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Real Estate

Chapter 1+2

Question	Answer
MREC stands for?	Maine Real Estate Commission
OLR	Office of Licensing and Registration
6 commissioners	2 - non field 4 -field appointed by govenor for 3 years
MREC 6 functions	1. education 2. license 3. standards 4. complaints 5. hearings 6. warnings
7 exceptions to needing a license	1. selling own property 2. attorney 3. Auctioneer 4. rental 5. condo 6. timeshare 7. business without property
Requirements for license	18 yo hs grad 55hr 75% or higher apply pass test
Sales agent	good for 2 years
Associate Broker	60hr 75% or higher 2 years with 21 hrs of class
Broker	2 yrs as associate broker 45 hr course, 75%
Designated broker	in charge of all brokers in agency, 1st 90 days all paperwork for new agent signed off on.
Agency	must be a fixed place of business have a company all re done with agency not the individual
agency must have 3 things	display license written handbook trust account
explain why realtors are indep contractors versus employees	employees are told how, when, given tools, salary, taxes, etc. indep contractor is told what and goes and does it.
List the rank of real estate	National association of realtors maine ass. of realtors local chapters realtor.org/com MAR takes care of MLS for maine
Antitrust laws	no "fixed fees" each agency must have their own fees set. = no limiting competition.
Real estate	land and everything more or less attached to it.
Personal Property	"chattel" moveable items crops
Fixtures	attached to the property
If fixtures not staying and not stated in PAS how does judge decide?	intent of parties degree of attachment adaptation to re relationship of parties (used for selling or personal pleasure)
Trade Fixture	used for business installed by someone leasing
What are the 3 types of real estate descriptions	1. lot on a plan 2. metes and bounds 3. rectangular/gov survey system
Lot on a Plan	at the registry of deeds
metes and bounds	POB -point of beginning distances and directions to describe the boundaries
rect/gov survey system	-24sq mile rect -each divided in township lines (hor) and rang lines (vert) at 6 mile intervals -divided in 36 1sg mile section 640acres
Water boundaries	tidal water -low tide mark stream/river- not navigable line goes to middle, moves with erosion
Property rights	owner has rights
bundle of sticks rights	you can rent while still owning
limitations to rights	there are some, but you own from the center of the earth to the heavens -surface rights -air rights -subsurface rights
Estate	extent of owners interest in real property
freehold estates and the two types	estates for an indefinite amount of time. = fee simple and life estates all others are less than fee simple.
Fee simple absolute estates	largest rights a prop owner can have most important:right to decide who gets title when seller is done
fee simple defeasible	owner can loose title to the property
two types of fee simple defeasible 1. fee simply determinable	duration written in the grant, as long as x,y,z (must do)
two types of fee simple defeasible 2. fee simple on condition	"never to be used as" (can't do)
life estate	owned for life
reversionary estate:	estate goes back to original owner of their heirs after life estate runs out
Maine's law of descent and distribution	unless stated in will deceased spouse gets property.
4 types of leases	1. estate at will 2. year to year 3. estate for years 4. tenancy at sufferance
estate at will lease	written or verbal,lease for undetermined period of time. May be terminated at any time by either party. Ceases on sale of property or death of either party.
year to year lease	lease from period to period that renews itself automatically unless either party gives notice
Estate for years lease	lease for a definite period of time. Does not automatically renew.
Tenancy at sufferance lease	"hold over" after lease expires but before kicking tenant out, tenant still bound by lease
Gross lease payment	one check covers everything
net-lease payment	one rent check, and 3 others (to keep up with increase/decreases)
index lease payment	rent paid on index, subject to increase
percentage lease payment	rent based on monthly income
ground lease payment	tenant rents just the ground
graduated lease payment	increases yearly by percent
estoppel certificate	written statement signed by each tenant restating terms of use
Property Management Contract	take care of managing property
Registry of deeds	maine has 16 counties of 18 registry of deeds, keeps who owns what, after sale buyer delivers deed to town where it is stamped and dated
grantor	sells
grantee	buys
Sole ownership	one person owns
Probate Process	when someone dies anything left needs to be paid off.
testate	with a will
intestate	without a will
ownership of business entity	owned by group of people, one has the power to sell
co-ownership	2 or more people own property
joint tenant	when one dies another gets it, equal ownership
common tenant	when one dies goes to probate, no survivorship, aquire interest at different times.
