Virginia national and state PSI real estate study flashcards

Virginia national and state PSI real estate study flashcards Flashcards Proposed uses or changes in uses that should trigger inquiry about public or private land use controls the agent need not disclose anything about adjacent properties, land use regulations, or highways or streets near the property, even if the agent knows about issues or problems Cost approachThe process of estimating the value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation.Agency Relationshipbetween the broker and the principal created by contractual agreemen Requirements for validityA valid home purchase agreement must be in writingThe contract must contain an offer and an acceptanceThe purpose of the agreement must be legalThere must be an exchange of things of value (usually, it's money for property) note and mortgagepromissory note secured by a specified mortgage loan.PITIPrincipal, Interest, Taxes, Insurance Adjustable-rate mortgage loansthe interest rate changes according to economic conditions Types of hazardslead, asbestos (which causes mesothelioma), carbon monoxide, formaldehyde (which causes SBS), radon (second leading cause of lung cancer), and underground storage tanks.Termination of agency -Mutual AgreementAgreement of both parties would end the agency.Superfund Amendments and Reauthorization Act (SARA)amended CERCLA once again in 1986. This amendment added many important changes to the program. It stressed more permanent remedies for environmental hazards and encouraged states to more strongly consider requirements and standards of other states to increase protection.buyer agencythe firm and employees represent only buyers in real estate transactions Land ContractThe seller accepts a down payment on a parcel of land but title to the property does not pass until the last principal payment has been received. This is referred to as an installment sales contract or a contract for a deed.Situations requiring appraisal by certified appraiserall transactions of $1,000,000 or more.master plansis a set of laws enacted by state, county and city governments to determine the required design and construction standards for home construction. For example, building codes determine how electrical, plumbing and framing must be built. ... Building codes are enforced by the

building permit process.Nonexclusive right-to-represent contracts provides for compensation to be paid to the broker if the broker proposes the house the buyer decides to buy or otherwise represents the buyer.

Debt ratioslook at how much borrowing a company has done in order to finance the operations of the business Termination of agency - ExpirationGenerally, a listing agreement will include a time frame it is in effect. If the property is not sold within this time frame, it will cause a termination of the agency. If there is no time limit in the listing agreement, it may be terminated after a "reasonable" period.Government disclosure requirements (LEAD) Federal law requires that before being obligated under a contract to buy housing built prior to 1978, buyers must

receive the following from the homeseller: An

EPA-approved information pamphlet on identifying and controlling lead-based paint hazards titled Protect Your Family From Lead In Your Home (PDF).Real Property Sales ContractAn agreement to convey title to real property upon satisfaction of specified conditions which does not require conveyance within one year of formation of the contract.Private Controlsdeed restrictions Equal Credit Opportunity ActGives all applicants the same rights. Credit providers may

not discriminate based on: Age, Social Security, Housing

loans.interestA sum paid or charged for the use of money or for borrowing money Termination of agency - Completion/performance The most common termination of agency in this category is by performance. Performance is the completion of the agency's purpose. For example, a broker hired to sell a property sells the property. This performance would terminate the agency.Escheatgovernments reversionary right. Abandoned property of intestate owners with no heirs may revert to the state.Economic Principles of Value1. Principle of Anticipation2..Principle Of Demand, Supply, and Desire3.Principle Of Substitution4. Principle Of Balance5.Principle Of Progression6.Principle Of Regression` 6-Principle of Anticipation-Buyers buy properties for future benefits.2.Principle Of Demand, Supply, and Desire-The scarcity of a commodity influences its value by creating a greater demand for the item3.Principle Of Substitution-The value of a property tends to be set at the cost of an equally desirable substitute property4.Principle Of Balance-This principle refers to the relationship between cost, added cost and the value it returns5.Principle Of Progression-The idea behind this principle is, the price of a property escalates with an increased perceived value of a location.6.Principle Of Regression-The price of a property decreases with a reduced perceived value of a site.SuperfundA fund created by Congress in 1980 to clean up hazardous waste sites. Money for the fund comes from taxing chemical products.

truth in lending disclousureA Truth-in-Lending Disclosure Statement provides information about the costs of your credit. Your Truth-in-Lending form includes information about the cost of your mortgage loan, including your annual percentage rate (APR) credit scoringa method of evaluating an applicant's creditworthiness by assigning values to such factors as income, existing debts, and credit references Conventional loansa home buyer's loan that is not offered or secured by a government entity. It is available through or guaranteed by a private lender or the two government-sponsored enterprises-Fannie Mae and Freddie Mac Adjusting Comparablesdeduct from comp if better than subject; add to comp if worse than subject RESPAReal Estate Settlement Procedures Act - requires special information booklet, requires good faith estimate, requires uniform settlement statement Asbestosis a mineral that has natural insulating and fireproofing capabilities. Until the 1980s, construction and manufacturing industries valued the mineral for these capabilities, and used it as an additive in building products and insulation.*FHA insured loans (Federal Housing Administration)a mortgage that is insured by the Federal Housing Administration (FHA) and issued by an FHA-approved lender.Responsibilities of agent to customers and third parties honesty No statement or action can result in fraud or misrepresentation. All laws and regulations pertaining to the transaction must be obeyed, including the disclosure of material facts.Void, Voidable, and Unenforceable Contracts Essentially, the difference between void and voidable

contracts is enforceability: a void contract is illegal and

unenforceable; a voidable contract is legal and enforceable. A contract that is void is unenforceable, meaning that neither party has legal recourse against the other for a breach.police powerEnacts and Enforces laws governing land use - public control of land ( Eg. zoning, building codes, etc) Sales or market comparison approachcompares recently-sold local similar properties to the subject property.agency agreementsCreate agency relationship between owner and seller Income Analysis Approachuses the income the property generates to estimate fair value Deed of TrustA deed to real property, which serves the same purpose as a mortgage, involving three parties instead of two. The third party holds naked title for the benefit of the lender.