IN Real Estate cheat sheet

Real property includes land, fixtures, appurtenances, and the bundle of rights; personal property is movable and not permanently attached.

Fixture tests are annexation, adaptation, and intent; the parties' intent generally controls whether an item is realty.

Fee simple absolute is the most complete estate, lasting indefinitely and inheritable; a life estate ends at the measuring person's death.

Tenancy in common has separate undivided interests and no survivorship; joint tenancy has equal interests with right of survivorship.

Tenancy by the entirety is available only to spouses and generally includes survivorship; community property exists only in community property states.

An easement appurtenant benefits a dominant parcel and burdens a servient parcel; an easement in gross benefits a person or entity.

A lien-theory state treats a mortgage as a lien while the borrower retains title; a title-theory state gives the lender title until repayment.

Mineral rights, air rights, and water rights can be severed or limited; riparian rights belong to owners adjacent to water.

Condominium owners hold a unit plus an undivided share of common elements; cooperative owners hold shares in a corporation plus a proprietary lease.

Zoning regulates use, height, bulk, and density under the police power; it does not require compensation for reasonable restrictions.

A nonconforming use existed lawfully before zoning and may continue, subject to rules on expansion, discontinuance, or amortization.

A variance grants relief from a zoning requirement when strict application causes unnecessary hardship; a special exception permits a listed use with conditions.

Spot zoning singles out a small parcel for different treatment and is often invalid if inconsistent with the comprehensive plan.

A comprehensive plan is a policy guide; zoning ordinances and subdivision regulations implement it.

Deed restrictions and covenants are private land-use controls; they run with the land if they touch and concern the land and the parties intended them to bind successors.

Eminent domain requires public use and just compensation; police power regulations that go too far can become a compensable taking.

Building codes, health codes, and subdivision platting rules are examples of government controls separate from zoning.

Indiana local plan commissions and boards of zoning appeals administer planning and variance decisions under state enabling statutes.

Agency can be created by express agreement, implication, ratification, or estoppel; the brokerage relationship should be documented in writing.

Fiduciary duties include loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care.

A seller's agent owes loyalty to the seller; a buyer's agent owes loyalty to the buyer; a customer receives honesty but not fiduciary loyalty.

Dual agency occurs when one agent represents both sides; it requires informed written consent where permitted and limits full loyalty to either party.

A licensee must disclose material facts about the property and the transaction but must not reveal a principal's confidential information.

Confidentiality generally survives termination; loyalty and obedience end when the agency relationship ends.

An agent may not accept undisclosed compensation from a third party without the principal's informed consent.

Agency terminates by completion, expiration, revocation, death or incapacity of a party, or operation of law.

Indiana licensees must explain brokerage relationships and agency options as required by state law before the parties commit.

A valid contract requires offer, acceptance, consideration, capacity, lawful purpose, and mutual assent.

The Statute of Frauds requires real estate sale contracts and leases over one year to be in writing and signed by the party to be charged.

A counteroffer changes terms, rejects the original offer, and becomes a new offer.

Earnest money is a good-faith deposit; the contract states who holds it and how it is disbursed on closing or default.

Contingencies such as financing, inspection, and appraisal must be satisfied or waived by the stated deadline.

A listing agreement is an employment contract, not a transfer of title; it should state price, term, commission, and agency.

Remedies for breach include damages, specific performance, rescission, and liquidated damages when enforceable.

An option gives a buyer the right to purchase within a set period; a right of first refusal gives a chance to match another offer.

Time is of the essence only when the contract says so or the circumstances clearly require strict timing.

A promissory note is the borrower's promise to repay; a mortgage or deed of trust pledges the property as security.

In a lien-theory state, the borrower keeps title and the lender has a lien; in a title-theory state, the lender holds title until repayment.

The loan-to-value ratio equals the loan amount divided by the lesser of the purchase price or appraised value.

PITI equals principal, interest, property taxes, and insurance; lenders also compare total debt to gross monthly income.

Fixed-rate loans have constant principal and interest; adjustable-rate loans change with an index and margin, subject to caps.

The annual percentage rate includes interest and certain finance charges, making it a broader cost measure than the note rate.

Private mortgage insurance is commonly required on conventional loans above 80% LTV and may terminate under federal rules as equity grows.

FHA, VA, USDA, and conventional loans have different insurance, eligibility, and down-payment rules.

Foreclosure may be judicial or nonjudicial; Indiana mortgage foreclosure generally proceeds through court, and borrowers may face deficiency liability unless barred.