Joint Tenancy stipulations (6)	1. receive the title at the same time 2. names of both on the deed 3. same interest recieved 4. everyone has full rights to all 5. must say joint on deed 6. can sell your interest but no pass survivorship
Petition for Partition	co-owners that don't agree on use of land, goes to judge to break land into parts.
Condos	owned by maine condominium act must declare condo at registry of deeds. all tenants own common areas, tenant owns just paint between walls
condo association by laws	owners association must be made and officers appointed, owners have vote proportionate to ownership.
selling/buying condo	buyer must get info about future of condos, also gets resale cert stating the financial situation of the association, law gives buyer 5 days after cert to declare contract.
Planned unit development	property owner has title so he is responsible for maintanence.
cooperative (coop)	several ppl own property at same time, corporation buys prop and leases to share holders
Ownership restricted to Married couples (does not exist in maine)	Tenants by entirety- survivorship, creditors cant go after spouse, no partition to petition. Community Property: joint tenancy each owning 1/2
REIT	real estate investment trust, pool money of investors to buy re. pay investors with rental income or capitol gains.
Trust	established by an investor who drafts an agreement. names trustees and beneficieries. trust has leagal power, trustees have only power given to them in trust and must pay income to beneficieries.
adverse possession	given property if: -continued/uninterrupted for 20years -open use -adverse to owners posssion -hostile (wo owner knowing) -claim of right, must believe it is owned.
Easement	non-possesssory right in land belonging to someone else.
2 types easements	1.appurtenant 2. in gross
appurtenant easement	2 parcels of land, benefitted-use driveway servient/burdened- shares drive
easement in gross	one parcel of land, telephone company.
conservation easement	not for development
affirmative and negative easement	gives easement: Positive cant do/takes away: negative
5 ways easements are created	1. grant in deed -can do something 2. reservation in deed - has right to do something 3. necessity: need to access land 4. prescription: uses land for 20yrs without knowing 5. implication: implied use, needed item on lot.
6 terminations to easements	1. expiration 2. both parties agree 3. abandonment (path grows over) 4. destruction 5. merger (owned by same person) 6. end of purpose
Driveway permits	DOT decides, not given everywhere
Encroachment	trespass of improvement onto anothers real property
Profit a Prendre	interest in land that allows the holder onto landowners land to harvest/excevate for money.
Restrictive Covenant	common private limitation on land use
defeasible fee	sold with restrictions on property
Police power	make enforce laws
home rule	towns can make rules on top of states
zoning	each town has comprehensive plan for growth. each has zoning ordinance (where certain things can go)
CEO	codes enforcement officer enforces zoning
non conforming	grandfathered
variance	excemption to zoning made in case by case
no action letter	town knows of violation but will take no action
spot zoning	allowing one parcel to be zoned for something not originally
shoreland zoning	state laws imposed on shorelines nonconforming: only increase by 30% not towards the water
building code	by town to establish min construction standards
3 septic laws	1. must have 1/2 acre to build septic 2. must have plumber sign off on season to non seasonal plumbing switch 3. when selling need a note if issues arise within 180days of sale
subdivisions	divisions of 3 or more, or adding 3 or more lots in 5 years.
Municipal subdivision law	lot must be approved before sold
how does division work	1st division = 2lots 2nd = 3 lots *if you live on land for 5+ years you can divide in half without subdivision
endangered species act	cant develop near endandered nest, vernal pools: breeding grounds
Natural Resource Protection	cant do construction near wildlife area
CERCLA	fund to clean up hazardous waste
Municipal Taxes (town)	based on assessed value
homestead exemption	exempt first 10,000 of taxes for primary residence
veterans exp	A veteran who served during a recognized war period and is 62 years or older; or, is receiving 100% disability as a Veteran; or, became 100% disabled while serving, is eligible for $6,000.
tax relief programs (4)	1. tree growth 2. farmland 3. open space 4. working waterfront all could be taxed high for potential as income but get a tax break for keeping them as is/serving maine
ordinary income	salary, rent
capitol gains	sale of assets short term :12months or less Long term: 12 months or greater
Primary Residence	if house sold is primary residence for 2 of last 5 years 250,000 excempt from tax, 500,000 if husband.
