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Demand of a commodity decreases Supply rises
Supply of a commodity decreases Price rises
Population demographics and wage levels effect? Demand
Price Fixing Group Boycotting Market Allocation Tying Agreements Antitrust Laws
S.P.A.T Sale Price, Personal Property, Assumed Mortgage, Taxable Amount
Sale Price-Personal Prop.-Assumed Mort=? Taxable Income
Taxable income must round too? Up to nearest 500
Taxable Income / ? 500
Taxable Income / 500 x ? .75
SPAT / 500 x .75 = ? Transfer Tax
Scheduled Gross Income - vacancies & credit losses = ? Effective Gross Income
Principal x Rate x Time = ? Interest
Yearly Income - Vacancy Factor - Total Yearly Expense = ? NOI (Net Operating Income)
Yearly Income x Vacancy Factor = ? Total Vacancy Factor for Consideration
What is omitted from Expenses in Income Approach? Monthly Mortgage
Order These Steps: -Calc NOI -Yearly Income -Add Expenses -Vacancy Factor -Yearly Income -Vacancy Factor -Add Expenses -Calc NOI
OVERALL FORMULA: Income Approach NOI = ? x ? NOI = Rate x Value
Changing a real estate item to personal property Severance
Chattels include ? Trade Fixtures
"Bundle of legal rights" is found in...? The definition of Real Property
What does not apply as long as a real estate investment remains intact in the philosphy behind and exchange? Income tax
PITI stands for and is applied to ? Principal, interest, taxes, insurance - basic costs of home ownership
Basis + Closing Costs + Capital improvements - Depreciation = (Hint: BasiCCC D AB) Adjusted Basis
Selling price - selling expenses = (hint: peAR) Amount Realized
Amount Realized - Adjusted basis = Capital Gain
____ can be deducted from federal income tax regulations real estate taxes
Policyholders must have a ______ for 80% of replacement costs Coinsurance Clause
Sale Price x % of listing price, Sale price - <--- answer, Above 1. / Above 2 = x% Percentage profit
If >80% covered then the loss of the residence will be settled actual cash value or prorated repair cost
A client and their ____ is that of a fiduciary relationship agent
The rules of law that apply to the responsibilities of a person who acts for another Law of agency
A licensee must disclose all known adverse facts about the property's physical condition
CASE: has no duty to discover undisclosed latent material defects Munjal v. Baird & Warner, Inc
Statutory rules replaced what in IL? Common law of agency
The person who receives brokerage services but is not repped by the broker Consumer
CASE: Preprinted form, yes! Drafting legal docs, no. Chicago Bar Assoc. et al. v Quinlan and Tyson, Inc
Boundary not in IL Second Principal Meridian
In IL irregular tracts, portions of a recorded lot or fractions of a section Metes and bounds
Township, ranges, sections, quarter section lines Monuments in metes and bounds
Graphic description of the land Survey
North & South Lines, East and WEst lines Principal Meridian, base line
Land six miles wide north to south ranges
Get a spot survey to? Verify boundraries & encroachments
Not considered a full survey Improvement Location Certif.
Sq ft per acre an acre 43560
Feet in a mile 5280
Recorded subdivision plat is used in the lot and block system
Buyer defaults the seller can sue because of specific performance
parol evidence rule a written real estate contract that is assumed complete
You dont need this for a contract notarized signatures
Income tax should not apply as long as a real estate investment remains intact exchange
Fed income tax regulations allow a homeowner ro reduce taxable income by amounts paid for real estate taxes
Real estate was listed for sale: $100,000 --- Cost was 80% of listing price -- what is percentage of profit? 25% - 100,000 x 80% = 80,000 --- 100,000-80,000 = 20,000 --- 20,000/80,000 = 25%
What is NOT a real cost/expense of owning a home Personal property taxes
provide real property as security Hypothecation
Allows govt to regulate the lending practices of mortgage lenders; Regulation Z Truth in Lending Act (TILA
estimating the value of a property Capitalization
What is capitalizations formula Net income / rate = value
State and county transfer taxes in IL is paid by the ? Seller
Accrued interest on an assumed mortgage loan on a closing statement is a debit to the _____ and a credit to the _____ Seller, buyer
The borrower may NOT cancel the loan transaction within five days after settlement RESPA
-Broker can charge whatever fee the broker determines is fair, the borrow must pay whatever fees are charged, the broker is required to disclose the existence of other loan products that are not part included Using Computer loan origination (CLOS) permitted under RESPA
In a closing statement an accrued item is treated as a ? proration
How expenses are handled at the end so the buyer and seller pay their respective portions Proration
If the terms of the assumed loan are modified by the lender this may apply to loan assumptions under ? Real Estate Settlement Procedures Act
The principal balance on an assumed mortgage is entered on the closing statement as a ____ to the seller, and ___ to the buyer debit, credit
Bills related to the property that have not been paid as of the time of the closing will become a credit to who? The buyer
