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Georgia Real Estate
Questions
| Question | Answer |
|---|---|
| Characteristics of land | Physical and Economical |
| Physical characteristics of land | Immobility, Indestructible, and Nonhomogeneity |
| Indestructible | The fact that land does not typically wear out over time. |
| Immovable | Land cannot be moved from one location to another. |
| Nonhomogeneity | No two parcels of land are identical, each are unique. |
| Economic characteristics of land | Scarcity, Fixity, Situs, and Improbability |
| Situs | Location preference. People will pay more to live in one area that theu will to live in another. |
| Improvability | Recognizes that changing a property can change the value, not only the property changed but also the surrounding areas. |
| Scarcity | The supply of land in relationship to the demand of the land. when supply is down then price is up and when supply is up price is down. |
| Fixity | Land is typically not a short term investment; refers to the fact that lands, and additions to the land such as buildings, take long periods of time to pay for themselves. |
| Appurtenance | Right or privilege or improvement to that belongs to and passes with the land but is not necessarily a part of the land. Ex: Easement and Condo parking |
| Fixture | An object that has been attached to the land physically so as to become real estate. As a rule it is the property of the landowner and when the land is conveyed to a new owner, it is automatically included in the land. |
| M.A.R.I.A. | The test that can be determine if items are real or personal property. Modification, Attachment, Relationship to the party, Intentions of the annexing party, and Agreement. |
| Modification (MARIA) | Alteration of the article for the building or the building for the article? EX: Microwave installed in the cabinet as opposed to a microwave on the counter |
| Attachment (MARIA) | How the object is affixed to the land. Physically: cement, bolts, nails, etc. Legally: like remote for the garage door opener |
| Relationship to the party (MARIA) | The relationship of the item(s) to the party, like if a retail store bolts down shelving units and then takes them back when selling the property. The store needs the shelves to operate, however, the flooring would have to be fixed. |
| Intentions of Annexing party (MARIA) | WEAKEST of the MARIA test. When the owner installed the item did they intend for it to depart when they sold. Best bet to win is if it is a family heirloom. If taken must replace with something similar. |
| Agreement (MARIA) | Agreement between the buyer and seller of what will stay and what will go. Best to get in writing and placed in the contract. |
| Easement | Right or privilege of one party as to use the land of another for a special purpose not inconsistent with the owner's use of the land. |
| Types of easements | easement appurtenant, personal easement in gross, and easement in gross |
| Creates an Easement | grant, reservation, condemnation, necessity, and prescription |
| Easement appurtenant | Must have two properties; Servient the property that is serving/providing/burdened by the easement. Dominant the property benefiting from the easement. |
| Easement in gross | Only a servient property. Ex: Utility companies using your property to run their lines. Your property serves as the servient property. |
| Personal easement in gross | An easement that will terminate with the death of the property owner or the transfer of the property. EX: Developing an easement for use of hunting or fishing. |
| Commercial easement in gross | Can be assigned to another. |
| Utility and Drainage Easement | Legally a burden to the land and consistent with the use of the land but without these services would most likely make the land less useful and hence less valuable. |
| Party Wall Easement | Easement that exist when a single wall is located in the lot line that separates two parcels of land. The wall may be a fence of wall of a building. |
| Easement granted | Written document to specifically grant an easement go another party. |
| Easement reserved | Owner can reserve (withhold an easement in the deed when granting the property to another. EX: Land developer may reserve easements for utility lines when selling lots. |
| Easement by government condemnation | An easement created by the government or government agency that has exercised its right under eminent domain. EX: Gov flood control district purchases an easement to run a drainage pipe under someone's land. |
| Easement by necessity | No written document needed. Created by need. EX: If an owner is landlocked by another property. |
| Easement by prescription | No written documentation is needed. If a person acts like they own an easement long enough and the use is open, obvious and without the permission of the property owner, that person will have a legally recognized easement. |
| Allodial System | Land is owned to the benefit of the people |
| Government Rights to Personal Land Owners Property | PETE: Police Power Eminent Domain Taxation Escheat |
| Police Power | The right of government to enact laws and enforce them for the order , safety, health, morals, and general welfare of the public. Includes zoning laws and building codes. |
| Eminent Domain | The right of the government to take privately held land for public use, provided fair compensation is paid. |
| Legal Requirements for Eminent Domain | 1. The property MUST be for public use. 2. The property owner MUST be paid fair and just compensation |
| Condemnation | The legal proceeding involved when acquiring land through eminent domain. |
| Escheat | The state takes property upon an owners death if there is no will & no heirs exist. |
| estate | One's legal rights or interest or rights in land |
| Fee Simple | The largest, most complete bundle of rights one can hold in land; land ownership. |
| Freehold Estate | An estate in which you have exclusive rights to enjoy the possession of a property for an undefined length of time. |
| Characteristics of Freehold Estate | 1. There must be an actual ownership of the land 2. Estate must be of unpredictable duration |