Mortgage interest deduction	can deduct 1st and 2nd homes mortgage interest on taxes
non resident withholding	if not a maine resident part of sale goes to maine as tax. 2.5 % of 50,000 or 8.5% of gain
real estate transfer tax	maine taxes for each sale, $2.20 for every $500 in transaction, shared between buyer and seller ex. 100, 000 /500 = 200 X 2.20 = 440, or 220 each
Foreign investment in re property tax act	when alien sells house buyer witholds money unless it is primary residence or less than 300,000
Sales tax on rentals	must register with state of maine, and collect 7% sales tax unless renting for less than 15 days a year. no tax on primary residence of greater than 28days
deeds	document gives buyer right to the title
8 deed must haves	1. grantor must sign 2. grantee - name 3. property description 4. restrictive covenant- limitations 5. habendum- buyer rights 6. warranty covenants - warranty of title 7. signature of grantor 8. ecknowledgement that grantor did sign of free will =
general warranty deed	garantee of current owner and all others
special warranty deed	garantee only for time of ownership
personal representative deed	no warranties. 10 day notice
quitclaim deed	no warranties. often used in divorce
mortgage foreclosure	cannot pay, bank takes home
eminent domain	goverment can take home for good of public. (condemnation and condemnation value)
escheat	person dies, no will or hiers, goes to state
recording system	seller sells to 2 buyers
recording system statues (3)	1. race -whoever records it first 2. race-notice: 2md buyer who records it first gets it 3. notice: 2nd gets it if not knowledge of the first.
Title examination process	before buying a title company it hired to research the title no outstanding " mortgages,ets
liens	owner owns anything, property tax, construction, etc.
uniform commercial code financing statement	something in house not paid for, not property
lis pendens	property subject of lawsuit
Title examination	- chain of title back 40yrs -abstract title - what each owner did with property is discharged -certificate of title- issues title
Title insurance	just in case, 2 kinds 1. lenders: bank policy 2. Owners: should get just in case.
event that triggers form #3	Substantive communication between realtor and customer.
4 reasons you do not need to give form #3	for anything other than a 1-4 family property, don't need to give it to yourself, if they already have a copy, solicitation of business
how long is form #3 kept?	3 years by the DB
what are the fiduciary duties/OLD CARD?	obedience, loyalty, disclosure, confidentiality, accounting, reasonable care, diligence.
explain obedience	realtor must obey the client's instructions
explain loyalty	put the client's interest above your own interests.
explain disclosure	disclose clients material facts, including things that may be pertinent to his sale/buy
explain confidentiality	not sharing info about the client, or any info that would inversely impact them.
explain accounting	need to be accountable for the earnest money check, where it is, and appropriately dispurse it.
explain reasonable care	must be careful to make sure that the disclosures make about the property are correct, terms of sale are properly included, don't be stupid.
explain diligence	pursue the client's business with all due diligence...don't be a slack ass.
brokerage agreement needs the following 5 things	to be in writing, signature of client, terms and conditions, method/amount of compensation, the date of expiration
Dual Agency	representing both the buyer and the seller
a dual agent may disclose any information to both clients that is relevant to their transaction unless..4 things	willingness of seller to accept less than the asking price, the willingness of the buyer to pay more than what is offered, confidential negotiating strategies, the motivation or either the buyer or the seller
when must the dual disclosed paper be signed?	at the time of forming the client/realtor relationship
appointed agency	represented by the individual
sub-agency	the relationship between 2 agents or agencies both represent the seller, not really used anymore
Transaction broker	no fiduciary duties, only provides the services to the client. not liable for false information if they are provided false information. may NOT give advice. not responsible for finding latent defects. no written agreement required
transaction brokers can NOT (3)	conduct inspections, investigations or analysis for the benefit of any party. verify the accuracy of statements made by parties, promote the interest of any party in the transaction
Written Company Policy Manual (7)	buyer agency only, seller agency only, buyers/sellers no dual disclosed, buyers/sellers/dual disclosed, appointed agency buyers/sellers/no dual disclosed, appt. agency/buyers/sellers/dual disclosed, transaction broker.
