Texas Salesperson Real Estate Exam (National) Latest 2023 Graded A

Texas Salesperson Real Estate Exam (National) Latest 2023 Graded A Real Property Land and Improvements and the Right to Use Them Fixture Personal property that has been attached. "Installed" or "Annexation" Trade Fixtures Required to run a business. They may be removed from the property prior to the termination of the lease. (Doctors, Dentists, Chef, Barber) Non-homogeneity Land: No two pieces are exactly alike. Immobility Land: Cannot be moved Indestructibility Land: "Durability" - it will always be there. Scarcity Land: In short supply where demand is great. Modification Land: Improvements made my man (fencing, railroads). Fixity Land is fixed and is not a liquid asset. Situs Land: Location preference. Economic location not geographic. "Location, Location, Location." Metes and Bounds Legal Description of Land: Always have a point of beginning. Uses compass direction, degrees, and minutes. Used in 13 colonies. Lot, Block, Subdivision Legal Description of Land: Recorded Map or Plat Monuments Legal Description of Land: They add accuracy, all 4 corners must be monuments. "Old oak tree" "where John shot the bear" "stand of timbers." Can be man made. Rectangular Survey System Legal Description of Land: "Government Survey System," Base lines, meridians, townships and sections. Township = 36 sections, Section = 640 acres (1 square mile), Acre = 43650 square feet. EX: S7 T3 R2 means Section 7 Township 3 and Range 2. Modular and Prefabricated Physical description of property to specify types of construction. These are homes that are constructed using offsite construction and brought onsite. Encumbrance Anything that restricts your rights. Also a cloud on title. Release The legal method of removing an encumbrance Lien A charge on the property as a security for a debt. When is a mortgage enforceable? When it is recorded. What takes precedence Statutory or Common Law? Statutory. Ad Valorem According to Value When can an M&M Lien be placed on a property? When the materials have been delivered or work has begun. What type of lien is a judgement? General Lien Specific Lien A lien that attached to one or more specific properties (ex. Mortgage). General Lien Lien that attached to all of the property of the debtor (judgement or an IRS Lien.) Reservation Withholds title to a part of the land described in the deed (ex. an easement or mineral rights). Encroachment When a structure or improvement overlaps onto another's property. An encroachment MUST be disclosed. Buyer's agent must ALWAYS require a survey of the land. Easement Allows limited use or enjoyment of another's land. It is a RIGHT IN LAND and must be written and recorded. They can be created by express (written or verbal) or implied (actions or evidence) grant, agreement, reservation, limitation, PRESCRIPTION, necessity or condemnation. Dominant Estate The owner that crosses over the other's land is dominant. Subservient Estate The property with the road (easement) is subservient to the Dominant Estate. It is ENCUMBERED. Easement Appurtenant The Easement goes with the land, and whoever owns the land owns the easement. Easement in Gross Easement owned by a person or corporation - such as a utility easement. Licence (Encumbrance) Permission to do a particular act upon the land of another. (Ex. Theatre Tickets, Sporting Events). It is usually given verbally and easily revoked. Adverse Possession (Squatter's Rights) Property is acquired from the rightful owner through the Statute of Limitations. Occupancy MUST BE hostile, visible, actual, continuous, and distinct for the statutory period. Freehold Estate All of the legal rights attached to real property. Include right to sell, lease, encumber, use, enjoy, exclude, will to heirs, etc. These are also called the "Bundle of Rights." Remainderman The person who gets property after the life estate is ended. They also get FEE SIMPLE. Life Estate with Reversion At the end of the life estate the property goes back to the original owner. Estate in Severalty (Sole Ownership) Ownership by one person. Corporations or Partnerships. If there is only one signature necessary to sell a property, how many owners are there? 1 Tenancy in Common Ownership by two or more without rights of survivorship. Unequal shares are permitted. Joint Tenancy Ownership rights of two or more with rights of survivorship. Partition A procedure to divide a property into pieces according to an owner's interest. Syndicate When two or more parties join to create and operate a real estate transaction. Tenancy by Entirety Co-owners are husband and wife. This type of ownership AVOIDS PROBATE. Estate for Years Lease with a definite start and end date. Periodic Tenancy Month to month lease. 