| Types of Freehold Estates | 1. Fee Estates 2. Life Estates 3. Estates Created by Statue |
| Less than Freehold Estates | An estate that is held for a fixed, defined period. |
| Leasehold Estate | An ownership of a temporary right to hold land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord. |
| Features of Leasehold Estate | 1. Possession of the land but no ownership. 2. Estate is of definite or indefinite duration |
| Difference of Leasehold and freehold estates | Freehold means ownership and leasehold means non-ownership |
| Estate for years | Tenancy that is for a specific time. An official start date and stop date. (DOES NOT HAVE TO BE A YEAR) and does not automatically renew itself. |
| Periodic Estate | Also known as an estate from year to year or periodic tenancy, has an original lease period with fixed length and when it runs out if the tenant or landlord does not act to terminate will auto renew. |
| Estate at Will | Indefinite period of time and normally not in writing and typically vague and informal. Due to the vagueness the agreement is terminated with the death of with any one of the parties or the transfer of property. |
| Georgia Estate at will | Requires: 1. Tenant give 30 days notice 2. Landlord give 60 days notice notice of termination. |
| Tenant of Sufferance | Tenancy stays beyond the legal tenancy without the consent of the landlord. The tenant is referred to holdover tenant. Eviction process must occur in order to get possession and if the landlord accepts payment it now becomes a tenant at will. |
| Tenancy at will | Without a lease or written agreement — that can be terminated at any time by either the tenant or the owner (landlord). It exists without a contract or lease and usually does not specify length of a tenant's duration or the exchange of payment. |
| Reliction | Also known as dereliction results when a lake, sea, or river permanently recedes exposing dry land. (Result of accretion) |
| Erosion | When land gradually wears away because of the action of wind or water. |
| Accretion | The increase of the actual land on a stream, lake or sea by the action of water which deposits soil upon the shoreline. The results are alluvion and reliction, |
| Alluvion | Increase in the area of land due to accumulation of soil, clay or other material deposited by water. The added land belongs to the owner of the property to which it is added. (Result of accretion) |
| Avulsion | When land is rapidly washed away by the action of water. This may result in property lines changing. |
| Results of Accretion | Alluvion and Reliction |
| Processes That May Cause Changing Property Lines | Accretion, Erosion, Reliction |
| Encroachment | The unauthorized intrusion of a building or other improvement onto another person's land. The owner of the property being intruded upon has the right to force the removal on the intrusion. |
| Easement Terminations | 1. End of necessity 2. Merger 3. Release 4. Abandonment |
| End of Necessity | Need of easement no longer exists , thus the easement is terminated. EX: A road being built to allow the owner of the dominant property to have access to the property) |
| Merger | When the dominant and servient estates are combined with the intent of extinguishing the easement |
| Abandonment | Lack of use of the easement |
| License | Not a right or an estate in the land, but a personal privilege given to someone to use land. Not an encumbrance. Can be given verbally. |
| Metes and Bounds | A detailed method of land description that identifies a parcel by specifying its shape and boundaries. (Most common land description in GA) |
| Rectangular Survey System | Also known as the government survey or U.S. public land survey, describes land based on longitude and latitude. |
| Plat Book | |
| Recorded Plat (Recorded Map/ Recorded Survey) | A subdivision map filed in the county recorder's office that shows the location and boundaries of individual parcels of land. Simplest and most convenient method of land description. |
| Riparian Rights | The right of a landowner whose land boarders a river or a stream (flowing) to use and enjoy that water. |
| Littoral Rights | Right of landowners to use and enjoy the water (lakes and seas) touching their land. |
| Datum | A point , line, or surface from which a vertical height or depth is measured. |
| Square Mile Section | Contains 640 acres |
| Acre | 43,560 square feet |
| Doctrine of Prior Appropriation | The first owner to DIVERT water for personal use may continue to do so, even though it is not equitable to the other landowners along the waterway. |
| Doctrine of Capture | The first to USE the water has prior right to its use. |
| Percolating Water | Where water is not confined to a defined underground waterway |
| Deed | A written document that, when properly executed and delivered, conveys title to land. |
| Grantor | The person named in a deed who conveys ownership ("giver" of the deed); typically the seller. Must have legal capacity meaning legal age and sound mind. |
| Grantee | The person names in a deed who acquires ownership (the "receiver" of the deed); typically the buyer. |
| Legal Description | The property must be identified geographically, exclusive of any other property on the face of the earth. In Georgia, this is typically satisfied with a metes ad bounds description or recorded plat. |
| Granting Clause | The deed must clearly state the intention to convey the property from the grantor to the grantee. Common Wording : grant, sell, convey. |
| Consideration | Anything given, good or valuable, to induce another to enter into a contract. (normally a dollar amount but does not have to be money) |
| Restriction and Exceptions | A clause in a deed that limits the use of land for things such as easements or air rights. |
| Signature of the Grantor | The grantor is required to sign the deed, however the grantee is not. Signature must be voluntary. |
| Delivery and Acceptance | In order for a deed to be valid, the deed must be delivered by the grantor and accepted by the grantee (or a person empowered to accept on the behalf of the grantee). This must take place during the lifetime of the parties. |