what are the 3 major forums for licensees when they get in trouble?	in court lawsuit, panel of local REALTOR organization, Maine Real Estate Commission.
when the buyer/seller has been financially harmed by the licensee they are brought in front of what forum?	court lawsuit
if a licensee has a dispute with another member of the REALTOR organization or they have a breach of the code of ethics they are brought in front of what forum?	a panel of peers through the REALTOR organization
What are the 3 actions the MREC may take after an investigation of a licensee	dismissal, consent agreement, hearing.
define dismissal	if the complaint has no merit the director can take it before the board and dismiss it
define consent agreement	if a violation is found the director will write up a letter with the sanction to be agreed upon by the defendent or rejected and go to a hearing.
define hearing	if unable to agree to a consent agreement the case will go to a hearing. similar to a courtroom trial, lawyer presents case in front of the commissioners who are like judge and jury. they decide the sanction if necessary.
what 5 sanctions can come of a MREC review?	reprimand, correct the violation with a cease and decease order, fine (no more than 2,000/violation), suspend or revoke the license, report findings to the attorney general for prosecution.
who decides on MREC cases	the commissioners not the director and staff
The Wall	the commissioners are to be separate from the daily work of the staff, the first time they hear of the case is when it is presented to them to keep them from tainting their view
what are the 3 ways a hearing can be brought before the MREC commission	motion by the director, motion by the applicant for a license who has been denied by the director, a motion by the commission themselves
Can a decision by the MREC be appealed? if so how?	yes, by bringing it to the administrative court or law court
commingling	clients money needs to be in a separate trust account than the companies account
earnest money	needs to be deposited within 5 days cannot be used for ANYTHING before closing unless in writing.
2 ways undisputed earnest money can be release	signed authorization by both parties, the DB, according to purchase and sale, can release the money
disputed earnest money return	notify each party in writing of the request by one party, keep all parties informed of all doings with the money including keeping it until both parties give signed consent and the dispute is over, it may go to a judge via lawsuit
offers and counteroffers must be kept by the DB for	1 year
all other transaction documents (other than offers and counteroffers) must be kept for	3 years
the MREC may deny a license or the renewal of a license for: (10)	lack of trustworthiness, misconduct, act that constitutes denial, substantial misrepresentation, failure to protect principal, failure to avoid error, liability of agency or DB, unlawful payment, suspension or revoction of license, failure to qualify
who can/who cant do an appraisal for a foreclosure, bank, divorce	can: AB, DB cannot: Sales agent
Bottom up Reporting	the licensee is to keep the DB informed.
what must advertising for RE contain?	trade name, contact information prominently seen. need permission of client.
A licensee must state that they are so in the PAS when:	buying RE not listed with an agency, when buying with their agency, when buying and sharing in the brokerage fee.
What 4 disclosures must a licensee make on a home:	private water supply, heating, waste disposal, known hazardous material
what 3 steps must a licensee take to disclose the private water supply, heating, waste disposal, known hazardous material	ask the seller, make a visual inspection, do a reasonable and appropriate amount of research.
asbestos	mineral, good for insulation, fibers float in the air and destroy lung tissue.
