National Real Estate Exam Portion for Ohio Flashcards

National Real Estate Exam Portion for Ohio Flashcards Hold over TenantA lessee who stays on property after the expiration of the lease, can work in the lessee's favor if the lessor continues to accept rent, but the lessee may be evicted if not Acres to Square Yards1 acre = 4840 Abatementa tax break offered by a state or municipality on certain types of real estate or business opportunities illegal and unenforceableVoidable Contract must be in writing and they must be signed to be enforceablelack of considerationabsence of mutual assent (meeting of the minds)impossibility Bilateral Contract OptioneeBuyer in an option CareObedienceAccountingLoyaltyDisclosure Exclusive Right to Sell Township LinesRun parallel to the base line and are six miles apart Tenancy at sufferanceTenant is allowed to live on property after lease is over but before they are forced off the property Littoral RightsRights granted to owners of land that are bordering navigable lakes, seas, and oceans MortgagorBorrower Percentage LeaseBased on a percentage of the monthly or annual gross sales made on the premises Sections in a Township36 The agent gets to keep everything he can get that's more than the sale price the owner wants. (illegal in ohio) Termination of Agency Actual Evictionphysical expulsion of a person from land or rental property (relieves lessee from owing rent) Life EstateForm of joint ownership, with a life tenant and remainderman. The remainderman cannot take possession until the life tenant has passed away. Life tenants cannot sell or mortgage the property without the approval of the remainderman LeadDeed Restrictions Privately created rules between parties regarding the use and improvement of real property Common Homeowner's Associations Regulations Erosiongradual wearing away of land by natural forces Joint Tenants2 or more people own equal rights with the right of survivorship Capital GainNet selling price of a property - its adjusted basis Acres to Square Feet1 acre = 43,560 Gross LeaseLessee pays the property owner a flat rental fee in exchange for the exclusive use of the property (includes taxes, utilities, and insurance)

Special AssessmentsLong term taxes used to pay for things like schools, parks, and emergency services sellers have the right to use as many brokers as they want.However, the seller isn't obligated to pay any of them if they sell the property without the broker's help Net Listing ID the address and parties involvedPrice and termsClosing date and costsTaxes and special assessmentsfixtures includedearnest money amountclosing costs and who's payingcontingencies When does an offer become binding?Agent gets paid if any broker sells the property, but not if the seller finds the buyer on their own Open Listing Adjusted BasisInvestor's initial cost + cost of physical improvements - depreciation claimed as a tax deduction Riparian RightsCommon-law rights granted to owners of land along the course of a river, stream, or similar flowing body of water both parties exchange promises to perform Unilateral contract Title Theory StateBanks or mortgage lenders hold the title of a property until it is paid in fullForeclosure occurs through non-judicial proceedings, so lenders can foreclose without a hearing MortgageeLender Once the Offer is signed by the Buyer and the Seller, and the contained contingencies are met time is of the essence clause the role of an Agent before the client elects the Agent as a buyer or seller's representativeWhen a real estate licensee works as a facilitator that licensee assists the seller and/or buyer in reaching an agreement but does not represent either the seller or buyer in the transaction COALD (agency duties) Bundle of Rightsright of possessionright to control the property (within the framework of the law)right of enjoyment (use the property)right of exclusion (keep others from entering)right of disposition (transfer) Capitalization RateIndicates the rate of return that is expected to be generated

on a real estate investment propertyFormula:Net Operating

Income / Current Market Value sum of housing expenses (mortgage principal and interest payments; also look at other regular costs - homeowners and hazard insurance, utility bills, property taxes, homeowners association fees, and mortgage insurance) is divided by the borrower's income to arrive at the housing expense ratio (should be 28% or less) Special Agency Subsurface RightsRights to the natural resources below the earth the agent gets paid no matter who sells the propertyExclusive Agency Tenants in commonOwnership where tenants could have different amounts of ownership. If passed away heir will take over the undivided ownership (no survivorship)

