MS Real Estate cheat sheet

Fee simple absolute is the largest estate of land: potentially infinite duration, freely inheritable, and freely alienable.

A life estate is measured by a named person's life; the holder may possess and use the land but owes duties against waste, and the future interest is a reversion (grantor) or remainder (third party).

Fee simple determinable ends automatically when the stated event occurs and leaves the grantor a possibility of reverter; fee simple subject to condition subsequent requires the grantor to exercise a right of entry; fee simple subject to executory limitation shifts title automatically to a third party.

Tenancy in common gives co-owners separate, possibly unequal undivided shares with no right of survivorship; each owner may possess the whole and may seek partition.

Joint tenancy requires the four unities - time, title, interest, and possession - and carries survivorship; a conveyance by one joint tenant severs the joint tenancy as to that share.

Mississippi is not a community property state; property titled in one spouse's name is not automatically owned one-half by the other spouse.

Fixture classification turns on the method of annexation, adaptation to the realty, and the intent of the party who installed the item; trade fixtures installed by a tenant generally remain the tenant's personal property.

Land includes surface, airspace, and subsurface mineral rights, which may be severed and owned separately; water rights follow riparian or prior-appropriation doctrines depending on the jurisdiction.

A valid deed requires a competent grantor, a named grantee, words of conveyance, a sufficient legal description, execution by the grantor, and delivery with present intent to convey; acceptance by the grantee is presumed.

A general warranty deed contains covenants of seisin, right to convey, against encumbrances, quiet enjoyment, and warranty; the future covenants run with the land to later grantees.

A special warranty deed limits the grantor's warranty to defects arising during the grantor's own ownership, while a quitclaim deed conveys only whatever interest the grantor may hold with no warranties.

Recording acts allocate priority: race (first to record wins), notice (later bona fide purchaser without notice wins), and race-notice (bona fide purchaser who records first wins); recording gives constructive notice to the world.

Lien priority rules: property tax liens ordinarily outrank all private liens; mechanics' liens typically relate back to commencement of work; a purchase-money mortgage beats earlier judgments against the purchaser.

An easement appurtenant benefits and burdens neighboring parcels and runs with the land; an easement in gross benefits a person or entity and is not tied to a dominant parcel.

An easement by prescription requires use that is open and notorious, adverse, continuous, and for the statutory period.

Adverse possession requires possession that is actual, open and notorious, exclusive, hostile, and continuous for the statutory period; some states add color of title or tax payment.

Evidence of title includes an abstract with an attorney's title opinion, a title insurance policy, and Torrens registration in jurisdictions that use it.

Fiduciary duties owed by an agent: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care (commonly memorized as OLD CAR).

Single agency represents one party; dual agency represents both parties in the same transaction and requires informed written consent; designated agency assigns different licensees within one brokerage to each side.

Mississippi recognizes transaction brokerage, in which a licensee assists both parties without representing either as an agent; the relationship requires disclosure and consent.

Agency may be created by express agreement (written or oral), implication from conduct, ratification of an unauthorized act, or estoppel.

Agency terminates by performance, expiration of term, mutual agreement, revocation by the principal, renunciation by the agent, or death, incapacity, or bankruptcy of either party - except an agency coupled with an interest.

Confidentiality survives termination of the agency, but it never excuses withholding known material adverse facts about the property.

Commingling (mixing client or trust funds with personal or brokerage funds) and conversion (misusing trust funds) are license-law violations.

Compensation does not itself create an agency relationship; a broker may be paid by a party whom the broker does not represent.

Elements of a valid contract: offer, acceptance, consideration, capacity, and legality; mutual assent means a meeting of the minds on the same terms.

Statute of frauds: contracts for the sale of land and leases longer than one year must be in writing, signed by the party to be charged, and identify the parties, the property, and the essential terms.

Earnest money is consideration supporting the buyer's promise and typically serves as liquidated damages if the buyer defaults without a valid contingency excuse.