Radon	odorless invisible gas that occurs naturally in the environment. 2pcL in the air is above recommended according to maine. higher amounts are okay in water. mitigation is $1,200
Lead-based paint	disclose known lead based paint, deliver to buyer copy of EPA's booklet on Lead paint, give the buyer 10days to have the property tested.
underground oil storage tanks	cannot fill an underground unprotected steel or asphalt coated tank with oil because of leakage
arsenic	found in water and pressure treated lumber.
mold	fungi. wherever there is adequate moisture and food. some are toxic, some cause allergies, not specific requirement to disclose other than under the other hazardous material
referrals	cannot be paid for referring people to others business
tree growth tax law 2 requirements	10 acres or more, landowner files a forest management and harvest plan by licensed prof every 10 years
what happens if someone new acquires tree growth tax law area?	they must, within 1 year, send in a sworn statement that they have a plan or a statement from a licensed prof that they are following the plan of the previous owner
exemptions from shoreland seasonal conversion rule	only occupied seasonally, dwellings that are in a shoreland but the disposal system is outside the shoreland zone
how close do you need to be to a natural resource protection site to need a permit? or building on how many acres?	75 ft of a protected area. 20 acres of building, metallic mineral, subdivisions, oil facilities.
give the distance in feet of shoreland zoning	250 feet ofhigh-water line of any great pond (natural pond over 10 acres), any river that drains at least 25 square miles, and all tidal waters and saltwater marshes; • 250 feet of a freshwater wetland over 10 acres • 75 feet of a stream.
Underground Storage Tanks	The owner or operator of an underground oil storage facility must file a registration form with the commissioner immediately upon any change of ownership. The board may establish, by rule, a late registration period not to exceed 10 business days
exceptions for fair housing act (5)	Housing for older persons, Sale or rental of single family home by its owner,Mrs. Murphy exemption, Religious, social, fraternal organizations, Private clubs
explain Housing for older persons fair housing act exemption	properties for 65 and older, 80% of units occupied by 55 or older,government program to assist elderly
explain Sale or rental of single family home by its owner fair housing act exemption	owner does not own more than 3 such properties, no re license used for transaction, no discriminatory advertising used, if not the most recent occupant they can only use it once every 24 months.
explain Mrs. Murphy fair housing act exemption	Rental of a unit or a room in a dwelling with 1to 4 units The owner must occupy one unit No real estate licensee is used for the transaction No discriminatory advertising is used
explain Religious, social, fraternal organizations fair housing act exemption	Dealing with their own property in a noncommercial transaction May limit occupancy or give preference to their own members Can not restrict on basis of race, color or national origin
explain Private clubs fair housing act exemption	Lodgings must not be open to the general public, Not operating for a commercial purpose, May limit occupancy or give preference to their own members
what is the purpose of the LURC?	The purpose of the commission is to extend principles of planning, zoning and subdivision control to the unorganized townships of Maine. This territory encompasses approximately 50% of the land area of the state.
how much can a landlord charge for security deposit?	no more than 2 months rent. kept separately from his other finances, if asked must tell the name of bank and the account number.
what happens if a landlord asks a tenant to leave "with cause"	they must leave within 7 days or the LL can file a Forcible Entry and Detainer action (law suit)
what happens if the tenant leaves behind abandoned property	less than 750$ -given 14 days notice the LL can sell for money the tenant owes, remainder to state. more than 705$ - 14 day notice then auctions it for money tenant owes, remainder to state.
Maine Nonresident Withholding Tax	2.5% of total cost or 8.5% of the capitol gain, whichever is less, if no capitol gain they can apply for exemption
Maine Transfer Tax -rounding up	What digit appears to the right of the decimal point? If the digit is anything other than zero, round up to the next highest whole number.
Minimum Lot Size single family residential property has a subsurface waste disposal system	at least 20,000 square feet.,If the lot abuts a lake, pond, stream, river or tidal area, it must also have a minimum frontage of 100 feet on the body of water.
Open Space Tax Law, percent reductions	open space land a reduction of 20%,permanently protected anadditional30%.forever wild open space land is eligible for an additional 20%.public access an additional 25%.
Homestead Exemption	owned homestead property in Maine for at least twelve months and make the property they occupy on April first their permanent residence. Property owners receive an exemption of $13,000 off the assessed value of their property.
Paraplegic Veteran tax exemption	A veteran who received a federal grant for a specially adapted housing unit may receive $50,000.