| Dedication | The voluntary transfer of private property by its owner to the public for some public use, such as for streets or park land. |
| Accession | Mode of acquiring property that involves the addition of value to property through labor or the addition of new materials. |
| Covenant | A written agreement or promise |
| Covenant of Seizin | The grantor warrants (guarantees) to the grantee to be the owner and possessor of the property being conveyed (sold) and has the right to convey (sell) it. |
| Warranty | An assurance or guarantee that something is true as stated |
| Covenant of Quiet Enjoyment | The grantor warrants (guarantees) to the grantee the the grantee will not be disturbed, after taking possession, by someone else claiming an interest in the property. (free of liens). Also used in lease situations |
| Covenant Against Encumbrances | The grantor warrants (guarantees) to the grantee that the title is not burdened with any easements, restrictions, unpaid property taxes, assessments, judgements and so on except as stated in the deed. |
| Covenant of Further Assurance | Requires the grantor to procure (obtain) and deliver to the grantee and subsequent documents that might be necessary to make good the grantee's title |
| Warranty Forever | Guarantee to the grantee that the grantor will bear the expense of defending the grantee's title. |
| General Warranty Deed (Warranty Deed) | (FULL DEED) The best deed. Grantor makes full guarantee to buyer against defects of title. |
| Special Warranty Deed | (promise during GRANTOR OWNERSHIP) Grantor warrants title only against defects occurring during the grantor's ownership and not defects existing before that time. Generally deed used in Foreclosures. |
| Bargain and Sale Deed | Contains no covenants (promises) and only the minimum essentials of a deed. This only has a date, identifies the grantor and grantee, recites consideration, property, words of conveyance & grantor's signature. Grantor only IMPLIES ownership. EX: Auction |
| Quitclaim Deed | A legal instrument used to convey whatever title the grantor has; it contains no covenants, warranties, or implication of the grantor's ownership. |
| Cloud on the Title (Title Defect) | Any claim, lien, or encumbrance that impairs title to property. |
| Gift Deed | Deed created by simply replacing the recitation of money and other valuable consideration wit the statement "in consideration of his natural love and affection". |
| Guardian's Deed | Used to convey a minor's interest in real property. It contains only one covenant: that the guardian and minor have not encumbered the property. The deed must state the legal authority that permits the guardian to convey the minor's property. |
| Sheriff's Deed | A deed that gives ownership rights in property bought at a sheriff's sale. A sheriff's sale is a sale conducted by a sheriff upon order of a court after a failure to pay a judgment. |
| Correction Deed (Deed of Confirmation) | Deed used to correct an error in a previously executed and delivered deed. |
| Intestate Succession | When a person dies without a will, it directs how the deceased's assets will be distributed; also called a title by descent. Process of allocating deceased's assets. |
| Testate | When a person dies leaving a will |
| Person Who Leaves the Will | Testator (male) Testatrix (female) |
| Lien | Hold or claim that one person has on the property of another to secure payment of debt or other obligation. |
| Voluntary Lien | A lien that is created by the property owner. Most common is a mortgage. |
| Involuntary Lien | Created by operation of law. Some examples are property tax liens, judgements and mechanic's liens. |
| Special Lien | Lien on a specific property. An example would be a property tax lien as it is against a particular property. |
| General Lien | Lien on all the property a person has in a given jurisdiction. Ex: judgements and state and federal taxes |
| Parties Involved in Liens | Lienor (holding the lien, i.e mortgage lender) and lienee (party whose property is subject to the lien) |
| Lis Pendes | Written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it. The notice is usually filed in the county land records office. ... Latin for "suit pending". |
| Estate in Severalty | Sole Ownership |
| Dowery | Recognizes the wife's efforts in marriage and grants her legal ownership to 1/3-1/2 of the family's real property for the rest of her life. Prevents the husband from selling family estate w/o the permission of wife. GA does not recgonize. |
| Tenants in Common | Shared ownership of a single property among two or more persons; interests need not be equal and no right of survivorship exists |
| Right of Survivorship | A feature of joint tenancy whereby the surviving joint tenants automatically acquire all the rights , title , and interest of the deceased joint tenant |
| Joint Tenancy | Form of property co-ownership that features Right of Survivorship. Upon the death of joint tenant, that interest does not descend to the heirs or pass by will. Rather the entire ownership remains in the surviving joint tenants. ONLY a human can be a |
| Four Unities | For joint tenancy, unities of possession, interest, title, and time must be present. Represented by PITT |
| Unity of Possession | Means that the joint tenants must enjoy the same undivided possession of the while property. All joint tenants must have the use of the entire property. (ONLY unit essential to tenancy in common) |
| Unity of Interest | Joints tenants own the same amount of interest and each tenant has exactly the sam e right in that interest. |
| Unity of Title | Joint tenants acquire their interests from the same source (same deed or will). |
| Unity of Time | Each Tenant in Joint Tenancy must acquire their ownership interest at that same moment. Once a joint tenancy is formed it is not possible to add a new joint tenant without creating a new joint tenancy. |
| Tenancy of Entirety | ONLY husband/wife. Joint ownership for married persons; right of survivorship exists & neither spouse has a disposable interest during the lifetime of the other. Terminated by joint action of husband/wife. Same unities as joint ten. but add 5th the un |
