1. Master Plan B. SUBDIVIDED LANDS ACT 1. Condominiums or Subdivisions a. Sidewalks b. Estate in Real Property c. Seller Provides Buyer 2. Real Estate Commissioner 3. Public Report a. Given b. Receipts c. Excessive Price C. GENERAL INFORMATION 1. Building Code a. Purpose 2. Building Permit ERC RET

19 3. Developer 4. Time Share Gifts IX. BUSINESS OPPORTUNITIES A. GENERAL INFORMATION 1. Franchise 2. Advance Fee for Advertising 3. Bill of Sale X. APPRAISAL A. APPRAISAL THEORY 1. Appraiser a. Narrative Report b. Type of Value 2. Fee Appraiser 3. Appraisal 4. Maintenance of Value 5. Market Value ERC RET

20 6. Principle of Contribution 7. Highest and Best Use 8. Principle of Substitution 9. Principle of Regression 10. Unearned Increment 11. Plottage 12. Highest value 13. Appreciation B. MARKET DATA (COMPARISON) APPROACH 1. Difficulty of Market Data 2. Least Reliable 3. Warehouse ERC RET

21 C. COST (REPLACEMENT) APPROACH 1. Upper Limits of Value a. Replacement 2. New Property 3. Cost of Construction House D. CAPITALIZATION (INCOME) APPROACH 1. Effective Gross Income 2. Net Income 3. Present Worth 4. Capitalization Rate 5. Capitalization (Income) Approach E. GROSS RENT MULTIPLIER F. DEPRECIATION 1. Effective Age 2. Economic Life 3. Obsolescence 4. Functional Obsolescence a. Same Building Costs, Different Values ERC RET

22 5. Economic Obsolescence 6. Obsolescence G. CONSTRUCTION TERMS 1. Bearing Wall 2. Joist 3. Ridge Board 4. Footing 5. Structural Pest Control Report a. No Infestation or Damage b. Best Time to get Report 6. Deciduous 7. Roof Sloping on Four Sides 8. Higher EER 9. Sheet Metal 10. Insulation a. R-Value ERC RET

23 11. Turn Key Project 12. Elevation Sheet 13. Information Booth 14. Backfill 15. Cracked Foundation 16. Plot Plan 17. Foundation Plan 18. Substandard Building 19. Repairs to Building s Broken Equipment 20. Commercial Acre 21. Orientation 22. HVAC ERC RET