Blind tax Exemption	An individual who is determined to be legally blind receives $4,000.
What do you find at the registry of deeds office?	sellers deed, survey, restrictive covenenant, easements, etc.
what do you find at the tax assessors office?	tax card with assessed value of buildings and the land.
what do you find at the codes enforcement office?	info about the legal use of the property, what improvements have been made, town or private septic, location of well, etc.
definition of market value	highest price estimated in a competative, open market, fair sale.
highest and best use of value	the possible legal use of a property, zoning, etc.
comparable Market Analysis (CMA)	comparable properties, current listings, pending properties. adjustments are made to the comparable because that is the only known data.
emblements	tenant has right to harvest crops on their previously owned property
how many feet in a mile?	5,280ft
how many ft in a square mile?	43, 560ft
pur autre vie estate	"in the life of another" a life estate that will be someones until the other person dies.
community property	owners are married, aquired during marriage therefore equally owned. not community if bought before marriage, by gift/inheritance, income from separate property.
tenancy by entirety	neither spouse can separately convey an interest during the others lifetime. on the death of spouse the survivor owns the property.
Tenancy by partnership	parnership of co-owners to conduct business for profit. requires consent, does not include personal property
dominant tenement	estate that uses another's land for an easement. by using right of way.
servient tenement	the land is used by another or serves another.
Three approaches to value	CMA, Cost Approach, Income Approach
what 3 things does a CMA compare?	comparable properties, current listings, pending properties.
reconciliation	agents best judgement about what the property should be based on her interpretation and all of the factors that affect value.
define Cost Approach	used by appraisers to estimate the market value of properties where there are no comparables.
What are the 4 steps of the cost approach?	estimate the price of land without the building, estimate the cost (new) of replacing the value, estimate the depreciation of the property, add #3 to #1
what 3 ways can an appraiser estimate the cost of improvements in a cost approach appraisal?	quantity survey method, unit in place method, square foot method.
quantity survey method	adding up the labor and materials in a home to estimate the cost of improvement
unit in place method	general method of how much it costs for certain improvements then multiplying it by the # of feet in a property.
square foot method	looks at the cost of construction of a similar property then multiplies the square footage in the house by the cost of the building per square foot.
Income approach	uses the income of the property to establish the value
Gross rent multiplier (GRM)	appraiser uses the gross rent from the property and estimates the value. if the properties are similar and you know the sale price of other similars.
Cap Rate	a rate that anticipates the value of the income stream and the return of the capitol to the investor. using the Net Operating Income (NOI) or income after expenses. V=I/R
What are the 3 types of listing agreements the law recognizes	open listing, exclusive agency listing agreement, Exclusive right to sell listing agreement.
open listing agreement	seller can list with multiple companies. first agency to bring a buyer gets the listing, if the seller brings a buyer they get the commission
exclusive agency listing agreement	only 1 company, if they find a buyer they get commission but seller can also find buyer for no commission
Exclusive right to sell listing agreement	one company, seller gives up the right to find a buyer with no commission.
What 9 things must be presented to a buyer to help them understand their responsibilities	maine realtor's residential transaction booklet, lead paint, radon, arsenic, asbestos, sample purchase and sale, financial preapproval, buyer representation agreement.
Secondary Mortgage market	GNMA, FNMA, FHLMC, make the funds of others available for residential real estate financing.
conforming loans	loans sold in the secondary market must "conform" to certain standards. standardized application form.
portfolio loans	direct lenders, more willing to lend than secondary mortgage.kept in the banks portfolio
Point/LTV	a fee charged by the lender. one point = 1% of the loan. when a buyer pays points upfront the bank lowers the interest therefore the monthly payments.
Truth in lending	all lenders must disclose the true cost of the loan as an Annual Percentage rate or APR, lender must give a TIL disclosure statement.
Three day right of rescission	a homeowner who enters into a transaction that will result in a lien on their home has 3 days from the signing to cancel(rescind) the contract as if it never happened
kickbacks	lenders increasing the clients cost in order to pay a referral fee to the re agent who brought them in = illegal
Good Faith estimate of closing costs	buyer has meaningful disclosure of closing costs from lender and the costs can not change.
bait and switch	lenders can't tell clients it is going to be one cost and then increase it at the closing.
