CeRER flashcards
CeRER · Build recall with a focused review session.
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; perpetual, inheritable, and freely transferable, subject only to government powers and private restrictions.
- Joint tenancy
- Co-ownership with equal shares and right of survivorship; requires four unities: time, title, interest, and possession.
- Tenancy in common
- Co-ownership with possibly unequal shares and no right of survivorship; each owner may sell or will their share.
- Fixture test
- Determines if personal property became realty by examining annexation, adaptation to the property, and the parties' intention.
- Adverse possession
- Acquiring title by actual, open, notorious, exclusive, hostile, and continuous possession for the statutory period.
- Sales comparison approach
- Estimates value by adjusting comparable sales to the subject; add for inferior comps and subtract for superior comps.
- Capitalization rate
- Rate used to convert net operating income into value: cap rate = NOI ÷ value; value = NOI ÷ cap rate.
- Gross rent multiplier
- Sale price divided by gross monthly rent; multiplied by subject rent to estimate value in the income approach.
- Net operating income
- Effective gross income minus operating expenses; excludes debt service, depreciation, income taxes, and capital improvements.
- Highest and best use
- The use that is legally permissible, physically possible, financially feasible, and maximally productive, producing the highest value.
- Exclusive right to sell
- Listing agreement where the broker is paid regardless of who procures the buyer, including the seller.
- Exclusive agency listing
- Listing where the broker is paid if anyone except the seller procures the buyer; seller retains right to sell without paying.
- Open listing
- Non-exclusive listing; seller may use multiple brokers and pays only the broker who procures the buyer.
- Buyer representation agreement
- Written agreement establishing agency, duties, compensation, term, and scope between buyer and broker.
- Pre-approval
- Lender's written conditional commitment after reviewing income, assets, credit, and documents; stronger than pre-qualification.
- Statute of frauds
- Requires real estate contracts to be in writing and signed by the party to be charged to be enforceable.
- Earnest money
- Buyer's deposit showing good faith; held in trust and applied to purchase price or disbursed per contract on default.
- Contingency
- Contract condition that must be satisfied or waived by a deadline, such as financing, appraisal, inspection, or sale of buyer's home.
- Lead-based paint disclosure
- Required for sales and leases of pre-1978 housing; disclose known hazards and provide EPA pamphlet and acknowledgment.
- Specific performance
- Equitable remedy compelling a party to perform contract terms; common in real estate because each property is unique.
- Loan-to-value ratio
- Loan amount divided by property value or purchase price, whichever is lower; determines down payment and mortgage insurance.
- PITI
- Principal, interest, taxes, and insurance; the standard monthly housing expense used in qualifying and escrow analysis.
- Back-end ratio
- Total monthly debt payments including housing divided by gross monthly income; used by lenders to assess capacity.
- Amortization
- Scheduled repayment of a loan with regular payments applying interest first and reducing principal over time.
- Loan Estimate
- TRID disclosure provided within three business days of a mortgage application, summarizing loan terms and closing costs.
- Closing Disclosure
- TRID form provided at least three business days before closing, detailing final loan terms and settlement costs.
- Fiduciary duties
- Obligations owed by an agent to a principal: care, obedience, loyalty, disclosure, confidentiality, accounting, and reasonable skill.
- Dual agency
- Representing both buyer and seller in one transaction; requires informed written consent and may be limited by state law.
- Fair housing protected classes
- Federal classes: race, color, religion, sex, national origin, familial status, and disability; state and local laws may add more.
- Blockbusting
- Illegal practice of inducing panic selling by suggesting that members of a protected class are moving into a neighborhood.
- RESPA Section 8
- Prohibits kickbacks and unearned fees for referrals of settlement service business; penalties include fines and imprisonment.
- Antitrust violations
- Price fixing, group boycotts, and market allocation among competitors; commissions and fees must remain negotiable.