| Types of Ownership | 1. Severalty 2. Tenants in Common 3. Joint Tenancy 4. Tenants by the Entirety |
| Curtesy | (opposite of dowery) Gives husband benefits in his deceased wife's property as long as he lives. Unlike dowery the wife can contest the Curtesy in her will. State law requires that the couple have a child in order for the father to qualify. NOT in GA |
| Community Property | Spouses are treated a equal partners, with each owning one-half interest. Honored in 10 states. GA is not one. Property owned before the marriage or gifted, purchased with separate funds or inherited after the marriage is considered SEPARATE PROPERTY. |
| Term Loan (Straight Loan) | Loan that requires interest payments until the last day of its life, at which time the full amount borrowed is due. |
| Ballon Loan | Any loan that has a final payment larger than any of the previous payments on the loan. The final payment is called the balloon payment. (Type of term loan) |
| Conventional Loan | Real estate loans that are not insured by the FHA or guaranteed by VA. (Non-Gov) |
| FHA (Federal Housing Administration) | Loan is a mortgage issued by federally qualified lenders and INSURED. The loans are designed for low-to-moderate income borrowers who are unable to make a large down payment. |
| VA (Department of Veterans Affairs) | loan is a mortgage loan in the United States GUARANTEED. The basic intention is to supply home financing to eligible veterans and to help veterans purchase properties with no down payment. |
| RHSA (Rural Housing Services Administration) | Federal Agency under the US Dept of Agri., & offers programs to help purchase/operate farm. GUARANTEE a portion of loan made by a private lender, or will make the loan itself. This assistance can also be used for the purchase of a rural home. |
| PMI (Private Mortgage Insurance) | A private mortgage insurance source to insure lenders against foreclosure loss. Insures only the top 20-25% of the loan. Borrower can get loan with5-10% down as oppose to 20-30% down. Fee is normally 1% of loan. |
| UFMIP (Up -Front Mortgage Insurance Premium) | One time charge of FHA for insuring the loan. 1.75% of loan and annual premium 1.35% of loan balance added to monthly payment ends when owner had 22% equity in home. |
| Amortized Loan | A loan requiring periodic payments that include both interest and partial repayment of principal. |
| Partial Amortization | Repayment schedule of a loan call for a series of amortized payments followed by a balloon payment at maturity. |
| Loan to Value Ratio (L/V, LTVR) | A percentage reflecting what a lender will lend divided by the sale price or market value of the property, whichever is less (loan amount divided by Value or property) |
| GPM (Graduated Payment Mortgage) | A mortgage with an interest rate and maturity that are fixed, but with a MONTHLY PAYMENTS that gradually rises because the initial monthly payments are insufficient to fully amortize the loan. |
| ARM (Adjustable Rate Mortgage) | A mortgage on which the INTEREST RATE rises and falls with the changes in prevailing interest rates. |
| Promissory Note (Note) | Contract between a borrower and lender and is the fundamental loan document and creates the OBLIGATION of the borrower to pay the lender. Establishes the amount of debt, term of repayment and interest rate. |
| Promissory Note Must Haves | 1. Be in writing 2. Between borrower and lender 3. State the borrower's promise to pay a certain sum of money 4. show the terms of payment 5. Signed by the borrower 6. Voluntarily delivered by the borrower and accepted by the lender |
| Obligee and Obligor | Parties of a note. "or" gives and "ee" receives. The Obligor or borrower is the one giving the obligation or making the payments on the note. The Obligee or lender receives the payments. |
| Contract | Agreement to do (or not to do) a particular thing. |
| Expressed Contract | Agreement in which the parties to the contract declare their intentions-either orally or in writing to do a particular thing. |
| Implied Contract | Agreement made by neither words nor writing but by actions of the parties, which indicate that they intend to create contract. EX: When you take a taxi implied that you will pay and they will take you where you want to go |
| Unilateral Contract | A promise exchanged for performance. "I will do this if you will do that" arrangement. The offer is made and accepted by performance. |
| Bilateral Contract | A promise exchanged for a promise. "I will do this and you will do that" agreement. EX: Real estate contract, I will sell you the property if you pay. |
| Forbearance | A special agreement between the lender and the borrower to delay a foreclosure. (Not to act) |
| Valid Contract | Agreement that contains ALL essential elements of a contract |
| Essential Elements of a Contract | 1. Legally and Competent Parties 2. Mutual Agreement 3. Lawful Objective 4. Consideration (Value) |
| Void Contract | Agreement missing one of the essential elements of a contract and has no legal effect. (Not a legal binding agreement) |
| Voidable Contract | Agreement that contains all of the essential elements of a contract but from which because fo defect, one or more of the elements may be removed at the option of the injured party. |
| Invalid Contract | Agreement between parties once had validity, but for which the validity has ceased. |
| Enforceable Contract | A contract that a court would allow and uphold. |
| Unenforceable Contract | A contract that a court would not allow or would not uphold. |
| Executory | Contract that is in the process of being carried out, that is, in the process of being performed. |
| Executed | Once a contract is completed, that is performance has taken place. this may refer to the signing of the contract or to its completed performance. |
| Execute | MOST frequent. Process of completing, performing, or Carrying out something. Thus, you do this to a document when you sign it. |
| Capacity | Capacity is subject to different meanings, but in the legal sense, it refers to the ability to make a rational decision based upon all relevant facts and considerations. (AGE and Mental Competence) |
