Real Estate Exam Vocabulary

Flashcards covering vocabulary related to real estate commission calculations and contract law.

How to calculate commission

The sales price of a property multiplied by the commission rate.

How to calculate sales price when commission is known

The total commission divided by the commission rate.

How to calculate commission rate

The commission divided by the sales price.

Time is of the essence

Means that each element of that contract must be performed in a specified time.

LOCK

1: Legal purpose and legally competent parties 2: Offer and acceptance 3: Consideration 4: Consent between the parties. These are the essential elements of contract.

Valid contract

Contract that has all the essential elements.

Void contract

Contract that is missing an essential element, it was never legal.

Voidable contract

Contract appears valid, but can be canceled by a person who has the option to cancel it within a certain amount of time.

Time frame to void a contract in Maryland

Three years, also known as Statue of limitations.

Executed contract

Completed and finished contract

Executory contract

Contract that is still in the process.

Owner Financing

Seller provides credit for all or part of the funds that will allow the buyer to move forward. Also known as a land contract or installment contract.

Vendor

The seller in owner financing.

Termination of Seller Representation

The Broker's agreement to represent a property seller, and it may be terminated for the following reasons: Purpose is fulfilled,Terms expire, Property destroyed, By operation of law, Broker and seller mutually agree to cancel, or if either the Broker or seller dies or become incapacitated.

Exclusive right to sell agreement

listing agreement will guarantee you get paid regardless of who finds the buyer

Exclusive agency listing

Broker is in competition with the seller. If the seller finds a buyer, the seller is not obligated to pay the broker a commission.

Open listing

The least protection of any listing agreement because not only is the agent in competition with the seller to find a buyer, he's in competition with these other agents that have sell a 100% time.

Net listing

Unlawful, illegal, will never be used as taking advantage of someone.

Novation

Replacing of a contract.

Civil Rights Act of 1866

Prohibits discriminating in all housing.

Fair Housing Protected Classes

Race, color, national origin, religion, sex, familial status, and disability.

Maryland's Additional Protected Classes

Marital status, sexual orientation, and gender identity.

Substantially Equivalent Fair Housing enforcement

Federal Fair Housing Act is administered by HUD, which refers Maryland cases to the Maryland Commission on Civil Rights because Maryland enforcement have been judged to be substantially equivalent to the federal fair housing act.

Supply in Real Estate

Houses.

Demand in Real Estate

People.

Land's Physical Characteristics

immobile, indestructible, and unique.

Homogenous

Same or alike.

Nonhomogeneity

Not alike, dissimilar, and different.

Real Estate

Land plus the house.

Improvement

Anything man made related to land.

Real Property

Land plus the improvements.

Title

Ownership.

Appurtenant

Goes with it and runs with the land.

Severance

Changing real property into personal property.

Annexation

Changing personal property to real property which means to permanently attach it.

Fixtures

Anything attached to the house. Your radiators, your kitchen cabinets, your heating systems, all of those are.

Trade Fixtures

Personal property used in conducting a business on a rented space.

Maria Test

To determine if an item is real or personal property, courts call on MARIA: Method of attachment, Adaptability of the item, Relationship of the parties, Intention of the parties, Agreement.

What is the Maria Test?

MARIA: M-Method of attachment, A-Adaptability of the item, R-Relationship of the parties, I-Intention of the parties, A-Agreement.

Factors That Affect Supply

the factors the affect supply: Labor force, availability of builders, the materials cost, government controls the monetary policy, and government has use on the property

Factors That Affect Demand

The factors that affect demand : Population, employment and wages

Ownership in Severalty

There is only one owner and he is cut off from everybody else.

Tenancy in Common

Each has an ownership interest. The property is not divided.

Joint Tenancy

Comes with the right of survivorship which means that when and owners die, it's just one less owner

Joint Tenancy Acronym

To create a joint tenancy you need Pit: possession, intent, time

Tenancy by the Entirety

The law sees them as one undivided person.

Community Property Law

Sees them as two equal partners.

Trustor

Creates the trust.

Beneficiary

A person who's gonna benefit from the truth.

Trustee

A person that you hire to carry out the trust.

Partnership

Two or more people association of two or more people who carry on a business for profit

General Partners

run the business. They make all the decisions. They put up all the money

Limited Partners

Can't participate in running the business because he only put up $10,000 in his multi billion dollar company. The only the only benefit he can get is dividends when they make money now, then he makes money, but he can't make no business decision.

Corporation

Known as an artificial person

Fee Simple

The highest form of ownership allowed by law

Condominium

That your unit you can pay it off and pass it down to your heir it can last forever and indeterminable length of time

Cooperative

Cooperative is a corporation zones it

Timeshare Estate

You own that one week in that same condominium every year for the rest of your life you paid it off. That's your week

Timeshare Use

The developer owns it, but you have a license to use it for so many years. And at the end of those years, your rights are extinguished.

Fee Simple Determinable

You own it, but I'm giving this five acres to the church to use, but only for religious purposes. If they use the property for anything other than religious purposes, I can take it back

Fee Simple Subject On A Condition.

The condition is there's no alcohol to be consumed on the premises. If alcohol is consumed, I can still get it back, but I gotta take them to court to prove it

Life Estate

An estate based on a lifetime of a person. They get to own it as long as they live.

Reversionary Interest

Gonna go back to the original owner.

Remainder Man

The owner doesn't want to come back to him to a remainder man could be one of his kids or somebody else.

Pets Acronym

These are the government powers: Police power, eminent domain, property taxing, sheet

Eminent Domain

Government's right to take private property for public use

Condemnation

And that's when a government agency is going to negotiate with the seller or the property owner fair market value.

Escheat

You died, and you have no heirs and no will.

Liens Paid

Are paid in the order in which they were recorded, but there are some exceptions

Deed

The deed is a document by which the owner of real estate conveys a right title or interest owned in appatial real estate to someone else

Type of Deeds

General warranty deed, bargain and sale deed, quick claim deed

General Warranty Deed

Type of deed gives the buyer the greatest protection

Device

Receives any kind of real property in a will,

Probate

Is a formal judicial process to present the will and for the court determining whether this will is valid

Title Search

Examination of the public crackers to determine if any defects exist in the chain of title.

Abstract of title

Summary report where that title search found in a public record

Marketable Title

Nothing is preventing that from happening a mortgage or selling it

Title Insurance

Greatest protection of title.

Transfer Tax

When a deed is recorded that transfer has a tax.

Accretion

We land this game through the natural action of slow

Avulsion

Quick lost tornado

Broker Protection Clause

Some listing contracts contain a broker protection clause to pay if buyer buys property in the next month after the listing expired.