A deed must identify the grantor and grantee, contain words of conveyance, include a legal description, be signed by the grantor, and be delivered and accepted.

A general warranty deed warrants against all title defects; a special warranty deed covers defects created by the grantor; a quitclaim deed conveys only the grantor's interest.

Recording gives public notice and establishes priority; Indiana follows a race-notice recording rule for many conveyances.

Title insurance protects against covered defects existing at the policy date; an owner's policy and a lender's policy are separate.

Closing involves prorations, payoff of liens, delivery of the deed, disbursement of funds, and recording.

Marketable title is title reasonably free from defects; insurable title is title a title insurer will accept.

Title can transfer by deed, will, intestacy, adverse possession, foreclosure, or eminent domain.

Indiana property taxes are paid in arrears, with installment due dates of May 10 and November 10 unless adjusted.

A title search and survey help reveal liens, easements, encroachments, and boundary issues before closing.

Market value is the most probable price in a competitive and open market under fair sale conditions; investment value is value to a particular investor.

The sales comparison approach adjusts recent comparable sales for differences from the subject to estimate value.

The cost approach estimates value as land value plus replacement or reproduction cost minus depreciation.

The income approach estimates value by converting net operating income into value using a capitalization rate.

Capitalization rate equals net operating income divided by value; value equals net operating income divided by capitalization rate.

Gross rent multiplier equals sale price divided by gross rent; it is a quick income-based screening tool.

Depreciation includes physical deterioration, functional obsolescence, and external obsolescence.

Highest and best use must be legally permissible, physically possible, financially feasible, and maximally productive.

Appraisals for federally related transactions must follow USPAP and be performed by qualified licensed or certified appraisers.

Federal fair housing law prohibits discrimination based on race, color, religion, sex, national origin, familial status, or disability.

Indiana law adds state protected classes and enforcement through the Indiana Civil Rights Commission; licensees must follow the stricter applicable rule.

Sellers of most residential property in Indiana must provide the state seller's residential real estate sales disclosure form.

Sales and leases of housing built before 1978 require lead-based paint disclosure, the EPA pamphlet, and a 10-day inspection opportunity.

RESPA applies to federally related mortgage loans, requires certain settlement disclosures, and prohibits kickbacks and unearned fees.

TRID combines loan estimates and closing disclosures for most consumer mortgage loans.

Advertising must be truthful, identify the brokerage as required, and avoid discriminatory language.

Licensees must disclose known material defects and cannot make substantial misrepresentations about property condition.

Privacy and do-not-call rules restrict marketing calls and use of consumer information.

Commission equals sale price multiplied by the commission rate; net to seller equals price minus commission, payoffs, and closing costs.

Loan-to-value ratio equals loan amount divided by the lesser of sale price or appraised value; down payment equals price minus loan.

Monthly PITI equals principal and interest plus one-twelfth of annual taxes plus one-twelfth of annual insurance.

Housing expense ratio equals PITI divided by gross monthly income; total debt ratio equals PITI plus other debts divided by gross monthly income.

One acre equals 43,560 square feet; one section equals 640 acres; one square mile equals 640 acres.

Prorations use annual amount divided by 365 times the number of days, unless the contract specifies a 360-day year.

Capitalization rate equals net operating income divided by value; value equals net operating income divided by capitalization rate.

Gross rent multiplier equals price divided by gross rent; monthly gross rent multiplier uses monthly rent.

Appreciation or depreciation equals original value times the rate per period, compounded when applied over multiple periods.

The Indiana Real Estate Commission regulates real estate brokers, adopts rules, and decides disciplinary cases; the Professional Licensing Agency administers licensing.

Indiana entry-level licensure is the broker license; a managing broker supervises a real estate office and must meet additional experience and education requirements.

Broker applicants must be at least 18, have a high school diploma or GED, complete required prelicensing education, pass the exam, and clear a background check.

Licensees must complete the continuing education required by the Commission before renewal and retain proof of completion.

Commissions and referral fees may not be paid to unlicensed persons for real estate brokerage activity.

Trust funds must be kept in a proper escrow or trust account; commingling with personal or business funds is prohibited.

Advertising must not be false or misleading and must identify the brokerage as required by Commission rules.

Unlicensed assistants may perform clerical work but may not negotiate, advise on material terms, or perform licensed brokerage activities.

The Commission may impose penalties including reprimand, suspension, revocation, and civil penalties for violations of license law.