| Competent Party | Person considered legally capable of entering into a binding contract. |
| Lawful Objective | To be enforceable, a contract can't call for the breaking of laws. A court of law can't enforce a contract that requires that a law be broken. Such a contract is void or if already in operational unenforceable. |
| Consideration | The promise or payment of something good or valuable (The value in the real estate contract) |
| Mutual Agreement (Mutual Consent, Mutual Assent, or Meeting of the minds) | Must be agreement to the provisions of the contract by the parties involved. Must be mutual willingness to enter into a contract. |
| Statue of Frauds | In each state a law that states that all contracts for sale of land or interest in land be in writing tp prevent fraud. |
| Novation | Simply replacing someone or something in a contract with someone or something else. All parties must agree to the replacement or the new contract is not valid. Replaces the original contract with a new one. |
| Mortgage | A document that makes property security for the repayment of a debt. |
| Deed of Trust | A document that conveys NAKED TITLE to a neutral third party as security for a debt. It is an instrument that provides security (collateral) that the lender can sell the property if the note is not paid. |
| Earnest Money | Deposit (money/check) that accompanies an offer to purchase as evidence of good faith to purchase the land/property. |
| Installment Contract | A method of selling or financing property whereby the seller retains title but the buyer takes possession while making the payments. |
| Binder | A short purchase contract used to secure a real estate transaction until a more formal contract can be signed. |
| Liquidated Damages | Damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach |
| Specific Performance | Contract performance according to the precise terms agreed upon. |
| Mortgagee | The party receiving a mortgage; the lender. The loan is given by the lender. |
| Mortgagor | The party giving the mortgage the borrower. The mortgage is given by the borrower. |
| Naked Title | Title that lacks the rights and privileges usually associated with ownership; also called a bare title. Carrying with it none of the benefits of ownership. Usually the title held by a trustee, with the beneficiary holding equitable title. |
| Trustor | One who created a trust; the borrower in a deed of trust |
| Trustee | One who holds property in trust for another; the third party in a deed of trust. |
| Hypothecation | The borrower retains the right to possess and use the property while it serves as collateral. Opposite of pledging. |
| Pledging | Give up the possession of the property to the lender while it serves as collateral. Opposite of Hypothecation. |
| Security Deed | A document used in GA to secure a (debt) note. Replaces a mortgage or deed of trust. |
| Foreclosure | The procedure by which a person's property can be taken and sold to satisfy an unpaid debt. |
| Beneficiary | One for whose benefit a trust is created; The lender in a deed of trust. |
| Reconveyance Deed (Release Deed) | Used to reconvey title to property back to the borrower once a debt has been paid on a deed of trust. |
| Alienation Clause (Due on Sale Clause) | Says if the borrower conveys any interest in the property to another without the lender's prior written consent, the lender has the right to call the entire loan balance due and payable. |
| Acceleration Clause | Allows the lender to demand immediate payment if the entire loan if the borrower defaults. |
| Deed in lieu of Foreclosure (Friendly Foreclosure) | Voluntary act by borrower & lender to avoid hassle of foreclosure proceedings and possible deficiency judgement where the borrower gives the lender the deed of the mortgaged property in turn the borrower should demand cancellation of the unpaid debt. |
| Defeasance Clause | Lender must cancel the security instrument upon full payment. |
| Judicial Foreclosure | Taking the matter for court of law in the form of a lawsuit that asks the jusdge to foreclose the borrower. (GA) |
| Nonjudicial Foreclosure | Doesn't go to court and is not heard by a judge. It is conducted by the lender (or trustee) in accordance with provisions in the mortgage and state law. |
| Power of Sale | Allows a mortgagee to conduct a foreclosure sale without first going to court |
| Blanket Mortgage (Blanket Loan) | Type of loan used to fund the purchase of more than one piece of real property. Popular with builders and developers who buy large tracts of land, then subdivide them to create many individual parcels to be gradually sold one at a time. |
| Package Mortgage | Loan secured by real estate and in which the personal property and furniture is included in the purchase price of the house. . The personal property is used as collateral, and cannot be sold without the approval of the lender. (EX: HOTEL) |
| Codicil | Written supplement or amendment made to a previously existing will. Used to change will and must be dated, signed and witnessed. |
| Adverse Possession | Acquisition of land through prolonged and unauthorized occupation |
| First Right of Refusal | The right to match or better an offer before the property is sold to someone else. Protects the tenant from having a rental property sold without being able to match the offer. |
| Option Contract | A person has a right, but not an obligation to perform under agreed upon terms, price, and time period. Unilateral contract. Buyer is the optionee and seller optionor. |
| Contract for Deed | Tool that can allow buyers who either don't qualify for traditional lending options or who want a faster financing option to purchase property. The seller retains title until the balance is paid; the buyer gets legal title once the final payment is made |
| Devise | Real property that is willed. Recipient of the real property willed is the devisee. |
| Bequest (Legacy) | Personal Property that is willed. Recipient of the personal property willed is the LEGATEE |
| Executor (Executrix-female) | In the will the testator (person that made the will) usually names an executor to carry out the instructions in the will. |