Contingencies - financing, inspection, appraisal, sale of the buyer's home - must be satisfied or expressly waived by the stated deadlines.

An assignment transfers a party's rights and duties to a third party; a novation substitutes a new party or obligation and releases the original; subordination changes lien priority.

An option gives the optionee the right to buy on stated terms within a stated period; the optionor must not sell to another buyer during the option term.

A time-is-of-the-essence clause makes deadlines enforceable; the merger doctrine extinguishes most pre-closing contract terms when the deed is delivered.

Equitable conversion: once a sale contract is enforceable, the buyer holds equitable title and often bears risk of loss, subject to the contract and state law.

Loan-to-value ratio = loan amount divided by the lower of purchase price or appraised value; down payment = purchase price minus loan amount.

PITI = principal + interest + property taxes + hazard insurance, frequently expanded in underwriting to include mortgage insurance and HOA dues.

Conventional loans are not government insured; FHA loans require mortgage insurance premiums with lower down payments; VA loans offer no-down-payment financing with a funding fee; USDA loans target rural areas.

Fully amortizing fixed-rate loans retire the balance over the term; balloon loans leave a lump-sum balance due; interest-only and negative-amortization loans do not reduce principal on schedule.

Adjustable-rate mortgage pricing: index + margin = fully indexed rate, limited by periodic and lifetime caps and often starting with a teaser rate.

Discount points are prepaid interest equal to one percent of the loan amount and buy a lower note rate; origination fees compensate the lender for making the loan.

Regulation Z/TRID requires a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before consummation.

RESPA Section 8 prohibits kickbacks and unearned fee splits for settlement-service referrals; escrow account rules limit the lender's cushion to one-sixth of annual disbursements.

Homeowners Protection Act: the borrower may request private mortgage insurance cancellation at 80% LTV based on original value, and PMI terminates automatically at 78%.

Market value is the most probable price in an arm's-length transaction between an informed, willing buyer and seller, neither under undue pressure, with the property exposed to the market.

Sales comparison approach: adjust closed comparables to the subject's characteristics; add value when the comparable is inferior and subtract when the comparable is superior.

Cost approach: value = land value + replacement cost new - accrued depreciation; it is most reliable for new construction and special-purpose property with few sales.

Depreciation consists of physical deterioration, functional obsolescence, and external (economic or locational) obsolescence.

Income approach: value = net operating income divided by capitalization rate; capitalization rate = NOI divided by price; gross rent multiplier = price divided by gross monthly rent.

Net operating income = effective gross income minus operating expenses; it excludes debt service, depreciation, and capital improvements.

Highest and best use must be legally permissible, physically possible, financially feasible, and maximally productive, and is tested both as vacant and as improved.

Reconciliation weights the approaches by relevance and reliability to reach a single value conclusion; it is a judgment, not a simple average of the approaches.

USPAP requires appraisers to be competent and unbiased and to retain a workfile for five years after the report or two years after final disposition of a related judicial proceeding.

Exclusive right to sell: the broker is paid regardless of who procures the buyer, including a sale by the owner; exclusive agency: the owner may sell personally without paying; open listing: no exclusive right; net listing: the broker's fee is the excess over the seller's net, restricted or prohibited in many states.

A listing agreement should state the term, list price, compensation, duties of the parties, and any authority to cooperate with other brokers.

Months of inventory = active listings divided by average monthly sales; roughly five to six months suggests a balanced market, lower favors sellers, higher favors buyers.

Overpricing typically produces fewer showings, extended days on market, eventual price reductions, and appraisal risk for the buyer's financing.

A comparative market analysis by a licensee is a pricing opinion from recent sales, active competition, and expired listings; an appraisal is a licensed, USPAP-compliant valuation.

A seller net sheet estimates proceeds as sale price minus loan payoff, closing costs, commissions, and prorations of taxes, rents, and other items.