The title commitment or title insurance policy determines the condition of the sellers title
A debit is an? Expense
Who administers RESPA HUD
Real estate taxes, rents, and utilities bills are all _____ at closing prorated
RESPA provides that the borrower must be given an estimate of the _____ ______ before the time of the closing closing costs
Yearly charge / 360 Statutory method of proration
Leed is found in? water pipes, alkyd oil-based paint, automobile exhaust
Water supplies must report any health risk within ? 24 hours
Asbestos is present in what & of comm. and public buildings 20%
Superfund? EPA
The Fair Housing Act does not prohibit discrimination on the basis of? marital status
Best term for familial status The head of the household responsible for minor children
Civil Rights Act of 1866 Race
Charging more interest than is legally allowed Usury
A dead of trust differs from a mortgage Number of parties involved
Right of the mortgagor to regain property by paying the debt after a foreclosure sale Redemption
When there is no agreement the lien that has priority is the first recorded
a guarantee by a government agency Promissory note
Under the lien theory the equitabl etitle to the property is held by the Mortgagor
Under installment land contracts - the buyer takes possession of the property and the legal title is kept by the seller until the purchase price is paid according to the contract
Conveyance of legal title at a future date is provided in a land contract
Unpaid balance of a loan at the time of sale, if it exceeds the sale price, can be recovered by seeking deficiency judgement
Redemption, Strict Foreclosure and power of sale associate with mortgage or dead of trust foreclosure
An existing mortgage loan can have it's lien priority lowered through the us of a subordination agreement
Illinois is most accurately referred to as what type of mortgage theory state Intermediate
Grantor is not associated with a mortgage
Court awards lender full legal title after borrower defaults Strict
Illinois is classified as what type of state for mortgage foreclosure Judicial foreclosure
A mortgage broker generally offers this bringing the borrower and lender together
Control density and avoid overcrowding bulk zoning
What is NOT included as part of the development costs of a lot? The purchase price of the land
Regulates the offering, sale, lease or assignment of any improved or unimproved land offered as part of a common promotional plan and divided into 25+ lots Illinois Land Sales Registration Act
A municipality establishes development goals through its comprehensive plan
Zoning ordinances, building codes and city planning requirements fall under Police Powers
Grantors control the future use of the ownership by means of? Deed restrictions
_____ _____ are created by deed, written agreement, general plan of a subdivision Deed restrictions
Streets curbs and sidewalks are provided by the ? Developer
What approach is used to calculate the land separately from the value of improvements Cost Approach
Scarcity, Transferability and Utility are all characteristics of? Value
NOI / Capitalization = Value
The estimated replacement cost of a building is used in what approach? Cost
Guidelines for estimating value based on the relationship of the sales prices to the monthly rental income Gross rent multiplier
The period of time which an improvement to the property will contribute to its value is known as its Economic life
If the subject property is larger the value of the comparable is adjusted ? Upwards
The market price of real estate is generally the same as the sales price
Clause that gives addition authority to the broker and obiligates them to share the listing with other brokers multiple listing clause
Failure to specify a termination date in a listing agreement is grounds for suspension or revocation of a real estate license
Non-discrimination terms, time duration of the listing, and proposed gross sales price must appear in a listing agreement
Doctrine of prior appropriation allocation of water rights determination when users of the water hold a recorded beneficial use permit
The most all-inclusive type of real property ownership is fee simple estate
Waste, remainder and dower are associated with Life estates
In illinois real property escheats to the country in which it is located
"So long as" "while" or "during" are all indicators of this kind of estate Determinable Fee
What easement provides the greatest protection for a prospective purchaser or owner Easement appurtenant
Homestead exemptions protects agains judgments of unsecured creditors
Land with a river through it that is acquired by ? Accretion
An original grantor's conditin continues to be enforceable by the right of reversion for how long 40 years
Developer grants rights to the gas company to install transmission lines is what kind of easement in gross
An easement by prescription in IL arises after how many years 20 years
What best describes a legal life estate? Homestead estate
A particular parcel of land is described by reference to how many principal meridians 1
What is the general datum plane used by IL surveyors? The North American Vertical Datum of 1988 (NAVD88)
When an owner divides a parcel of land into 2 or more parts, each must be surveyed seperately if any are less than how many acres 5
