Champions Texas Principles of Real Estate 2

LOAN TO VALUE

PERCENTAGE OF THE LESSER OF THE APPRAISED VALUE OR SALES PRICE THAT THE LENDER IS WILLING TO LEND.

PRINCIPLE OF SUBSTITUTION

A COMMODITYS VALUE IS INFLUENCED BY THE COST OF ACQUIRING A SUBSTITUTE OR COMPARABLE ITEM.

PRINCIPLE OF PROGRESSION

THE VALUE OF A SUBJECT PROPERTY IS INCREASED BY THE VALUE OF THE SUBSTITUTE OR COMPARABLE ITEM.

DUST

DEMAND, UTILITY, SCARCITY AND TRANSFERABILITY

VALUE OF PROPERTY CAN BE AFFECTED BY THE FOLLOWING

MARKET CYCLE, SOCIAL, ECONOMIC, GOVERNMENTAL AND ENVIRONMENTAL INFLUENCES.

SALES COMPARISON APPROACH

USED AS THE BEST INDICATOR FOR EXISTING PROPERTY VALUE

COST APPROACH

TAKES INTO ACCOUNT THREE TYPES OF DEPRECIATION SUCH AS ORDINARY WEAR AND TEAR, FUNCTIONAL OBSOLESCENCE AND EXTERNAL OBSOLESCENCE.

MARKET VALUE

LAND + REPLACEMENT COST - DEPRECIATION

CONSUMMATION

CLOSING THE SALE OF THE REAL ESTATE TRANSACTION IN WHICH ALL THE APPROPRIATE DOCUMENTS ARE SIGNED AND PROCEEDS ARE DISBURSED BY LENDER.

EQUAL CREDIT OPPORTUNITY ACT

PROHIBITS DISCRIMINATION IN ANY ASPECT OF A CREDIT TRANSACTION

SECONDARY MARKET

FUNDED BY INVESTORS

FNMA- THE MOST INFLUENTIAL IN BRINGING STABILITY TO THE US HOUSING MARKET

ADDRESSING MORTGAGE CREDIT IMBALANCES AMONG REGIONS OF THE U.S, ALLOWS LENDERS TO ORIGINATE LOANS FOR SALE, ATTRACTS INVESTORS WHO HAVE NOT TRADITIONALLY INVESTED INTO PRIMARY MARKET.

LOAN PRE QUALIFICATION

BUYERS ARE MORE REALISTIC WHEN SETTING PRICE GOALS, BUYERS AGENT HAS BETTER UNDERSTANDING OF WHAT BUYERS ABILITY IS TO PAY, BUYERS AGENT AVOIDS SHOWING PROPERTIES THAT BUYER CANT AFFORD, SELLERS ARE REASSURED THAT THE BUYER HAS SUFFICIENT INCOME.

RESPA-TILA

INTEGRATED DISCLOSURE, LOAN ESTIMATE MUST BE PROVIDED TO THE BORROWER NO LATER THAN 3 BUSINESS DAYS AFTER CLOSING.

CLOSING DISCLOSURE (CD)

MUST BE PROVIDED NO LATER THAN 3 BUSINESS DAYS BEFORE CLOSING.

BLANKET MORTGAGE

CONTAINS A RELEASE CLAUSE ALLOWING BORROWERS A PARTIAL RELEASE OF SPECIFIC LOTS BY MAKING REQUIRED LUMP SUM PAYMENTS.

BUDGET MORTGAGE

MONTHLY HOUSE PAYMENT INCLUDING PRINCIPAL, INTEREST, TAXES AND INSURANCE KNOWN AS PITI.

PMI

INSURES THE LENDERS RISK OF THE LOAN, FOUND ON THE HIGH LTV OF LOANS AND FOUND IN HIGH CONVENTIONAL LOANS.

MIP

INSURES THE ENTIRE LOAN AMOUNT.

GOVERNMENTAL RIGHTS TO PRIVATE PROPERTY

PETE

POLICE POWER

THE RIGHT TO REGULATE AND CONTROL THE WAY LAND IS USED.

EMINENT DOMAIN

THE RIGHT TO TAKE PRIVATE LAND FOR PUBLIC USE. INVERSE CONDEMNATION OCCURS WHEN GOVERNMENT IS FORCED TO BUY PRIVATE LAND.

TAXATION

THE RIGHT TO TAX LAND (CAN BE EXPRESSED IN MILLS OR PER THOUSAND DOLLARS OF VALUE)

ESCHEAT

THE RIGHT TO TRANSFER PRIVATE LAND TO THE GOVERNMENT WHEN SOMEONE DIES INTESTATE AND WITHOUT HEIRS.

CERCLA- (COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT)

GIVES AUTHORITY FOR CLEAN UP TO FEDERAL NATURAL RESOURCE AGENCIES, NATIVE AMERICAN TRIBES AND NOT PROPERTY OWNERS ASSOCIATION.

CCIM (Certified Commercial Investment Member)

GOLD STANDARD COMMERCIAL DESIGNATIONS.

SHORT SALE

A PROPERTY WITH THE CONSENT OF THE LENDER IS SOLD BY OWNER/BORROWER AT A PRICE THAT IS SUFFICIENT TO PAY OFF THE EXISTING MORTGAGE.

