AR Real Estate flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Fee simple absolute

The most complete ownership estate; it lasts indefinitely, is inheritable, and carries no conditions or limitations. It may be conveyed freely and is not defeated by the prior owner's heirs.

Easement appurtenant

An easement that benefits one parcel (the dominant tenement) and burdens another (the servient tenement). It passes automatically with the land when either parcel is transferred.

Tenancy in common

Co-ownership by two or more persons holding undivided interests that may be unequal, with no right of survivorship. Each owner may sell, mortgage, or will their share independently.

Right of survivorship

A feature of joint tenancy in which a deceased co-owner's share passes automatically to the surviving joint tenants outside probate. Joint tenancy requires unity of time, title, interest, and possession.

Prescriptive easement

An easement acquired by open, notorious, continuous, and adverse use of another person's land for the statutory period without the owner's permission, as though the use were a right.

Fixture determination tests

Courts weigh method of attachment, adaptability to the property's use, relationship of the parties, intention of the person who annexed the item, and any agreement to decide whether an item is real property.

Police power in land use

The government's authority to regulate private property for public health, safety, and welfare through zoning, building codes, and subdivision rules. Unlike eminent domain, it requires no compensation.

OLD CAR fiduciary duties

Obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care and diligence. These are the duties a real estate agent owes to the client who has engaged the agent.

Dual agency

Representing both the buyer and the seller, or two buyers, in the same transaction. It requires written informed consent from all parties because loyalty duties to each client conflict.

Procuring cause

The agent whose uninterrupted efforts produced the buyer who is ready, willing, and able to purchase on the seller's terms. It is the usual basis for claiming a commission in a dispute.

Commingling

Placing client money, such as earnest money, rents, or security deposits, into the broker's business or personal account instead of a separate trust account. It is a license-law violation.

Agency by estoppel

An agency relationship created when a principal's words or conduct lead a third party to reasonably believe that someone is the principal's agent and the third party relies on that belief.

Confidentiality after termination

The duty to keep a former client's confidential information secret continues after the agency relationship ends, even though the duties of loyalty and obedience have ended.

Statute of frauds

A legal rule requiring real estate contracts, deeds, and leases longer than one year to be in writing and signed by the party to be charged before a court will enforce them.

General warranty deed

A deed containing six covenants, including seisin, right to convey, quiet enjoyment, and warranty forever, under which the grantor defends title against claims arising from any period.

Quitclaim deed

A deed that transfers only whatever interest the grantor may hold, with no warranties of title. It is often used to clear defects or move interests between family members.

Race-notice recording statute

A law protecting a later purchaser who records first and takes without notice of a prior unrecorded interest. Arkansas follows this rule, so recording order and notice both matter.

Marketable title

Title that is free from reasonable doubt and from liens, encumbrances, and serious defects, so that a court would require a buyer to accept it under the contract.

365-day proration method

A settlement calculation that divides an annual or monthly item by the exact number of days in the year or month, allocating the cost between buyer and seller by closing date.

Earnest money

A deposit a buyer gives to show good faith and bind the sales contract. It is usually held in escrow and may be forfeited as liquidated damages if the buyer defaults.

Direct capitalization

An income-approach valuation method that estimates value by dividing a property's net operating income by a market-derived capitalization rate: Value equals NOI divided by cap rate.

Net operating income

Effective gross income minus operating expenses, calculated before debt service, depreciation, capital improvements, and income taxes. It is the key figure in income-approach valuation.

Loan-to-value ratio

The loan amount divided by the property's appraised value or purchase price, expressed as a percentage. Lenders commonly require mortgage insurance when the ratio exceeds 80 percent.

Debt service coverage ratio

Net operating income divided by annual debt service. Lenders use it to measure whether a property's income comfortably covers its mortgage payments; higher ratios indicate lower default risk.

Cash-on-cash return

Annual before-tax cash flow divided by the cash the investor actually put into the property. It measures the return earned on invested equity rather than on total property value.

Discount points

Prepaid interest a borrower pays at closing to obtain a lower note rate. One point equals one percent of the loan amount and is generally tax deductible as mortgage interest.

Arkansas Real Estate Commission

The state agency that licenses real estate brokers and salespersons, adopts licensing rules, investigates complaints, and imposes discipline for violations of Arkansas real estate license law.

Principal broker supervision

In Arkansas the principal broker supervises affiliated licensees and remains responsible for their brokerage activities, including trust account handling and compliance with advertising rules.

Escrow account records

Brokers must keep separate trust account records showing deposits, disbursements, and reconciliations for each transaction, and retain them for inspection by the Arkansas Real Estate Commission.

Blind advertising

Advertising a listed property without identifying the licensed brokerage firm. Arkansas rules require the firm's name in advertising so the public knows who is responsible.

Unlicensed practice

Performing acts that require a real estate license, such as listing or selling property for another person for compensation, without holding a valid Arkansas license.

Fair housing protected classes

Federal and Arkansas law prohibit housing discrimination based on race, color, religion, sex, national origin, familial status, or disability. Steering and blockbusting are prohibited practices.