30 days to terminate. Estate at Will Lease that can be terminated by either party at will. (Ex. Boarding House). Tenancy at Sufferance Lease when a person a person refuses to move out after termination date. Variance If your property violates zoning, you may request a variance. (Ex. adding to the front of a building PORCH). EIS Environmental Impact Study. A study done to determine the effects of a PROPOSED PROJECT on a community. Eminent Domain The right of the government to take private property for public use. Condemnation The act of taking a property owner's land by the government for public use. Assessed Value Value of your property for tax purposes. Special Assessment Tax A tax issued by the government when providing a benefit for a limited number of property owners (ex. curbs and sidewalks). 4 Forms of Private Controls of Land Use Deed Restrictions, Deed Covenants, Deed Conditions and HOA. Injunction What the court will use to enforce deed restrictions. Highest and Best Use The legal use that gives the greatest return in money/amenities (commercial parking is more valuable then residential parking). Principle of Substitution No person is justified in paying more for a property when a similar property can be purchased for less money. Principle or Conformity Degree of Similarity or Homogeneity. Principle of Increasing and Decreasing Returns Don't over-improve a property. Principle of Regression The presence of lower valued properties in the neighborhood leads to a decline in the value of your property. Principle of Competition An increase in competition will result in decreased profits. Principle of Anticipation Purchase price is affected by the expectation of future benefits. Assemblage Combining several parcels of land. Deferred Maintenance Type of physical depreciation (normal wear and tear). Life Cycle of a Neighborhood Grow, Stabilize, Decline, Revitalization Gross Area The area under the roof. Square Footage Living space. Collateral When lenders require an appraisal. When you have to obtain an appraisal to secure financing, the lender is considered the client, buyer, or seller? Client. MAI Member, Appraisal Institute. Mortgage Pledge of real property as a security for a promissory note. Note Is a personal promise to pay debt. It is NOT RECORDED. Deed of Trust It is not a deed, it is a MORTGAGE. The BUYER must sign this. Acceleration Clause If you default we can collect now. Alienation Clause Due on Sale Defeasance Clause Lien is defeated when debt is repaid. Escalation Clause Allows lender to raise interest rate. (Adjustable Rate Mortgage, ARM). Prepayment Clause The mortgagor can pay the entire loan amount before it is due. Subordination Clause Allows lender to take a lower lien position. Assumption Clause When a loan is taken over by new owners, they are responsible to pay off the loan. The original owners are STILL LIABLE. Straight Assumption New buyer takes over payments and liability. Loan Novation. Assumption "Subject To" Buyer takes over payments but is NOT LIABLE for the loan. MIP Mortgage Insurance Premium Are the parents of a soldier eligible for a VA loan? NO Term Loan/Straight Loaon Interest only until the end of the term. Blanket Loan Covers more than one piece of property. Package Loan Includes real and personal property. Budget Loan Includes Principle, Interest, Taxes, and Insurance (PITI) in monthly payments. Balloon Loan / Partially Amortized Loan Final payment substantially larger than the rest. Participation Loan Two or more lenders own a share. Open-end Mortgage Allows for additional borrowing on the same note (home equity line of credit / HELOC) ARM Adjustable Rate Mortgage Very poor for people on a fixed income (elderly). Wraparound Loan Lender is UNAWARE of SALE. Reverse Annuity Mortgage Allows borrowers (62 years or older) to borrow against their equity. Loan is due upon the sale of property or death of owner. Sub-Prime Loans Loan affected by the pre-payment clause. Order of Recording 1st Lien, Deed, Assumption, 2nd Lien (1-DA-2). Graduated Payment Mortgage Payments rise over a period of years, and then usually level off for the remaining term of the loan. Primary Market Where consumers go to borrow money. Secondary Market Where lenders go to borrow money. Conforming Loans Loans qualified to be purchased in the secondary market.