NE Real Estate cheat sheet

Freehold estates: fee simple absolute (potentially infinite duration); fee simple determinable (ends automatically on the stated event and reverts to the grantor); fee simple subject to a condition subsequent (grantor must re-enter or declare forfeiture); life estate (measured by a named life, or pur autre vie).

Easements: appurtenant benefits a dominant parcel and passes with it; in gross benefits a person. Creation is by express grant or reservation, implication, necessity, or prescription; termination is by release, merger, abandonment, prescription, or destruction of the servient estate.

Concurrent ownership: tenancy in common has no survivorship and permits unequal shares; joint tenancy has the right of survivorship and requires the four unities (time, title, interest, possession); tenancy by the entirety is limited to spouses and requires both to convey.

Liens: specific liens attach to one parcel (mortgage, mechanic's lien, property tax lien); general liens reach all of the debtor's property (judgment lien). Priority generally follows recording order, subject to statutory superiority of real estate taxes and certain mechanic's liens.

Fixtures: personal property that has become part of the realty. The tests are method of annexation, adaptation to the use of the property, and the intention of the parties; fixtures pass with a conveyance of the land unless reserved.

Zoning regulates use, height, bulk, and density under the police power. A variance relieves a hardship (use or area), a conditional/special use permit authorizes a listed use, and a nonconforming use may continue if it predates the ordinance.

Government powers over land: police power (zoning, building and health codes), eminent domain (condemnation with just compensation), taxation, and escheat.

Nebraska land use: municipalities and counties adopt comprehensive plans and zoning regulations; land must be platted and approved before subdivided lots may be sold and recorded.

Fiduciary duties owed a principal are commonly remembered as OLD CAR: obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care and diligence, plus good faith and fair dealing.

Agency is created by express agreement, implication from the parties' conduct, ratification of an unauthorized act, or estoppel. Nebraska licensees must give a written brokerage-relationship/agency disclosure to consumers before providing brokerage services.

A single agent represents one party. A dual agent represents both buyer and seller, requires informed written consent of both, and cannot give either principal undivided loyalty or full confidentiality.

To customers and unrepresented parties, a licensee owes honesty, good faith, disclosure of known material facts about the property, and accounting for funds - but not the fiduciary duties of loyalty and confidentiality.

Agency terminates by performance, expiration of the term, mutual agreement, revocation by the principal, renunciation by the agent, death or incapacity of either party, or operation of law such as bankruptcy of the principal.

Compensation is set by agreement, not by law or MLS rule. A broker earns the commission according to the brokerage agreement's terms (often tied to procuring cause), and competitors may not agree on rates because of antitrust law.

Trust funds such as earnest money, deposits, and rents must be held in a separate trust/escrow account and fully accounted for; commingling and conversion are grounds for discipline.

Confidentiality continues after termination as to information acquired during the agency, but known material defects affecting the property must still be disclosed to all parties.

Formation requires offer, acceptance on the offered terms, consideration, capacity, and a lawful purpose. The mirror-image rule applies, and a counteroffer simultaneously rejects the original offer and creates a new one.

Statute of frauds: a contract for the sale of land, an option to purchase land, and a lease for more than one year must be in writing and signed by the party to be charged.

Contract status: valid and enforceable; void (no legal effect from the outset); voidable (one party may rescind, e.g., minor or duress); unenforceable (otherwise valid but barred, e.g., by the statute of frauds).

Contingencies - financing, inspection, appraisal, sale of the buyer's home - are conditions that must be satisfied or waived by stated deadlines. A 'time is of the essence' clause makes stated deadlines enforceable.

Earnest money is consideration held in trust; the contract should state who holds it and how it is disbursed on closing, on permitted termination, or on default.

Remedies for breach: specific performance (land is unique), liquidated damages if reasonable, rescission, compensatory damages, and a vendor's or vendee's lien in appropriate cases.

Assignment transfers contract rights and delegation transfers duties; a novation substitutes a new party and extinguishes the original obligation, releasing the prior party.

Equitable conversion: at contract execution the buyer holds equitable title and the seller holds a right to the price, so risk of loss typically falls on the buyer unless the contract provides otherwise.

An option is a unilateral contract the seller cannot revoke during the option period; a right of first refusal gives its holder the chance to match a third party's offer rather than a fixed right to buy.

Loan-to-value ratio = loan amount divided by the lesser of the sales price or appraised value. Conventional loans generally require private mortgage insurance above 80% LTV; PMI terminates by amortization at 78% LTV.

PITI = principal + interest + property taxes + insurance. The front-end (housing) ratio compares housing expense to income; the back-end (total debt) ratio adds all recurring debt; common guidelines start near 28/36.

Points: one point equals 1% of the loan amount. Discount points are prepaid interest that lowers the note rate; origination points are lender fees for making the loan.

Amortization: fully amortizing loans retire the debt over the term; balloon loans end with a lump sum; interest-only and negative-amortization structures shift risk to the borrower.

A mortgage and a deed of trust both hypothecate real estate (pledge it as security without transferring title). A deed of trust adds a trustee and typically supports nonjudicial power-of-sale foreclosure; a mortgage generally is foreclosed judicially in Nebraska.

Loan programs: FHA (government-insured, low down payment, mortgage insurance premium), VA (guaranty for eligible veterans, funding fee, no monthly mortgage insurance), USDA (rural, income-limited), and conventional conforming loans subject to Fannie Mae/Freddie Mac limits.

RESPA/TRID: the Loan Estimate must be delivered within three business days of application, and the Closing Disclosure at least three business days before consummation. RESPA Section 8 prohibits fees for referral of settlement service business.

TILA discloses the APR and finance charge and gives a three-business-day right of rescission for refinances and home equity loans secured by a principal residence; purchases are not rescindable.

