California Real Estate Terms Flashcards

California Real Estate Terms Flashcards General PartnershipPartner personal assets are liable for debts of the business.They are liable jointly and severally.Master planDrafted by planning commission that shows freeways, air terminals, public streets and highways, water drainage, residential, commercial and industrial districts, and seismic safety.Impound AccountA reserve account sometimes required by lender to pay property taxes, fire insurance, special improvement assessments and home-owner association fees. Interest is not usually paid from the account.SyndicateA group of investors who pool their money for a common investment. Best approach to solve problem of nonliquidity.Capable of greater leverage (lenders have more favorable terms to groups of investors as opposed to individuals)4

Types: Corporation. Real Estate Investment Trust, General

Partnership, Limited Partnership Planning commissionPlanning commissions draft master plans with zoning requirements and make recommendations to city council or board of supervisors.Seasoned loanA loan where payments have been made, when due, for a certain length of time.Discount LoanA loan on which the lender collects all the interest in advance (at the time the money is borrowed) . Made usually with short term loans.RatificationA principal may adopt or approve an agency that has been performed on his behalf without previous authorization.FixturesItems of personal property which now are attached (physically or legally) to the land and are now considered

real propertyExample: screens, venetian blinds, wall bed

EquityThe interest or value which an owner has in real estate over and above the liens against it (the difference between the loan and the value of the property) FNMA, Federal National Mortgage Association, Fannie Mae Originally chartered as a governmental agency under FHA (Titled 3) it is now a privately owned corporation.Conventional LoansMade by lenders without governmental backing. Compared

to FHA loans: more risk for lender, higher interest rates,

larger monthly payments, lower loan-to-value ratio, shorter repayment priod ProrationsTaxes, insurance, interest (recurring costs), and rent are usually prorated to the close of escrow. Unsecured debts are not prorated. The basic idea of proration is to charge

the seller for his share of the use of these items and to charge the buyer for his share. There are two steps

involved: Establish who is to be charged, and calculate the

money involved.Statute of LimitationsBars any court action seeking relief, if not taken within specific time limitsOrange contract - Two yearsThree years

• Encroachment, inverse condemnationFour years - Written

contractTen years - Judgment lien

Mortgage Loan Disclosure Statement (Loan Broke Statement) Details all costs and expenses that will be charged to the borrower LachesUnfair delay in asserting legal rights which will not be excused by the courts. Such rights would then be lost.Seller's MarketExists when there are fewer parcels for sale to more people with the ability to purchase. Prices rise.Equal Credit Opportunity ActLenders cannot determine a borrower's credit worthiness based on sex, marital status, family planning, or part-time income.Interpleader actionAction taken to resolve a dispute between a buyer and seller concerning a deposit when the broker is in possession of the deposit.Subdivision map actPurpose is to give local authorities (city and country) control over the physical aspects of a subdivision (streets,

sewers, lightning, etc.)Applicable to: Any real property,

improved or unimproved, divided for the purpose of sale, lease or financing, whether now or in the future into two or more parcels Open Listing (non-exclusive listing)A contract given by the owner authorizing the broker to act as his agent.Real Estate Investment Trust (RET)Formed under federal law, trust is not taxed on profits, investors are, 75% of gross income must come from real estate investments Mortgage Insurance Premium (MIP, Mutual Mortgage Insurance) Borrower pays 2.25% of the loan. May be paid lump sum of amortized. FHA's "cost of doing business." Protects the lender in case of foreclosure.Loan to Value RatioMortgage loan as a percentage of appraised value.Third PartyEscrow company, Title companies, Alienation ClauseClause in a loan document providing for full payment if the property is sold.RiderAmendment to a contract Trading on EquityWhen an investor borrows funds at an interest rate that is less than the rate of return on the investment. This results in an increase in his equity yield (leverage) FHA Loans (Federal Housing Administration Loans) Established in 1934 by the National Housing Act for the purpose of permitting a buyer to purchase a home with a small down payment. Also protects lenders from loss.Federal Home Loan Mortgage Corporation, FHLMCA, "Freddie Mac" Provides a secondary mortgage market for FHA, VA, and conventional loans ConsiderationAnything of value given to induce entering into a contract; it may be money, personal services, or even love and affection.Quiet TitlesA court action brought to establish title, to remove a cloud on the title.