| Administrator (Administratrix) | If an executor is not named in a will in some states a person will be appointed by the court to carry out the instructions in the will. (Court appointed executor) |
| Freddie Mac | Federal Home Loan Mortgage Corp (FHLMC) government-sponsored enterprise created Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing for middle-income Americans. Conventional Loans |
| Fannie Mae | The Federal National Mortgage Association (FNMA), gov-sponsored; buys loans from mortgage lenders, packages them together, and sells them as a mortgage-backed security to investors on the open market. FHA, VA and conventional |
| Ginnie Mae | Government National Mortgage Association (GNMA). It was created in the Housing and Urban Development Act of 1968. The act split GNMA off from Fannie Mae. Both of these businesses involve mortgage backed securities for sale to investors. FHA,HUD, VA |
| Chain of Title | Sequence of historical transfers of title and runs from the present owner back to the original owner of the property. |
| Abstract of Title | Written history of all the recorded documents and proceedings related to a specific property. When a sale contract is authorized, an attorney or a title company researches all the recorded records related to a property and prepare a written history. |
| Index Recorder's Office | The procedure for indexing instruments presented for recording. Grantor-grantee indexes and Tract Index (one page dedicated to a parcel of land) |
| Public Recorder's Office | Government-operated facility wherein documents (instruments) are entered in the public records |
| Accession | mode of acquiring property that involves the addition of value to property through labor or the addition of new materials. The process is accretion and the results are Alluvion and Reliction |
| Community Reinvestment | A Federal Statue that encourages lenders to meet the needs of the community including low and moderate income. I believe this would be where the special programs for Police, Firemen, and Teachers have access to down payment assistance on FHA loans. |
| Low Income Programs | Loan Programs that help people with lower income achieve home ownership. |
| Determinable Estate | allows someone to own the land “so long as” No matter what the condition it will be stated in the deed and the new owner will remain the owner “so long as” If the new owner does not abide the deed is automatically reverted back to the originally owner |
| Conditional Precedent | New owner will not obtain possession until they meet a certain criteria, |
| Conditional Subsequent | similar to the determinable estate but, it does not automatically revert back to the original owner or a remainder person. It does give the original owner the right to take the property back. |
| Adverse Possession | Acquisition of land through prolonged and unauthorized occupation. (SQUATTER) (Also can happen through encroachment) |
| Color of Title | Adverse possession but paid taxes. Some plausible but not completely clear cut indication of ownership rights |
| Tacking | Process Adverse Possession person adds his period of possession to that of a prior adverse possessor. In order for title to property to vest in an adverse possessor, occupancy must be continuous, regular, and uninterrupted for the full statutory period. |
| Quiet Title Suit | court ordered hearings held to determine land ownership |
| Mortgage Banker | Company, individual or institution that originates mortgages. Use their own funds, or funds borrowed from a warehouse lender, to fund mortgages. |
| Mortgage Broker | an intermediary working with a borrower and a lender while qualifying the borrower for a mortgage. Gathers income, asset and employment documentation, a credit report and other information for assessing the borrower's ability to secure financing. |
| Mortgage banker vs Mortgage broker? | mortgage banker: makes loans from ONE bank mortgage broker: compiles loans from MANY banks |
| Simple L/V | .90001 to .95 L/V is 95% .80001 to.90 L/V is 90% .80 or below L/V is 80% |
| Partially Amortized Loan | special type of liability or obligation that involves partial amortization during the loan term and a balloon payment (lump sum) on the loan maturity date. Creates a smaller payment and some can go to principal. |
| Defeasance Clause | A mortgage provision indicating that the borrower will be given the title to the property once all mortgage payment terms are met. |
| Negative Amortization | When monthly mortgage payments are not sufficient to cover interest due to unpaid interest is added to principal. |
| The most significant component of an installment contract. | The seller does not pass legal title at the time of contract. |
| Lease | It is a bilateral, executory agreement. Executory because it is not completed until the end of the lease. |
| Essentials of a VALID contract | 1. Legally competent parties 2. Mutual Agreement 3. Lawful Objective 4. Consideration |
| Lawful Objective | To be enforceable , a contract cannot call for the breaking of laws. this is because a court of law cannot be called on to enforce a contract that requires that a law be broken. |
| Verbal Contracts | Valid but not enforceable (in most cases if witness is not present) |
| Constructive Notice | Given by public records and by visible possession, coupled with the legal presumption that all persons are thereby notified (also news paper) |
| Inquiry Notice | Information the law presumes a reasonably diligent person would obtain by making further inquiry EX: want to buy a house that current have tenants...do due diligence) |
| Actual Notice | Knowledge gained from what one has actually seen, heard, read or observed. |
| Acknowledges the deed so it may be recorded | The grantor is the person that acknowledges the deed so it may be recorded |
| 50 years | Time for a full title search in Georgia |
| Statue of Limitations | Limits by law the amount of time wronged party has to seek the aid of a court in obtaining justice. Time limits of three to seven years are typical for the breach of contract. |
| Concurrent Ownership | Ownership by two or more persons at the same time. Types: joint, in common, entirety and community property |
