Mississippi Real Estate Exam Flashcards

Mississippi Real Estate Exam Flashcards Loan-to-Value Ratio(LTV) An underwriting ratio that relates the size of a loan to the market value of the collateral. The closer the loan value is to market value, all provisions of the contract. A requirement for validity.Market priceAmount of money that a buyer has agreed to pay and a seller has agreed to accept to complete the exchange of a good or service.Special AgencyAgency relationship which restricts the agent's authorizations to a specific set of duties. The relationship usually terminates on performance of these duties, as in a real estate broker's listing agreement. Also called limited agency.EscheatWhen OWNER DIES WITHOUT A WILL and without heirs transfer of real property to the state or county Percentage LeaseRetail property lease which requires a tenant to pay a minimum amount of rent plus an additional increment that reflects the sales achieved by the tenant.Suit to Quiet TitleTo remove the cloud, an owner may need to initiate a suit to quiet title, which clears the title record of any unrecorded claims.AssignmentTransfer of one's entire interest in an item ofreal or personal property. The assignor transfers theinterest to the assignee.Abstract of TitleWritten, chronological record of the title records affecting rights and interests in a parcel of real property.LicensePersonal right that a property owner grants to another to use the property for a specific purpose.Income Capitalization ApproachApproach based on the principle of anticipation: the expected future income stream of a property underlies what an investor will pay for the property. Used for rental properties Police PowerState's or local government's legal authority to create, regulate, tax, and condemn real property in the interest of the public's health, safety, and welfare.Special WarrantyGrantor warrants only against title defects or encumbrances not noted on the deed that may have occurred during the grantor's period of ownership or trusteeship. The deed does not protect the grantee against claims that predate the owner's period of ownership.Special warranty deeds are often used by trustees and grantors who acquired the property through a tax sale.

Creating an Agency RelationshipThe most common way of creating an agency relationship is by listing agreement, which may be oral or written.An agency relationship can arise by implication, intentionally or unintentionally.Property Taxesstates may levy property taxes but many delegate this power to county and local government; states can impose a tax lien against real property TiersEast-west strips between parallels Price per Square Foot AppraisalUnit comparison method (square-foot method)The appraiser examines one or more new structures that are similar to the subject's improvements, determines a cost per unit for the benchmark structures, and multiplies this cost per unit times the number of units in the subject. The unit of measurement is most commonly denominated in square feet.RangesNorth-south strips between meridians Fiduciary Responsibilities to customerTo the customer: honesty and fair dealing; exercise of reasonable care and skill; proper disclosures; danger

areas: misrepresentation; advising beyond expertise

Master PlanActs as a blueprint for subsequent zoning ordinances and rulings uses intensive research and public opinion

Lot and Block SystemSubdivisions, lot reference and block reference ex: Lot 7

Block B Quitclaim DeedDeed transfers real and potential interests in a property, whether an interest is known to exist or not. The grantor makes no claim to any interest in the property being conveyed and offers no warrants to protect the grantee.The quitclaim is typically used to clear title rather than convey it.Termination of agencyExpirationCompletion/performanceTermination by force of lawDestruction of property/death of principalMutual agreement Property Owner's Condition DisclosureMost current listing forms require the seller to disclose the condition of the property to prospective buyers. New laws in most states allow buyers to cancel a sale contract if they have not received the seller's property condition disclosure before closing or occupancy or other deadline.ObsolescenceLoss of property value because offunctional or economic (external) factors.General AgencyFiduciary relationship which authorizes the agent to conduct a broad range of activities for the principal in a particular business enterprise. May or may not include authority to enter into contracts.Principles of valuesupply and demandUtilityTransferabilityAnticipationsubstitutionContribu

tionChangehighest and best useconformityprogression and regressionAssemblagesubdivision

Universal AgencyPrincipal empowers the agent to perform any and all actions that may be legally delegated to an agency representative. The instrument of authorization is the power of attorney.Title SearchAnalyst conducts the search of public records needed to produce an abstract. Insurers and lenders generally require the search to identify title defects and ascertain the current status of encumbrances.MeridianNorth-south lines 6miles apart Gross rent/income multiplierShortcut method for estimating the value of an income property. The procedure involves multiplying the property's gross monthly rent times a multiplier that reflects the ratio between gross monthly rent and sale price that is typical for similar properties in the area.Characteristics of valueDesireUtilityScarcityPurchasing Power Gross LeaseFull-service lease. A lease requiring the landlord to pay all of a property's operating expenses, including those that pertain to an individual tenant.Title InsurancePolicy that protects the holder against loss arising from defects in title or documents conveying title.Riparian Rightsproperties abutting moving water such as streams and rivers. If a property abuts a stream or river, the owner's riparian rights are determined by whether the water is navigable or not navigable. Navigable to water's edge ParallelsEast-west lines 6 miles apart Agent's Responsibilitiesassisting the buyer in obtaining financingassisting the seller in clearing titleassisting the seller in completing property repairsrecommending inspectors, appraisers, attorneys, and title companiesassisting in communications between principalsassisting in the exchange of transaction documents General Warranty DeedBargain and sale deed containing the assurance that the grantor will defend against any and all claims to the title.Ground LeaseLease of the land-only portion of a parcelof real property ReconciliationAppraiser's weighted blending of the results of different approaches to value into a final value estimate.Contract RequirementsBe validly created (mutual consent, consideration, legal purpose, competent parties, voluntary act)Be in writingIdentify the principal partiesClearly identify the property, preferably by legal descriptionContain a purchase priceBe signed by the principal parties Reproduction CostCost of constructing a precise duplicate of a property Market Value Approach/estimating valueOpinion of the price at which a willingseller and buyer would trade a property at a given time, assuming a cash sale, reasonable exposure to the market, informed parties,