BROKER MUST OFFER

MAINTAIN WRITTEN POLICIES, REQUIRE ADEQUATE TRAINING, ADVISE IN WRITING THE SCOPE OF AUTHORIZED ACTIVITIES.

BROKER IS CONSIDERED

AGENT AND BROKER.

APPRECIATION

PASSIVE INCREASE IN THE VALUE OF PARCEL DUE TO MARKET FORCES.

TAX BENEFITS TO INVESTING

TAX SHELTERED INCOME, FAVORABLE CAPITAL GAINS TAX TREATMENT, DEFERRED TAXATION.

REAL ESTATE INVESTMENT SYNDICATES

MAY BE ORGANIZED AS LIMITED OR GENERAL PARTNERSHIP OR A CORPORATION.

REAL ESTATE INVESTMENT TRUST (REIT)

EQUITY REIT PURCHASE COMMERCIAL PROPERTY, MORTGAGE REITS INVEST IN MORTGAGES OR MORTGAGED BACK SECURITIES.

REMICS (Real Estate Mortgage Investment Conduits)

TWO ISSUERS OF Freddie Mac AND Fannie Mae

ELEMENTS OF A VALID LEASE

COMPETENT PARTIES, LET AND TAKE AGREEMENT, ADEQUATE, LEGAL PURPOSE, DESCRIPTION OF PROPERTY.

RIGHT OF THE FIRST REFUSAL

WHEN TENANT HAS THE RIGHT TO MATCH OR BETTER AN OFFER THE LANDLORD MAY RECEIVE ON THE PROPERTY BEFORE THE PROPERTY IS SOLD TO SOMEONE ELSE. IT IS PROBABLE IN A COMMERCIAL LEASE.

LEASEHOLD ESTATE

ESTATE FOR YEARS, PERIODIC TENANCY, TENANCY AT SUFFERANCE, ESTATE AT WILL.

TEMPORARY RESIDENTIAL LEASE DOCUMENTS

PROMULGATED BY TREC, FOR PERIODS OF LESS THAN 90 DAYS, FOR RESIDENTIAL USE.

TAA

APARTMENT LEASE IS COPYRIGHTED ALSO FOR THE USE OF TEXAS APARTMENT ASSOCIATION.

ROLE OF PROPERTY MANAGER

ESTABLISHED AND IS WRITTEN PROPERTY MANAGEMENT AGREEMENT.

OPERATING COSTS

INCLUDES MAINTENANCE LIKE PAINT AND CLEANING SUPPLIES.

EQUITABLE TITLE

INTEREST CREATED BY A LEGAL DOCUMENT SUCH AS THAT HELD BY A BUYER WITH A SIGNED SALES CONTRACT WHO HAS NOT YET GONE TO CLOSING.

SOVEREIGNTY OF THE SOIL

TITLE AND LAND CAN BE TRACED BACK TO ITS ORIGINAL OWNER WHICH IS THE GOVERNMENT.

GENERAL WARRANTY DEED

A BUYER WHO WANTS TO ENSURE HE IS RECEIVING GOOD TITLE.

ALIENATION

CHANGE TO THE OWNERSHIP OF REAL PROPERTY.

AN INDIVIDUAL WHO INHERITS PROPERTY BY INTESTATE SUCCESSION

ACQUIRES TITLE BY DESCENT

ELEMENTS OF A VALID DEED

GRANTOR, GRANTEE, CONSIDERATION (SOMETHING GIVEN OF VALUE IN EXCHANGE FOR CONVEYANCE BY A GRANTOR.

TITLE IS CONVEYED

DEED IS DELIVERED AND ACCEPTED.

COVENANTS IN A DEED

COVENANTS OF SEIZIN, COVENANT AGAINST ENCUMBRANCES, COVENANT OF QUIET ENJOYMENT, COVENANT OF FURTHER ASSURANCE AND COVENANT OF WARRANTY FOREVER.

EASEMENT

MAY BE RESERVED FOR DEED

CONSTRUCTIVE NOTICE OCCURS WHEN

DEED IS RECORDED IN PUBLIC RECORDS.

WHEN GRANTEE TAKES POSSESSION OF PROPERTY

TYPES OF DEEDS INCLUDE GENERAL WARRANTY, SPECIAL WARRANTY, BARGAIN AND SALE DEED, QUITCLAIM DEED- NO OFFERS OF GUARANTEES.

LISPENDENS

PENDING LAWSUIT AFFECTING PROPERTY.

BUYER SHOULD DO FINAL WALK THROUGH ON PROPERTY

1-3 DAYS BEFORE CLOSING.

RESPA (REAL ESTATE SETTLEMENT PROCEDURES ACT)

IMPLEMENTED BY THE CFPB.

COMISSION EQUATION

COMISSION RATE x SALES PRICE.

YEARLY INTEREST EQUATION

INTEREST RATE x LOAN AMOUNT.

TAX CALCULATION

TAX RATE x ASSESSED VALUE.

1 ACRE OF LAND

43,56O SQ FT

ONE MILE =

5280 FT.

LOAN DISCOUNT POINT EQUATION

1 POINT= 1% OF LOAN