Under this law you can obtain a broker license without having prior experience as a real estate licensee The License Law of 2000
Sponsoring brokers must submit termination docs. for a previously sponsored licensee to IDFPR within how many days 2
Type of insurance for apartment and comm. buildings that offer a package of standard coverage Multiperil
How much is a "Discount Point" 1%
Sales Price x Percent Loan = $XX,XXX x Discount Points Equation for what? What seller would pay
Where would a you most likely get a residential real estate mortgage loan? A mortgage broker
Type of RE loand that allows the lender to increase the outstanding balance of a loan up to the original sum in the note while advancing additional funds Open end mortgage
You can get an FHA mortgage from? Any qualified lending institute
TILA or Regulation Z applies to Residential Sales
Type of laon that will most likely have th elowest LTV ratio conventional loan
The difference between the primary mortgage market and secondary origination vs purchase of mortgage loans
Interim finacing is also known as construction loan
Real and personal property as security is what kind of mortgage package mortgage
A lender can protect its interset in a loan by getting security through private mortgage insurance
A loan for one-to-four fmaily residential property would be covered by what Act? RESPA
The buyer insists that the owner's wife join in signing the deed - why? Terminate any rights the wife may have in the property
Income earned by one spouse during the marriage is considered? Community Property
Tenancy interest may be held by the remaining tenants upon death is tenancy ____ ______ with survivorship
To create joint tenancy relationship in the ownership of real estate their must be unities of possession time interest title PTIT
When you buy an apartment in a cooperative you become a ? stockholder in a corporation
A property held as tenancy by the entirety requires what? The cotenants be husband and wife
A joint tenancy with right of survivorship may be created by deed or will
Acquisition of real estate by a group that includes one or more sponsor and several investors syndication
1 joint tenant dies testate the other owns the store in ? severalty
The law that requires real estate contracts to be in writing to be enforeable is the Statue of Frauds
To assign a contract for the sale of real estate means to Transfer one's rights under the contrat
Money to compensate a seller in the event a buyer defaults Liquidated Damages
_____ insurance premium is paid in one payment, protects against forgery, mortgagee's policy decreases as each mortgage payment is made Title
When a claim is settled by a title insurance company, the company acquires all rights and claims of the insured against any other person who is responsible for the loss subrogation
Example of proof of ownership Title Insurance
A list of successive owners of the property up to the present Chain of Title
Provisions of a typical commercial lease, any trade fixtures that remain in the property after the lease has expired will be the property of The Lessor
Notice is required for termination of a mtm how many days? 30
A lease that will termination within on year can be oral
A lessee who pays some or all of the lessor's property expenses has a net lease
No notice is required to terminate the lease under tenancy for years
The grantee, devisee and vendee can all acquire title to real property
In Illinois this type of will is recognized Handwritten and witnessed
Primary purose of a dead Transfer title rights
By devise, descent, escheat Transfer property upon owner's death
What is not required for a deed to be valid? Signature of the grantee
The title to real estate passes when a valid deed is Signed and delivered
The deed that "grants and releases" and implies that the grantor has title is a ? Bargain and sale deed
The difference in the special warranty deed and general warranty deed is the grantors agreement in the special warranty deed Applies only to a definite limited time
Deed that contains no expressed or implied warranties Quitclaim deed
A valid will devises the decendent's real estate after the payment of all debts, claims, inheritance taxes and expenses through the court action known as probate
Grantee's present address, grantor's signature, recital of consider are all needed under IL law for what to be valid? Deed
Deed that can be executed without subjecting the grantor to legal warranties? Quitclaim
Law that requires transfers of real property ownership to be in writing is the Statue of frauds
When the grantor doesn't wish to convey certain property rights they may note the exception in the ______ ____ ________ Deed of conveyance
A quitclaim deed makes certain to the buyer that all the seller's interests in the property belong to the ______ Buyer
Deed states that the grantor is conveying all rights and interests of the grantor to have and to hold by the grantee Habendum
A 3rd party holds title to property on behalf of someone else through the use of a Trust Deed
Deed in which the grantor defends the title back to its beginning General Warranty
Illinois bargain and sale deed is similar to, but less complete in its warranties than a ? Warranty deed
Created by: mlosey
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