Offer handling: the seller may accept, counter, or reject; multiple-offer situations must follow the listing terms and fair-dealing requirements, and all offers should be presented promptly.

Transaction coordination tracks contract deadlines: earnest money deposit, inspection and repair requests, financing and appraisal, title commitment, final walk-through, closing disclosure, and possession.

Federal Fair Housing Act (1968, amended 1988) protected classes: race, color, religion, sex, national origin, familial status, and disability; state and local laws may add classes.

Prohibited practices include refusing to sell or rent, offering different terms or conditions, discriminatory advertising, steering, blockbusting, redlining, and retaliation.

Disability: a reasonable accommodation is a change in rules, policies, or services at the housing provider's expense; a reasonable modification is a structural change, generally at the tenant's expense unless the law provides otherwise.

Exemptions are narrow: the Mrs. Murphy exemption covers owner-occupied buildings of four or fewer units with no discriminatory advertising and no brokerage services; HOPA allows 55-and-over communities meeting occupancy requirements.

Jones v. Mayer holds that 42 U.S.C. section 1982 bars all racial discrimination in the sale or rental of property, public or private, with no exemptions.

Advertising must avoid references to protected classes and should carry the Equal Housing Opportunity logo or statement.

RESPA bars referral kickbacks and unearned fee splits; TILA/Regulation Z requires disclosure of credit costs; the Do Not Call registry and CAN-SPAM regulate solicitation.

NAR Code of Ethics anchors: Article 1 (client's interests), Article 10 (equal opportunity), Article 15 (no knowingly false statements), Article 16 (respect exclusive agency relationships).

Government powers over land: police power (zoning, building codes) needs no compensation; eminent domain requires public use plus just compensation; taxation and escheat are the remaining powers.

Euclid v. Ambler upheld comprehensive use-based zoning as a valid exercise of police power.

A nonconforming use existed lawfully before the ordinance and may continue, but it generally cannot be expanded and may be lost after discontinuance.

A variance relieves a unique hardship of the land (use or dimensional); a conditional or special-use permit authorizes a listed use subject to conditions.

Exactions must satisfy the essential nexus and rough proportionality tests (Nollan, Dolan); an unconstitutional regulation may be a taking requiring compensation.

A comprehensive plan guides the zoning map and ordinance; bulk regulations include setbacks, height limits, lot coverage, and floor-area ratio.

CERCLA imposes strict, joint and several liability for cleanup on current owners and operators, owners at the time of disposal, generators, and transporters; the innocent landowner defense requires due care and a Phase I environmental site assessment.

Section 404 of the Clean Water Act requires permits for dredge and fill of wetlands and other waters; lead-based paint disclosure is required for pre-1978 housing, along with the EPA pamphlet.

The Mississippi Real Estate Commission (MREC) administers the state real estate license law and rules, issues and renews licenses, investigates complaints, and may fine, suspend, or revoke licenses.

A Mississippi salesperson must be affiliated with a licensed broker, and compensation for brokerage services must flow through the broker rather than directly to the salesperson.

Mississippi licenses are renewed on a biennial cycle and require continuing education as set by MREC rules.

Brokers must keep trust or escrow funds separate from operating funds; commingling and conversion are grounds for disciplinary action.

Advertising rules require the licensed brokerage name to appear as MREC rules prescribe, and each office must be licensed as required.

Mississippi recognizes transaction brokerage; the licensee must disclose the agency or transaction-broker relationship and obtain the parties' consent as required by law.

The Mississippi Real Estate Recovery Fund may pay unsatisfied court judgments against licensees arising from fraud or conversion, subject to statutory limits and claim procedures.

Foreclosure of a Mississippi deed of trust is ordinarily nonjudicial: the trustee conducts a sale after statutory notice, without court action, when the instrument contains a power of sale.

Mississippi requires a written residential property condition disclosure statement in residential sales, covering known material defects in the property.