Underwriting loans	verifies that the application from the client is true, to see that the applicant profile fits.
what 3 things are underwriters looking for?	credit, collateral (is the house worth what they will have in?), and capacity (does the client have the means to pay back the loan?).
Credit	credit score based on other loans
collateral	appraisal done by the bank, title exam, and title insurance, mortgage inspection plan (MIP) quick survey of land/property
capacity	ability to pay back the loan. PITI (principal, interest, taxes, and insurance) = the monthly housing costs.they look at the monthly cost, monthly income, and long term debt.
mortgage insurance	fills the gap of the 20% down that a lot of buyers do not have to get a mortgage.
adjustable rate mortgage	interest rates that adjust over time after it is fixed for a certain amount of years.
term loan	how many years a loan needs to be payed back in have been extended so that monthly they are less
conventional loan	atleast 20% down. has a ceiling. not garaunteed or insured by the government.
jumbo loan	conventional loan that is greater than the ceiling, therefore has higher interest rate.
HELOC	Home equity line of credit, take a second loan out on their homes for extra money
80/10/10	20 percent down with a second mortgage of 10% and a down payment of 10%.
junior mortgage	owner may have more than one mortgage on the property, the earliest mortgages have priority over later ones, called senior mortgages, have better priority.
amortizing loan	payment made of both principal and interest
blanket mortgage	covers more than one parcel of real estate
balloon mortgage	repay in large sums of the principal from time to time.
seller financing	buyer doesn't have cash to buy, buyer has poor credit and cant get a loan
installment sale	buyer makes payments to the seller overtime and when all are made the seller hands over the deed.
Federal Housing Authority (FHA)	encourages home ownership by ensuring low down payments.
Veterans Administration (VA)	0% down payment, lienient qualifications, gov. garauntees a VA loan.
Rural Development	makes loans available to those with limited incomes in rural areas
Maine State Housing Authority.	low income and first time home buyers (someone who for the last 3 years has not owned a primary residence).
what 2 documents are used in re to finance?	promissory note, mortgage
promissory note	promise of borrower to pay back the loan amount.
deed of trust	given to a 3rd party, when the buyer is done making payments the trustee hands over the deed.
Legality of purpose	to be enforceable a contract must have a legal purpose, not enforced if illegal
what are the 2 types of contracts	bilateral, unilateral
bilateral contract	parties exchange promises. buyer pays money for deed on the house
unilateral contract	one makes a promise, other forms contract by completing the action. owner losses dog, offers reward, man finds dog, gets reward
executory contract	one not yet completed
executive contract	contract completed
valid contract	includes all essential pieces
void contract	looks proper but lacks one or more essential elements
voidable contract	each party has the right to disaffirm the contract because of fraud, duress, age, etc
enforcable contract	valid, written, contract is enforceable in the courts
unenforcable contract	valid, but not in writing,
equitable title	when a property is under contract the buyer has rights to the property, not legal rights but equitable, the right to buy.
kick-out clause	buyer buys home with the understanding that they need to their house first. if another buyer comes along before they sell buyer #2 gets the house.
liquidating damages	a pre-agreed sum that will be paid if one party defaults
option contract	commonly used by developers, seller takes the property off the market for a period of time while the buyer researches the property.
right of first refusal	someone wants to buy something that is not for sale, they ask to be the first ones notififed if ever it goes for sale
Standard Closing Statement: Hud-1	standard closing document required on 1-4 family residential properties. clearly sets forth closing costs to buyers and sellers.
real estate transfer tax	$2.20 on every $500 in transaction, split between buyer and seller. $100,000/500 200 x 2.20 440/2 220 each.
steering	re agent directs clients towards or away from certain neighborhoods based on discrimination.
blockbusting	agent tells clients to sell because neighborhood is going down.
redlining	lenders won't lend to people in "redlined" areas on map because they arent good for their money

Created by: Jplourde

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