ND 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 freehold estate; the owner holds title of potentially unlimited duration with all ownership rights, subject only to government powers such as taxation, eminent domain, police power, and escheat.

Easement appurtenant

An easement that benefits a specific parcel of land, the dominant tenement, and burdens another, the servient tenement; it passes automatically with title to the dominant parcel when transferred.

Fixture

An item of personal property attached to real estate so that it becomes part of the realty, determined by annexation, adaptation to the property's use, and the parties' intent; it then transfers with the land.

Tenancy in common

Concurrent ownership in which two or more persons hold undivided fractional interests with no right of survivorship; each owner may convey or devise that share independently of the others.

Life estate

A freehold estate lasting for the lifetime of a named person; the life tenant may use the property but may not commit waste, and the estate passes to a remainderman or reverts to the grantor.

Limited agency (North Dakota)

North Dakota's term for dual agency, where one broker represents both buyer and seller in the same transaction; it requires written disclosure to and informed written consent from all parties before it arises.

Fiduciary duty of loyalty

An agent's duty to act solely in the principal's best interest, placing that interest above the agent's own, disclosing any personal interest in the transaction, and avoiding undisclosed compensation.

Statute of frauds

A legal rule requiring certain contracts, including agreements for the sale of real estate and leases longer than one year, to be in writing and signed by the party to be charged.

Counteroffer

A response to an offer that changes any term; it operates as a rejection of the original offer and creates a new offer that the original offeror may accept or reject.

Liquidated damages

A contract provision setting a predetermined amount, often the earnest money, that the seller keeps if the buyer defaults; the amount must reasonably estimate the actual loss.

Capitalization rate

Net operating income divided by property value or price; it expresses the return an investor expects from a property's income and is used to convert income into an estimate of value.

Net operating income

A property's effective gross income minus operating expenses, excluding debt service, depreciation, income taxes, and capital improvements; it is the income figure capitalized to estimate value.

Gross rent multiplier

Sale price divided by the property's gross monthly rent; a screening tool for comparing similar income properties, with a lower multiplier indicating a higher relative income yield.

Functional obsolescence

A loss in value caused by outdated design, layout, or features that make a property less useful or desirable than newer alternatives, such as a poor floor plan or inadequate wiring.

Loan-to-value ratio

The loan amount divided by the property's appraised value or purchase price, whichever is lower; lenders use it to gauge risk and to decide whether mortgage insurance is required.

General warranty deed

A deed in which the grantor warrants title against all defects, present and past, through covenants of seisin, quiet enjoyment, warranty, further assurances, and freedom from encumbrances.

Constructive notice

Notice of recorded documents that the law imputes to everyone, whether or not they actually know of them; recording an interest in the county records gives the world legal notice.

Quitclaim deed

A deed that transfers only whatever interest, if any, the grantor holds in the property, with no warranties of title and no guarantee that the grantor owns anything.

Proration

The division of accrued expenses and income between buyer and seller at closing so each pays for the period of ownership; taxes, rent, and mortgage interest are typical items.

North Dakota Real Estate Commission

The North Dakota agency that licenses brokers and salespersons, adopts administrative rules, investigates complaints, and imposes discipline for violations of the state's real estate licensing law.

Commingling

Mixing client money, such as earnest money or security deposits, with the broker's personal or business funds; the practice is prohibited and broker trust funds must be kept separate.

Salesperson-broker affiliation

A North Dakota salesperson must be licensed under and affiliated with an active licensed broker, who is responsible for supervising the salesperson's real estate activity and for handling trust funds.

Biennial license renewal

North Dakota real estate licenses are renewed every two years and require completion of continuing education; failing to renew by the deadline results in inactive or expired license status.

Unlicensed assistant limits

An unlicensed assistant may perform clerical and administrative tasks such as answering phones and filing, but may not negotiate terms, quote prices, or perform activities requiring a real estate license.

Exclusive right to sell

A listing agreement in which the seller appoints one broker and agrees to pay that broker a commission regardless of who procures the buyer, including a sale made by the seller.

Open listing

A non-exclusive listing in which the seller may list with several brokers and pays only the broker who procures an acceptable buyer; the seller may also sell without paying a commission.

Trust account

A dedicated bank account a broker uses to hold client funds such as earnest money and deposits; records of receipts and disbursements must be kept and made available to the Commission.

Ready, willing, and able buyer

A buyer who is financially able and legally prepared to purchase on the seller's stated terms; producing such a buyer generally earns the commission even if the seller later refuses to close.

Familial status

A federal fair housing protected class covering households with a child under 18, a pregnant woman, or a person who has legal custody or is seeking custody of a child.

Reasonable accommodation

A change in rules, policies, practices, or services that a housing provider must make when needed so a person with a disability has an equal opportunity to use and enjoy the dwelling.

Blockbusting

An illegal practice in which an agent persuades owners to sell by predicting that members of a minority group will move into the neighborhood, exploiting fear for the agent's profit.

Mrs. Murphy exemption

The federal Fair Housing Act exemption for an owner-occupied building with four or fewer units; it does not permit discriminatory advertising and does not protect licensed agents' conduct.