| Wraparound Mortgage | commonly known as a "wrap", is a form of secondary financing for the purchase of real property. The seller extends to the buyer a junior mortgage which wraps around and exists in addition to any superior mortgages already secured by the property. |
| A listing broker earns a commission when: | The broker brings a contract from a ready, willing and able buyer at contract price and terms. (EARNS) |
| A metes and bounds description is most commonly used when: | There is no recorded plat. |
| A title cloud could be removed by | A quit claim deed. |
| A property owned and used as a primary residence is known as: | A homestead. |
| A property which is owned as tenants by the entireties is owned by: | Husbands and wives. |
| Which of the following is an emblement? | A growing crop of tobacco |
| An appraisal of property is BEST defined as | An estimate of value. |
| A home with outdated plumbing fixtures and appliances would most likely suffer from: | Functional obsolescence |
| Functional obsolescence | A reduction of an object's usefulness or desirability because of an outdated design feature that cannot be easily changed. |
| Which of the following is NOT a right of the state in privately held property | Deed Restrictions |
| Sellers, in the signing of a deed, swear that they are who they claim to be and they are signing the deed of their own free will. This is best described as | An acknowledgement |
| Acknowledgement | |
| A seller lists his property with a broker and the agreement provides that if the seller should find a buyer for the property himself, there will be no commission due to the broker. This type of listing is MOST likely an: | Exclusive agency listing |
| Sue deeds a property to Mark but retains an interest in the property for as long as she lives. Until Sue’s death, Mark would have a(n): | Estate pur autre vie |
| Of the following, which is a fixture | A built in range and oven. |
| A mechanics lien could be filed by which of the following | A lumber company |
| Nicole is a licensee and lists a property on Fall River Drive which is owned by Tyler. Which of the following would NOT terminate the agency relationship? | Nicole shows the property to a buyer client. |
| A broker finds a buyer who is willing to enter into an option on a property for 90 days. The potential buyer pays $1,000 for the option right which is acceptable to the property owner. Which of the following is TRUE? | The sales commission is earned only if the option is exercised. |
| A seller has rejected offers of $152,000 and $151,000. Another offer is presented from a cooperating broker who is representing a buyer. This offer is for $150,000. Which action by the listing broker is MOST appropriate? | Present the offer with a new market analysis. |
| A contract contains a short form legal description. Which of the following would NOT usually be a part of that description? | A point of beginning |
| A convenience store was built in 1965 on one acre of land. In 1981 the property was rezoned to multi-family residential. Which of the following is TRUE? | The use may continue as a non-conforming use. |
| Jake purchases a 4 bedroom, brick, 2-story traditional home in a neighborhood of other similar homes hoping that the investment will prove in the future to be a sound one. Jake is operating on the principle of: | Conformity |
| If a seller wishes to keep his liability to a minimum, which of the following deeds should he use? | Quitclaim deed. |
| The government has the right to take property when a person dies without a will and without heirs. This right is known as: | Escheat |
| Sales Person | A person employed by a broker to list, negotiate, sell, or lease real property for others; performs the acts of real estate on the behalf of the broker |
| Broker | A person who provides acts of licensure for another for compensation; one who acts an agent for others in negotiating contracts or sales |
| Associate Broker | Any person who meets the requirements of a broker but chooses to work for a broker |
| Brokerage Agreement | A written contract between a person and a broker whereby the person becomes a client of the broker. |
| GREC | Georgia Real Estate Commission; made up of six members |
| Real Estate | Any interest in real property, freehold or non-freehold; tangible on intangible |
| Real Estate Education and Recovery Fund | A fund that provides an avenue of protection to members of the public harmed by the illegal acts of a licensee |
| seal and records | |
| Community Association Manager Qualifications | 18 yrs of age resident of state* HS grad or equivelant 25 hr CommAsso course pass state exam |
| Real Estate Salesperson's Qualifications | 18 yrs of age resident of state* HS grad or equivelant 75 hr prelicense class pass state exam |
| Real Estate Broker's Qualifications | 21 yrs of age resident of state* HS grad or equivelant active licensee 3 of last 5 yrs 60 hr broker prelicense class CAM - 75 hr pre-license pass state exam |
| Non-Residence Licensees | Proof of other licensure Paying fees ack. Of law, rules & regs broker affiliation disciplinary documentation appt. GREC for notice investigation coop agree. |
| Real Estate Education and Recovery Fund Balance | The fund must always maintain a minimum balance of 1 million dollars. if it falls below, each licensee at the time of renewal, may be assessed up to $30 for each year in the renewal period |
| How much will the Real Estate Education and Recovery Fund pay out per transaction. | the fund may not be obligated to pay more than 25K on any one transaction the may have to make up the difference. |
| Total amount the Real Estate Education and Recovery Fund will pay out per agent | The fund may not be obligated for more than 75K for the acts of any one licensee, regardless of the number of transactions |
| Real Estate Education and Recovery Fund will pay out to one person | No one person shall ever obtain more than 25K from the fund |
| These person(s) DO NOT have a right to claim against the fund | 1. A bonding company acting as a bonding company, not a principal in a transaction 2. A licensee acting as an agent or principal 3. A spouse, parent, sibling, child, or personal representative of the violating licensee |
