DE Real Estate flashcards

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

Fiduciary duties

A licensee owes the principal care, obedience, loyalty, disclosure, accounting, and confidentiality; these duties arise from the agency relationship and continue while it exists.

Dual agency

A broker represents both buyer and seller in one transaction; Delaware requires informed written consent from both parties and impartial treatment, with limitations on confidential information.

Statute of Frauds

A legal rule requiring certain contracts, including most agreements for an interest in real estate, to be in writing and signed by the party to be charged.

Exclusive right to sell

A listing in which the broker earns a commission if the property sells during the listing period, regardless of who produced the buyer, including the owner.

Fee simple absolute

The broadest freehold estate; it lasts indefinitely, is inheritable, and has no conditions or limitations on transfer, subject only to government powers and private encumbrances.

Easement appurtenant

An easement that benefits a dominant parcel and burdens a servient parcel; it transfers with the benefited land even if not mentioned in later deeds.

Tenancy in common

A form of co-ownership in which each owner holds an undivided interest, may convey that interest, and has no right of survivorship; interests need not be equal.

Nonconforming use

A land use that lawfully existed before a zoning ordinance made it prohibited; it may generally continue but cannot be expanded without approval or amortization under local rules.

Sales comparison approach

A valuation method that estimates value by comparing recent sales of similar properties and adjusting each comparable for differences from the subject property.

Capitalization rate

The relationship between a property's net operating income and value, calculated as NOI divided by value; it is used to convert income into an indicated value.

Gross rent multiplier

A market indicator calculated as sale price divided by gross monthly or annual rent; it is applied to the subject's rent to estimate value.

Highest and best use

The reasonably probable use that is legally permissible, physically possible, financially feasible, and maximally productive, producing the highest value for the land or property.

Loan-to-value ratio

The loan amount divided by the property's value or purchase price, expressed as a percentage; lenders use it to assess risk and set mortgage insurance requirements.

Discount points

Fees paid at closing to reduce the mortgage interest rate; one point equals one percent of the loan amount and may be tax-deductible as mortgage interest.

Closing Disclosure

A federal mortgage disclosure that summarizes final loan terms and closing costs; it must be delivered to the borrower at least three business days before consummation.

Escrow account

An account in which a lender collects part of property taxes and insurance with each mortgage payment and pays those bills when due.

General warranty deed

A deed in which the grantor warrants title against all defects, including those created by the grantor and prior owners, and promises to defend the title.

Quitclaim deed

A deed that transfers only whatever interest the grantor may have, with no warranty of title; it is common in family transfers and curative transactions.

Constructive notice

Knowledge of a property interest that the law imputes to the public because the document is properly recorded in the public land records.

Race-notice recording

A recording rule that protects a later purchaser who takes without notice of a prior interest and records first; Delaware follows this type of recording statute.

Fair Housing Act

A federal law prohibiting discrimination in housing based on race, color, religion, sex, national origin, familial status, or disability in sale, rental, financing, and advertising.

Lead-based paint disclosure

For most housing built before 1978, sellers and landlords must disclose known lead-based paint hazards and provide the approved pamphlet and opportunity for inspection.

Antitrust violation

An agreement among competitors that restrains trade, such as price fixing, group boycotting, or market allocation; real estate professionals may not engage in such conduct.

Adverse action notice

A notice required under consumer credit law when a lender denies credit or changes terms based on credit information, stating reasons or rights.

Delaware Real Estate Commission

The state board within the Division of Professional Regulation that licenses and disciplines real estate brokers, associate brokers, and salespersons and adopts rules governing practice.

Commingling

Mixing client or transaction funds with a licensee's personal or brokerage operating funds; trust funds must be handled through a proper escrow or trust account.

Broker supervision

The designated broker is responsible for supervising affiliated licensees, reviewing their transactions, and ensuring compliance with license law and Commission rules.

Unlicensed assistant

A person who may perform clerical or administrative tasks for a brokerage but may not negotiate, solicit, or perform acts requiring a real estate license.

Commission calculation

A brokerage fee is computed by multiplying the sale price by the agreed commission rate; for example, six percent of two hundred thousand dollars equals twelve thousand dollars.

Mill rate

A property tax rate expressed in mills, where one mill equals one dollar of tax per one thousand dollars of assessed value; tax equals assessed value times mill rate divided by one thousand.

Equity

The owner's financial interest in property, calculated as current market value minus outstanding mortgage debt and other liens against the property.

Acre conversion

One acre equals forty-three thousand five hundred sixty square feet; to convert square feet to acres, divide the square footage by forty-three thousand five hundred sixty.