Fees paid directly to the lender at closing in exchange for a reduced interest rate (1 point = 1% of the loan amount) PMI (private mortgage insurance) All 4 things combined into one fee, used to understand a

monthly payment for a mortgageTaxes: general rule to

allow $1 of taxes for every $1,000 of the selling price Conventional Loan Base LinesRun east and west a financial instrument that contains a written promise by one party (the note's issuer or maker) to pay another party (the note's payee) a definite sum of money, either on demand or at a specified future dateContains all the terms pertaining to the indebtedness (principal amount, interest rate, maturity date, date and place of issuance, and issuer's signature) PITI (principal, interest, taxes, and insurance) Acres in a Section640 Tenancy by the EntiretySpouses with equal undivided ownership interests OptionThe seller offers the buyer the option to buy a property by a specified period of time at a fixed price requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loansLoans covered under TILA allow you three days to reconsider your decision and back out of the loan process without losing any money (right of rescission) RESPA (December 1974) Ad Valorem TaxTaxes placed on homes based on their value makes the current claim senior to any existing claims that have already been recorded Addendum a clause that requires one party in a real estate contract to fulfill his or her obligations within a certain time frame Key Elements of Lease Agreements Offer and AcceptanceIntention to create binding relations (offer + acceptance = meeting of the minds)ConsiderationLegal capacityHas to be legal Void Contract Tests of a Fixture (MARIA)- Method of annexation (how permanent?)- Adaptability for the land's ordinary use (was the fridge made to match the cabinets?)- Relationship of the parties (court favors tenant over landlord and buyer over seller)- Intention- Agreement of the parties Net Leaselessee pays a portion or all of the taxes, insurance fees, and maintenance costs for a property in addition to rent Architectural controlsLawn and holiday decoration restrictionsHome maintenance standardsNoise complaint policiesHome occupancy limitsParking rules and guidelinesPet size and quantity limitsShort-term rental restrictionsTrash and recycling rules Mortgage/Discount Points Tenancy at WillNo written agreement, and can be terminated at any time by landlord or tenant

General LienApplies to all property Land Contract (Contract for Deed)A written contract of seller financing, where the buyer makes payments until the price is paid in full. As soon as the buyer is making payments, they have an equitable title to the property Lot and BlockUses lot and block numbers referred to in a plat map that is filed in the public records of the county (mostly used in subdivisions and urban areas)Is always based on a parcel of land that is described in metes and bounds or the government system Provides consumers with improved disclosures of settlement costs and to reduce the costs of closing by the elimination of referral fees and kickbacks Equal Credit Opportunity Act Specific Lienonly applies to a specific property FHA, USDA, and VA loansFHA Loans Help make homeownership possible for borrowers who don't have a large down payment saved up or don't have

pristine creditHave to have:580 FICO score to have a 3.5%

down payment500 FICO score to put down 10%Require 2 mortgage insurance premiums (one up front, and one annually if you put down less than 10%) VA Loans Do not require a down payment or PMI, and closing costs are generally capped and may be paid by the sellerA funding fee is charged on VA loans as a percentage of the loan amount to help offset the program's cost to taxpayers Bridge Loan AccretionIncrease in land caused resulting from the deposit of soil CompletionExpirationTermination by force of law (incapacity, change in law)Destruction of property/death of principalMutual agreement Environmental Issues Requiring Disclosure Constructive EvictionLandlord so materially disturbs a tenant's enjoyment of the leased premises that the tenant is forced to move out and terminate the lease Buildings built before 1978 are much more likely to have lead-based paint.1. Inform the seller of their obligations under the Real Estate Notification and Disclosure Rule2.Provide an information pamphlet on identifying and controlling lead-based paint hazards3. Provide a 10-day period to conduct a paint inspection or risk assessment for lead-based paint or lead-based paint hazards (buyers can choose to waive this) Latent Defects Defects the homeowner knows about that wouldn't be seen in a regular inspection (mold, fires, foundation issues, leaks, etc.) (must be reported to the buyer) Material Fact Government SurveyUses principal meridians, base lines, township lines, and townships