Settlement mechanics: buyer's and seller's debits and credits, seller concessions, escrow holdbacks, and prorations of taxes, rents, and interest as of the closing date.

Market value is the most probable price in a competitive market between a willing buyer and willing seller, both informed and acting prudently, with reasonable exposure and no undue stimulus.

Sales comparison approach: adjust comparables to the subject for time, location, size, and condition. If the comparable is superior, deduct; if inferior, add. It is the primary approach for residential property.

Income approach: value = net operating income ÷ capitalization rate; cap rate = NOI ÷ price. Gross rent multiplier = price ÷ gross monthly rent, and indicated value = GRM × subject's monthly rent.

Cost approach: value = replacement or reproduction cost new − depreciation + land value. It is most reliable for new construction, special-purpose property, and markets lacking comparable sales.

Depreciation categories: physical deterioration (curable or incurable), functional obsolescence (outdated design or loss of utility), and external/economic obsolescence caused by forces outside the property.

Key appraisal principles: substitution, contribution, conformity, progression and regression, anticipation, increasing and decreasing return, highest and best use, and plottage.

A comparative market analysis is a licensee's pricing opinion for listing or marketing; an appraisal is a USPAP-compliant valuation performed by a qualified appraiser, and a CMA may not be presented as an appraisal.

Price is what is asked or paid, cost is what was spent, and value is an opinion of worth. A listing price is not evidence of value until confirmed by closed, arm's-length sales.

The Nebraska Real Estate Commission licenses and regulates brokers, associate brokers, and salespersons, adopts rules, sets education and examination requirements, and may suspend, revoke, fine, or place a licensee on probation.

A license is required to perform brokerage services for compensation. Exceptions include attorneys acting in the practice of law, court-appointed trustees and receivers, and persons acting on their own behalf as owners.

A salesperson must be affiliated with and supervised by a licensed broker; compensation for brokerage activity flows through the broker rather than directly from the client to the salesperson.

Trust funds must be deposited in a separate trust or escrow account, may not be commingled with business or personal funds, and the records must be retained and available for Commission inspection.

Advertising must identify the brokerage's licensed name. Blind advertisements that omit the responsible broker's identity are prohibited, and a salesperson's advertising is under the supervising broker's authority.

Continuing education: licensees complete 18 hours of approved education per two-year renewal cycle, including the required brokerage-relationship hours; failure to complete education blocks renewal.

Commission rates are negotiable. Licensees may not agree with competitors on fees or split arrangements (antitrust), and may not share compensation with unlicensed persons for brokerage services.

Out-of-state licensees may participate in Nebraska transactions by cooperating with a Nebraska-licensed broker; paying brokerage compensation to an unlicensed person is prohibited.

Grounds for discipline include misrepresentation, false promises, breach of fiduciary duty, failure to disclose known material defects, commingling or conversion of funds, undisclosed dual agency, and failure to account.

A valid deed must be in writing, signed by the grantor, identify the grantor and grantee, contain words of conveyance and a sufficient legal description, and be delivered and accepted. Recording protects the grantee but is not required for validity.

General warranty deed carries present covenants (seisin, right to convey, against encumbrances) and future covenants (quiet enjoyment, warranty, further assurances). A special warranty deed covers only the grantor's own acts; a quitclaim deed conveys whatever interest exists with no warranty.

Recording provides constructive notice and fixes priority. Under Nebraska's recording statute, a later purchaser who takes without notice and records first is protected against a prior unrecorded interest (race-notice framework).

Chain of title: a title search traces recorded conveyances back to a source of title. Gaps, wild deeds, and unrecorded interests are cured by corrective or quitclaim deeds, affidavits, quiet title actions, or adverse possession.

Nebraska title assurance practice relies on an abstract of title examined by an attorney who issues a title opinion, supplemented by owner's and lender's title insurance policies.

Nebraska documentary stamp tax is imposed on deeds at $2.25 per $1,000 of consideration; the register of deeds collects it when the instrument is recorded, and statutory exemptions apply.

Other methods of title transfer include intestate succession, wills and probate, condemnation, dedication, accretion and reliction, adverse possession, and foreclosure or tax sales.

Marketable title is title free from reasonable doubt and from objectionable encumbrances; insurable title is title a title company is willing to insure - the two standards are not identical.

Fair Housing Act protected classes are race, color, religion, sex, national origin, familial status, and disability (handicap). State and local ordinances may add classes.

Prohibited practices include refusing to sell, rent, or negotiate; offering different terms or conditions; discriminatory advertising; blockbusting; steering; redlining; and refusing reasonable accommodations or modifications for disability.

Limited exemptions include owner-occupied buildings of four or fewer units (Mrs. Murphy), a single-family home sold or rented by its owner without a broker and without discriminatory advertising, religious organizations, and private clubs. Brokerage services and advertising remain covered.

Enforcement: a fair housing complaint may be filed with HUD within one year or in federal court within two years; remedies include actual and punitive damages, injunctive relief, and civil penalties.

Lead-based paint rule for pre-1978 housing: sellers and landlords must disclose known lead hazards, provide the EPA pamphlet, and allow a 10-day inspection opportunity; buyers and agents sign an acknowledgment.

Nebraska Real Property Transfer Statement: sellers of residential property of one to four units deliver a written disclosure of known conditions and defects before the buyer makes an offer; certain transfers are statutorily exempt.

A licensee must disclose known material defects and adverse facts affecting value even when not asked, and must avoid misrepresentation and puffing in listing and advertising content.

Other consumer protections: RESPA anti-kickback rules, ECOA/Regulation B adverse-action notices and non-discriminatory credit standards, the Nebraska Consumer Protection Act, Do-Not-Call rules, and antitrust bans on price-fixing and group boycotts.