| Licensee that has the Real Estate Education and Recovery Fund payout | Should the commission be required to pay from the fund, the licensee of the licensee shall be automatically revoked and the licensee may not be eligible for a new license unless the licensee first makes full restitution to the fund including interest. |
| Appraisal | The Estimate or Value of Something; it is a necessary part of most real estate transactions. Also used to set prices on property. Used by govt to establish property tax levels for taxpayers. |
| Informal Appraisal | Estimate of value based on intuition |
| Formal Appraisal | an independently and impartially prepared estimate expressing an opinion of a defined value of an adequately described property as of a specific date, which is supported by the presentation and analysis of relevant market information |
| Valuation Process | Step by step procedure that appraisers use to conduct their work. |
| USPAP | Uniform Standards of Professional Appraisal Practice; guidelines established for the valuation process |
| Characteristics of Value | DUST (Demand, Utility, Scarcity, Transferability) Demand-desire coupled with ability Utility- usefulness or function of the product or service Scarcity-must be a short supply relative to demand for there to be great value Transferability-value to anyone |
| Transferability (Real Estate) | Marketable Title (IF title has defect then lowers the value of the property |
| Principles of Value | The key factors that determine value in real estate |
| Principal of anticipation | Present value is influenced by the anticipation of future benefit. The investor buys property in anticipation of future income |
| Principal of Substitution | Present Value of a property is influenced by what a person would have to pay for a reasonably desirable substitute. |
| Principle of Competition | States that demand creates profits, profits create competition stabilizes prices. |
| The principal of change | Reminds us that real property uses are always in a state of change. Present value of a property is related to its future uses |
| The principle of conformity | holds that maximum value is realized when there is a reasonable degree of homogeneity in a neighborhood (200K house would be out of place in a neighborhood of 90K) |
| Highest and Best Use | That use of a parcel of land that will produce the greatest value |
| Principal of supply and demand | Refers to the ability of people to pay for land coupled with the relative scarcity of land. When the supply of land is limited and demand is great the result is rising land prices. |
| The principal of increasing returns | the dollar spent adds a dollar to cost but more than a dollar to value; remodel of bathroom cost 10K but will make property go up 15K |
| the principal of decreasing returns | a dollar spent adds a dollar to cost but less than a dollar to value EX: a pool cost 50K but will not increase the value of the property by that much |
| The principal of contribution | The worth of improvement is measured by what if adds in overall value regardless of the cost . The principal ties together increasing and decreasing returns. |
| Value | Most think of market value...however at any given time a single property can have other values |
| Assessed Value | Value given to a property by the county tax assessor for purposes of property taxation |
| Assemblage | when two or more adjoining parcels are combined into one large parcel and |
| plottage | If assemblage causes an increase in value over the cost |
| Plottage value | The increased value of the large parcel over the sum of smaller parcels |
| Estate Tax Value | Value that federal and state taxation authorities establish for a deceased person's property. It is used to calculate the amount that must be paid |
| Insurance Value | Concerned with the cost of replacing damaged property |
| Loan Value | Value set on property for the purpose of making a loan |
| Rental Value | value of a property expressed in terms of the right to its use for a specific period of time |
| Replacement Value | value measured by the current cost of building a structure of equivalent utility |
| Salvage value | what a structure is worth if it has to be removed and taken elsewhere ; either as a whole or dismantled for parts |
| Buyer's Market | Supply and demand is unbalanced because of excess supply (prices are lower) |
| Seller's Market | When the imbalance occurs because demand exceeds supply (prices are higher) |
| Broad Market | Many buyers and sellers in the market at the same time. Makes it relatively easy to establish the price of a property and for the seller to find a buyer quickly and vice versa |
| Thin Market | Few Buyers and Few Sellers at the same time. Difficult to appraise property at this time because few sales thus few comparables |
| Market comparison approach | A method of valuing property based on recent sales of similar properties. To apply the following info must be collected 1. date of sale 2. sales price 3. financing terms 4. location of property 5. description of physical charateristics |
| Cost Approach | Land value plus current construction costs minus depreciation |
| Income Approach | A method of valuing a property based on the monetary returns it can be expected to produce |
| Comparables | Properties that are similar to the subject property that have sold recently (want to use ones that sold no more than 6 months prior). normally 5 provide enough basis for reliable comparison |
| Transfer tax | Georgia levies this in the amount of $1.00 per $1000. of sales price |
| Verification | for accurate appraisal each comps should be inspected with price and terms verified |
| Adjustment Process | Adjustments made for price changes, differences in physical features, amenities and financial terms. Result indicates the market value of subject property. ALWAYS adjust the comparable and not the subject |
| CIA | Comparable Inferior Add |
| CBS | Comparable Better Subtract |
| Avulsion | Sudden/Rapid |
| Erosion | Gradual |
Created by:
dirah66
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