NJ estate exam for Sasa

Real property

Land and anything permanently attached to it

Personal property

Property that is movable and not attached

Fixture

Personal property that becomes real property when attached

Fee simple absolute

The highest form of ownership

Life estate

Ownership lasting for a person’s lifetime

Life tenant

The person holding a life estate

Remainderman

The person who receives title after the life tenant dies

Severalty

Ownership by one person.

tenancy in common

Co-ownership without survivorship rights

Joint tenancy

Co-ownership with survivorship rights.

PETE

Police Power, Eminent Domain, Taxation, Escheat

Police Power

Government regulation of land use

Eminent Domain

Government taking private property for public use.

Condemnation

The legal process used under eminent domain.

Escheat

Property reverting to the state.

Easement

The right to use another person’s land.

Easement appurtenant

Benefits neighboring land.

Easement in gross

Benefits a person or company

Encroachment

Unauthorized intrusion onto another’s property.

Lien

A claim against property for debt.

Metes and bounds

A description using distances and directions.

Lot and Block

A subdivision description method.

Rectangular survey system

A system using townships and ranges.

Riparian rights

Rights associated with flowing water.

Littoral Rights

Rights associated with lakes and oceans.

Accretion

Gradual addition of land.

Avulsion

Sudden loss or addition of land.

Who is the Principal?

The client

Who is the agent?

The person representing the client.

Fiduciary Duty

Highest duty owed to a client.

OLD CAR

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable Care.

Dual agency

Representing both buyer and seller.

What must occur before dual agency?

Informed written consent.

What makes a contract valid?

COAL

COAL stands for?

Consideration, Offer & Acceptance, Agreement for legal purpose, Legal capacity.

Consideration

Something of value exchanged.

Bilateral Contract

Promise for promise.

Unilateral Contract

Promise for performance.

What is a Executed Contract

Fully completed.

Executory Contract

Not yet completed.

How many federal protected classes?

Seven

Name the Federal protected classes

Race, Color, Religion, Sex, National Origin, Familial Status, Disability.

Steering

Directing buyers toward or away from neighborhoods.

Blockbusting

Creating fear to induce sales

Redlining

Refusing loans based on location.

Mortgagor

Borrower

Mortgagee

Lender.

Promissory note

Promise to repay debt.

Equity

Value minus debt

Amortization

Gradual loan repayment.

PMI

Private Mortgage Insurance.

LTV

Loan-to-value ratio.

Market value

Most probable price.

Highest and best use

Most profitable legal use.

Most common appraisal method for homes

Sales comparison approach.

Best method for investment property

Income approach.

Best method for new construction?

Cost approach.

Principal of substitution

Buyer won’t pay more than a comparable substitute.

Principal of conformity

Uniformity increases value.

Principal of progression

Better properties increase value.

Principal of regression

Inferior properties decrease value.

Physical deterioration

Wear and tear

Functional obsolescence

Outdated design.

External obsolescence

Outside negative influences.

Lessor?

Landlord.

Lessee

Tenant

Estate for years?

Lease with fixed beginning and ending dates.

Periodic tendency

Automatically renews.

Tenancy at will

No definite term.

Tenancy at sufferance

Holdover tenant.

Which deeds offer the most protection?

General warranty deed.

Which deed offers the least protection?

Quitclaim deed.

What is a deed?

Transfers ownership.

What is title?

Ownership rights.

What is marketable title?

Title free from major defects.

What is a cloud on title?

Title defect.

What is title insurance?

Protection from title defects.

Zoning

Controls land use.

Variance

Permission to deviate from zoning.

What is a building code?

Construction standards.

An assessment

Property valuation for taxes.

Property tax lien priority

Usually highest priority.

Special assessment?

Tax for local improvements.

Vacancy rate

Percentage of vacant units.

Net operating income

Income minus operating expenses.

Attorney review period

3 business days.

What is commingling

Mixing client funds with broker funds.

What is conversion?

Misuse of client funds.

Where must earnest money be held

Trust/Escrow account.

Who must sponsor a sales person

A licensed broker.

How often do licenses renew?

Every 2 years.

Who regulates NJs real estate licenses.

New Jersey Real Estate Commission

Who usually pays the NJ Realty Transfer Fee

The Seller

Commission on $500,000 at 6%?

$30,000

Buyer’s broker receives half of $30,000 commission. Amount?

$15,000

Home worth $400,000 with $250,000 loan. Equity?

$150,000

LTV on $320,000 loan and $400,000 value?

80%

NOI formula

Income − Expenses

Appreciation formula

Gain ÷ Original Value × 100.

MOST IMPORTANT FACT TO REMEMBER

Attorney Review = 3 business days.